Bitcoin Production Halved As Supply Hits 10.5 Million
Bitcoins in circulation has hit 10.5 million, which triggers a code in the digital currency which will drastically change how many new bitcoins are being created. This comes at a time of heightened press for the new digital currency, and is expected, in and of itself, to have an impact on its pricing. That bitcoin production has decreased, as if succumbing to the pressures that make precious metals so expensive and rare but in a digital manner, is something foreign to either knowing or unknowing monetarists who roam the planet.
The part of the system triggered is referred to as the “block reward” and determines how many bitcoins can be mined at a time, which, because of the new change, drops from 50-25.
With fewer bitcoins in circulation, and increasing demand due to strong press coverage and support from a broad range of often Austrian School of Economic and tech savvy individuals, the dollar price of bitcoins is likely to rise, possibly double. Perhaps, after an initial price increase, a selloff will be triggered among users who had picked a price at which to cash out x-amount of their stashes. Technological innovations in the mining sector for bitcoin could also stabilize the effect built-in to the program halving the amount of bitcoins being mined.
Bitcoin’s monetary realm is significantly different than that of the dominant financial system with which most people are familiar, yet they persist together on the same planet. Whereas fiat currencies are consistently being devalued by command-and-controlism, the mathematical-design model of the bitcoin world is something quite different: there is a deflationary tendency built-in.
The brilliance is that, as reverse engineers figure out some of bitcoins nuances, they can augment a miners ability to mine. Thus, while it becomes tougher to mine bitcoins, technology creates more powerful means to do so.