THE MECHANISM BEHIND BITCOIN SCARCITY

[PhilosopherKing]

The CBN act of 2007 gives CBN right to print new naira note endlessly to replace and add to existing note. The United State Bureau of Engraving and Printing under the United States department of Treasury can also print endless Dollar note. This is the way it is for plenty of the country we know. Bitcoin is not like that. Bitcoin supply is fixed and it is only Twenty One Million that will ever be. It's programmed so it will not exceed that amount. That is why plenty person always say BTC is scare. This scarcity is one of the thing that make BTC good for storing person wealth for long time.

To know where the scarcity come from we will look at how bitcoin is issued.

In 2009, when BTC come out, every time a new block of transaction is added to blockchain which can take ten minutes to happen, the network will create 50 new BTC as incentives for miners who used their computer power to first solve the POW puzzle and add to the block. The reward did not stay the same. After every 210,000 block the reward would be cut into half. This is called halving and it happens every four year cycle in this way~

 50 > 25 > 12.5 > 6.25 > 3.125 >



In the image the new BTC reward keeps reducing after every four years. And as it is reducing so is the supply rate. And the more it goes on, eventually in the year 2140, new bitcoin circulation BTC will come to zero leaving only transaction fees as rewards for miner. This shrinking in new block reward creates scarcity.

[Sammysmart001]

On point OP, I really enjoy the way u explain how Bitcoin is a digital gold here.

Bitcoin code has being law, and while inflation is cause by CBN and Fed y did I say so because they can print money at anytime. Halving making sure that when demand goes up that supply stay tight up.

You really did well for the breaking down of 2140 timeline this really shows us that Bitcoin has come here to stay and had being there for long term.

[DiMarxist]

With every Bitcoin that is mined the 21 million Bitcoin cap that is in circulation drops, this only points to one thing that it will get to a point were in mining were the Bitcoin in circulation will finish. Bitcoin is limited and is not like our circular Fiat currencies, were it can be printed based on demand one of the features that makes Bitcoin different and unique is it scarcity.

[Hypnotizer]

The CBN act of 2007 gives CBN right to print new naira note endlessly to replace and add to existing note. The United State Bureau of Engraving and Printing under the United States department of Treasury can also print endless Dollar note. This is the way it is for plenty of the country we know. Bitcoin is not like that. Bitcoin supply is fixed and it is only Twenty One Million that will ever be. It's programmed so it will not exceed that amount. That is why plenty person always say BTC is scare. This scarcity is one of the thing that make BTC good for storing person wealth for long time.

Well, I think I read somewhere that the supply can actually be added with consensus but I don’t think we will ever have a need for adding the supply of bitcoin because it will reduce the scarcity feature of bitcoin and it’s like stealing the value of every bitcoin owner.

Nevertheless other currencies are centralized and don’t have fixed supply, so for sure the bodies controlling the currency can decide to increase the supply at any given time and even if they don’t inflation will steal from someone who decides to save in centralized currencies whereas Bitcoin can serve as a hedge against inflation.

~snip

Also you forgot to add, we need approximately four years to get the 210,000 blocks and that’s why Bitcoin Halving happens every four years.

[Realwhot]

You really explained it well especially the part where you compared fiat to bitcoin. But honestly i feel like what make bitcoin more unique is not just the scarcity itself but the fact that the scarcity is very predictable. Like with fiat, anything can happen at anytime, policies can change, more money can be printed, but with bitcoin everything is already laid out from the start and anybody can check it.
But if we are being real, scarcity alone does not determine the value of something. What makes bitvoin more interesting is the fact that the fixed supply is accompanied with decentralization and the fact that anybody can access it from anywhere. So in the end it comes down to trust...whether people will keep trusting this kind of system more than the normal government controlled money as time goes on

[Doan9269]

When something is scarce, it will have value, even though discussity does not mean that everyone cannot have access to Bitcoin, but we are talking about the limited supply here, this is why the more it is being mined the lesser the mining rewards while the value increases with time, everything about bitcoin has been made complete because you can trust the entire network to deliver up to your best expectation when it comes to financial economy and investment opportunities, just as I've said, bitcoin value always increases.

[AVE5]

The CBN act of 2007 gives CBN right to print new naira note endlessly to replace and add to existing note. The United State Bureau of Engraving and Printing under the United States department of Treasury can also print endless Dollar note. This is the way it is for plenty of the country we know. Bitcoin is not like that. Bitcoin supply is fixed and it is only Twenty One Million that will ever be. It's programmed so it will not exceed that amount. That is why plenty person always say BTC is scare. This scarcity is one of the thing that make BTC good for storing person wealth for long time.

The unlimited printing of the cash isn't only limited to specific countries but to all sovereign state.
The central banks regulates the supplies and circulations of money in the traditional monetary systems and from there the cash is overprinted which also leads to the lost of values over inflation.
Bitcoin at it own fixed concept is to give it edge to store values against inflations due to its scarcity.
And with the limitations of the 21 million of total supplies and as financial inclusion that can process transactions successfully across borders, also consider the decentralization of bitcoin which can be adopted by anyone and used globally, the demands following the population in the world and massive adoption will be a competition in the demands and while bitcoin is subjected to the limited supplies on that course gives it the hedge to be sustainable as asset to curb inflations.

[Mhizlove]

When something is scarce, it will have value, even though discussity does not mean that everyone cannot have access to Bitcoin, but we are talking about the limited supply here, this is why the more it is being mined the lesser the mining rewards while the value increases with time, everything about bitcoin has been made complete because you can trust the entire network to deliver up to your best expectation when it comes to financial economy and investment opportunities, just as I've said, bitcoin value always increases.

Let me add a little balance here, scarcity gives bitcoin strong value and that's true,also limited supply is a big reason why people do rate it but make we no forget say price no dey just skyrocket,the market mood, demand, big investors movement also do affect price. Bitcoin do have a solid design and a network of trust,but it's still the market asset that can  fluctuate for short period of time. It's understanding and patience that makes people benefit from it and not only because of scarcity

[Cryptomultiplier]

When something is scarce, it will have value, even though discussity does not mean that everyone cannot have access to Bitcoin, but we are talking about the limited supply here, this is why the more it is being mined the lesser the mining rewards while the value increases with time, everything about bitcoin has been made complete because you can trust the entire network to deliver up to your best expectation when it comes to financial economy and investment opportunities, just as I've said, bitcoin value always increases.

Let me add a little balance here, scarcity gives bitcoin strong value and that's true,also limited supply is a big reason why people do rate it but make we no forget say price no dey just skyrocket,the market mood, demand, big investors movement also do affect price. Bitcoin do have a solid design and a network of trust,but it's still the market asset that can  fluctuate for short period of time. It's understanding and patience that makes people benefit from it and not only because of scarcity

The scarce nature of Bitcoin is what makes it appreciate in value over the long term just like real estate that always appreciates over the years based on how development enters the area.

I don't know though if to agree that scarcity is more important than decentralization or they are equally important and essential to a Bitcoin investment over time. So am going to ask what you really think, OP.