How does Bitcoin achieve a constant total amount? Advantages and Disadvantages of Bitcoin

Dec 21,2022
How does Bitcoin achieve a constant total amount? Advantages and Disadvantages of Bitcoin

In the currency circle, I believe that investors are very familiar with Bitcoin. It can be said that all of you entered the currency circle from the contact with Bitcoin, so investing in Bitcoin has become a very popular project. Investors familiar with Bitcoin know that the total number of Bitcoin is 21 million. How does Bitcoin achieve a constant total number? What are its advantages and disadvantages? Next, let's have a look.

How does Bitcoin achieve a constant total amount?

Bitcoin is a deflationary virtual currency with a total number of 21 million. Do you know how it came about? When planning Bitcoin, Nakamoto Cong requires that each Bitcoin can be subdivided to 8 decimal places, and 50 Bitcoin will be sold in each block. After every 210000 blocks, the output of Bitcoin in each block will be halved.

One block is generated every 10 minutes. It takes about four years for 210000 blocks. Since 2009, the output of bitcoin has been halved twice. Currently, 12.5 bitcoins are sold in each block. About 2045, 99.95% of Bitcoin may be sold out. In 2140, Bitcoin cannot be further subdivided. By this time, Bitcoin will be sold out completely, with a total of about 21 million Bitcoins (Note: the actual number is 20999999.97690000).

Although the feasibility of Bitcoin's deflationary fiscal policy is controversial in the field of currency lending, this sales system strongly encourages miners to invest in Bitcoin mining as soon as possible, which has enabled the Bitcoin system to obtain a lot of computing power and security.

Here are some key analyses:


At 18:15:05 GMT, January 3, 2009, the Genesis Block came out. The Genesis block is numbered 0. Starting from Genesis Block, "Phase 1" will generate 50 new Bitcoins or 5 billion Cong per block.

2. Target height 210000

At 15:24:38 GMT, November 28, 2012, the 210000 block was generated. In "Phase 2" from this block, the number of new bitcoins contained in each block is halved to 25, which is the first time in history that the number of bitcoins is halved. In the future, the number of bitcoins will be halved for every 210000 blocks generated. Until the 33rd half, 0.0021 new bitcoins generated by each block will be directly reduced to 0.

3. Once every four years

Half every four years is not a strict statement. Details: Bitcoin generates one block every 10 minutes, and 210000 10 minutes are nearly 4 years (4 years equals 210384 10 minutes. This should be the number chosen by Nakamoto).

4. Before and after 2016

The second half reduction will occur in 2016, but it is too early to discuss this. What I want to say is the difficult problem of 2016.

The principle of Bitcoin system to adjust the mining difficulty is: according to the total time of the first 2016 blocks, the mining difficulty of the 2016 blocks will be adjusted so that the time for digging out the 2016 blocks is 14 days. Because, 6 10 minutes per hour, 24 hours and 14 days=2016. Therefore, the so-called 10 minutes is only an average goal. Due to the rapid increase of computing power, the rate of digging 2016 blocks is generally lower than 14 days.

Advantages and Disadvantages of Bitcoin


1. Decentralization (security+transparency)

Our current monetary system is a centralized design. Speaking of the advantages of decentralization, let's first look at the disadvantages of centralization:

The reason why the banknotes in everyone's hands are valuable is that the government recites. If the government says that the money in your hands has become waste paper, you have no choice as a common people.

No kidding, India announced in November last year that some of your banknotes have become waste paper!

Although most countries will not be as capricious as Ah San, it is still common for them to print more money, so the money in everyone's hands will become less and less valuable!

2. No tampering, no forgery

In real life, there are always counterfeit money, and some counterfeit money can even cheat the money detector.

However, in Bitcoin software, all coins are recorded from their appearance to your hands.

It's like you went to Lao Wang's next door to buy food. Lao Li gave you 3 yuan, and you took 3 yuan to Lao Zhang's to buy a bottle of Coke. At this time, Lao Li knew that Lao Li had asked for your 3 yuan, and he could also trace it back to the money printing machine.

In this case, when you take a counterfeit coin to Lao Zhang's house to buy Coke, Lao Li looks at it and finds that the source of your 3 yuan is unknown. He immediately slaps the counterfeit coin on your face.

3. Convenient transactions, especially cross-border transactions

Bitcoin transactions are very convenient, similar to bank transfers.

① Open Bitcoin wallet software (equivalent to the bank background)

② Enter the opposite address (equivalent to the opposite bank account)

③ Enter the number of bitcoins to be transacted (equivalent to the transfer amount)

④ Sign (equivalent to entering the bank card password)

⑤ Get it done!

China is a country of foreign exchange supervision. For individuals, they can only exchange 50000 US dollars every year. If they want to exchange more US dollars, they should either go through the troublesome process of the foreign exchange bureau or take some illegal ways.

With Bitcoin, you can directly exchange dollars from the exchange. Save time and effort, and there is no limit.

In addition, there is a high service charge for foreign currency exchange. In comparison, the service charge for Bitcoin transfer is much cheaper!

4. No inflation

The output rate of Bitcoin is programmed. A small amount of new coins will be produced every 10 minutes, and the output will be halved every 4 years. This information is absolutely open and transparent.

At the same time, the total amount of bitcoin is very limited, with a total of 21 million bitcoins sold, which will not be printed as many as money.


1. Unable to solve a large number of transactions at present

Because of the limitation of the capacity of each block, Bitcoin cannot solve a large number of transactions at the same time at this stage.

The current situation is just like a road that is not wide enough. If there are more cars, it will be blocked naturally.

However, the key is that it is not difficult to deal with it. Some people suggest widening the road and separating the traffic lane from the bicycle lane

Therefore, this situation is not terrible and will gradually improve in the future.

2. Large price adjustment

● Don't look at the sharp rise of Bitcoin and the sharp fall!

● In the first half of 2011, the price of Bitcoin increased by 100 times from 30 cents to 30 dollars!

● In the second half of 2011, it dropped to $2 all the way, down more than 90% from the peak in June!

● On April 10, 2013, Bitcoin rose as high as 266 dollars at that time. It was not long before Bitcoin fell to 105 dollars that night and at least 50 dollars in a week!

● In November 2013, the price reached a stage high of 1242 dollars. It fell to 576 dollars in December.

● From 2014 to 2015, the market was sluggish, and only in September 2015 did a bull market begin.

● Increase more than ten times in 2016

● From November to December 2017, the increase was more than 10 times

3. People don't understand

From the advent of Bitcoin to today, everyone has been discussing whether Bitcoin is a fraud. Bitcoin is useless. Bitcoin Barabara

However, the price of Bitcoin is rising amid numerous doubts. What do you mean

It's too much to say. Let time prove it.

Speaking of this, I believe you have a certain understanding of how Bitcoin achieves a constant total, as well as the advantages and disadvantages of Bitcoin. In general, the editor here also reminds investors that the currency circle market is volatile and unpredictable, and investment is accompanied by certain risks. You must have a comprehensive understanding before entering the market, and do not invest blindly.