Bitcoins are limited
Contrarily, there is no central power which can arbitrarily decide to create more bitcoin. This transparency alone brings incredible value compared to fiat currencies.
Article continues below advertisement Market Realist Bitcoins are limited in supply In the prevalent centralized economic system, there is no limit on the amount of money UUP FXE issued by central banks.
In contrast, the concept of bitcoin is based on a limited supply. Even if demand continues bitcoins are limited rise, bitcoins will remain finite in supply.
The founders of bitcoin, through a bitcoin generation algorithm, have already defined the number of bitcoins that are to be issued and the rate at which they have to be issued. It is the most important feature of bitcoin because it makes money supply more predictable and without any interference from central banks.
Decreasing supply algorithm The founders have set a limit of 21 million bitcoins SOXX that can be mined over a period of time. Of those, Since only 4.
That explains the recent frenzy in the bitcoin market. Bitcoins are designed based on a decreasing supply algorithm.
Since bitcoins are in limited supply, their value generally tends to rise.