Summary
TLDR: Bitcoin was designed to have a limited supply by halving the mining reward every four years, with the upcoming halving reducing the reward to 3.125 BTC. This process maintains scarcity and encourages layer-2 solutions for Bitcoin scalability. Stacks is highlighted as a digital asset with a native BTC yield, which will benefit from the upcoming halving event and improvements in mining efficiency.
Key Points
1. Bitcoin was developed to emulate the scarcity and finite nature of resources like gold, thereby ensuring a limited supply. Satoshi Nakamoto, the founder of Bitcoin, intended that the maximum currency supply would be capped at 21 million coins.
2. Every four years, the network cuts the reward for mining bitcoin transactions by 50% via a process known as the halving. This is meant to slow down the influx of new coins and preserve the currency’s scarcity over time. It also ensures that Bitcoin‘s total finite supply approaches the 21 million cap gradually and predictably.
3. Following the halving next month, the block reward will be reduced to 3.125 bitcoin (BTC).