The underlying architecture could be altered, I believe, to accommodate more Bitcoin.

But it’s all just a big bubble anyway, huh? Like, where’s the real value? Yes, thank you blockchain, we’ll use you when appropriate. Honestly, I’m becoming more convinced Bitcoins only purpose is speculating and crime. The ideas will live on, but I think, Bitcoin will either change drastically or be supplanted.

@crazyguy “I am puzzled by how a hard limit can be set on mining bitcoin.”

There is a threshold that can be dialed in to what qualifies as a successful coin being created or not. Imagine 100 machines throwing darts at board. The system can change the diameter of the bull’s eye to ensure that if the dart machines begin to throw darts at a faster rate, or people start adding more machines, there will still only be 10 new bulls eyes produced every hour on average. So it’s not a “hard ceiling” on the total bitcoin circulation, it’s a soft limit that ensures new coins are added to the bitcoin money supply at a relatively predictable, constant rate.

The hard limit for total number of bitcoins is set at 21 million in the equations that are used.

@Smashley I was a bitcoin doubter for many, many years. While my son was accumulating at what now appear to be insane prices (like below $20!)

What finally got me on board was a comparison to gold. Gold has a value in jewelry and some industrial applications; however, most of it is just hoarded as a safeguard against inflation. So, what exactly is the difference between bitcoin and hoarded gold?

@gorillapaws That is exactly what I thought. If you threw enough computing power at it, you could always find a few more bitcoins. However, my son, who understands blockchain technology better than I can ever hope to, tells me that is not the case. In fact, his favorite saying is: you can make more of everything except time and bitcoin!

@dabbler That is what I have heard. I am not sure how blockchain reaches a limit. But imagine if all 21 million have been mined and somebody wants more?

@crazyguy This video does a good job of explaining how it works.

@gorillapaws Thanks for the link. I think I have a slightly better grasp now.

Is there a set formula for hash?

Also, how exactly does the method limit the total number of bitcoin? Can’t somebody decide to make it easier to min whenever the so-called limit is hit?

@crazyguy Bitcoin uses SHA-256. This video explains how it works.

@gorillapaws That maybe too much technology !

@Tropical_Willie I hear you. Basically it takes the data you want to encode and breaks them into chunks of a fixed size. It starts with a set of numbers, and the first chunk of the data to encode, updates those numbers with them using math, repeats over and over with each subsequent chunk of data until it’s passed through all of the data you’re encoding.

I saw a guy buy a new Dodge truck in a newspaper article, paid less then 100 bucks for bitcoin and dealership said that they would accept Bitcoin. New truck for next to nothing.

@gorillapaws Thanks again. I watched the video through to the end; however, I think Youtube truncated it. So I still do not have an answer to how exactly the algorithm ends when 21 million bitcoin have been mined.

I don’t think it’s an algorithmic limit. Once the 21,000,000th Bitcoin is mined, they stop issuing new currency. In theory they could expand the money supply in the future if they wanted to.

@gorillapaws That is exactly what worries me.

“I don’t think it’s an algorithmic limit. Once the 21,000,000th Bitcoin is mined, they stop issuing new currency. In theory they could expand the money supply in the future if they wanted to.”

I don’t think any of this is correct:
The algorithm in this case is built so that there are no new solutions once 21M B are mined.
There isn’t anyone “issuing currency” That’s a core feature. There is no central bank, there is no central control. The only thing you have is a collective agreement to abide by the algorithm as it is. Using a modified algorithm would generate invalid results that will not be recognized by any other bitcoin processor.
“They” cannot expand the money supply, there is no “they”. There would have to be massive collusion among more than a majority of all processors – and a well-coordinated algorithm update – for any BC transactions to succeed following any algorithm changes.
In general it is a feature of the process that everyone has a vested interest in sticking with the official algorithm, use it or you’re out of the game.

@dabbler It looks like the value is hard-coded into the algorithm, but it’s not a fundamental consequence of the math. In other words every bitcoin processing software package has the same constant defined as the same value and that results in the 21 million cap. In theory, all clients could be updated to increase this number in the future if people wanted to do that, so it’s a “hard cap” that could be changed, versus something like a system that only had 21 million mathematical solutions ever possible, where even if everyone wanted to increase the number, it would be mathematically impossible to do so.

@dabbler – I don’t have data, but isn’t there getting to be a lot of consolidation of power in btc? I’m getting the impression that retail investors are avoiding it after getting burned three years ago, but hedge funds and massive miners are gobbling up the supply. Couldn’t a small group of massively invested collaborators force a change the underlying programming? I know this could theoretically hurt btc price, but low trading volumes also hurt Bitcoin’s ability to rise quickly in value, which seems to be one of its primary uses.

@dabbler I think you are correct in your assertion that there are no new solutions once 21M B are mined. If that were not the case, BTC would suffer from the same problems as the dollar and the euro.

@gorillapaws “not a fundamental consequence of the math” Totally correct. The same blockchain principles are the foundations of all the other cryptos, too. Bitcoin has 21M as a design feature, part of bitcoin’s definition, along with the computational requirements for BC.

@Smashley yes, monopolistic consolidation is a known possibility and I don’t follow the recent intrigues closely but I know I’ve read about the hazard of a cartel of BTC holders theoretically being able to mess with the algorithm due to their processing dominance.

These same parties have invested big money in custom FPGA circuits that are optimized for high speed execution of the BTC mining and verification algorithms using far less electricity than other means. The only thing holding them back I suspect is that a whiff of manipulation will also crash the BTC market and deflate their holdings dramatically. When they figure out how to hedge that problem profitably then it’s ransom-time.