Behind the Bitcoin Issuance: Determinants and Future Outlook

In the wave of digital currency, Bitcoin, as the first and most well-known cryptocurrency, has always attracted the attention of global investors and technology enthusiasts. The issuance of Bitcoin is limited to 21 million pieces. The reasons and impacts behind this design are worth our in-depth discussion. What determines the issuance of Bitcoin? This question not only involves the basic principles of economics, but is also closely related to technology, market psychology, and the future financial ecology.

First of all, the issuance of Bitcoin is set at 21 million, which is derived from the design concept in the white paper released by its founder Satoshi Nakamoto in 2009. This setting is not arbitrary, but based on a deep understanding of scarcity and inflation. In traditional economics, scarcity is the basis of value. The total amount of Bitcoin is limited precisely to ensure that it can maintain a certain value in the future. Imagine if there is no upper limit on the issuance of Bitcoin, and it can be printed indefinitely like legal tender, then its value will inevitably depreciate due to oversupply. Relatively speaking, the upper limit of 21 million gives Bitcoin the characteristics of "digital gold" to a certain extent, making it an asset that can be stored and preserved.

Furthermore, the issuance mechanism of Bitcoin is closely related to its blockchain technology. Every 10 minutes, the network generates a new block, and miners get Bitcoin as a reward by calculating and solving complex mathematical problems. Initially, the reward for each block was 50 Bitcoins, and this reward was halved every 210,000 blocks, forming the so-called "halving mechanism". At present, after several halvings, the block reward has dropped to 6.25. This design makes the issuance of Bitcoin gradually decrease, approaching the total amount of 21 million over time. Behind this mechanism, it reflects the careful consideration of the control of money supply, ensuring that Bitcoin will not depreciate due to excessive issuance like legal currency.

It is worth noting that although the total amount of Bitcoin is fixed, its price is highly volatile. This price fluctuation is not only related to market demand, but also affected by various external factors. For example, government policies, market sentiment, technological progress, etc. may all lead to drastic fluctuations in Bitcoin prices. In 2017, the price of Bitcoin soared from less than $1,000 to nearly $20,000 in just a few months, and then quickly fell back. This fluctuation reflects, to a certain extent, the market's different expectations and psychology about the future value of Bitcoin.

When analyzing the determinants of Bitcoin issuance, we cannot ignore the impact of technological progress on its ecosystem. As an emerging technology, the development of Bitcoin is accompanied by the continuous evolution of blockchain technology. With the improvement of mining technology, the computing power of miners continues to increase, which also leads to the improvement of Bitcoin production efficiency. However, it is worth noting that as Bitcoin approaches the issuance limit of 21 million, the difficulty of mining will continue to increase, and the amount of Bitcoin that miners can obtain will become less and less. This change in supply and demand will have a profound impact on the value of Bitcoin in the future.

From the perspective of market psychology, the scarcity of Bitcoin has formed a "speculative mentality" in the minds of investors. It is generally believed that the supply of Bitcoin is limited and there may be a situation where supply exceeds demand in the future. Therefore, many investors choose to buy when the price is low, expecting to get rich returns in the future. This mentality not only drives up the price of Bitcoin, but also makes more and more people interested in it. At the same time, media publicity and the spread of social networks are also constantly strengthening this psychological effect, forming a "follow-up effect."

However, it is precisely because of the high volatility and unpredictability of Bitcoin that its risks in the investment field cannot be underestimated. While pursuing high returns, investors must remain calm and rationally analyze market dynamics. In recent years, as more and more institutional investors have entered the Bitcoin market, the maturity and stability of the market have improved, but risks still exist. Especially in the context of an unstable global economic situation, the price of Bitcoin may still be severely impacted.

Looking ahead, how will the issuance of Bitcoin affect its development trend? In the next few years, as Bitcoin gradually approaches the issuance limit of 21 million, the market will face increasing challenges. On the one hand, scarcity will further enhance the value of Bitcoin and attract more investors to participate; on the other hand, as the supply of new Bitcoin approaches zero, the income of miners will be greatly reduced, which may cause some small miners to exit the market, thus affecting the security and stability of the network.

In addition, the government's regulatory policies will also have an important impact on the future of Bitcoin. In recent years, governments have gradually strengthened their supervision of cryptocurrencies, and the introduction of relevant policies may affect the market demand for Bitcoin and investor confidence. Although Bitcoin, as a decentralized asset, is theoretically not controlled by a single country, in actual operation, policy changes often have a direct impact on the market.

In general, the issuance of Bitcoin is not just a number. It contains complex economic principles and market psychology. As investors, we need to be cautiously optimistic about the future of Bitcoin. While enjoying the convenience and opportunities brought by digital currency, we must also be aware of the potential risks. Bitcoin still has a long way to go, and its future development will depend on technological progress, market changes, and policy guidance. Only on the basis of a deep understanding of the mechanism behind it can we better grasp the investment opportunities in this digital age.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

As Paypal opens cryptocurrency purchase services, Grayscale's holdings continue to increase, and the trading volume and attention of the crypto market continue to rise. The price of Bitcoin has broken through the 2017 high and is getting closer to $20,000. Therefore, there are rumors in the currency circle that Bitcoin is the best performing asset this year, which has also led to more currency circle novices pouring into the digital currency market and trading Bitcoin. However, for these currency circle novices, they only know that the price of Bitcoin is high, and they don't know anything else. For investors, they need to understand the issuance of Bitcoin. So, what determines the issuance of Bitcoin? The following editor of the currency circle will tell you the origin of the issuance of 21 million Bitcoins.
 What determines the issuance of Bitcoin?
A rough description of the total issuance is this: a certain amount of Bitcoin is generated every 10 minutes, which is halved every four years, and the total issuance is capped at 21 million.
Let's talk about the halving rule. In January 2009, the genesis block of Bitcoin was born. The so-called genesis block is the 0th block on the Bitcoin blockchain. The number of bitcoins generated in this block is 50. Ten minutes later, the next block will appear on the system, and the number of bitcoins generated is still 50. The Bitcoin system stipulates that the output of Bitcoin will be halved every four years, that is, starting from 2009, 50 will be generated per minute; four years later, 25 will be generated every 10 minutes; after another four years, 12.5 will be generated every 10 minutes. By 2140, all bitcoins will be produced, with a total of 21 million.
The above is a rough description of the Bitcoin issuance process. The so-called rough description means that some data are inaccurate. For example, a calculator can be used to calculate that by 2140, the total amount of Bitcoin actually issued will be slightly less than 21 million.
 The origin of Bitcoin’s 21 million issuance
1. Bitcoin was designed by Satoshi Nakamoto to have an upper limit of 21 million. By limiting its maximum supply and slowing down the production of new Bitcoins, Satoshi Nakamoto hopes that each Bitcoin unit (currently called "Satoshi") will appreciate over time.
According to an email shared by Satoshi and Bitcoin Core contributor Mike Hearn, Satoshi believed that if 21 million BTC were used by some portion of the world economy, then 0.001
The value of BTC is approximately 1 Euro.
This prediction came true in 2013, when Bitcoin surpassed the €1,000 price point for the first time; today, each 0.001 BTC is worth nearly €8.25.
2. Although Satoshi Nakamoto compared the price of Bitcoin to the Euro in his email, some simple math suggests that he may have had a grander vision for Bitcoin, which explains why the upper limit of 21 million was chosen.
When Bitcoin was created, the world’s money supply was about $21 trillion. This number is called the M1 money supply and is made up of the total value of all physical money in the world, including cash, gold, checks, and so on.
If Bitcoin were to develop into the single world currency (replacing all currencies included in the M1 figure), then each BTC would be worth $1 million. Since there are 100 million Satoshis in each Bitcoin, each Satoshi would be worth $0.01.
If Satoshi didn’t do it on purpose, it’s an amazing coincidence that these numbers are so closely aligned to the truth.
3. Although the M1 money supply replacement theory may be the most plausible reason for Satoshi Nakamoto to choose 21 million as the upper limit of Bitcoin, there is another (possibly simpler) explanation.
Looking at the parameters used to control Bitcoin’s supply, it is clear that the 21 million Bitcoin figure enables the network to ensure that blocks are mined within a regular time period (10 minutes).
It also ensures that the amount of Bitcoin paid to miners as block rewards decreases over time as the maximum supply approaches its cap. It turns out that the parameters set by Satoshi for this inevitably lead to a maximum of 21 million BTC ever being produced.
4. The Bitcoin Core code currently adjusts the mining difficulty to ensure that a new block is mined every 10 minutes on average, regardless of the network's hash rate. Based on this feature, 210,000 blocks should be mined in every four-year cycle, after which the block reward will be halved.
The first cycle saw 50 BTC mined per block; that number halved to 25 BTC/block in 2012, then again to 12.5 BTC in 2016
/block. Following the 2020 halving, it currently sits at 6.25 /BTC block.
If you extrapolate forward, you'll find that the sum of the block rewards per cycle equals 100 (50+25+6.25+3.125+1.5625+.... and so on). By multiplying that number by the 210,000 blocks/cycle figure, you can come up with a maximum supply of 21 million.
Through the above introduction, I believe everyone has some understanding of the question of what determines the issuance of Bitcoin. In fact, for investors, the most important thing in the process of Bitcoin trading is to understand more and learn more. After all, investment is risky and you need to be cautious when entering the market. Everyone knows this. For example, it is like sailing on the sea. No one can face zero risk. You can't control the fluctuations in the market. You can only increase the ability of the helmsman and the quality of the ship. In that way, your safety will be more guaranteed when the market is fluctuating, and the corresponding danger you face will be reduced.