The rise of Bitcoin, the virtual currency, has triggered global attention and discussion. As its market capitalization continues to climb, concerns have arisen about whether Bitcoin’s supply is limited. In this article, we’ll delve into the restrictive nature of Bitcoin’s supply and explain five hot-button issues surrounding Bitcoin to give you a deeper understanding of the cryptocurrency.

The saying that Bitcoin has a limited supply comes from the fact that its founder, Satoshi Nakamoto, set a total limit of 21 million in the Bitcoin white paper. This setting makes Bitcoin a scarce resource, which is fundamentally different from the way traditional currencies are issued. The resulting impacts and challenges are also the focus of many investors and economists.

First, let’s explore what it means to have a limited supply of Bitcoin. Compared with traditional currencies where the government can issue currency at will to cause inflation, the total amount of Bitcoin is capped to ensure its stability and value-preserving properties. This scarcity design makes Bitcoin more similar to precious metals such as gold, with certain investment value and risk hedging functions. This also explains why more and more investors regard Bitcoin as a safe-haven asset to deal with economic fluctuations and uncertainty.

Secondly, Bitcoin’s supply limit has also brought some controversy. Some critics believe that this scarcity design could lead to Bitcoin becoming an unstable instrument of speculation rather than a true currency. They pointed out that the price of Bitcoin fluctuates violently, lacks real value support, and is easily affected by market sentiment and speculation. This view also explains to a certain extent why the price of Bitcoin fluctuates so drastically and has become a hot topic in the investment field.

Third, a key issue related to Bitcoin supply is mining. The Bitcoin mining process requires a large amount of computing resources and energy input, which has led to controversy over negative environmental impacts and energy consumption. Especially in the context of global concern about environmental protection and sustainable development, the energy consumption of Bitcoin mining has become a highly controversial issue. Some countries and regions have even introduced policies to limit or ban Bitcoin mining to reduce their impact on the environment.

Fourth, Bitcoin’s supply constraints also raise concerns about its future development. As the size of the Bitcoin market continues to expand, some people worry that Bitcoin's supply cap will lead to its lack of liquidity, thus affecting its application in daily transactions. This has also triggered a discussion on the future development direction of Bitcoin. Some people advocate solving this problem through technological upgrades or forks to promote the widespread application and development of Bitcoin.

Finally, Bitcoin’s supply constraints are also closely related to the financial system and regulatory policies. As the Bitcoin market continues to develop and grow, regulatory authorities have begun to increase supervision of the Bitcoin market to prevent financial risks and protect the rights and interests of investors. However, the decentralized nature of Bitcoin also brings difficulties in supervision. How to promote innovation and development while ensuring market order has become a challenge faced by regulatory authorities and industry practitioners.

To sum up, the limited supply of Bitcoin is an important part of its design and characteristics, which not only brings investment opportunities and value storage functions, but also causes many controversies and challenges. As the Bitcoin market continues to evolve and improve, we believe that this cryptocurrency will usher in more opportunities and challenges in its future development and become an integral part of the global financial system. Let us look forward to the future of Bitcoin and explore its infinite possibilities!

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.

Question 1: The supply of Bitcoin is limited?

According to Bitcoin regulations, there will only be a maximum of 21 million Bitcoins produced through computer mining, and there will never be any more. This statement is not wrong in terms of rules, but it is not necessarily true in politics.
The Bitcoin protocol can be modified through collective consensus. The Bitcoin protocol can be modified as long as the majority of participants in the Bitcoin network decide, and the regulations have been modified several times.
At present, Bitcoin does maintain a limited supply based on the consensus of the majority of users, but the guardian of this rule is politics, not mathematics.

If the Bitcoin community agrees with mainstream economists, the political landscape could change.
Economists believe that Bitcoin will slowly decrease over time due to various unexpected factors. When the supply is limited, Bitcoin will fall into deflation.
Some new cryptocurrencies have chosen not to limit the supply like Bitcoin, but to follow the monetary policy of low and stable inflation advocated by economist Milton Friedman.
So don’t be too surprised if one day you see that the supply of Bitcoin is no longer limited to 21 million.

Question 2: Can Bitcoin users remain anonymous?

Since Bitcoin transactions do not list real identities, users’ privacy is protected. Bitcoin users can create as many pseudonyms as they want, and most Bitcoin software will create a pseudonym for each transaction.
Even WikiLeaks encourages sponsors to donate in Bitcoin, because the anonymous nature of Bitcoin prevents outsiders from easily knowing the identity of the sponsor. But in fact, most Bitcoin users do not have better privacy protection than traditional bank transfers, and even worse privacy than pure cash transactions.
Because users’ pseudonyms can be linked together through blockchain research, some blockchain analysis units have now begun to provide this service to law enforcement agencies.
What’s more important is that most users will go through KYC (Know your
customer) procedures to prevent money laundering and bribery. At this time, the identity will be left for confirmation, so if you really want to trace it, there will still be traces to follow.

While technically capable users can use currency mixing protocols to exchange currency with other users to hide their identity, this practice is uncommon.
In addition, some cryptocurrencies provide stronger privacy protection mechanisms than Bitcoin, but are currently relatively less popular than Bitcoin.

Question 3: Bitcoin is not controlled by law?

Bitcoin is the mainstream currency in the black market on the dark web. French financial regulators have criticized Bitcoin as a tool for criminals. Nobel Prize winner Joseph Stiglitz even publicly claimed that Bitcoin should not be legal.
But in fact, the emergence of new technologies will always make it difficult to regulate existing laws, just like it was when cars, computers, and the Internet first appeared. Gradually these new technologies will be brought into the scope of the law, and Bitcoin is also undergoing this process.

Bitcoin transactions are already regulated under the laws of several US states, including New York, and all major ones at least try to comply with KYC procedures to prevent money laundering. The IRS in 2014
Bitcoin was recognized as taxable property in 2006, so it is absolutely an illusion that Bitcoin is not subject to legal regulations. Many countries have also begun to actively formulate laws and regulations related to virtual currencies. For example, Japan in April 2017
The Payment Services Amendment Bill was signed in March, legalizing Bitcoin and strengthening regulatory procedures.

Question 4: Does Bitcoin waste energy?

Bitcoin miners need to consume a lot of electricity to mine Bitcoin to calculate the encryption puzzle of the blockchain. Some reports indicate that the energy consumed by a Bitcoin transaction is as much as 3
Weekly households use as much electricity, and some even believe that Bitcoin will use up all the world’s electricity within a few years.
Regarding the argument of wasting energy, we should also know that although the current currency does not seem to consume much energy, some hidden costs have not been calculated. For example, the custodians employed by banks also consume a lot of manpower and material resources.
However, these are seen as necessary costs of the financial system and not as waste. In contrast, the energy consumed by Bitcoin is also necessary to maintain this distributed system.
The best-case scenario, of course, would be to find a way to keep Bitcoin transactions running that doesn’t require so much energy, or to have a greener cryptocurrency replace it.
But until then, this energy is a necessary expense for using Bitcoin.

Question 5: Will Bitcoin replace credit cards and cash?

Many Bitcoin supporters believe that Bitcoin will one day become the dominant payment method, and that old cash and credit cards will become a thing of the past. But in fact, Bitcoin currently does not have the conditions to become a universal payment solution.

The biggest problem is the transaction processing speed. The current design allows Bitcoin to only process a few transactions per second, which is far less than the tens of thousands of transactions that the credit card network can handle, let alone the large number of transactions that are carried out every minute and every second in various regions. Cash transaction.
Although the Bitcoin community has plans to improve transaction processing capabilities, it has not yet reached an effective consensus. In addition, due to the limitations of the blockchain characteristics, Bitcoin transactions will not take effect immediately. On average each transaction requires 10
It takes minutes to complete, and when users have additional security requirements, it can even take more than an hour. Although there is still room for improvement in these problems, it is still difficult to determine whether Bitcoin can become a universal payment method, let alone completely replace credit cards and cash.
At least for now, Bitcoin is more like a valuable reserve asset such as gold or treasury bonds than becoming a currency used in daily life.