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15 Jan, 2018 10:09

With 80% of bitcoin mined, fears rise it will become another fiat currency

With 80% of bitcoin mined, fears rise it will become another fiat currency

As bitcoin gets closer to its 21-million-unit limit, enthusiasts say buying the cryptocurrency will gradually become much harder, making it more valuable. Others say it will stop being decentralized.

Over 16,800,000 BTC have been mined as of January 13. It is impossible to predict when all the 21 million will have been mined. Some are saying that it can be done in five years, others argue that will not happen in the next 100 years, as mining will become more difficult.

Originally, 50 bitcoins were earned as a reward for mining a block. It then dropped to 25 bitcoins, and then to 12.5 bitcoins. In 2020, it will fall to 6.25 bitcoins, making mining unprofitable.

Once all 21 million bitcoins have been mined, supply cannot grow — regardless of growing demand. Some people will lose access to their electronic wallets, making supply even smaller. By contrast, cryptocurrency ripple allows miners to create a maximum of 100 billion tokens.

Blockchain-analysis company Chainalysis has estimated that 2.78 million to 3.79 million bitcoins worth up to $50 billion at current prices have already been lost forever. Bitcoin enthusiasts have said this will result in a rapid surge in prices, to levels of up to $100,000 per token.

Critics say that stockpiles of inactive coins exist, which belong to the mysterious person or group who founded bitcoin – Satoshi Nakamoto. It is possible that these inactive bitcoins will be used to “regulate” the market like fiat money, with Satoshi Nakamoto acting like a central bank.

On Monday, bitcoin was trading at $13,780 – more than 30 percent below its $20,000 record high. Bitcoin has also been losing its dominance in the cryptocurrency market, of which it now holds a 33-percent share – down from the 85 percent it held last year.

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