Bitcoin Makes History By Becoming The Scarcest Asset In The World

After the latest halving, the inflation rate of Bitcoin (BTC) has now dropped to 0.83%, lower than that of gold, making BTC the scarcest asset in history. The block rewards for miners have been permanently reduced by half, marking the fourth halving. This adjustment brings the block rewards down to 3.125 BTC compared to the previous amount of 6.25 BTC.

The Importance Of The Halving

The block rewards, the only way new cryptocurrency is minted, are distributed to miners at a near-constant rate, irrespective of mining conditions, thanks to the coded Difficulty concept in the network. When miners increase computing power, the network adjusts the Difficulty to maintain the desired pace of block rewards distribution.

As a result, the Bitcoin supply grows almost continuously between halving events. Consequently, the Issuance, or the amount of cryptocurrency miners produce daily, remains relatively constant. Therefore, the inflation rate of Bitcoin also remains stable within these Halving periods, halving alongside the Issuance during halving events.

Scarcity Matters

Bitcoin is scarce because of its fixed supply limit of 21 million coins, enforced by its protocol. This scarcity is further emphasized by the periodic halving events, which reduce the rate of new coin creation, making a whole Bitcoin increasingly difficult to obtain over time.

With the latest halving, the aforementioned inflation rate has once again decreased. In the last epoch, the annualized inflation rate was about 1.7%, which has now dropped to 0.85% in the new epoch. This achievement places Bitcoin ahead of gold, as its steady-state issuance rate is now lower than the precious metal, marking a historic moment in the comparison of the scarcest assets.