Bitcoin’s Supply is Limited
Basic economics suggests that insatiable demand results in higher and higher prices, but what if we add into the mix limited supply? The prices are going to go through the roof. That is the situation with Bitcoin. The beauty of this new virtual currency is that supply is limited. There will be no printing of funny money. What’s available is available. At the moment there are some 12 million Bitcoins in circulation.
How is a Bitcoin created? Without getting too technical, there are complex formulas that miners can use to unleash new Bitcoins on the market. The max number of Bitcoins that can be harvested is 21 million. The race then is on for miners and hoarders alike to accumulate Bitcoins. That puts even more pressure on the price as new buyers will be forced to bid up the price in order to acquire what can only be viewed as a rare virtual currency.