Bitcoin has a finite amount that can be produced, l.e. supply is limited, and this amount is capped at 21 million coins. There is no such thing as the government printing more money when it comes to bitcoin.Lol.
What this implies is that after the 21 million coins has been mined, no further ones can be mined telling us that once this happens Inflation which is the " middlename" of normal Currencies would have but a very minor grip on Bitcoins. This is just a simple case of Supply and demand in relation with Inflation.
When Bitcoin was first launched in January 3 2009, it was set to release 50 bitcoins to miners every 10 minutes(estimated time for Proof of Work).
Every four years, the code halves, meaning that the released coins to miners divides by half. So, on November 28, 2012, the coins released fell from 50 to 25. Then on July 9, 2016, it halved again, falling to 12.5 coins released every 10 minutes.
Interesting right, but now there is something most of us miss, now when this happens there is shortage in supply and when this happens prices go up. Okay we know this but why is it so significant? The next halving event is going to happen May 25, 2020. Both times bitcoin halved in the past the price of bitcoin rose dramatically the previous year. Just looking at the year before the last half, we see bitcoin rose from $220 to $770, that’s a 250% return. The time before that bitcoin price rose from $3.30 to $11.50, that’s a 248% return.
Giving this supply-demand concept coupled with the way things are and how Cryptocurrency is being applied in mainstream a resulting Decrease in the supply available of Bitcoin and increasing demand of its usage may just send the prices over the roof.
