Possibilities of Bitcoin Deficit

There is no chance for Bitcoin deficit.

Let’s start with facts:

  1. Number of Bitcoins is limited to 21 million (currently we have almost 17 million mined and in circulation)
  2. Every day, certain number of Bitcoins is lost due to various reasons (people forgetting the keys of their wallets, dying without telling about it, etc.)

So, naturally, the number of Bitcoins in circulation (after all of them are mined) will start to drop. But the deficit of Bitcoin will have a natural consequence – increase in value.

It’s logical – if many people want something, some of them will be willing to pay more to get it. And when the sellers realize they can sell their coins for more money, new, higher prices are set.

So, now we have two variables:

1. Higher demand (as Bitcoin adoption rates grow every year)

2. Lower supply (as number of Bitcoins starts to drop)

Simple law of the market applies:

When everyone wants something that only a few have – the price goes up.

Considering the high adoption rate and an exponential growth in the number of Bitcoin transactions in combination with lower mining rewards, lost coins, and other factors that lower supply the only natural path for the price is to go up.

This means that you’re not going to buy a PC for 1 BTC (current price – $1150), but for let’s say 0.01 BTC. Hypothetically speaking, of course. So, the only consequence of the Bitcoin “deficit” will be the use of decimals.



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