Tell me, Borihira!? The world’s most hands-on guide to getting started with cryptocurrency｜ Episode 2: Issuance cap and various cryptocurrencies
FX traders should also be hearing a lot about cryptocurrency news lately. In this feature, for those who are interested but don’t know how to start, professional trader Borihei will explain the basics of cryptocurrency from the very basics. This time, we cover one factor behind Bitcoin’s rise—the issuance cap—and discuss cryptocurrencies other than Bitcoin.
*This article is a reprint/edit of FX攻略.com's June 2018 issue. Please note that the market information written in the text may differ from the current market.
Characters
Borihei (Yazawa Akemi)
Famous for consistently making profits through short-term trading as an FX trader. Later became a leading figure in binary options. He is also well-versed in automated trading systems such as AutoRail, making him a versatile full-time trader. His knowledge of cryptocurrency is also extensive. His son is Yazawa Daemu, a member of the Japan national futsal team.
Katsuya Ozawa
Represented Chiba Prefecture in water polo at national level during high school. After working as a sports trainer and a personal trainer, he is now a businessman. He still plays water polo and also mentors elementary and junior high school students. Hearing that billionaires are rising in cryptocurrency, he could not sit still and entered under Borihei through the FX攻略.com editorial department.
Bitcoin has a fixed issuance limit
BoriheiLet's continue studying cryptocurrencies this month as well.
Ozawa: Thank you! To start, in last month’s lesson we learned that Bitcoin and other coins can be obtained as mining rewards. Will this continue indefinitely?
BoriheiFor mineable cryptocurrencies, the total issuance is basically fixed. For Bitcoin, the issuance cap is 21,000,000 BTC, and it will never increase beyond that.
Ozawa: So it’s finite.
BoriheiYes. As explained last month, unlike yen or dollars, it cannot practically increase indefinitely.
Furthermore, of the total issuance of Bitcoin, about four-fifths has already been mined.
Ozawa: That much already? If only a little more will be issued from here on, the existing supply might increase in value.
BoriheiYes. In that sense, because its reserves are finite, it is sometimes called digital gold.
Ozawa: It really feels like mining, doesn’t it?
BoriheiAlso remember that mining rewards halve at certain intervals. Bitcoin's mining reward halves every 210,000 blocks. This is called halving. The last halving was in 2016, with the next expected around 2020.
Thus, mining gradually decreases, and Bitcoin is expected to be exhausted around the year 2140.
