Recently, many people have asked me why Bitcoin is called “digital gold.” In fact, the key lies in its scarcity design. Since its inception, Bitcoin has been capped at 21 million coins. This limit was hardcoded by its creator, Satoshi Nakamoto, in the white paper, and it will never change.

What’s interesting is that this number was not chosen at random; it is based on a mathematical infinite-series algorithm. Satoshi Nakamoto set the block reward to halve every 210,000 blocks (about 4 years), starting from 50 coins. Following this rule, the series 1/2 + 1/4 + 1/8 + 1/16... ultimately converges to a final limit of 21 million. This inflation-control mechanism ensures that Bitcoin cannot be infinitely issued like traditional currencies, thereby protecting its value.

As for the halving cycle, this is a crucial mechanism for Bitcoin. When Bitcoin was first created in 2009, miners received a reward of 50 coins for each block they mined. By November 2012, it was reduced to 25 coins; in July 2016, it was halved again to 12.5 coins; and in May 2020, it dropped to 6.25 coins. The fourth halving already occurred in April 2024, and the current mining reward is 3.125 coins. As the reward keeps getting smaller, the cost of mining rises as well, further reinforcing Bitcoin’s scarcity.

Why does Bitcoin have to be produced through mining? Because Bitcoin uses a fully decentralized ledger system, with no central bank or any institution controlling it from behind. Miners are like the guardians of this network—they verify transactions and record blocks through complex hash algorithms. This process consumes a great deal of computing power, and the difficulty is constantly adjusted. Miners are therefore rewarded with newly issued Bitcoin and transaction fees. This incentive mechanism not only ensures the network’s security, but also allows Bitcoin to circulate steadily.

Interestingly, Bitcoin also has five different units. The largest is Bitcoin itself (BTC). Then come centibit (0.01 BTC), millibit (0.001 BTC), microbit (0.000001 BTC), and the smallest unit called “Satoshi” (0.00000001 BTC). This name comes from the creator Satoshi Nakamoto’s “Satoshi.” As Bitcoin prices fluctuate in markets such as Hong Kong, these units are becoming more and more common in real trading.

So, from Hong Kong to the rest of the world, the reason Bitcoin’s price can maintain a relatively stable long-term value fundamentally comes down to this ingenious scarcity design. Every halving draws market attention because it represents a further reduction in mining rewards. This programmed scarcity is more convincing than any promise.