Recently, someone asked me why Bitcoin is called digital gold. The answer is actually quite simple — it’s scarcity. Bitcoin’s total supply is permanently limited to 21 million coins; this design was written into the code from the very beginning and cannot be changed. This absolute supply cap gives Bitcoin a store-of-value attribute similar to gold, which is also why the price of Bitcoin has been closely watched in Hong Kong and global markets.

When it comes to how Bitcoin is produced, many people think it’s issued out of thin air by some organization, but that’s not true. Bitcoin uses a decentralized blockchain ledger system: anyone can participate, and no central bank or institution can control it. To ensure transaction security, miners need to verify transactions by calculating complex hash algorithms — this is what’s known as mining. Miners trade their computing power for rewards. This both protects the network’s security and is the only way Bitcoin is issued.

When designing Bitcoin, Satoshi Nakamoto used a clever mathematical model — an infinite geometric series. Specifically, every time 210,000 blocks are mined (about 4 years), the mining reward is cut in half. The first 4-year reward is 50 Bitcoin per block; then it becomes 25, then 12.5, then 6.25. If you continue calculating this series, the limiting value comes out exactly to 21 million coins. That’s why the total supply of Bitcoin will not exceed 21 million — it’s not set by people, but a mathematical inevitability.

Let’s look at the history of halvings. When Bitcoin was born on January 3, 2009, the mining reward was 50 Bitcoin. Then the first halving occurred on November 28, 2012, and the reward became 25. The second halving took place on July 9, 2016, dropping it to 12.5. The third halving occurred on May 11, 2020, bringing it to 6.25. Then in April 2024, the fourth halving happened, and the reward is now 3.125 Bitcoin. Each halving event attracts market attention because it directly affects Bitcoin’s supply growth rate.

Over time, mining difficulty has kept increasing. Miners need more powerful computing equipment to stay competitive, which has also led to rising mining costs. But precisely because of this, Bitcoin’s scarcity is truly ensured — not through any policy, but through pure mathematics and economics. This design has given Bitcoin a status similar to that of precious metals across the world, including in the Hong Kong market.

By the way, let’s talk about Bitcoin units. The smallest unit is a Satoshi; 1 Bitcoin equals 100,000,000 Satoshis. Larger units include micro (0.000001 BTC), milli (0.001 BTC), cent (0.01 BTC), and Bitcoin itself. These units are designed to accommodate potential large-scale adoption in the future.

In summary, the reason Bitcoin can become digital gold is that its supply is completely transparent, its mathematical rules cannot be changed, and it will become increasingly difficult to obtain. This kind of scarcity can’t be replicated, and it’s exactly the fundamental reason Bitcoin is able to maintain its value in Hong Kong and worldwide.