Bitcoin’s scarce supply is on its way to becoming even more limited, as the 17 millionth coin is likely to be mined in the coming day.

Data from Blockchain.info shows the development, which would mark another milestone for the world’s first and largest cryptocurrency, wherein only 21 million Bitcoins can ever be mined.

Looking back, the first million-Bitcoin market that was crossed in mid-2016 is perhaps interesting as another reminder of the technology’s computer science advancement, which is the idea of digital scarcity created and enabled by shared public software.

Put simply, Bitcoin’s code, which has since been replicated and adapted innumerable times by startup cryptocurrencies, ensures that only a specific number of Bitcoins are introduced to its economy. Miners, those who own and operate the hardware that is used to track Bitcoin’s transactions are rewarded with this scarce data each time they add new entries to the official blockchain record.

At the same time, variability is still present in the process.

In fact, nobody can accurately predict when and which machine will mine the 17^th million Bitcoin, partly because of minute variances that are meant to keep the software in sync throughout the globe. However, there still exists relative predictability. Each bitcoin block produces 12.5 new Bitcoins, and since blocks occur about every 10 minutes, nearly 1,800 new Bitcoins are created every day.

As such, it’s perhaps wise to view this event as a “psychological barrier” that is interpreted differently by different communities within the Bitcoin space, or at least that’s what Tetras Capital founding partner Alex Sunnarborg has said.

Speaking to CoinDesk, Sunnarborg stressed that another way to interpret the result is that 80% of all the Bitcoins that will be created have already been mined, which is to say that only about a fifth of the eventual supply remains for miners and future buyers.

Others see the milestone as an event to be marked by appreciation of the technology and its achievements.

"I think it is awesome," Tim Draper, the venture capitalist who bought millions of Bitcoins seized by the U.S. government at auction in 2014, said of the coming milestone.

He said: “I would bet the founders wouldn't have imagined how important bitcoin would become in their wildest dreams.”

Multiplicity of interpretations

Meanwhile, others sought to use this as an opportunity to educate the masses as to the features of Bitcoin and cryptocurrencies in general.

For example, unless all humans operating the machines were to suddenly decide to make a change on the blockchain network, there is no way to ever introduce more Bitcoin into the system. This underlines the technical achievement of introducing scarcity in a digital economy, mimicking other naturally occurring assets like Gold or Silver.

In this way, readers of Austrian economics who bought into Bitcoin early were quick to realise the value of the feature, perhaps even to the extent where the term “cryptocurrency” was eventually invented as a result.

Trace Meyer, one of this group’s most vocal members, summed up the philosophy in a recent tweet, where she argued that governments might look to curb Bitcoin owners from keeping the asset in the future.

"Increasing money supply is a means to confiscate through inflation which is a form of taxation without representation or due process of law," he wrote.

The “mining” analogy also lends itself to the process of acquiring gold too, further compounding the Bitcoin-asset perception. Instead of being issued by a central bank, Bitcoin is created through its network of blockchain maintenance. When a miner unlocks a valid hash for recent transactions, solving the protocol puzzle, s/he is rewarded with a “coinbase transaction,” with Bitcoin being credited to the account or account pool.

The Bitcoin supply curve

When Bitcoin’s Satoshi Nakamoto mined the first block on January 3^rd 2009, he subsequently created the first 50 Bitcoins. This reward remained constant for another 209,999 blocks, when the first “halvening,” much like isotopic decay, or reduction in rewards took place.

Every 210,000 blocks, according to a hard-coded schedule, the network reduces the block reward by 50%. Following the most recent “halvening”, in July 2016, the reward is 12.5 Bitcoin. This means that only 4 million Bitcoins are left to mine. However, as the halvenings continue to be cut in half, the rate of monetary inflation, i.e. supply growth, slows with it.

This creates an exponential curve as demonstrated below by BashCo, which shows the total supply in blue against its rate of monetary inflation in orange.

Assuming the bitcoin protocol remains unaltered, such that a new block is mined every 10 minutes, the last new bitcoin will not be mined until May 2140.

Another 120 years of Bitcoin

This brings us to the realisation that Bitcoin is programmed to run for a very, very long time. Lead infrastructure engineer at wallet provider Casa spoke to CoinDesk about the relatively early period the currency still finds itself in.

He said: "While 17 million BTC may sound like a lot, it's incredibly scarce - there won't even be enough for every current millionaire to own a whole bitcoin. Thankfully, each bitcoin is divisible into 100 million satoshis, thus there will always be plenty to go around!"

That said, there are some notable quirks with the software.

For starters, Bitcoin will never reach 21 million units as the total supply will never reach exactly 21 million due to exponential halvening.

Further, Bitcoin will not stop running once those elusive 21 million Bitcoins are mined – to the extent that is possible. At this point, miners should be remunerated via transaction fees which they already collect. Though some scientists have found this a contentious issues and debate whether it would actually work in practice.

So with several questions left unanswered, the 17 million event serves as another reminder of how far the first Cryptocurrency has come, and how much more further it has yet to go.

As long-time developer Adam Back says: “Another million down, four more to go.”