Why will there never be more than 21 million BTC?

When choosing the number, did Satoshi consider that 21 “is the smallest positive natural number for which there exist pairs of squares with different positive edge lengths that can be combined to form a square?”. Or was the pseudonymous founder of Bitcoin aware of the symbolism that esoteric circles attribute to 21 – among other things as the number of completion? Or, as is so often the case in life and at crime scenes, did a co-worker’s “coincidence” play a role?

In fact, there is no mention of a 21 million limit in the Bitcoin whitepaper. It wasn’t until the mail in which Satoshi published the Bitcoin white paper that the 21 million became official:

The total mintage will be 21,000,000 coins. It will be distributed to network nodes as they form blocks, with the amount halving every four years
every 4 years.

the first 4 years: 10,500,000 pieces
the next 4 years: 5,250,000 pieces
next 4 years: 2,625,000 coins
the next 4 years: 1,312,500 pieces

When this is phased out, the system can support transaction fees if necessary. It is based on open competition and there will likely always be nodes willing to process transactions for free.

Satoshi Nakamoto, January 8, 2009

So why exactly 21 million? As you can see in the email traffic between Satoshi and Mike Hearn, another bitcoin developer from the very beginning, the number has not a metaphysical but a pragmatic background:

My choice for the number of parts and distribution plan was based on an estimate. It was a tough decision because once the network is up and running it is fixed and we have to live with it. I wanted to choose something where the rates are similar to existing currencies, but without knowing the future, it’s very difficult.

Satoshi Nakamoto to Mike Hearn, April 12, 2009

Satoshi was looking for the middle ground: whether Bitcoin should remain a niche or become a big hit, the limit should allow for not too large numbers in either case. Sathoshi explains the math to Mike Hearn like this:

If you imagine that [Bitcoin] used for only a fraction of world trade, then there will only be 21 million pieces for the whole world, so one unit would be worth much more. Values ​​are 64-bit integers with 8 decimal places, so 1 coin is internally represented as 100000000. There is a lot of granularity when typical prices get small. For example if 0.001 [Bitcoin] is worth 1 euro, it might be easier to change the position of the decimal point.

Satoshi Nakamoto to Mike Hearn, April 12, 2009

21 million: Exactly

Maybe it wasn’t the 21st either millions, but the 50 BTC per block – in line with the targeted block time of 10 minutes – at the beginning of the considerations. Because the 21 million is also a mathematical consequence. It is obtained by multiplying the number of blocks produced (210,000 per year) by the sum of the rewards divided by two (50 + 25 + 12.5 + … 0 ≈ 100). The question remains as to which came first – the limit or the mining protocol.

When is the last Bitcoin Halving – and what happens next?

First of all: despite all the advances in medicine, it is unlikely that the kind reader will attend the last halving: because it will – from today – take place around the year 2140. So one crypto world where the last bitcoin was “mined” is Terra Incognita. In this scenario, transaction fees are the only source of income for miners. For this reason, there were early considerations to increase the block size in order to accommodate more transactions (and therefore more fees) in a block. The block size dispute has been with Bitcoin since the very beginning and has already resulted in several spin-offs (hard forks).


This article was previously published in October 2020. Before being republished, it was reviewed and adjusted accordingly.

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