Understanding Bitcoin's Fixed Supply
Bitcoin has a hard cap of 21 million coins that will ever exist. This fixed supply is enforced by code and cannot be changed. Unlike fiat currencies that can be printed indefinitely, Bitcoin's scarcity is mathematically guaranteed.
New bitcoins are created through mining. Miners who successfully add a block to the blockchain receive a block reward in newly minted BTC. This reward started at 50 BTC per block in 2009 and halves approximately every 4 years.
Bitcoin Halving Schedule
The halving is a built-in event that reduces the block reward by 50% every 210,000 blocks (roughly every 4 years). This creates a predictable, decreasing inflation rate:
Block Reward = 50 BTC ÷ 2^(era number)- 2009-2012: 50 BTC per block (10,500,000 BTC mined)
- 2012-2016: 25 BTC per block (5,250,000 BTC mined)
- 2016-2020: 12.5 BTC per block (2,625,000 BTC mined)
- 2020-2024: 6.25 BTC per block (1,312,500 BTC mined)
- 2024-2028: 3.125 BTC per block (656,250 BTC mined)
By 2140, all 21 million BTC will have been mined. After that, miners will be compensated solely through transaction fees.
Why 21 Million?
Satoshi Nakamoto chose 21 million as the maximum supply. While the exact reasoning was never explained, this number creates several useful properties:
- Divisibility: With 8 decimal places, there are 2.1 quadrillion satoshis (smallest units) available
- Scarcity: Finite supply creates digital scarcity, similar to gold
- Predictability: Anyone can calculate the exact supply at any point in time
Frequently Asked Questions
How many Bitcoin currently exist?
As of the current block height, approximately 19,700,000 BTC have been mined, representing about 93.8% of the total supply. The exact number increases with each new block mined.
When will all Bitcoin be mined?
The last Bitcoin is expected to be mined around the year 2140. However, over 99% of all Bitcoin will be mined by 2040. The final few satoshis will take decades to mine due to the halving schedule.
How many Bitcoin are lost forever?
Estimates suggest that 3-4 million BTC are lost forever due to lost private keys, forgotten wallets, and coins sent to unspendable addresses. This includes approximately 1 million BTC believed to belong to Satoshi Nakamoto that have never moved.
What is Bitcoin's current inflation rate?
With a block reward of 3.125 BTC and approximately 144 blocks mined per day, about 450.0 new BTC are created daily. This translates to an annual inflation rate of approximately 0.85%, which will continue to decrease with each halving.
Can the 21 million limit be changed?
Technically, the limit could be changed if the majority of Bitcoin nodes agreed to run modified software. However, this would require near-unanimous consensus from miners, node operators, and users. Such a change would effectively create a new cryptocurrency and destroy the properties that make Bitcoin valuable.
What happens when all Bitcoin are mined?
After 2140, miners will no longer receive block rewards. Instead, they'll be incentivized solely by transaction fees. By then, increased adoption and transaction volume should make fee-only mining economically viable.
How is Bitcoin supply different from gold?
While gold is scarce, its total supply is unknown and new gold is constantly being mined. Bitcoin's supply is mathematically fixed - we know exactly how much exists and will ever exist. Bitcoin is the first truly scarce digital asset.
What is stock-to-flow ratio?
Stock-to-flow (S2F) measures scarcity by dividing existing supply by annual production. After the 2024 halving, Bitcoin's S2F ratio exceeded gold's, making it the scarcest asset by this measure. Each halving doubles the S2F ratio.
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