Have you ever wondered why Satoshi Nakamoto — the creator of Bitcoin — set the supply of $BTC to be fixed at 21 Million? 👀 We may have the answer! 👇
, also known as sats) would still be worth less than one cent — making it sufficiently divisible even as the world’s primary currency.This max supply rationale was further elaborated in an email between Satoshi and software developer Mike Hearn, where Nakamoto said:
“If Bitcoin remains a small niche, it’ll be worth less per unit than existing currencies. If you imagine it being used for some fraction of world commerce, then there’s only going to be 21 million coins for the whole world, so it would be worth much more per unit.”in 2010 briefly pushed the total supply to over 184 billion. This prompted a forced chain split at block 74,638 to correct an anomalous transaction that minted 184.4 billion BTC as a result of an integer overflow bug.
Much of this supply was released in Bitcoin’s early years when the block reward was set at 50 BTC per block. Threelater, the block reward sits at 6.25 BTC, which are minted approximately every 10 minutes as each new block is added to the blockchain. With a current reward of 6.25 BTC per block, and an average of 144 blocks mined a day, this results in the circulating supply expanding by 900 BTC per day, or 328,500 BTC per year. By dividing this into the current circulating supply, we get the yearly inflation rate — around 1.7%. This is set to fall to under 0.85% in approximately March/April 2024, at which point the block reward will be slashed to just 3.125 BTC.
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