Bitcoin's supply: halvings and the 21 million cap

There will never be more than 21 million bitcoin. New coins are released on a schedule written into the code, and the release rate is cut in half about every four years. This lesson explains the schedule and what it does and does not mean.

A fixed schedule

New bitcoin is created only as the reward miners earn for adding a block. In 2009 that reward was 50 bitcoin per block. Every 210,000 blocks, about four years, it is cut in half. The event is called a halving.

Why the total stops at 21 million

Halving the reward again and again makes the total approach a limit just under 21 million. More than 20 million bitcoin, over 95% of that total, had been mined by October 2026. The rest is released more and more slowly, and the last fraction is expected around the year 2140.

Smaller units

One bitcoin divides into 100 million units called satoshis, or sats. You never need to buy a whole bitcoin.

What happens to miners

As the reward shrinks, miners depend more on transaction fees. After the final coin is mined, fees will be their only income. Whether fees alone will pay for enough security is an open question. A 2016 Princeton study found that fee-only rewards could make mining less stable.

What scarcity does and does not mean

A fixed supply means nobody can create extra bitcoin to dilute the coins that exist. The cap could only change if nearly all of Bitcoin's users agreed to new rules, and holders have every reason to refuse.

A fixed supply does not guarantee a price. Price also depends on demand, and demand for bitcoin has swung widely. Bitcoin's price reached new highs in the period after earlier halvings, but the schedule is public and the past is not a promise.

One more detail: coins whose keys are lost can never be spent. The amount people can use is lower than the amount mined.