CommonLounge Archive

Supply of Bitcoin

October 04, 2017

The supply of bitcoin is capped in the long run.

Bitcoin halves the block reward every 210,000 blocks and stops block rewards entirely after 21 million coins have been mined, in order to keep the supply of the currency relatively fixed in the long run. The reasoning here is that, while inflation is good in the short-term because it serves as a distribution mechanism for the coin and incentivizes more people to participate in validating the blocks, in the long run, after the currency is diffused, the incentive is no longer needed.

There are lots of arguments for and against inflationary features of coins, and some other coins have chosen to implement different inflationary structures, but this was the choice bitcoin in particular made.

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