Bitcoin Forum
December 11, 2016, 12:23:23 AM *
News: Latest stable version of Bitcoin Core: 0.13.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Pages: [1] 2 »  All
  Print  
Author Topic: Why IS the bitcoin limited to 21 million?  (Read 9196 times)
Fuzzy
Hero Member
*****
Offline Offline

Activity: 560



View Profile
June 28, 2011, 11:50:31 AM
 #1

Has anyone that is familiar with the source code behind bitcoin figured out why such an arbitrary number was chosen, and why it's so low to begin with?

21 million "scarce" bitcoins, to be the foundation of the new decentralized world currency?

Rumor has it that of the many iterations of bitcoin that the original dev had compiled, this just happened to be the one that snowballed, which explains why there is such a lack of built in security, and why the whole thing is so un-polished, it simply wasn't meant to be the final release/candidate.

Or maybe he got bored and just released whatever he had at the time and figured "let someone else figure it out".

Anyone have any reliable information not otherwise found on Wikipedia?
1481415803
Hero Member
*
Offline Offline

Posts: 1481415803

View Profile Personal Message (Offline)

Ignore
1481415803
Reply with quote  #2

1481415803
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481415803
Hero Member
*
Offline Offline

Posts: 1481415803

View Profile Personal Message (Offline)

Ignore
1481415803
Reply with quote  #2

1481415803
Report to moderator
1481415803
Hero Member
*
Offline Offline

Posts: 1481415803

View Profile Personal Message (Offline)

Ignore
1481415803
Reply with quote  #2

1481415803
Report to moderator
1481415803
Hero Member
*
Offline Offline

Posts: 1481415803

View Profile Personal Message (Offline)

Ignore
1481415803
Reply with quote  #2

1481415803
Report to moderator
Synaesthesia
Member
**
Offline Offline

Activity: 86


View Profile
June 28, 2011, 11:54:40 AM
 #2

Well some arbitrary number had to be chosen. Might as well make it 21 million  Smiley

Remember bitcoins can be divided up into really small fractions!

I deal in Bitcoins: 1ANtpQH5UKKYrd9619VSSibL76uzjZGH1D
cbeast
Donator
Legendary
*
Offline Offline

Activity: 1722

Let's talk governance, lipstick, and pigs.


View Profile
June 28, 2011, 11:56:02 AM
 #3

Yeah, it's likely that it isn't an arbitrary number, but more related to the hashing algorithm chosen as the most efficient and secure.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
rebuilder
Legendary
*
Offline Offline

Activity: 1618



View Profile
June 28, 2011, 11:57:12 AM
 #4

I seem to recall someone quoting Satoshi saying it was "an educated guess".
Whatever that means.

Selling out to advertisers shows you respect neither yourself nor the rest of us.
---------------------------------------------------------------
Too many low-quality posts? Mods not keeping things clean enough? Self-moderated threads let you keep signature spammers and trolls out!
hugolp
Hero Member
*****
Offline Offline

Activity: 742



View Profile
June 28, 2011, 12:06:41 PM
 #5

I seem to recall someone quoting Satoshi saying it was "an educated guess".
Whatever that means.

I think Satoshi has a very black sense of humour.
aeroSpike
Jr. Member
*
Offline Offline

Activity: 42


View Profile
June 28, 2011, 12:36:20 PM
 #6

I also don't understand the reasoning. If you're serious about a currency becoming a major player in the world, you'd at least try to keep the expected single unit value in the same order of magnitude as existing currencies. That's also what was done with the €. Once it exists it will lead its own life and establish natural exchange rate levels, but 21M can never do that.

In any case, we can always correct it. Just create a new currency, which is not minable, but only obtainable by exchanging BTC. The BTC that is exchanged will be lost from the Bitcoin circuit.

You could think of multiple coexisting virtual currencies, each based on its own economical model.
stic.man
Full Member
***
Offline Offline

Activity: 168


View Profile
June 28, 2011, 12:41:51 PM
 #7

move the decimal place, voila! Plenty of coins!
JoelKatz
Legendary
*
Offline Offline

Activity: 1386


Democracy is vulnerable to a 51% attack.


View Profile WWW
June 28, 2011, 12:51:01 PM
 #8

I also don't understand the reasoning. If you're serious about a currency becoming a major player in the world, you'd at least try to keep the expected single unit value in the same order of magnitude as existing currencies. That's also what was done with the €. Once it exists it will lead its own life and establish natural exchange rate levels, but 21M can never do that.

In any case, we can always correct it. Just create a new currency, which is not minable, but only obtainable by exchanging BTC. The BTC that is exchanged will be lost from the Bitcoin circuit.

You could think of multiple coexisting virtual currencies, each based on its own economical model.
We can fix it just by changing the capitalization. Just as 1 calorie is 4.814 joules but 1 Calorie is 4,814 joules, if at some point in the future, 4.814 BitCoins is a fortune, we can call it 4,814 BiTcoins.

I am an employee of Ripple.
1Joe1Katzci1rFcsr9HH7SLuHVnDy2aihZ BM-NBM3FRExVJSJJamV9ccgyWvQfratUHgN
wareen
Millionaire
Hero Member
*****
Offline Offline

Activity: 742

bitcoin-austria.at


View Profile
June 28, 2011, 12:53:58 PM
 #9

The 21 million actually derive from a few other educated guesses, which may be a bit easier to relate to:
- 10 minutes between blocks (network propagation delay doesn't allow this to be much lower)
- 50 BTC per block (that's probably the most arbitrary)
- 4 years between block reward halving (that might come from expectations about the growth-rate of Bitcoin usage)

The 4 years were rounded down to 210.000 blocks probably just to have nicer numbers.

Pity he didn't chose 100 BTC per block to start with, because then we'd have a total of 42 million BTC Wink

I also don't understand the reasoning. If you're serious about a currency becoming a major player in the world, you'd at least try to keep the expected single unit value in the same order of magnitude as existing currencies.
That's not going to work because Bitcoin price is so highly volatile. Even an order of magnitude can be crossed quickly within weeks as we have seen. If you design it around the market capitalization of the whole world economy (or only the part which is accounted in USD) then we'd have to deal with immensely large numbers now or the inflationary phase of Bitcoin would be much much longer.
tymothy
Full Member
***
Offline Offline

Activity: 224


View Profile
June 28, 2011, 01:00:35 PM
 #10

Why 21 million specifically? I want to imagine that it's some nice fraction of the USD value of the money supply of all world currencies (21 trillion? glancing at Wikipedia) give or take. So if the value of the Bitcoin economy was valued at 1-ten thousandth of all existing currencies, it would trade at .01 USD, which looks good enough for it to be on par with the Yen and other currency's exchange rate and give it the potential to be taken seriously as a currency. And one-ten thousanth seemed very possible on the low end, so 21 million was decided. Complete guess.
stic.man
Full Member
***
Offline Offline

Activity: 168


View Profile
June 28, 2011, 01:20:08 PM
 #11

dude loved blackjack
luxgladius
Newbie
*
Offline Offline

Activity: 28


View Profile
June 28, 2011, 01:23:24 PM
 #12

Keep in mind that "a Bitcoin" doesn't exist in any real sense in the code. What does exist is the satoshi (.00000001 BTC). In other words, there's not really such a thing as 21 million Bitcoins. Rather, in the technical sense there are 21x10^6*10^8=2.1x10^15 = 2.1 quadrillion satoshis. In comparison, according to Google, the world GDP is about $56 trillion, which is to say about 5.6 quadrillion pennies. (Yes, I know the whole world GDP is not actually measured in dollars, but go with me here.) So really, it's not that ridiculous a level of volume.
phatsphere
Hero Member
*****
Offline Offline

Activity: 739


View Profile
June 28, 2011, 01:25:54 PM
 #13

21M is not a hard limit where the supply will suddenly stop. it's a limit process and the 21M will never actually be reached! therefore, this is somehow mathematically equivalent to an infinite supply ... thank's to the number of decimal digits, it's also no problem at all.
koin
Legendary
*
Offline Offline

Activity: 874


View Profile
June 28, 2011, 01:28:37 PM
 #14

Has anyone that is familiar with the source code behind bitcoin figured out why such an arbitrary number was chosen, and why it's so low to begin with?

a little over a year ago one bitcoin was worth just $0.006   (see laszlo's pizza as evidence)

here's why that is relevant:

unfortunately most people don't grasp the basics.  ask someone around you this question:
  right now general motors stock (nyse:gm) is trading at $30 a share
  ford (nyse:f)  is trading at $14 a share.
  which company is "better" (or "worth more").

if the answer comes back gm, now you know why 21 million bitcoins was the perfect number.  

notice when bitcoin's "tipping" point started.  about the time it hit parity with the dollar.  too many people think bitcoin is superior because it trades more than a dollar.  not that i don't agree bitcoin is superior, but that comparative value should hardly be a factor.

(incidentally, ford's market cap at $51 billion is greater than gm's at $47 billiion.  but that doesn't matter, as the only correct answer to the "which is better" question is "don't know, how many shares are there?")
luxgladius
Newbie
*
Offline Offline

Activity: 28


View Profile
June 28, 2011, 01:40:51 PM
 #15

21M is not a hard limit where the supply will suddenly stop. it's a limit process and the 21M will never actually be reached! therefore, this is somehow mathematically equivalent to an infinite supply ... thank's to the number of decimal digits, it's also no problem at all.

Not quite accurate. The 50 BTC reward figure divides by two every 210,000 blocks (about four years, depending on network growth). Let's see, 50 BTC = 5*10*10^8 satoshi = 5^10 * 2^9. The division is performed by bitshifting, so the 5s are really identical to 4s or 2^2 for these purposes, so all together 2^29. So the fee will entirely disappear in 30 cycles of 210,000 blocks, or about 120 years.[/nitpick]
spruce
Full Member
***
Offline Offline

Activity: 140


View Profile
June 28, 2011, 01:41:07 PM
 #16

Why Satoshi chose 21? Dunno. Could be as explained above. But this is interesting: http://www.ridingthebeast.com/numbers/nu21.php

Includes things like

  • Number of the perfection by excellence, 3 x 7, according to the Bible.
  • Symbol representing the unknown superiors or the great spiritual Masters of the humanity.
DamienBlack
Jr. Member
*
Offline Offline

Activity: 56


View Profile
June 28, 2011, 02:49:59 PM
 #17

21M is not a hard limit where the supply will suddenly stop. it's a limit process and the 21M will never actually be reached! therefore, this is somehow mathematically equivalent to an infinite supply ... thank's to the number of decimal digits, it's also no problem at all.

Not quite accurate. The 50 BTC reward figure divides by two every 210,000 blocks (about four years, depending on network growth). Let's see, 50 BTC = 5*10*10^8 satoshi = 5^10 * 2^9. The division is performed by bitshifting, so the 5s are really identical to 4s or 2^2 for these purposes, so all together 2^29. So the fee will entirely disappear in 30 cycles of 210,000 blocks, or about 120 years.[/nitpick]

In 120 years (assuming bitcoins are still around) it is possible that the system has been extended to include more decimals. In that case it might make sense to continue the rewards at increasingly small values.

I trade bitcoin options at https://bitoption.org/ ... Join me.
I play poker at https://betco.in/ ... Join me.
Support the bitcoin economy, what do you do?
Tips: 1NfXhiTFEdKQTdLy49s6DYAP1K7MeFWyao
finnthecelt
Full Member
***
Offline Offline

Activity: 140


View Profile
June 28, 2011, 05:17:29 PM
 #18

It's easy, all you have to do is google it....


Search Results

Immigration increases Australian population - 21,000,000

Mousepotato
Hero Member
*****
Offline Offline

Activity: 896


Seal Cub Clubbing Club


View Profile
June 28, 2011, 05:39:19 PM
 #19

This got me to thinking... given the total pool of money in the world, if everybody suddenly ditched their currency (dollars, yen, euro, whatever) and adopted BTC, how much would 1 BTC be worth in your native currency?

Mousepotato
TraderTimm
Legendary
*
Offline Offline

Activity: 1652



View Profile
June 28, 2011, 06:45:27 PM
 #20

I would've gone with '42', in tribute to Douglas Adams Smiley

fortitudinem multis - catenum regit omnia
Pages: [1] 2 »  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!