why 21 million?

[Disruptivas]

Bitcoin and Satoshi Nakamoto has several secrets and questions still open. One of the questions that intrigues me the most is why 21 million? It could be 20 or 22. Where did that number come from?

I've read several theories, but none convinced me. Did Satoshi ever explain this in any post or email?

[1714954393]

1714954393

[1714954393]

1714954393

[hZti]

This explains it quiete well: https://thenextweb.com/news/heres-why-satoshi-nakamoto-set-bitcoin-supply-limit-to-21-million . The point is that the block reward will be cut in halve and started with an even number. So there were a few numbers to choose but not every number like for example 20 Million would be possible.

[BitMaxz]

There are lots of threads with the same question/topic why don't you use the search button above to find them?
Since you are here for almost 2 years and you are already a Sr. member you should already know how to use search button.

Anyway, check these threads below to get an idea about your topic.

- https://bitcointalk.org/index.php?topic=1090560.0
- https://bitcointalk.org/index.php?topic=5206704.0
- https://bitcointalk.org/index.php?topic=5337252.0

[franky1]

he didnt choose 21m btc and then calculate backwards that over X years backwards means the base genesis has to release 50btc

instead he looked at a base coin to release at genesis FIRST..  that was not too many coins but also not too few that it would stop halving so soon. or not to few to not be tempted/not seem worthy of collecting if there wasnt a large enough userbase to form competition around the world

he wanted a number that would half every period. but didnt want some random number.
he also didnt want the binary value to be large where by it would take up lots of bytes
so he decided on 33 as the starting genesis allotment that would, by removing 1 bit per halving
mean 33 halving sessions..

which would be at max
111111111111111111111111111111111 = 8589934591 units iniitially which seemed alot per block..
(so when doing the 'scarcity' illusion of dividing units(sats) by 100m to make it a system of measure 'buckets/allotments' called btc at 85.89934591btc)

this 85.88934591 still wouldnt be a nice round number and would cause sat decimal issues of rounding instantly at first halving
(halving the 1 sat =0.5.. halving the 9sat=4.5   halving the 5 sat=2.5)

so had to find a nice number that would not need to be rounded at sat level for many halving sessions atleast

he knew that deflation meant more value per coin so he had to do a x100,000,000 of a base binary measured unit, to start an allotment as looking reasonably small. but allow alot of allotment decimals to allow share-ability when value went up, but without really breaking the decimal of the base binary amount(sat) for a while.


so he then looked for nicer rounded numbers to start.. and settled on 5000000000sat and dividing it by 100m for nice small allotment bucket measure that seemed scarce
by which when doing the other rules of the 210k block having worked out as 2,099,999,997,690,000sat
after ~133 years (just under 21m btc)

which all sounded more reasonable..
..

(my personal theories of his other thoughts he might have had when deciding the numbers)
he could have started with the 32bits and using binary of.. 5000000000sat BUT called a btc an allotment of just 10m sats
meaning releasing 500btc a block initially. but then that doesnt seem as scarce/valued in the beginning (near 210m btc allotments limit)
it would also be limiting the divisions later by 10x when value was higher in 133 years. so having it as a btc allotment with 8 decimals instead of 7. seemed logical for both initial release and long term share-ability of divisions later

he also could have made the btc allotment 9 decimals releasing only 5btc per block. but after the amount of blocks it would only be under 2.1m coin released which meant that people would think there was not enough whole coins for a wide enough population to be interested in(only 1.05m coins released in first 4 years), in the beginning.(not enough whole allotments for wide adoption)
so the near 21m made it seem early on, enough allotments of btc to spread around a nice multi million user base(10.5 in first 4 years). which can then divide down to more users only holding smaller subsets as value grows.

[cryptoaddictchie]

Bitcoin and Satoshi Nakamoto has several secrets and questions still open. One of the questions that intrigues me the most is why 21 million? It could be 20 or 22. Where did that number come from?

It did some reason dude. For sure he is a smart guy and came up with such technicalities to explain the tokenomics based on the technology and how this will be used on an ecosystem called blockchain.

I think franky1 explanation is good enough on how Satoshi come up with 21 million coins for this bitcoin project.

[otrkid1970]

There are lots of threads with the same question/topic why don't you use the search button above to find them?
Since you are here for almost 2 years and you are already a Sr. member you should already know how to use search button.

Anyway, check these threads below to get an idea about your topic.

- https://bitcointalk.org/index.php?topic=1090560.0
- https://bitcointalk.org/index.php?topic=5206704.0
- https://bitcointalk.org/index.php?topic=5337252.0

He asked an honest Question why be a smartass? Simply DON'T reply if his Q triggers you.   DICK

[tranthidung]

• How is the 21 million Bitcoin cap defined and enforced? (Jameson Lopp's blog)
• Controlled supply (Bitcoin Wiki)

There is money supply replacement theory. In one of satoshi's email, he explained why he chose the supply cap. 21M is a rough number. The exact total supply of Bitcoin is 20999999.9769 BTC

• Satoshi Reply to Mike Hearn

From: Satoshi Nakamoto <satoshin@gmx.com>
Date: Sun, Apr 12, 2022 at 10:44 PM
To: Mike Hearn <mike@plan99.net>
Hi Mike,

I’m glad to answer any questions you have. If I get time, I ought to write a FAQ to supplement the paper.

There is only one global chain.

The existing Visa credit card network processes about 15 million Internet purchases per day worldwide. Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost. It never really hits a scale ceiling. If you’re interested, I can go over the ways it would cope with extreme size.

By Moore’s Law, we can expect hardware speed to be 10 times faster in 5 years and 100 times faster in 10. Even if Bitcoin grows at crazy adoption rates, I think computer speeds will stay ahead of the number of transactions.

I don’t anticipate that fees will be needed anytime soon, but if it becomes too burdensome to run a node, it is possible to run a node that only processes transactions that include a transaction fee. The owner of the node would decide the minimum fee they’ll accept. Right now, such a node would get nothing, because nobody includes a fee, but if enough nodes did that, then users would get faster acceptance if they include a fee, or slower if they don’t. The fee the market would settle on should be minimal. If a node requires a higher fee, that node would be passing up all transactions with lower fees. It could do more volume and probably make more money by processing as many paying transactions as it can. The transition is not controlled by some human in charge of the system though, just individuals reacting on their own to market forces.

Eventually, most nodes may be run by specialists with multiple GPU cards. For now, it’s nice that anyone with a PC can play without worrying about what video card they have, and hopefully it’ll stay that way for a while. More computers are shipping with fairly decent GPUs these days, so maybe later we’ll transition to that.

A key aspect of Bitcoin is that the security of the network grows as the size of the network and the amount of value that needs to be protected grows. The down side is that it’s vulnerable at the beginning when it’s small, although the value that could be stolen should always be smaller than the amount of effort required to steal it. If someone has other motives to prove a point, they’ll just be proving a point I already concede.

My choice for the number of coins and distribution schedule was an educated guess. It was a difficult choice, because once the network is going it’s locked in and we’re stuck with it. I wanted to pick something that would make prices similar to existing currencies, but without knowing the future, that’s very hard. I ended up picking something in the middle. 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. Values are 64-bit integers with 8 decimal places, so 1 coin is represented internally as 100000000. There’s plenty of granularity if typical prices become small. For example, if 0.001 is worth 1 Euro, then it might be easier to change where the decimal point is displayed, so if you had 1 Bitcoin it’s now displayed as 1000, and 0.001 is displayed as 1.

Ripple is interesting in that it’s the only other system that does something with trust besides concentrate it into a central server.

Satoshi

[dansus021]

we dont really know what satoshi purpose 21 million max. but as far as i know is for the inflation so there is no more than 21M and we can expect the higher price fiat in other hand is unlimited supply like eth did but eth have burning mechanism so we know the circulating supply.

This explains it quiete well: https://thenextweb.com/news/heres-why-satoshi-nakamoto-set-bitcoin-supply-limit-to-21-million . The point is that the block reward will be cut in halve and started with an even number. So there were a few numbers to choose but not every number like for example 20 Million would be possible.

What the article said is to the point. and mathematical is really great as well  

[franky1]

the post above in yellow highlight is a short summary. but doesnt explain all the math decisions that went into the summary.

but the main one is. if you change when the halving happens it changes the total coin supply..
each 190k blockheight halving points = ~19m btc
each 200k blockheight halving points = ~20m btc
each 210k blockheight halving points = ~21m btc
each 220k blockheight halving points = ~22m btc
you get the idea

by choosing the 50btc instead of the less uniform near 86 max coins a 32bit binary measure can halve by.
and by chooses every 210k blocks as the halving point are the 2 crucial numbers that created the ~21m btc total supply

[bitmover]

There is money supply replacement theory. In one of satoshi's email, he explained why he chose the supply cap. 21M is a rough number. The exact total supply of Bitcoin is 20999999.9769 BTC

• Satoshi Reply to Mike Hearn

From: Satoshi Nakamoto <satoshin@gmx.com>
Date: Sun, Apr 12, 2022 at 10:44 PM
To: Mike Hearn <mike@plan99.net>
Hi Mike,

....

Ripple is interesting in that it’s the only other system that does something with trust besides concentrate it into a central server.

Satoshi

This is very interesting. First of all the Date (2022?)

And I am impressed that Satoshi is somehow praising Ripple (the company which was founded in 2004, not the cryptocurrency XRP).

Anyway, as I have read in the website you posted we cannot confirm if the email is real, but it is certainly interesting.

he didnt choose 21m btc and then calculate backwards that over X years backwards means the base genesis has to release 50btc

I also agree with this, and it makes sense compared to the email posted above.

He choose convenient numbers, that would do the job the most efficient way possible.

[tranthidung]

This is very interesting. First of all the Date (2022?)

And I am impressed that Satoshi is somehow praising Ripple (the company which was founded in 2004, not the cryptocurrency XRP).

Anyway, as I have read in the website you posted we cannot confirm if the email is real, but it is certainly interesting.

Interesting. I did not notice it because I read it previously and when I made that post, I searched for that page again so did not actually check the date again.

I believe it is a glitch issue or something technically on that website. They are building a new one similar as https://nakamotoinstitute.org/. Maybe they're building something new at a new domain: https://nakamotostudies.org

The year of this email is 2009. It is confirmed by Mike Hear in this forum  

Ian, Satoshi did plan for Bitcoin to compete with PayPal/Visa in traffic volumes. The block size limit was a quick safety hack that was always meant to be removed.

In fact, in the very first email he sent me back in April 2009, he said this:

Hi Mike,

I'm glad to answer any questions you have.  If I get time, I ought to write a FAQ to supplement the paper.

There is only one global chain.

The existing Visa credit card network processes about 15 million Internet purchases per day worldwide.  Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost.  It never really hits a scale ceiling.  If you're interested, I can go over the ways it would cope with extreme size.

By Moore's Law, we can expect hardware speed to be 10 times faster in 5 years and 100 times faster in 10.  Even if Bitcoin grows at crazy adoption rates, I think computer speeds will stay ahead of the number of transactions.

I don't anticipate that fees will be needed anytime soon, but if it becomes too burdensome to run a node, it is possible to run a node that only processes transactions that include a transaction fee.  The owner of the node would decide the minimum fee they'll accept.  Right now, such a node would get nothing, because nobody includes a fee, but if enough nodes did that, then users would get faster acceptance if they include a fee, or slower if they don't.  The fee the market would settle on should be minimal.  If a node requires a higher fee, that node would be passing up all transactions with lower fees.  It could do more volume and probably make more money by processing as many paying transactions as it can.  The transition is not controlled by some human in charge of the system though, just individuals reacting on their own to market forces.

Eventually, most nodes may be run by specialists with multiple GPU cards.  For now, it's nice that anyone with a PC can play without worrying about what video card they have, and hopefully it'll stay that way for a while.  More computers are shipping with fairly decent GPUs these days, so maybe later we'll transition to that.

I found something more interesting

• 17 messages from satoshi to Mike Hearn

[aysg76]

See there are many assumptions that why he choose this number of 21 million bitcoin only with all the halving and last bitcoin till 2140 but I would say he well planned everything in advance and have adequate knowledge of what will be the future circumstances.

The first possible explanation of blocks rewards with total time period also seems reasonable justification to me for this Target :

Calculate the number of blocks per four year cycle:

6 blocks per hour
* 24 hours per day
* 365 days per year
* 4 years per cycle
= 210,240
~= 210,000

Sum all the block reward sizes:

50 + 25 + 12.5 + 6.25 + 3.125 + … = 100

Multiply the two:

210,000 * 100 = 21 million.

Or there could be some other reasons also but i would say keep it the way it is and the things would work fine with complete decentralisation and we still have a century left until we are out of coins.

[franky1]

he didnt choose 21m btc and then calculate backwards that over X years backwards means the base genesis has to release 50btc

I also agree with this, and it makes sense compared to the email posted above.

logic and common sense of decisions plays out as

wanting a currency that deflats(halfs its release amount every so often but not too quick to cause chaos and also not run out of coins once hitting total supply too quick

he chose 33bits where removing one bit off the end per sesion halves the amount of units it converts to in normal human readable numbers meaning 33 halving events.

then the next logic was the halving events should be not weekly or monthly or yearly but ~4 yearly so that after 33 sessions it means it would take over 130years to get to total supply cut off

the next logic decision was the binary conversion to of 33bits was a large number of units
8589934591  which seemed a huge number of units to offer. so decided on the decimal of 8 (/100,000,000)
85.89934591
logic shows the halving would cause issues right from the start of halving a 1 and next session halving a 9. where by some value is lost immediacy by rounding
so decided a more even number to start so chose the 50btc as a nice number

by which point if working out that, the halving at 210k block intervals =21m coins.

it was then logic dictates how fast that would be by realising 210k intervals if 4 years was the goal per interval
would mean 52.5k per year, 2019.27 a fortnight (bad decimal amount(cant have .27 of a block))

logic decision again to put in the 2 week adjustment(difficulty formula) to try to keep it to a nicer round number of 2016 blocks a fortnight, which then calculated down to a block ~10mins which seemed a reasonable amount of hard work time to create a block and send it around a network without causing issues with data broadcast delays between peers

[otrkid1970]

• How is the 21 million Bitcoin cap defined and enforced? (Jameson Lopp's blog)
• Controlled supply (Bitcoin Wiki)

There is money supply replacement theory. In one of satoshi's email, he explained why he chose the supply cap. 21M is a rough number. The exact total supply of Bitcoin is 20999999.9769 BTC

• Satoshi Reply to Mike Hearn

From: Satoshi Nakamoto <satoshin@gmx.com>
Date: Sun, Apr 12, 2022 at 10:44 PM
To: Mike Hearn <mike@plan99.net>
Hi Mike,

I’m glad to answer any questions you have. If I get time, I ought to write a FAQ to supplement the paper.

There is only one global chain.

The existing Visa credit card network processes about 15 million Internet purchases per day worldwide. Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost. It never really hits a scale ceiling. If you’re interested, I can go over the ways it would cope with extreme size.

By Moore’s Law, we can expect hardware speed to be 10 times faster in 5 years and 100 times faster in 10. Even if Bitcoin grows at crazy adoption rates, I think computer speeds will stay ahead of the number of transactions.

I don’t anticipate that fees will be needed anytime soon, but if it becomes too burdensome to run a node, it is possible to run a node that only processes transactions that include a transaction fee. The owner of the node would decide the minimum fee they’ll accept. Right now, such a node would get nothing, because nobody includes a fee, but if enough nodes did that, then users would get faster acceptance if they include a fee, or slower if they don’t. The fee the market would settle on should be minimal. If a node requires a higher fee, that node would be passing up all transactions with lower fees. It could do more volume and probably make more money by processing as many paying transactions as it can. The transition is not controlled by some human in charge of the system though, just individuals reacting on their own to market forces.

Eventually, most nodes may be run by specialists with multiple GPU cards. For now, it’s nice that anyone with a PC can play without worrying about what video card they have, and hopefully it’ll stay that way for a while. More computers are shipping with fairly decent GPUs these days, so maybe later we’ll transition to that.

A key aspect of Bitcoin is that the security of the network grows as the size of the network and the amount of value that needs to be protected grows. The down side is that it’s vulnerable at the beginning when it’s small, although the value that could be stolen should always be smaller than the amount of effort required to steal it. If someone has other motives to prove a point, they’ll just be proving a point I already concede.

My choice for the number of coins and distribution schedule was an educated guess. It was a difficult choice, because once the network is going it’s locked in and we’re stuck with it. I wanted to pick something that would make prices similar to existing currencies, but without knowing the future, that’s very hard. I ended up picking something in the middle. 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. Values are 64-bit integers with 8 decimal places, so 1 coin is represented internally as 100000000. There’s plenty of granularity if typical prices become small. For example, if 0.001 is worth 1 Euro, then it might be easier to change where the decimal point is displayed, so if you had 1 Bitcoin it’s now displayed as 1000, and 0.001 is displayed as 1.

Ripple is interesting in that it’s the only other system that does something with trust besides concentrate it into a central server.

Satoshi

Why is this Email dated Sun, Apr 12, 2022 at 10:44 PM  ?

[odolvlobo]

...

From: Satoshi Nakamoto <satoshin@gmx.com>
Date: Sun, Apr 12, 2022 at 10:44 PM
To: Mike Hearn <mike@plan99.net>
Hi Mike,
...

Why is this Email dated Sun, Apr 12, 2022 at 10:44 PM  ?

That is odd. The same email published elsewhere shows this:

From: Satoshi Nakamoto <satoshin@gmx.com>
Date: Sun, Apr 12, 2009 at 10:44 PM
To: Mike Hearn <mike@plan99.net>
Subject: Re: Questions about BitCoin
 
Hi Mike,
...

[witcher_sense]

Bitcoin and Satoshi Nakamoto has several secrets and questions still open. One of the questions that intrigues me the most is why 21 million? It could be 20 or 22. Where did that number come from?

I've read several theories, but none convinced me. Did Satoshi ever explain this in any post or email?

You have already been presented with several convincing theories of why Satoshi Nakamoto had chosen that specific number as a maximum supply limit for his peer-to-peer electronic cash. tranthidung's post with quotes from Satoshi's correspondence with one of the former bitcoin developers explains pretty much everything. But I wouldn't fully trust what Mark Hearn said or posted about bitcoin because, as we all know, he turned out to be an enemy of censorship-resistant decentralized bitcoin and badically wanted to take control over it. But why Satoshi wanted bitcoin to have a limited total supply in the first place? It may be he was inspired by ideas of Austrian school economists such as Mises or Rothbard, who said that the economy could work well on a limited amount of money, or maybe he merely hadn't found a way to create a smart-enough algorithm to govern the rate of inflation? Who knows... If Satoshi's bitcoin had had an ever-growing total supply, we would have taken it as a given and continued transacting with peer-to-peer electronic cash.