Ben Justman🍷
· 28w
I did a really shit job explaining to my GF the reasons why Bitcoin can only ever have 21 million coins.
Anyone got a simple, succinct explanation for this?
The goal is to have it easy enough that ...
The primary and possibly only purpose for a digital currency like bitcoin is to pay node operators in the native currency for securing the network through verification of transactions on the blockchain. There is no intrinsic value.
There are two methods of payment: transaction fees, paid by the current holders of the digital currency and system rewards of new units or coins being issued.
When the code was written the transaction fees were initially zero and the system reward was coded to be a decreasing amount over a fixed interval of time: resulting in a fixed supply. All to encourage node participants, usage of the network and value creation.
As the first invention of its time the design decision could have resulted in any fixed supply as the 21 Million is the result of starting the block reward at 50 bitcoin along with a fixed length of 210,000 blocks before decreasing the reward by half.
It could have been any fixed supply but 21 Million definitely has a good vibe.
Had Satoshi started with 100 we could have had the answer to the ultimate question of life in 42 Million.
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