# Why is Bitcoin's total supply limited to 21 million?

By MadMaxx | Psycho Crypto | 17 Apr 2020

Ever thought of it? Why is it that Bitcoin has it's total supply at 21 million coins? Is it Nakamoto's birthday? It is the number of computers he owns? Was it the age when he got the idea? We didn't know. Till now.

I have scoured the web, looking for answers. I read the white paper(again) to see if I could get anything. Zilch.

Eventually, after a few hours of research, I got the answers I was searching for. And I'll share them today.

Just as a side note, I have a giveaway contest running on my blog on my previous post. Check that out if you're interested!

Ok. Let's get started!

At the start of it all, Nakamoto intended for Bitcoin‘s unit prices to eventually align with traditional fiat currencies, so that 0.001 BTC would be worth 1 dollar, for instance. This was to ensure that everyone would be able to get their hands on it at a fair price.

“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,” Nakamoto said.

“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,” he equally added.

Well, turns out that Nakamoto was way off in his prediction. Right now, 0.001BTC is worth up to \$10 US.

However, how did he come up with 21 million? What is the significance?

One solid theory that tries to answer this question involves dissecting Bitcoin‘s distribution model. But the mathematics involves in this method is very, very technical, and I'm truly not up for it.(I gave up once I saw weird symbols)

Many believe that the total supply was inadvertently decided upon when Nakamoto added into the source code the criteria that Bitcoin should add a new block to its chain every 10 minutes, and that the reward paid to miners should be halved every quaternary year.

However, I was able to decipher the real reason using just a little easy to read math.

Number of blocks for a 4 year cycle

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

Addition of all the block  reward sizes

50 + 25 + 12.5 + 6.25 + 3.125 + … = 100( recall that they get cut in half every four years)

Take the product:

210,000 * 100 = 21 million.

There you have it! How they arrived at 21 million.

Thanks for reading, and I hope you learnt something new!