Topic: 21 million cap (Read 21470 times)

Screencapped and added to flashdrive.

Ramen, brother.

May you be touched by his noodlely appendage.

And here I thought it was because when you divide the starting number of coins generated by the number of blocks before the coins halve and then multiply by the current recommended transaction fee you get the answer to life, the universe, and everything:

(210,000 / 50) * 0.01 = 42

Ah, that makes more sense now.

The end total was probably also given some consideration. If an exact number of blocks for 4 years was used, the result would be some odd number:
http://blockexplorer.com/q/changeparams?interval=204480&precision=8&subsidy=50
You'd have to say that the amount of BTC will never go beyond 20.5 million in that case, which doesn't have the same ring to it.

No.  The number comes from the combinations of the initial block reward (50 coins), the target blocks per hour (6) and the halving period (4 years).  There will be 10.5 million created in the first four year period, and then the reward will be halved while all other metrics remain the same.  As the reward continues to half again with each four year period, the total number of coins issued will trend toward the mathmatical limit (as in a logrithmic) of 21 million.  The numbers that define the outcomes are the initial reward, the target block interval, and the halving term.  All of these were design decisions that resulted in the outcome of 21 million, not the other way around.  The interval could have been 9 minutes, or 12, or anything; same with the halving period or the initial reward.  The interval needs to occur quick enough to verify transactions within a rational amount of time, and be long enough for a huge future bitcoin network to propagate transactions and blocks without significant latency issues; but why 10 minutes and not 6 or 15?  Mostly it was an arbitrary design decision, and 6 or 15 or 525 seconds or anything else would have worked.  The same is true for the initial block reward, why a round decimal and not a round binary, such as 64 or 128?  Why 50 and not 100?  Why an even four years and not 3, 5 or a moving term?  (i.e. why half only the reward?  why not two-thirds of the reward and two-thirds of the halving term?  too complex?)  In the end, someone had to make decisions before this all began, and their merits are arguable, but in the end they are still arbitrary.

210,000 comes from 10 minutes, 4 years, and 50BTC/block. Those are a little less strange imo. Only the block award is arbitrary, but 50 feels nice to me.

edit: arbitrary is the wrong word. I mean that 10 minutes can be chosen for a reason and so can 4 years.

210,000 is an equally strange number, other than being exactly 1% of 21 million.

The rate of Bitcoin adoption is pretty key, too. I suspect that the rate of deflation will decrease with the rate of newcomers over time.

0.001 USD is called a mill.  It did find some use early on in the history of America, and it still can be found in American gasoline refilling stations (where the gasoline price shows an additional 9 mills per gallon).  It also applies to taxes where sometimes taxation rates are set in terms of a number of mills per thousand dollars of value.

Considering that the penny is now threatened with extinction due to inflation, it is obviously a seldom used denomination.  If the dollar ever went deflationary again over a prolonged period of time it might be used again, but that wouldn't happen as long as the Federal Reserve Bank is in charge of monetary policy in relation to the U.S. Dollar.

Exactly. It may be on the school curriculum, but most people have no interest in, or a need to use, scientific notation. Or any numbers outside of what they have to deal with in their daily life. And what you don't use, you lose.

If bitcoin wants to be taken seriously by a wider audience, it will need to address this. It is (or will be) one more hurdle to acceptance, and there are more than enough hurdles for an idea like bitcoin to deal with in the first place.


The rate of this change is fairly key to the discussion. If the change from bitcoins to milli-bitcoins happens over a couple of generations, fine. If it happens in the space of 10 years, that's a problem.

People need to be able to compare prices over time to be able to make useful decisions about purchases now compared to the past, and their relative value. Large-scale deflation raises the same problems with this, and with menu costs, as large-scale inflation does.

I suspect that Satoshi started with an initial per-block reward of 50 BTC which cuts in half every 4 years (210,000 blocks).  The consequence was 21 million coins over time.  As mentioned above, the top limit doesn't really matter, but using psychologically convenient numbers when the system bootstraps probably does.

No, I meant exactly 0.001 USD. And it is not a problem because you can sell 10 pieces for 1 cent.

Did you mean 0.01 USD?  Because many would have a problem if they saw a single item priced at a tenth of a cent.  But as FatherMcGruder said, people will likely adapt to a common nomenclature over time. I still think 21 million was an odd choice, though.

1 BTC ≈ 1 USD now. Does someone have any problems with the 0.001 USD now?
I think not, because you can always sell enough goods to get at least 0.01 USD.
And, by the way, if bitcoin would cost too much, we can always move the point.

Millibitcoins
Microbitcoins
Nanobitcoins
Picobitcoins

I don't see an issue ... maybe just a small advantage for the scientifically literate who understand what the those things actually mean.

Bitcoin cent is kind of a mouthful ... centibitcoins or bitcents?

then it could get messy but still decipherful ... millibitcents, microbitcents, etc ... trying to know what terminology people will use for their monetary divisions or numbering is futile. Look at the UK billion and the US billion ... and how many people on the street even understand what a billion is .... they hear it but  ....?

Well, I guess anyone who is incapable of learning a few prefixes does not have much economic value anyway.  So I don't mind if these people don't use bitcoin.

PS.  If I ask my mother what scientific notation is, she will obviously say she has no idea.  But if I ask her how many millimeters there are in on meter, I'm pretty sure she'll have to give it about 10 seconds thought, but hopefully she'll come out with the right answer.

Americans used to describe their currency in cents. Then as it inflated, people came to refer to dollars, Benjamins, and grands. Same thing with Bitcoin, except the trends will follow deflation.

I learned a lot of crap in school and retained it only to the next test.  Ask your mother if she knows what scientific notation is.