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Home Cryptocurrency news Bitcoin

Bitcoin Mathematics: Why 21 Million BTC May Have Been Chosen

Tony Spilotro by Tony Spilotro
2 years ago
in Bitcoin, Cryptocurrency news
Reading Time: 3min read
bitcoin btc 21 million supply
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Everything about Bitcoin is heavily steeped in mathematics – defined as the study of quantity, structure, space, and change. Quantity has always been of particular interest to crypto investors and traders – in increasing the quantity of one’s own holdings, and the impact the hard-capped quantity of BTC has on its long-term value.

Recently, a Twitter thread questioned the reasoning behind why the first-ever cryptocurrency’s creator, Satoshi Nakamoto, selected 21 million BTC as the total supply and not another arbitrary number. The answer, like everything else surrounding Bitcoin, can be found in very simple math.

The Not Secret Anymore Formula For Bitcoin’s Hard-Capped Supply

Bitcoin’s hard-capped supply provides it with unique attributes. It gives it a layer of scarcity fiat currencies don’t have, but safe-haven assets like gold are lauded for. It also prevents inflation by never increasing the BTC supply. We can all see why it’s important to Bitcoin’s value, but still – why 21 million BTC?

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Related Reading | Can Ancient Math Predict the Next Bitcoin Top at $220K?

In a detailed and thought-provoking Twitter thread started by Sasha Fleyshman, the trader at Arca – an asset management firm focusing on cryptocurrencies and blockchain – inquires into why Bitcoin’s creator chose 21 million BTC as the total amount of Bitcoin to ever exist. Like most things related to Satoshi, the reason has always remained unknown.

After much discussion, Fleyshman gathered the collective thoughts and based on a simple mathematical formula, may have discovered the reason behind the 21 million BTC supply.

This is offset by what is called a "Difficulty Adjustment", where the 'hash'(random generated number) that is required to solve the block is adjusted – this occurs every 2016 blocks (14 days). So, for all related purposes, 6 blocks/hour is a safe metric to use. pic.twitter.com/4DoS3Uev0f

— Sasha Fleyshman (@ArcaChemist) August 30, 2019

The theory is based on time, mostly. The variables used were hours per day, days per year, years per cycle, and blocks per hour.

Also, hardcoded into Bitcoin, is the fact that it takes roughly ten minutes for each new block to be added to the blockchain. Fleyshman points out that this varies by a few seconds, but is ultimately offset at each “difficulty adjustment” occurring every 14 days.

When you break down four years worth of blocks at six blocks per hour, there are approximately 210,000 total blocks per halving cycle.

At Bitcoin’s next halving, its supply will be cut from 12.5 BTC to 6.25 BTC. Prior to this, the block reward was 25 BTC, and before that, 50 BTC. The sum of all block reward sizes is 100.

Related Reading | Crypto Analyst: Bitcoin Price Could Be Trapped in Tight Range Until Halving

When you multiply 100 with the 210,000 total blocks per halving cycle, you get 21 million BTC. At least that’s according to Fleyshman’s theory, which makes logical sense.

While all the math lines up, it could also just be a coincidence, and the true answer will likely never be known, as Satoshi Nakamoto’s true identity may never be revealed. Until that ever happens, this theory is among the most convincing yet.

Tags: bitcoincryptoSasha FleyshmanSatoshi Nakamototwitter
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a global remote work leader with a decade of award-winning content experience and excellence. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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