The 21 million Bitcoin limit is an approximation, not an exact figure hardcoded into Bitcoin's protocol. Here are the key points:
-
Bitcoin's code does not explicitly set a cap at 21 million coins. Instead, it defines a schedule for creating new bitcoins with each block, which gets halved roughly every 4 years.[1]
-
When you add up all the mining rewards over time until the last halving (around 33 halvings), the total number of bitcoins created is approximately 20,999,999.9769, slightly less than 21 million.[1]
-
A significant portion of the existing bitcoin supply is permanently lost or inaccessible. Estimates suggest anywhere from 3.89 million to 4.87 million bitcoins could be considered lost forever due to reasons like Satoshi's unmoved coins, lost private keys, etc.[2]
-
Taking the lower estimate of 3.89 million lost bitcoins, the actual circulating supply would be around 17.11 million, which is 18% less than the commonly cited 21 million figure.[2]
So in summary, while 21 million is a useful approximation, the actual maximum supply of bitcoins is slightly below that due to the mining reward schedule, and the circulating supply is likely even lower due to permanently lost coins.[1][2]
Sources
[1] The 21 Million Bitcoin Myth: Understanding the Code Behind It https://blog.bitwage.com/21-million-bitcoin-myth/
[2] Bitcoin's 21 million limit is a boomer myth - Blockworks https://blockworks.co/news/bitcoins-21-million-limit-myth
[3] Bitcoin - The Currency of the Internet - Reddit https://www.reddit.com/r/Bitcoin/
[4] Blog | Bitwage https://blog.bitwage.com
[5] satx ₿ on X: "Why doesn't Bitcoin have 21 million? This is an ... https://twitter.com/Satxweb3/status/1790249839705632945