Bitcoin Supply Cap
Nobody knows where the 21 million bitcoin cap comes from; this is likely just an arbitrarily chosen number. However, what's important is that this number can't be changed — ever.
21 million
Nobody knows where the 21 million bitcoin cap comes from; this is likely just an arbitrarily chosen number. However, what's important is that this number can't be changed — ever.
This is arguably the most important characteristic of Bitcoin, scarcity. For virtually every other asset class, there is no guaranteed scarcity. Companies can always issue more stock and dilute shares, fiat currencies print more money into circulation regularly, more gold can be mined every year, etc. Even land, which in theory is limited and we can't “create” more of, is not actually scarce as there is plenty of undeveloped land in the world.
Bitcoin is the only asset class with a guaranteed fixed supply. This is why as Bitcoin adoption (demand) increases, the price also increases. Obviously, there are more than 21 million people in the world; this means that not everyone can own a whole bitcoin. However, each bitcoin can be split into "satoshis," kind of like how dollars can be split into cents. Each bitcoin contains 100 million satoshis, and so, there are 2.1 quadrillion satoshis in total.
