Skip to main content

Does the Difficulty Adjustment Affect the Total Supply Limit of a Cryptocurrency?

No, the difficulty adjustment mechanism does not affect the total supply limit of a cryptocurrency like Bitcoin. The total supply limit (21 million for Bitcoin) is determined by the protocol's fixed block reward schedule and the halving events.

The difficulty adjustment only influences the rate at which new blocks are found, ensuring it stays close to the target time, but it does not change the amount of new coins issued per block or the total cap.

How Does the Fee Rate Concept Relate to the Concept of “Cost-per-Unit” in Financial Analysis?
Does Burning Guarantee a Net Deflationary State for Ethereum?
How Is the Difficulty Adjustment Mechanism a Defense against a Rapid Hashrate Drop?
What Are the Primary Regulatory Bodies Overseeing Options Trading and Crypto Derivatives in the US?