How Does the Total Supply Cap of Bitcoin Relate to the Halving?
The total supply cap of Bitcoin is fixed at 21 million coins. The halving is the mechanism that enforces this cap by systematically reducing the rate at which new Bitcoin is introduced into circulation.
By cutting the block subsidy every four years, the halvings ensure that the 21 million limit is asymptotically approached over time.
Glossar
Total Supply Cap
Constraint ⎊ The total supply cap represents the absolute, hard-coded maximum number of coins that will ever be created and exist for a given cryptocurrency protocol, acting as a fundamental, immutable constraint on its monetary policy.
Cap
Strike ⎊ Cap, within cryptocurrency derivatives, denotes the predetermined price level at which an option contract ⎊ typically a call or put ⎊ may be exercised.
Supply Cap
Constraint ⎊ A supply cap, within cryptocurrency derivatives, defines a predetermined maximum quantity of an asset available for trading or minting, influencing price discovery and market dynamics.
Total Supply
Circulation ⎊ Total Supply, within cryptocurrency, defines the amount of a given digital asset currently available for public use and trading, representing a critical metric for assessing market capitalization and potential price dynamics.