01
Monetary policy · 21M21 Million
Why today’s rules prevent an endless supply of bitcoin, who checks them, and what the limit means for holders.
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Bitcoin mainnetBlock ···Epoch 04
ECONSOURCE-LED TOPIC GUIDE
Bitcoin economics: issuance, money and incentives
Distinguish issuance rules, bank-money creation and economic reasoning about scarcity, incentives or value. A verifiable limit is not a price forecast.
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177Source links
01What this field explains
New issuance corresponds to the subsidy component of the block reward, whose permitted amount gradually declines. Under consensus rules, total issuance will not exceed 21 million BTC; transaction fees only transfer existing bitcoin. A bank deposit is a claim on a commercial bank. Cash and central bank reserves are other forms of money; fiat money does not mean only paper banknotes. A commercial bank typically creates a matching deposit when it grants a loan; repayment of principal destroys such deposit money. A central bank creates reserves through a different mechanism. The quantity of money also depends on the chosen aggregate definition.
Primary sources
An issuance cap does not guarantee bitcoin's purchasing power or price growth. Bank deposit creation is not unlimited either: credit risk, capital, liquidity, regulation and monetary policy constrain it. None of these properties alone determines suitable custody or investment for a particular person. The banking sources describe the United Kingdom and euro area; local rules vary. Bitcoin Core v29.0 is an implementation example, not a claim to be the latest version. Linked entries have their own sources and reviews.
02Start with these coordinates
A curated path from first principles to the details that matter.
02
Monetary policy · ½Halving
Why fewer bitcoins are created in each successive period, what this means for miners, and why a halving does not cut your savings in half.
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03
Monetary policy · MBMonetary Base
Paying by card or handing a shopkeeper a banknote may feel like two ways of doing the same thing. Behind the scenes, however, different forms of money are involved. Monetary Base helps distinguish cash from banks’ reserves at the central bank. It is neither the sum of everyone’s account balances nor all the wealth in a country. The distinction becomes easier to follow when we look at how cash reaches an ATM and what happens when a payment crosses from one bank to another.
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04
Economics · SOVStore of Value
How to carry today’s ability to buy into the future — and why a rising price or an unchanged bitcoin balance is not enough.
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05
Economics · SALESalability
How readily you can turn an asset into something you need, without a long wait or a large discount.
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06
Economics · MNEMonetary Network Effect
Money becomes more useful when people and businesses you need to trade with accept it. How that relationship works, and what it cannot guarantee.
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03Explore the connected entries
Definitions, mechanisms, people and source data connected to this field.
SUBBlock SubsidyMonetary policy · 4 §½HalvingMonetary policy · 3 §21M21 MillionMonetary policy · 5 §SAT/vBTransaction FeesMonetary policy · 4 §SATSatoshiMonetary policy · 8 §FIATFiat moneyEconomics · 9 §AUSAustrian economicsEconomics · 15 §SOUNDSound moneyEconomics · 11 §STRANDStranded Energy MiningEconomics · 5 §DRDemand Response MiningEconomics · 6 §HEATHeat Reuse MiningEconomics · 6 §MPMonetary PremiumEconomics · 5 §CANTCantillon EffectEconomics · 5 §TIMETime PreferenceEconomics · 5 §EₛSupply ElasticityEconomics · 5 §EᴅDemand ElasticityEconomics · 6 §MBMonetary BaseMonetary policy · 6 §BMBroad MoneyMonetary policy · 7 §M0M0Monetary policy · 6 §M1M1Monetary policy · 6 §M2M2Monetary policy · 6 §SEIGSeigniorageMonetary policy · 7 §DEBASEDebasementMonetary policy · 6 §HYPERHyperinflationMonetary policy · 7 §DISINFDisinflationMonetary policy · 6 §DEFLMonetary DeflationMonetary policy · 6 §DDEFDebt DeflationEconomics · 6 §VVelocity of MoneyEconomics · 6 §MV=PYQuantity Theory of MoneyEconomics · 6 §UOAUnit of AccountEconomics · 6 §MOEMedium of ExchangeEconomics · 6 §SOVStore of ValueEconomics · 7 §SALESalabilityEconomics · 5 §S2FStock-to-FlowEconomics · 7 §MNEMonetary Network EffectEconomics · 6 §NFXNetwork EffectEconomics · 6 §LINDYLindy EffectEconomics · 5 §PPPurchasing PowerEconomics · 5 §LEGALLegal TenderEconomics · 5 §HYPERBTCHyperbitcoinizationEconomics · 7 §FOCALSchelling PointEconomics · 9 §
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