Why are there only 21 million bitcoin?

There will only ever be 21 million bitcoin because the limit is built into the software that every participant in the network runs. New coins are released on a fixed schedule that shrinks over time and ends around the year 2140. The figure was chosen by bitcoin's creator, who never fully explained it.

Where does the number come from?

The cap is the result of two rules. Miners who add a block to the chain receive a reward that started at 50 bitcoin. That reward is cut in half every 210,000 blocks, an event known as the halving.

Add it up: 210,000 blocks at 50 bitcoin, then 210,000 at 25, then at 12.5, and so on. The total approaches 21 million and never passes it. Because amounts are rounded down to the smallest unit, the satoshi, the true maximum is very slightly under 21 million.

Satoshi Nakamoto set these numbers before launching the network in 2009. The goal was a currency whose supply could not be expanded at will, in contrast to money issued by central banks. Why the figure is 21 million exactly was never spelled out in public.

When will the last bitcoin be mined?

Around 2140. The pace is heavily front-loaded. Half of the total was issued by late 2012, and the large majority is already in circulation.

The number of coins people can use is smaller than the number issued. Bitcoin is controlled with a private key, a secret number that authorizes spending. If the key is lost, nobody can move the coins tied to it. Coins have been lost through discarded hard drives, forgotten passwords and owners who died without passing on their keys.

Estimates of the total lost run into the millions of coins. No one can measure it precisely, because a lost coin looks the same on the ledger as one its owner has chosen not to touch.

What happens to miners when the rewards end?

Miners earn the block reward plus the fees users pay to have transactions processed. As the reward shrinks toward zero, fees are meant to take over as the incentive to keep mining.

Whether fees alone will be enough is an open question. Mining is what protects the network against attack, and some researchers worry that a lower payout could mean less computing power and weaker security. Others expect fee income to grow as the network is used more.

Could the limit be changed?

In theory, yes, because software can be rewritten. In practice, a change would need the people who run the network's nodes, the computers that enforce its rules, to adopt new software. Holders have little reason to accept a change that dilutes their own coins.

Critics note that this makes the cap a social agreement, not a law of nature. Supporters reply that it has held since 2009.