The 21 million number is causing a lot of confusion for those just starting to learn about bitcoin.
21 million always come up as a talking point to help explain the deflationary nature and fixed money supply of bitcoin. That is, there will always only be 21 million of them.
This explanation introduces a false notion of bitcoin being an indivisible unit. Calling our new coin "Bitcoin" or using a graphical representation of a coin (which are physically indivisible objects) doesn't help these fake images.
"If only a certain amount of money is being created, how will this work when more and more people start using bitcoin?"
The number 21 million is certainly a matter of misunderstanding.
Bitcoins are divisible.
Bitcoins are divisible and you can only buy a fraction of them.
In fact, what we call bitcoin is divisible into 100 million units, each unit called satoshi - after the creator of bitcoin.
So the bitcoin network will eventually have about 2.1 quadrillion units of value.
Part of the misunderstanding stems from that infamous 21 million number that leads people to believe they don't have the money to buy bitcoin.
Since a bitcoin is worth more than $1000, it is useful to quote prices in millibits, for example, $1 for 1 millibit. Granted, talking in milibits adds "something else to explain" but it also solves the misunderstanding of an indivisible bitcoin.
"A millibit is one-thousandth of a bitcoin."
real number of bitcoin
21 million is the approximate number of bitcoins that will exist. I say "approximate" because the *real* number is 20,999,999,9769 bitcoins.
Why are there only 21 million bitcoins?
I'll leave the math and finer details to you, but a quick run is like that.
When bitcoin miners verify a block of transactions, they are rewarded with a certain number of bitcoins for their work. The "block reward" was 50 bitcoins when the network was launched in 2009.
Currently block reward
Every 4 years or so, the block reward is halved. Currently, in 2021, the reward is around 6.25 bitcoins.
Because of this halving, the number of new bitcoins created will decrease until no more are created.
The last bitcoin would originally be mined in 2140. This is another commonly misunderstood date, often incorrectly stated in the media as 2040.
The reason for the incorrect date is that 99.9% of all bitcoin will be mined around 2040, although there is still a trickle for the next century.
Is 21 million bitcoins enough?
Please forgive the dramatic title of this post, which is illegal about how a newcomer can misinterpret bitcoin divisibility.
Yes, 21 million bitcoins would be enough because they are divisible by 100 million units.
By 2040, when 99.9% of all bitcoins exist, there will be 2 billion units of value.
Now (June 28, 2021), you can buy 100 million units for $34,000 - $35,000.
