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Just to check what would take for that limit to be changed. (not that I want to be changed, quite the opposite). I know the total number of bitcoin reward is halved every 4 years.

So does the verifying nodes check if the number of rewarded bitcoins match the distribution schedule?

3 Answers 3

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Every node in the Bitcoin network checks every block it receives and validates any transactions in it. As coin generation is a transaction that is included in the block, it is also checked. Same as a node would not accept a transaction that does not balance its inputs and outputs (for example, by spending more coins than it has), neither would it accept a block reward different, than the one that is scheduled to occur (50 coins currently, half of that for some number of blocks, and then other fractions of that amount). The nodes know what rewards to expect based on the block number, as it is set to half based on that number.

To change it you would have to (convince people to) change all the clients, exactly like any other protocol change.

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The software in the bitcoin client verifies that each transaction follows the algorithm that is part of the protocol.

Now even if the developers of the client were to somehow conclude that increasing the limit was a good idea and were to then push that client out for distribution, those holding bitcoins would likely not accept the new client. There would then be a fork in the blockchain as the limit increase would devalue the currency already issued and therefore it would be rational to those holding bitcoins already would protect the value of their currency by not accepting transactions from the new fork.

So to change the limit you not only need to get the developers to make the changes that fork the blockchain but also you need to get exchanges and merchants to accept transactions using the fork -- something that, in this case, is irrational.

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  • Bitcoin source code: github.com/bitcoin/bitcoin/blob/master/src/main.cpp#L1053 Apr 12, 2013 at 8:26
  • @StephenGornick In order to see the code that limits bitcoin to 21 million, am I supposed to read down from line 1053? Is there an english translation of the code anywhere for non-coders? thanks Jul 22, 2014 at 22:21
  • Well, the source code is continually changing, so a pointer to a specific line of code in "tip" (the latest code that exist) will be obsolete in a short amount of time. Jul 23, 2014 at 15:24
  • 2
    The code to look at is the GetBlockValue function. The block subsidy started out at 50 but is halved every 210,000 blocks. So the english translation basically is "if block 1 through 210,000 then award 50 XBT per-block, if block is 210,001 through 420,000 then award 25 XBT per-block, if block is 420,001 through 630,000 then award 12.5 XBT, etc. Eventually (like a hundred some years from now) the reward is so small, there is no block award remaining to issue. Jul 23, 2014 at 15:30
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An updated answer.

First, check out the block subsidy calculation: https://github.com/bitcoin/bitcoin/blob/master/src/validation.cpp#L1068

CAmount GetBlockSubsidy(int nHeight, const Consensus::Params& consensusParams)
{
    int halvings = nHeight / consensusParams.nSubsidyHalvingInterval;
    // Force block reward to zero when right shift is undefined.
    if (halvings >= 64)
        return 0;

    CAmount nSubsidy = 50 * COIN;
    // Subsidy is cut in half every 210,000 blocks which will occur approximately every 4 years.
    nSubsidy >>= halvings;
    return nSubsidy;
}

An important constant: consensus.nSubsidyHalvingInterval = 210000 comes from this file here: https://github.com/bitcoin/bitcoin/blob/master/src/chainparams.cpp#L67

Right now the current block height is 704673 (you can look it up here if you like: https://blockexplorer.one/bitcoin/mainnet)

halvings = int(704673 / 210000) == 3

So the current reward 50 >> 3 == 6.25

The sum of a series that halves like that is a/(1-r), where a is the first value (50) and r is the ratio (0.5). See: https://en.wikipedia.org/wiki/Geometric_series for more info.

Thus 50 + 25 + 12.5 + 6.25 + 3.125 + 1.5625 + … + 0.000000001 = 100

Since the same amount is given per block, you need only multiply that by the total number of blocks issued per halving: 210000

210,000 * 100 == 21,000,000

Bitcoin is an open source consensus protocol. It's not a company, there is no "foundation", and the code can be reviewed by anyone with about a high school level of knowledge of math.

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