Bitcoin is designed with a capped supply, which is one of its defining features. The maximum supply of Bitcoin is 21 million coins. This limit is hardcoded into the Bitcoin protocol and plays a crucial role in its economic model.

Details of Bitcoin's Supply Cap

1. Deflationary Nature:

   The capped supply of 21 million bitcoins creates a deflationary environment. As demand for Bitcoin increases, its limited supply can lead to an increase in value over time, contrasting with traditional fiat currencies, which can be printed at will by central banks.

2. Halving Events:

   Bitcoin's issuance follows a process called halving, which occurs approximately every four years (or every 210,000 blocks). During a halving event, the reward that miners receive for adding a new block to the blockchain is cut in half. This mechanism ensures that the rate of new bitcoins entering circulation decreases over time.

3. Current Supply:

   As of now, over 19 million bitcoins have already been mined. The remaining bitcoins will be mined through the halving process until the maximum supply is reached, which is expected to occur around the year 2140.

4. Supply Schedule:

   The issuance schedule of Bitcoin is predetermined and follows a predictable pattern. Initially, the reward for mining a block was 50 bitcoins. After the first halving in 2012, it became 25 bitcoins, then 12.5 bitcoins after the second halving in 2016, and 6.25 bitcoins after the third halving in 2020.

Sample Code: Calculating Remaining Supply

The following sample code demonstrates how to calculate the remaining supply of Bitcoin based on the current block reward and the total number of mined bitcoins:

    const MAX_SUPPLY = 21000000; // Maximum supply of Bitcoin
    const currentReward = 6.25; // Current block reward in bitcoins
    const totalBlocksMined = 700000; // Total blocks mined (as of 2023)

    // Function to calculate total supply of mined bitcoins
    function calculateMinedSupply(blocksMined, reward) {
        return blocksMined * reward;
    }

    // Calculate the total supply of mined bitcoins
    const minedSupply = calculateMinedSupply(totalBlocksMined, currentReward);
    const remainingSupply = MAX_SUPPLY - minedSupply;

    console.log(`Total Mined Supply: ${minedSupply} BTC`);
    console.log(`Remaining Supply: ${remainingSupply} BTC`);
    

Conclusion

In conclusion, the maximum supply of Bitcoin is capped at 21 million coins, a feature that contributes to its deflationary nature and scarcity. The halving events and predictable supply schedule ensure that the issuance of new bitcoins slows over time, leading to a gradual approach to the maximum supply. Understanding Bitcoin's supply dynamics is essential for grasping its economic principles and potential value as a digital asset.