In Part 7 of the Bitcoin Beginner’s Guide, I talk to Dan Held Bitcoin OG and Director of Business Development at Kraken to look at Bitcoin’s monetary policy. We discuss how the economy works, the 21 million hard cap, the release schedule and block rewards.

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“A 21 million hard cap is, I would argue, Satoshi’s most brilliant innovation.”
— Dan Held

Location: Skype
Date: Wednesday, 22nd January
Project: Kraken
Role: Head of Business Development

Welcome to the Beginner's Guide to Bitcoin.

Beginners Guide Part 7 - Bitcoin's Monetary Policy with Dan Held

In our current economic system, currency is issued by the central banks. As fiat (government-issued money) is no longer backed by gold or any other scarce asset these central banks are able to print, or issue money at will.

As more and more money is printed and enters circulation, the money you hold in your bank account becomes a smaller percentage of the total supply and therefore loses value. This by de-facto promotes spending rather than saving and by many, is seen as a flaw in the financial system.

When Satoshi released the Bitcoin protocol, it offered an alternative to this system: scarce digital money. Satoshi gave Bitcoin a fixed supply of 21 million Bitcoins. He also designed an issuance schedule of 50BTC every ~10 minutes which is cut in half every 210,000 blocks (~4 years).

The exact number of the total supply of Bitcoin is not important and it doesn’t matter that the issuance schedule is designed exactly as it is, what is crucial is that this monetary policy can’t be changed.

These rules are part of the Bitcoin protocol and can not be amended or changed without a hard fork. Social consensus for a change like this would almost certainly never happen and Bitcoiners can be confident that their Bitcoin holdings will not lose value to do inflation.

In Part 7 of the Bitcoin Beginner’s Guide, I talk to Dan Held Bitcoin OG and Director of Business Development at Kraken to look at Bitcoin’s monetary policy. We discuss how the economy works, the 21 million hard cap, the release schedule and block rewards.