Block Subsidy

The block subsidy is the amount of newly created bitcoin a miner is allowed to award itself in each block. It began at 50 BTC in 2009 and halves every 210,000 blocks, roughly every four years. Since the fourth halving at block 840,000 in April 2024, the subsidy is 3.125 BTC per block. It is the only mechanism that creates new bitcoin.

Why it matters

The subsidy schedule is bitcoin's entire monetary policy, fixed in code since day one. The geometric halving series sums to a hard cap just under 21 million coins, with the final satoshi of subsidy expected around the year 2140. The subsidy also funds security: it is the bulk of the block reward that pays miners to expend energy protecting the chain. As it shrinks toward zero, transaction fees must gradually replace it, a transition often called the security budget question and one of the most substantive long term debates about the protocol.

In the gold vs bitcoin debate

Gold's stock grows around 1.5 to 2 percent per year, and that rate responds to price: when gold rallies, mining intensifies. Bitcoin's subsidy is perfectly inelastic. No price movement can accelerate issuance, because difficulty adjusts to keep blocks near 10 minutes regardless of how much hardware joins. Bitcoin's stock to flow ratio now exceeds gold's and rises at every halving, which is the quantitative heart of the harder money argument.