Barry on Nostr: The beauty of this formula lies in its simplicity and the way it automates Bitcoin ...

The beauty of this formula lies in its simplicity and the way it automates Bitcoin monetary policy without the need for intervention from a central authority. It is a self-regulating system that mimics the extraction of finite resources, where "mining" becomes increasingly difficult, mimicking the increasing difficulty of extracting gold from the earth as readily available supplies are depleted. The total supply of Bitcoin is capped at 21 million, a number that is hard-coded into the Bitcoin protocol. This restriction ensures the scarcity of Bitcoin, similar to precious metals such as gold, which cannot be produced in unlimited quantities. The mathematical formula that defines the issuance of new Bitcoins is an example of a geometric progression. The series is represented by the sum of Bitcoins released in each block reward, which initially was 50 Bitcoins per block. Every 210,000 blocks, or approximately every four years, the block reward for Bitcoin miners processing transactions is cut in half, an event known as the “halving.” The formula that reflects this is: