cd ~/blog && cat rules-that-enforce-themselves.md
Rules that enforce themselves
Why Bitcoin needs nobody to keep its promises
On 20 April 2024, at block 840,000, the reward for mining a Bitcoin block dropped from 6.25 to 3.125 bitcoins. There was no meeting, no vote, no announcement. Nobody had to approve it.
It had been written down since 2009, and anyone could know, years in advance, the exact block at which it would happen. What does it mean for a rule to enforce itself?
The 21 million sum
Every time a miner adds a block, they receive a reward in new bitcoins. It’s the only way bitcoins are created. And every 210,000 blocks, roughly four years, that reward is cut in half: that’s the halving.
Bitcoin’s most famous number comes from a simple sum. The first 210,000 blocks paid 50 bitcoins each: 10.5 million. The next ones paid 25: another 5.25 million. Then 2.625 million. Each stretch adds half as much as the one before, and the total gets closer and closer to 21 million without ever going over.
More than 19.6 million have already been issued. The last satoshi, the smallest fraction, will arrive around the year 2140.
In almost any currency, the amount in circulation is decided by an institution. In Bitcoin it’s written in public code, and anyone can know today how many bitcoins will exist twenty years from now.
Don’t trust, verify
A rule being written down isn’t enough: someone has to enforce it. In Bitcoin, that someone is every node, checking every block it receives. If a miner paid themselves a single satoshi too many, every node would reject it.
Bitcoin has already passed the toughest test. On 15 August 2010, a software bug allowed a block to create more than 184 billion bitcoins out of thin air. It was spotted within hours, and in less than five a fix was released that rejected that kind of transaction. Updated nodes followed a chain without them, which soon overtook the other one. Those bitcoins never came to exist on the chain we all use today.
And you don’t need to trust anyone to check it. With your own Bitcoin Core node, the gettxoutsetinfo command goes through every coin in existence and returns the total. It’s the exact figure, calculated on your own computer.
Who pays for security
Miners don’t work for free. To add a block, they spend real energy on calculations that the rest of the network can check in an instant. That cost is what makes attacking the network so expensive: rewriting history would mean redoing all that work.
In return, they earn the block reward and the transaction fees. With each halving, the first is cut in half and fees carry more weight. It’s a transition designed from the start: issuance subsidises security while the network grows, and over time the people who use it take over paying for it. Energy is still the anchor; what changes is who pays for it.
Written from the start
In Bitcoin, the calendar isn’t measured in days but in blocks. Blocks arrive every ten minutes on average, so the date of the halving could only be estimated, and the estimate sharpened as it got closer. The block, on the other hand, had been known since 2009: number 840,000, with its exact reward of 3.125 bitcoins, just like the three before it.
Rules that enforce themselves, that anyone can read and check, don’t ask for trust: they earn it.