The True Limit of 21 Million Bitcoins Lies in Consensus

• Changing the limit of 21 million would require modifying Bitcoin's consensus rules.
• A fork does not force nodes to adopt the new issuance rules.

Bitcoin (BTC) has a maximum supply of 21 million coins, but that figure is not protected because it is technically impossible to modify it. It is written in the rules that the participants of the network execute, and like any software, those rules can be changed.

The difference lies in getting others to accept the change.

As reported by CriptoNoticias, the recent discussion about a tail emission --- a small permanent issuance intended to sustain miners' income --- clearly illustrates that difference.

But the debate goes beyond determining who can modify the code. The 21 million is part of Bitcoin's monetary proposal because it makes its scarcity predictable and eliminates the possibility of an authority deciding to increase its supply. And here lies the crux of the matter: the code sets the limit, but consensus is what maintains it.

The Monetary Strength of Bitcoin

Currently, the protocol stipulates that the subsidy given to miners is reduced approximately every four years until the issuance of new BTC is practically zero. That sequence leads to the well-known maximum of 21 million.

Modifying it would imply changing the consensus rules, that is, the conditions that nodes use to determine which blocks and transactions they consider valid. And that rigidity, far from being a limitation, is one of Bitcoin's monetary strengths because it makes its supply predictable and prevents it from being expanded by the decision of an authority.

The challenge will appear in the long term when that same policy forces Bitcoin to sustain the security of the network without relying on new emissions.

Peter Todd, former Bitcoin Core developer, proposes a model that exceeds 21 million, and any developer could write software to implement it. That does not mean that those who use Bitcoin are obliged to adopt it.
Peter Todd is one of the early contributors to Bitcoin Core. Source: YouTube.

Therefore, it is not enough for a group of developers to modify the code. There is also no Bitcoin directory capable of decreeing a new monetary policy.

The question is who executes those new rules.

Giacomo Zucco, entrepreneur and recognized bitcoiner, points precisely to that aspect when he rejects the tail emission. For him, a small issuance would not even be the main problem. "The tail emission itself would not be a particular problem, if it is reasonably low. Arbitrary changes in the economic fundamentals would be the existential problem," he states.

His argument shifts the discussion from how many additional BTC could be created to the very possibility of changing the monetary rules. And that point is more important than the figure. Bitcoin could have had a maximum of 10, 50, or 100 million coins, yes, but what is distinctive is that its future supply was determined in advance and does not depend on a later decision about how much money is convenient to issue.

Dan Held, an investor and Bitcoin advocate, already defended a related idea in 2019. Explaining why Bitcoin needs a fixed supply, he argued that the specific value of 21 million was less important than the existence of a known limit.

"Its exact amount is irrelevant. What matters is simply that there is a fixed amount," he emphasizes in a document he shared through his personal X account.

For Held, a predetermined supply functions as a unit of measurement that cannot be modified at will. In his analysis, he also referenced an explanation from Satoshi Nakamoto: "There is no one acting as a central bank or Federal Reserve to adjust the money supply as the user population grows."
Dan Held had prepared a report on adding tail emissions in Bitcoin. Source: Dan Held -X.

Here lies the most uncomfortable point of the tail emission. A permanent emission could provide an answer to a future security problem, but it would do so by reintroducing discretion over a variable that Bitcoin was designed to remove from human decision-making.

This does not mean that a minimal emission would automatically destroy the value of BTC. On the contrary, modifying the limit would have a consequence that goes beyond adding new coins: it would demonstrate that a monetary rule considered fixed can be renegotiated when circumstances demand it.

That is precisely the attribute that a modification of the limit would test. The code can change, but what would happen to Bitcoin's monetary proposal?

Let’s assume that a portion of the participants decides to accept a permanent emission while another refuses.

If the new rules were incompatible with the current ones, a fork could occur. One part would continue validating Bitcoin under the existing rules, while the other would accept the new monetary policy.

The software can create both possibilities. What it cannot decide for itself is which of them will be recognized by users, nodes, miners, exchanges, and the market as bitcoin.

Pieter Wuille, one of the historical developers of Bitcoin Core and known as sipa, brought that argument directly to the debate on tail emission. Although he acknowledged that a permanent emission could even be better, he argued that it should be experimented with "in another currency, where it can compete fairly."
Pieter Wuille is one of the most recognized historical developers in the Bitcoin ecosystem. Source: Youtube.

Adam Back, cryptographer, inventor of Hashcash, and CEO of Blockstream, was even more categorical about the possibilities of Bitcoin adopting Todd's proposal: "It’s a resounding NACK (no) to tail emission. I don’t know why he doesn’t give up on that: it’s never going to happen, ever."

The security of the 21 million then appears in a different place than one might assume. It does not reside solely in a line of code, but in the difficulty of convincing enough participants to replace it.

BIP-110 has just shown how that resistance works {#h-bip-110-acaba-de-mostrar-como-funciona-esa-resistencia}

Bitcoin has just experienced a discussion about changes to its rules. BIP-110, proposed by Dathon Ohm, suggests a temporary soft fork that restricts certain fields used to introduce data into transactions. Unlike changing the emission, a soft fork introduces more restrictive rules while maintaining compatibility with nodes running the previous rules.

The proposal initiated a user-driven activation mechanism and established a mining signaling threshold of 55%. However, miner support remained far from that level during the process. The chain with BIP-110 was stalled with only 4 blocks mined. Source: https://bip110.orange.surf/live.html

The graph allows us to observe the distance between a technically implementable proposal and its effective acceptance. BIP-110 has software capable of applying the new rules, but that alone does not make those rules the ones for the entire network.

The comparison has an important limit: BIP-110 does not modify the 21 million nor the issuance policy. Its relevance to this discussion lies elsewhere.

It demonstrates in real time that proposing a rule, writing the code, and distributing a client to execute it does not equate to getting Bitcoin to change. And modifying the monetary policy would be even deeper.

The 21 million are an agreement {#h-the-21-million-are-an-agreement}

This helps to better understand what it really means to say that Bitcoin has a maximum supply.

The 21 million exist in the code, but their permanence depends on participants continuing to consider that monetary policy valid. If someone modifies the software to issue more BTC, others can simply reject those blocks and continue with the current rules.

That does not make the limit fragile. It can precisely explain why it is so resilient.

Bitcoin eliminated the need for a central authority capable of deciding how many coins should exist. Instead, it left a known rule in advance whose modification requires something much harder than editing code: getting a decentralized network to accept changing what it considers bitcoin.

Therefore, reducing this discussion to "21 million versus more than 21 million" hides the essence of this issue.

The discussion about tail emission still largely belongs to the realm of long-term problems. Perhaps the fees will be sufficient, and Bitcoin will never have to face this dilemma.

However, the proposal raises an interesting question: a solution designed to protect Bitcoin's future security might require modifying one of the monetary properties that make valuable what it attempts to protect.
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