The Sigma Equation (Halving)
TL;DR
The Sigma Equation defines Bitcoin’s absolute scarcity: a hard cap of 21 million coins, governed by a supply schedule that halves every 4 years.
What Is It?
The Sigma Equation () is the predetermined monetary policy of Bitcoin. It dictates how many new bitcoins are issued in each block.
- Initial Reward: 50 BTC per block.
- The Halving: Every 210,000 blocks (approx. every 4 years), the block subsidy is cut in half.
- The Cap: This geometric series converges at 21 million satoshis (units).
Why Does It Matter?
Unlike fiat currencies, which can be printed at will, Bitcoin has a fixed supply. This makes it a “disinflationary” asset. The halving schedule ensures that the supply becomes increasingly scarce over time, shifting the focus from issuance to transaction fees for network security.
The Schedule
- 2009: 50 BTC
- 2012: 25 BTC
- 2016: 12.5 BTC
- 2020: 6.25 BTC
- 2024: 3.125 BTC
- …
- ~2140: Issuance reaches zero.