$BTC Tokenomics of Bitcoin

Tokenomics is the economic foundation of cryptocurrency functioning. It includes the total amount of asset units that will exist, as well as how these units will be introduced into circulation over time.

Bitcoin is introduced into circulation as a reward for miners who validate new batches of transactions. Unlike traditional fiat currencies, which can be created at will and have an unlimited supply, the supply of Bitcoin is capped at a strict limit of 21 million coins.

A systematic process called halving periodically reduces (by half) the block reward for Bitcoin over time until all units of Bitcoin are mined.

This process is not deflationary, meaning it does not remove Bitcoin coins from circulation. However, each halving reduces the number of new coins entering circulation. As the reward is halved approximately every four years, it is expected that miners will mine the last Bitcoin in 2140.