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Issuance Schedule

This chapter looks at Bitcoin's issuance as a monetary policy curve, not just the mechanics already covered in Block Rewards and The Halving, but what that curve actually looks like over time, and how it compares to the issuance patterns of other monetary assets discussed in Money and Economics.

The shape of the curve

Bitcoin's issuance is disinflationary, not deflationary, in a specific technical sense worth being precise about (see Inflation and Deflation): the supply is still growing (new bitcoin is still being created with every block) but the rate of that growth (annual inflation rate, as a percentage of existing supply) continuously falls, stepping down by half at every halving. This is a meaningfully different pattern from a currency with a literally shrinking supply (which would be deflationary in the stricter sense), even though the community and media sometimes use "deflationary" loosely to describe Bitcoin's overall long-run trajectory toward a fixed cap.

Annual inflation rate over time

function annualInflationRate(circulatingSupplyBTC: number, blocksPerYear: number, subsidyBTC: number): number {
  const newSupplyPerYear = subsidyBTC * blocksPerYear;
  return (newSupplyPerYear / circulatingSupplyBTC) * 100;
}

const BLOCKS_PER_YEAR = Math.round((365.25 * 24 * 60) / 10); // ~52,596 blocks/year at 10-min average

// Illustrative circulating-supply snapshots at various points — not live data.
console.log("~2013 (post-1st halving, ~11M BTC circulating):", annualInflationRate(11_000_000, BLOCKS_PER_YEAR, 25).toFixed(2), "%");
console.log("~2021 (post-3rd halving, ~18.6M BTC circulating):", annualInflationRate(18_600_000, BLOCKS_PER_YEAR, 6.25).toFixed(2), "%");
console.log("~2024 (post-4th halving, ~19.7M BTC circulating):", annualInflationRate(19_700_000, BLOCKS_PER_YEAR, 3.125).toFixed(2), "%");

Verified output from running this exact code:

~2013 (post-1st halving, ~11M BTC circulating): 11.95 %
~2021 (post-3rd halving, ~18.6M BTC circulating): 1.77 %
~2024 (post-4th halving, ~19.7M BTC circulating): 0.83 %

The circulating-supply figures used are illustrative approximations for the stated eras, not precise, sourced historical snapshots, replace with cited figures from a block-explorer supply history before treating any specific percentage as authoritative for a specific date.

The clear pattern regardless of exact figures: because both the subsidy per block and (following each halving) its share of an ever-growing existing supply are falling, the annual inflation rate declines considerably faster than a simple "halving the subsidy" description alone might suggest, each successive halving cuts new issuance in half while dividing it into an already-larger base.

Comparison to other monetary assets

Gold's annual production has historically added roughly 1-2% to the existing global above-ground gold stock in most years (see Commodity Money), a figure that has been relatively (though not perfectly) stable over long periods, since gold mining output responds to price and extraction technology rather than following any fixed schedule. Fiat currency supply growth, discussed in Money Supply, varies considerably by country and period, and is a matter of ongoing central bank discretion rather than a fixed schedule at all (see Monetary Policy). Bitcoin's issuance, by contrast, is the only major monetary asset covered in this book with a publicly known, mathematically fixed schedule extending decades into the future, verifiable by anyone rather than dependent on geological luck, extraction technology, or institutional discretion, a genuinely distinctive property, independent of any judgment about whether that predictability is, on net, beneficial (a question this book examines from multiple angles in Austrian Economics and Bitcoin and Critiques of Bitcoin as Money).

Common misconceptions

A falling inflation rate does not mean the circulating supply is shrinking. New bitcoin continues to be created at every block until the last subsidy is mined around 2140, the rate of growth falls, not the total amount in existence.

The issuance schedule is not adjustable in response to demand, price, or economic conditions. Unlike gold (where higher prices can incentivize more extraction) or fiat currency (where a central bank can expand supply in response to a crisis), Bitcoin's issuance follows its fixed schedule regardless of any external economic condition, a deliberate design choice examined from multiple sides throughout the Economics section.

Further reading

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