Bitcoin (BTC) Tokenomics

Issuance Mechanism

Bitcoin's issuance is governed by a process called "mining," where new bitcoins are created as rewards for miners who successfully add new blocks to the blockchain. The total supply is capped at 21 million BTC. The issuance rate is programmed to halve approximately every four years (the "halving" event), reducing the number of new bitcoins created and distributed to miners over time. This mechanism ensures a predictable and decreasing supply schedule, ultimately leading to the cessation of new issuance once the cap is reached.

Allocation Mechanism

All newly issued bitcoins are allocated exclusively to miners as block rewards. There is no pre-mine, team allocation, or foundation reserve. The distribution is entirely based on the competitive process of mining, which is open to anyone with the necessary computational resources.

Allocation Table

Note: The table above reflects the ongoing linear unlocking of block rewards to miners, with the final issuance expected to complete around 2140, but the sample data shows a specific period for illustration.

Usage and Incentive Mechanism

• Usage: Bitcoin (BTC) serves as a decentralized, censorship-resistant digital currency. It is used for peer-to-peer payments, store of value, and as a settlement asset.
• Incentive: The primary incentive mechanism is the block reward, which compensates miners for securing the network and processing transactions. As block rewards decrease over time, transaction fees are expected to become the main incentive for miners.

Locking Mechanism

Bitcoin does not have a protocol-level token locking mechanism for its native issuance. All newly mined bitcoins are immediately liquid and spendable by the miner who receives them. However, Bitcoin's scripting language allows users to create custom locking scripts (e.g., time locks, multi-signature requirements) for individual transactions, but these are not part of the issuance or allocation process.

Unlocking Time

There is no vesting or delayed unlocking for newly mined bitcoins; they are available to miners as soon as a block is confirmed. The overall unlocking of the total supply is governed by the block reward schedule, which linearly releases new bitcoins to miners until the 21 million cap is reached, projected to occur around the year 2140.

Summary Table

Bitcoin's token economics are designed for transparency, decentralization, and long-term sustainability, with all incentives and allocations governed by open protocol rules and competitive mining.