Rewriting Bitcoin's Monetary Policy: Protocol-Level Changes to the 21 Million Cap

A deep technical examination of how Bitcoin Core enforces its fixed supply and what it takes to modify it at the consensus layer

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Bitcoin’s 21 million supply cap isn’t enforced by a single line of code, nor is it hardcoded as a literal constant. Rather, it’s the emergent result of the halving schedule baked into Bitcoin’s subsidy calculation rules. The monetary policy is deterministic and enforced by the network consensus rules, primarily at the full node validation layer.

Changing the supply cap necessitates altering the subsidy logic, which determines the number of new satoshis introduced per block. This change is trivial in terms of source code modification but represents a hard fork and an economic non-starter under current consensus. Nevertheless, here’s how it works technically.

How Bitcoin Enforces Its Monetary Cap

Full-node software, such as Bitcoin Core (or Bitcoin Knots), implements the supply schedule under consensus-critical code paths. There is no hardcoded “21_000_000 * COIN” value.

The cap arises from three parameters:

• Initial subsidy: 50 BTC (5,000,000,000 sats)

• Subsidy halving interval: every 210,000 blocks

• Minimum subsidy: truncated to 0 via right-shifting

We compute the actual subsidy per block using exponential decay. As the right-shift continues, eventually the block reward rounds to zero, which terminates issuance.

The function in Bitcoin Core implements this process.GetBlockSubsidy()src/validation.cpp

Example code:

CAmount GetBlockSubsidy(int nHeight, const Consensus::Params& consensusParams)
{
    int halvings = nHeight / consensusParams.nSubsidyHalvingInterval;
    if (halvings >= 64)
        return 0;
    CAmount nSubsidy = 50 * COIN;
    nSubsidy >>= halvings;
    return nSubsidy;
}

Note the halvings >= 64check. The 64 halvings (64 * 210,000 blocks) set the limit after which the subsidy will drop to 0 because of uint64 truncation and the way exponential decay works.

So the “21 million cap” is emergent:

Total Issuance= ∑n=063(50⋅108)⋅12n⋅210000\text{Total Issuance} = \sum_{n=0}^{63} (50 \cdot 10⁸) \cdot \frac{1}{2^n} \cdot 210000 Total Issuance = n = 0∑63​(50⋅108)⋅2n1​⋅210000

This converges to just under 21 million BTC.

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What changes are necessary to alter the supply cap?

Any modification must change how the block subsidy is computed and validated. The procedure requires full node adoption and introduces a hard fork. Here are the technical steps.

1. Modify Block Subsidy Logic

To increase the total supply, you would modify the return condition in ⁣, for example, by implementing a tail emission or infinite issuance.GetBlockSubsidy()

Instead of cutting off at halving #64, you could introduce a minimum emission:

if (halvings >= 64)
    return 1; // Emit 1 sat per block indefinitely

Or implement a more explicit tail emission policy:

if (halvings >= 30)
    return 1000000; // Fixed tail of 0.01 BTC per block

Or change the halving logic itself:

int halvings = nHeight / 420000; // double the halving interval

2. Change Consensus Parameter for Halving Interval

This is set src/chainparams.cpp inside each network’s parameters:

consensus.nSubsidyHalvingInterval = 210000;

You may need to define a new constant or policy logic depending on your emission schedule.

3. Modify Block Reward Validation

Block acceptance validates the subsidy. This implies that the node's determination of a coinbase output's validity must incorporate these changes.

Validation happens in, under, and src/validation.cppCheckBlock()CheckTransaction() ensuring the Coinbase value is within acceptable subsidy + fees.

if (txoutTotal > nFees + GetBlockSubsidy(nHeight, consensusParams))
    return state.DoS(...);

If you modify your subsidy logic, it must maintain coherence with the updated model.

4. Update All Relevant Tests

We must rewrite functional and unit tests that assume the 21 million cap or standard subsidy schedule.

Critical files include:

• test/functional/rpc_mining.py

• src/test/subsidy_tests.cpp

• test/functional/feature_block_reward.py

Failing to update these will break the build or regress consensus logic.

5. Update the Block Template Logic (Optional)

Miners rely on templates created by the node software (for example, via ⁣ in ⁣) even though they are not a part of the consensus.CreateNewBlock()src/miner.cpp These functions use GetBlockSubsidy() to estimate the coinbase value. If you’ve changed subsidy logic, this parameter needs to stay in sync, or miners will produce invalid blocks.

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Side Effects and Consensus Layer Risks

By definition, this change results in a hard fork. Full nodes running unmodified Bitcoin Core will reject any block violating the standard subsidy schedule. Any miner producing blocks under the modified subsidy logic will waste their hashpower unless a supermajority of nodes accept the change.

Economic coordination is required. This step isn’t like a soft fork (e.g., adding OP_CHECKTEMPLATEVERIFY or OP_CAT). It breaks the monetary covenant Bitcoin has with its users. Node operators, exchanges, merchants, and wallets would all have to opt into the fork.

Furthermore, the entire UTXO set and fee market operate under the assumption of an eventual zero subsidy. Introducing a tail emission changes the basic ideas about fees over time, which can affect how secure the network is, how miners act, and how the economy is planned.

There Is No MAX_SUPPLY Constant

Many new developers expect to find a bug in #define MAX_SUPPLY the codebase. That doesn’t exist. Dynamic functions and protocol parameters, not static constants, encode Bitcoin’s monetary schedule. It’s a key reason Bitcoin is auditable and deterministic at the protocol layer without central issuance control.

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Summary

Changing Bitcoin’s supply cap requires:

• Editing GetBlockSubsidy() in validation.cpp

• Possibly changing halving intervals in chainparams.cpp

• Ensuring coinbase validation logic accepts new reward values

• Adjusting mining logic in miner.cpp

• Updating tests and policy code to reflect the new issuance

• Accepting the implications of a hard fork and complete divergence from Bitcoin consensus

Technically simple. This scenario is both politically and economically unlikely.

Final Note

You can change the code. But unless the network runs your new rules, you’ve just forked yourself into irrelevance. That’s the real consensus mechanism at work—not in the code, but in the nodes.

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