The End of Inflation

Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.

- Satoshi Nakamoto, Bitcoin Whitepaper

Over time, the amount of coins distributed to node operators through the block subsidy reduces. The first blocks found each awarded the winning blocks 50 Bitcoins, however every 210,000 blocks, or approximately every four years, the amount is cut in half, eventually reaching 1 Satoshi per block and then going to zero in around 2140 or after 32 ‘halvening’ events. From this moment there will be no further inflation in the number of Satoshis that enter the network.

The reduction in the rate at which new Bitcoins enter the economy is an important aspect of the system of incentives that encourage network scaling as it incentivises competing enterprises to build a network that can accommodate larger numbers of transactions with a view to using the fees paid as a means to replace the subsidy income.

This also creates an incentive for node operators to build usage through targeted funding and the creation of novel use cases as an investment in a highly used application can deliver a big long-term return in the form of additional transaction fees through the network.