What Are The Bitcoin Consensus Rules?
The Bitcoin consensus rules are the set of rules that all of the bitcoin nodes agree on that govern and maintain the Bitcoin protocol.
The consensus rules refer to the rules that all of the nodes absolutely must abide by and enforce while other bitcoin rules are not core consensus rules and do not need to be adopted by all of the nodes. Enforcing and upholding the bitcoin consensus rules is one of the primary reasons to run your own node.
21 Million Hard Cap
The Bitcoin consensus rule hard cap is a permanent limit set by the protocol, dictating that no more than 21 million bitcoin can ever be created. This limit was set by Satoshi Nakamoto when Bitcoin was first released, and is enforced by the bitcoin nodes to ensure that this number will never be exceeded. This means that no more than 21 million bitcoin can be produced.
By capping the maximum number of bitcoin that can ever come into existence, it enforces digital scarcity of bitcoin and helps ensure long-term value and stability.
Generating New Bitcoin
As an incentive for bitcoin miners to provide valid proof of workWhat Is Proof Of Work? Proof Of Work, often abbreviated as PoW, is both the method for achieving consensus across the entire Bitcoin network as well as a piece of..., they are rewarded with newly mined bitcoin and transaction fees. The amount of new bitcoin that is able to be produced in a single block is set by the Bitcoin consensus rules. This reward helps incentivize miners to successfully mine Bitcoin blocks, as it provides them with a steady stream of income from mining activity. At the same time, the hard-capped amount of bitcoin that can ever be created (21 million) ensures that these rewards slowly decrease over time.
In the event that a miner attempts to cheat and issue more bitcoin than what is allowed by the consensus rules, their attempt will fail and they will forfeit their block as well as any associated rewards.
Difficulty Adjustment
In order to ensure that it does not become too easy to mine new bitcoin blocks as more bitcoin miners come online, the difficulty of bitcoin mining needs to be adjusted up and down in relation to the total hashrateWhat Is Bitcoin Hashrate? Hashrate, sometimes called hash power, is the measurement of the total computational power per second contributed by bitcoin miners globally. Typically, the hashrate refers to all.... To account for the fluctuations of hashWhat Is A Hash? A hash, or cryptographic hash, is a mathematical function that takes digital data of any size as an input and produces a digital output of a... power around the world, the difficulty adjusts every 2,016 blocks to ensure that the supply of new bitcoin are issued approximately every 10 minutes.
Block Subsidy Halving
Every 210,000 the block subsidyWhat Is The Block Subsidy? The Block Subsidy is the amount of new bitcoin that is created in each block and awarded to the miner that finds the block. The... is cut in half in a process commonly called The Halving. This is to ensure that there is a slow and consistent issuance of new coins and that there is not a
You can use this tool, Bitcoin Block Half, to estimate when the next halving is likely to happen.