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Looking at the M2 supply it seems the dollar increases it supply production by about +50% every 4 years. This may explain why Satoshi choose to cut the supply production of bitcoin by -50% every 4 years.

Using M2 supply [https://fred.stlouisfed.org/series/M2](https://fred.stlouisfed.org/series/M2) I just picked a random 4 year period…

jan 1 1996 = 3636.9

jan 3 2000 = 4664.4

increase in m2 supply +1,027.5

​

jan 5 2004 = 6066

increase in m2 supply +1,401.6

​

​

We can see that the production of $1,401 blocks of USD during a 4 year period, compared to 1,027 blocks of USD the previous 4 year period. So about +40%, but i bet if you used different periods the avg would be aroudn +50% so im just rounding the number. Bitcoin is the opposite of USD in terms of supply production.



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5 Comments

  1. It’s also hypothesized he picked a 4 year cycle to mimic human emotions in the market. It is the only part of the Bitcoin protocol that seems deliberately placed when it could have had reductions every 1 year, 1 week, or 1 hour.

  2. Horrible logic

    > Bitcoin is the opposite of USD

    For this to make sense the M2 would have to double every 4 years, or the block reward would need to fall 33%, not 50%

    Also, how would you explain that Satoshi’s first code release halved the reward every 100,000 blocks?

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