> For the complete documentation index, see [llms.txt](https://protocol.bsvblockchain.org/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://protocol.bsvblockchain.org/concepts/economic-model.md).

# Economic Model

The economic incentives defined by the protocol

The protocol defines an economic system: a native token, a fixed issuance schedule, and a proof-of-work incentive that rewards nodes for extending the chain. This page summarises the parts of that model that are fixed by consensus rules. The rules themselves are specified on the [Consensus Rules](/specification/consensus-rules.md) page.

## Native token and supply

The native token is BSV. Its indivisible unit is the **satoshi**; 1 BSV = 10⁸ satoshis. Total issuance is capped at **21,000,000 BSV** (2.1 × 10¹⁵ satoshis), distributed entirely through block subsidies. The cap is a consequence of the block-subsidy schedule below and is not separately configurable.

## Block subsidy

New coins enter circulation through the coinbase transaction of each block. The subsidy (`GetBlockSubsidy`) starts at **50 BSV** per block and **halves every 210,000 blocks** (approximately every four years), reaching zero after 64 halvings. A coinbase may claim at most the subsidy plus the total fees of the transactions in the block; a block that claims more is invalid (`bad-cb-amount`). See [Consensus Rules](/specification/consensus-rules.md#block-subsidy-rule-consensus).

As the subsidy diminishes, transaction fees become the primary incentive for nodes to include transactions and extend the chain.

## Proof of work as an incentive

Proof of work requires nodes to expend computation (and therefore energy and capital) to produce a valid block. A node that produces a block earns its subsidy and fees only if other nodes accept the block and build on it, which they do only if it satisfies the consensus rules. This ties a node's reward to rule-compliant behaviour. The difficulty-adjustment algorithm targets a fixed average block interval regardless of how much computation the network applies; see [Proof of Work](/specification/blocks.md#proof-of-work) and [Blocks](/specification/blocks.md).