Network Economics

BTQ preserves Bitcoin's economic model while adapting it for 1-minute block times and post-quantum transaction sizes. This page explains the supply mechanics, mining incentives, and fee dynamics that underpin the network.

Supply and Emission

Total Supply

BTQ has a hard cap of 21,000,000 BTQ, identical to Bitcoin's 21 million BTC. This cap is enforced by the consensus rules and cannot be changed without a hard fork agreed upon by the network.

Block Reward

Each new block creates 5 BTQ as a reward for the miner who found it. This is one-tenth of Bitcoin's initial 50 BTC block reward, compensating for the fact that BTQ produces ten times more blocks.

Halving Schedule

The block reward halves every 2,100,000 blocks, which takes approximately 4 years at 1-minute block intervals. This produces the same halving cadence as Bitcoin:

After roughly 64 halvings, the block reward reaches zero and no new BTQ are created.

Equivalence with Bitcoin

The emission curve is mathematically identical to Bitcoin's:

At any point in time, the percentage of total supply that has been mined is the same for both networks (assuming both launched at the same time). The only difference is granularity: BTQ distributes rewards in smaller, more frequent increments.

Block Timing

1-Minute Target

BTQ targets one new block every 60 seconds. This produces 1,440 blocks per day (compared to Bitcoin's 144) and provides significantly faster initial confirmations for transactions.

Difficulty Adjustment

To maintain the 1-minute target, BTQ adjusts mining difficulty every 20,160 blocks (approximately 2 weeks). If blocks are being found too quickly, difficulty increases; if too slowly, it decreases. This is the same wall-clock retarget period as Bitcoin (2 weeks), just with 10 times more blocks in each window.

Coinbase Maturity

Newly mined coins cannot be spent until 100 blocks have passed (approximately 1 hour and 40 minutes). This protects against chain reorganizations that might invalidate a miner's reward. Bitcoin uses the same 100-block maturity, but at 10-minute intervals it translates to roughly 16.7 hours.

Fee Market

How Fees Work

Every transaction must pay a fee to be included in a block. Miners prioritize transactions with higher fee rates when assembling blocks. The fee is the difference between the total value of a transaction's inputs and its outputs.

Weight-Based Pricing

Fees in BTQ are calculated based on transaction weight, not raw byte size. Transaction weight accounts for the witness discount: data in the witness section (where Dilithium signatures and public keys reside) is counted at a fraction of its actual size.

This means that although a Dilithium transaction is roughly 3,800 bytes in raw size, its effective weight is significantly less because the ~3,700 bytes of witness data receive a 16x discount.

Fee Dynamics with Larger Transactions

Dilithium transactions are larger than ECDSA transactions, which affects fee economics:

The combination of larger blocks, faster block times, and the witness discount keeps fee pressure manageable even with significantly larger transactions.

Mining Economics

SHA-256 Compatibility

BTQ uses SHA-256 double-hash for proof of work, the same algorithm as Bitcoin. This means existing Bitcoin mining hardware (ASICs) can mine BTQ without modification. Miners can switch between Bitcoin and BTQ based on relative profitability.

Reward Structure

A miner's total revenue per block consists of:

1. Block subsidy: The newly created BTQ (currently 5 BTQ per block)
2. Transaction fees: The cumulative fees from all transactions included in the block

As the block subsidy decreases through halvings, transaction fees become an increasingly important component of miner revenue. This transition is identical to Bitcoin's long-term security model.

Mining Profitability

Mining is economically sustainable when:

• The value of (block subsidy + transaction fees) exceeds the cost of electricity and hardware
• More miners joining increases difficulty, which increases security but reduces individual profitability
• Miners leaving decreases difficulty, making mining more profitable for those who remain

This self-regulating feedback loop maintains network security proportional to the economic value being secured.

Long-Term Sustainability

The Fee Market Transition

Like Bitcoin, BTQ's long-term security depends on transaction fees replacing the diminishing block subsidy. Several factors support this transition:

• 1-minute blocks provide more frequent fee revenue opportunities
• Growing adoption increases demand for block space
• Larger transactions mean each transaction contributes more in fees (even with the witness discount)
• The quantum threat timeline creates increasing urgency for quantum-resistant transactions, driving demand

Supply Scarcity

With a fixed 21 million supply and a predictable, decelerating emission schedule, BTQ follows the same deflationary monetary policy as Bitcoin. No mechanism exists to increase the supply beyond 21 million, and the decreasing block reward ensures that new supply enters the market at an ever-decreasing rate.

Learn More

• Design Rationale - Why these economic parameters were chosen
• Consensus & Proof of Work - How miners secure the network
• Scalability & Performance - Block capacity and throughput analysis
• Mining Guide - How to mine BTQ on testnet