New bitcoin enters circulation through a subsidy paid to whoever produces a block, and that subsidy halves at fixed intervals until it reaches nothing. The schedule was fixed at the outset for reasons that have little to do with the numbers chosen.
Distribution required an initial subsidy
A network with no issuance has no way to distribute coins to the people securing it, and no way to bootstrap the security in the first place.
Paying block producers with newly created units funds security from the currency itself rather than requiring users to pay enough fees on day one.
Early on, transaction fees were negligible, so the subsidy was effectively the entire budget for keeping the chain secure.
Decay was necessary for a finite supply
A constant subsidy produces unlimited supply, and a supply that keeps expanding at a fixed rate dilutes holders indefinitely.
Halving at intervals makes the total a converging sum, so issuance approaches a limit rather than growing without bound.
The step function was chosen over a smooth decay because it is trivially verifiable: anyone can compute the subsidy at any height from the rules alone.
Predictability is the property that matters
Any schedule that could be revised would invite continuous argument about revising it, particularly whenever conditions favoured a change.
Fixing it removes that debate from the agenda, and the absence of a decision point is what makes the eventual supply believable.
Changing it later would require agreement across the entire network, and the holders who would have to agree are precisely those the change would disadvantage.
The security budget shrinks in coin terms
Each halving reduces the reward miners receive for the same work, and difficulty then adjusts as marginal operations shut down.
Whether the network's security spending falls depends on price, since the budget is the subsidy valued in currency rather than in coins.
Historically the price effect has offset the reduction, though nothing in the design guarantees that it continues to.
Fees are the intended replacement
As the subsidy declines toward nothing, transaction fees are meant to become the dominant source of miner revenue.
That transition depends on demand for block space being sufficient to fund security, which is a question the schedule does not answer.
The design fixes what issuance will be and leaves open what will replace it, which is the central unresolved question about the network's long-term economics.