How many characters can UTF-8 encode?

Question

If UTF-8 is 8 bits, does it not mean that there can be only maximum of 256 different characters?

The first 128 code points are the same as in ASCII. But it says UTF-

Answer 1

Unicode vs UTF-8

Unicode resolves code points to characters. UTF-8 is a storage mechanism for Unicode. Unicode has a spec. UTF-8 has a spec. They both have different limits. UTF-8 has a different upwards-bound.

Unicode

Unicode is designated with "planes." Each plane carries 2¹⁶ code points. There are 17 Planes in Unicode. For a total of 17 * 2^16 code points. The first plane, plane 0 or the BMP, is special in the weight of what it carries.

Rather than explain all the nuances, let me just quote the above article on planes.

The 17 planes can accommodate 1,114,112 code points. Of these, 2,048 are surrogates, 66 are non-characters, and 137,468 are reserved for private use, leaving 974,530 for public assignment.

UTF-8

Now let's go back to the article linked above,

The encoding scheme used by UTF-8 was designed with a much larger limit of 2³¹ code points (32,768 planes), and can encode 2²¹ code points (32 planes) even if limited to 4 bytes.[3] Since Unicode limits the code points to the 17 planes that can be encoded by UTF-16, code points above 0x10FFFF are invalid in UTF-8 and UTF-32.

So you can see that you can put stuff into UTF-8 that isn't valid Unicode. Why? Because UTF-8 accommodates code points that Unicode doesn't even support.

UTF-8, even with a four byte limitation, supports 2²¹ code points, which is far more than 17 * 2^16