Bitcoin developers could theoretically remove the 21 million coin supply cap, though miners are unlikely to accept such a change. This view was expressed by Cointelegraph analyst Trezor Josef Tetek.
In recent critical remarks about digital gold, JPMorgan CEO Jamie Dimon once again questioned the asset’s supply limit.
Is Increasing the Supply Cap Feasible?
Casa co-founder and CTO Jameson Lopp responded by posting a snippet of Bitcoin’s protocol code, which dictates that miner rewards are halved every 210,000 blocks, or roughly every four years. This means that after 33 halvings, the reward will drop to zero from the initial 50 BTC, and no new coins will be produced.
Jamie Dimon thinks Satoshi will come back one day and print more Bitcoin.
“How do you know it will stop at 21 million?” He keeps asking YEAR after YEAR after YEAR.
Bro it’s 5 LINES OF CODE and not even Satoshi can force us to change it! pic.twitter.com/315ukGolx7
— Jameson Lopp (@lopp) January 17, 2024
Lopp stated that “not even Satoshi [Nakamoto] can force” a change to these five lines of software.
However, Tetek believes that theoretically, changes to Bitcoin’s source code, like any other, can be made. But the final decision will be made by miner consensus.
“Developers can potentially propose anything they want, but they cannot impose changes on anyone. The final say on what will be accepted lies with the operators of full Bitcoin nodes worldwide,” he noted.
The analyst cited a historical precedent related to the “block size war” in 2017. Some developers, crypto companies, and mining pools wanted to increase the block size from the original 1 MB to scale the network.
“Node operators rejected such a change because it would lead to greater centralization of Bitcoin,” Tetek stated.
The roughly two-year “civil war” within the community resulted in the creation of Bitcoin Cash with 8 MB blocks through a hard fork, the implementation of SegWit as a scaling solution, and several other technical changes.
In a comment to ForkLog, emcd pool CEO Evgeny Kitkin confirmed that Bitcoin developers can propose changes to the protocol on GitHub through so-called BIP. To implement changes, 51% miner support is required. For example, this could have happened with the Bitcoin Cash fork, but the proposed changes did not gain the necessary quorum, resulting in a new cryptocurrency, the expert recalled.
Former Bitfury CIO Alexey Petrov noted in a comment to ForkLog that the path from BIP to actual changes in the final code is quite long.
“Initially, all proposals are discussed and tested with experienced developers and the community. Any questionable changes will cause significant community and business backlash even before implementation in the code. The final release is evaluated by millions of owners, users, businesses, miners, and node operators, and if they disagree, no 51% miner support will help push and accept them,” the expert emphasized.
In his view, without user and business approval of changes and software updates, block producers with a different consensus “will remain in the minority and are likely to fork without the ability to sell or exchange their reward.”
“Neither 51% nor even 75% of the hash rate can force the network and users to update the software and accept some ‘beneficial’ change solely for themselves. The essence of Bitcoin’s equilibrium is consensus, a double-edged compromise in which everyone is interested and strives to maintain certain basic rules unchanged for all, without the ability to benefit individual parties.
This is a kind of equilibrium: everyone owns their funds, the network supports and enables transactions, but no one can take away others’ funds, just as individual users cannot change the general rules, others’ balances, or the total number of bitcoins,” Petrov stated.
Regarding Dimon’s statement, the expert said that the entire community “will certainly oppose changing the basic rules.”
“Any outsider, even if it’s Satoshi [Nakamoto] or a group, can try to propose such a change — it will be considered and rejected by the community,” Petrov expressed confidence.
Concerning a 51% attack, the interlocutor indicated that this is a theoretical minimum for attempting a double-spend “exclusively of those bitcoins you own and have private keys for only.”
“In practice, it’s even more complicated. To guarantee an attack and achieve a highly probable secure chain of blocks, preferably 75% + a whole sequence of technically complex factors and coordination is needed.
But, even owning 80% of the hash rate without the support of most of the community, it’s unrealistic to push changes — at most, for a while, you’ll create a crisis in the network with delayed confirmations, but later it will end with just splitting networks into separate forks with different rules/consensuses,” Petrov concluded.
How Interested Are Miners in Removing the Cap?
Regarding miners’ potential interest in removing Bitcoin’s supply cap, Kitkin noted that on one hand, it would allow pools to potentially increase future profits through a larger cryptocurrency supply.
“However, the opinion of the entire crypto community will inevitably come into play, which may refuse to accept changes that deviate Bitcoin from its philosophy and financial model. Such a refusal could trigger a total sell-off, and consequently, a decline in value. Miners would then find themselves mining a worthless and depreciated asset, rendering their continued work pointless,” he stated.
In a discussion of Dimon’s statement on the Bitcointalk forum, many users also noted that increasing the supply would negatively affect trust in the cryptocurrency.
“The limited supply of 21 million BTC is an advantage that distinguishes Bitcoin from other banking products. With a supply cap, the asset becomes more valuable (limited supply will lead to increased value as demand grows). Any attempt to increase the supply is foolishness committed by short-sighted people who want to undermine trust in digital gold,” wrote a participant with the nickname Moneystery.
There were also those who expressed concern about the potential emergence of a “super-deficit” of Bitcoin for future generations due to the supply limit. In response, one commenter noted that the discussion is actually about issuing an incomparably larger number of coins, referring to satoshis.
Most participants in the discussion agreed that the final decision rests with the community, which is unlikely to support changing the emission parameters.
“Bitcoin is not fiat currency, you can’t just turn on the money printer and increase the supply… you need network participant consensus,” emphasized a user with the nickname Kakmakr.
For now, the potential change to the cap remains speculative, as there are no official proposals from developers, Evgeny Kitkin pointed out.
“In conclusion, I note that throughout the existence of cryptocurrencies, the market has been filled with a huge number of rumors, many of which remained just rumors, not supported by real facts. This is the strength of decentralization — the more opinions influence decision-making, the more stable Bitcoin and the industry as a whole will remain,” he stated.
On January 12, it was 15 years since the first digital gold transaction of 10 BTC, which the protocol’s creator Satoshi Nakamoto sent to cryptographer Hal Finney.