The debate over whether the supply limit of 21 million Bitcoins is truly fixed has resurfaced after BlackRock posted a 3-minute video explaining Bitcoin, which included an additional disclaimer stating that nothing guarantees it will not change.
A fixed supply is one of the strongest foundations of the top cryptocurrency by market cap to be seen as a store of value, and removing this limit would affect how investors perceive it.
In a video on December 17, BlackRock explained that Bitcoin has a fixed total supply of 21 million coins, emphasizing that “the hard coded rule controls supply, protects buying power, and prevents potential abuse by creating more coins.”
However, the company has added a disclaimer stating: “There is no guarantee that the supply limit of 21 million Bitcoins will not change.”
Since then, the video has been reposted by MicroStrategy's chairman and ardent Bitcoin supporter Michael Saylor, prompting some critics to argue that Bitcoin is theoretically not scarce.
“When the increase in the supply limit occurs, it will be seen as always part of the plan. And now, in 2024, people have enough courage to say that Bitcoin has never been seized,” Dashpay's marketing and business development director Joel Valenzuela stated.
“BlackRock understands Bitcoin better than users do,” Ethereum developer Antiprosynthesis added.
Could the supply limit of 21 million Bitcoins change?
Super Testnet, the Bitcoin developer behind BitVM, shared that whether the supply limit can change or not entirely depends on how each person defines what 'Bitcoin' is.
Some believe that theoretically, it could change if some community members like node operators, core developers, miners, and investors reach consensus on a hard fork to switch to a new chain.
Developers will likely propose first to spark community discussion and see who agrees before implementing rule changes into Bitcoin Core.
To achieve that, a hard fork is needed, and community members must decide which new set of rules they will adopt.
If the majority of node operators and miners begin to support the new fork due to gaining more market share and hash rate, they will operate on the 'new' network with unlimited supply.
However, Super Testnet stated that while this is possible, the new chain would not be 'Bitcoin.'
“The inflation limit is the essence of Bitcoin. If you remove this factor, then anything you have will no longer be Bitcoin. You might also ask, what would turn Bitcoin into PayPal,” Super Testnet said, referring to Satoshi Nakamoto's Whitepaper.
In other words, an unlimited supply version of 'Bitcoin' would not be Satoshi Nakamoto's Bitcoin.
There are 1.09 million Bitcoins left to be mined according to the fixed supply rule of 21 million | Source: BitBo
Who wants to change?
Bitcoin's security model relies on individuals and organizations mining, but they must be economically incentivized.
Miners are paid a block subsidy for contributing hash rate and receive an additional transaction fee for each Bitcoin block mined.
However, that block subsidy halves every 210,000 blocks, meaning Bitcoin's price must continue to rise, with significantly higher transaction fees or a combination of both to incentivize miners.
Currently, miners are rewarded 3.125 BTC (worth approximately $316,950) for mining a block, but this figure will be halved to 1.625 BTC at block height 1,000,050 around 2028.
Miners benefited greatly from a surge in transaction fees in 2024 during the Bitcoin Ordinals craze. However, interest trends in Bitcoin's decentralized finance space and network activity stemming from it are largely seasonal.
In May, the mining pool ViaBTC explained that Bitcoin's application layer needs to continue to be developed to ensure sufficient revenue for miners in the coming decades, as BTC will be fully mined around 2140.
According to Super Testnet, miners alone cannot successfully activate a new Bitcoin hard fork.
“Bitcoin is a decentralized system, and no authority can guarantee this change. Although you can ensure authenticity by using your own node,” Pierre Rochard said.
This has happened before during the Blocksize War in 2016 and 2017 when about 95% of miners wanted to increase the block size limit to allow Bitcoin to scale.
Most node operators and investors decided not to accept this change, and developers began building more layer 2 solutions.
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