StarkWare CEO Eli Ben-Sasson has caused a stir in the cryptocurrency world. He proposed that Bitcoin abandon its sacred limit of 21 million coins and transition to a model with annual emission of new tokens up to four percent. According to him, the current system is unsustainable in the long term due to the constant accumulation of permanently lost coins, which could threaten the stability of the network and miners’ income in the future.
You might like: Euro stablecoins dominate the non-dollar market
Where are bitcoins disappearing and why does it bother miners?
The main argument for the change is the fact that people lose keys to their wallets, forget passwords, or die without passing on access. According to estimates by Ledger and other analysts, 2.3 to 4 million BTC may be permanently inaccessible, representing nearly one-fifth of the total supply. Ben-Sasson warns that this gradual drying up of liquidity, along with the approaching end of mining rewards (which halve every four years), will create unhealthy pressure on the network that mild controlled inflation could prevent.
Zcash co-founder Bryce “Zooko” Wilcox also joined the debate, pointing out that network sustainability can be addressed without increasing the total limit. Zcash, for example, is preparing a mechanism that returns a portion of previously removed coins back into circulation through future block rewards, thereby replacing shock halvings with a smoother process. For Bitcoin, however, it was previously assumed that after all coins are mined, miners would live purely off transaction fees, which proponents of the current setup consider sufficient.
Read more: Anycoin review
For the community, the limit is untouchable
However, the Bitcoin community and developers strictly reject any interference with the fixed supply. The firmly limited quantity is a fundamental pillar of Bitcoin as “digital gold,” and any inflation would, according to them, destroy its reputation as a scarce store of value. Moreover, according to critics of the proposal, lost coins only increase the value of the remaining ones, and thanks to the extreme divisibility of one bitcoin into 100 million satoshis, there is no risk that small units for everyday payments in the economy would ever run out.
Implementing such a radical change in Bitcoin’s code is virtually impossible in practice, as it requires absolute consensus among developers, miners, and node operators. If the group around the StarkWare CEO attempted to break the limit by force, the network would simply split (hard fork) into two separate branches. The result would be the creation of a new, likely unpopular altcoin, while the original and dominant Bitcoin would continue unwavering with its immutable cap of 21 million coins.
Don’t miss: BITmarkets.com: Exchange review rewriting the rules
