Cryptocurrencies

The co-founder of Zcash believes that the limit of 21 million bitcoins should eventually be replaced by a constant issuance — releasing about 4% of new coins each year.

At first glance, the idea seems strange. After all, it is the limited number of BTC that many consider to be Bitcoin's main advantage. But if you look at it from another angle, there is some logic to it.

Every year, a portion of bitcoins is lost forever. Some forget their seed phrase, some lose their wallet, and some fail to transfer access to their coins. As a result, the actual number of BTC gradually decreases.

There is another argument that he points out. Currently, miners earn not only from fees but also receive new bitcoins for each block they find. However, this reward is halved every four years.

Sooner or later, the issuance of new BTC will completely end, and miners will only be able to rely on fees. According to the idea's author, a constant issuance would solve this problem: miners would always have an incentive to support the network, and new coins would gradually replace those that were lost.

But then Bitcoin would no longer be the same asset with a fixed supply. Even a small issuance still constitutes inflation. And for many, it is the limit of 21 million that makes BTC what it is today.

The most interesting thing is that technically this is quite feasible. The rules can be changed. But to do this, practically the entire community must agree.

If there is no such consensus, there will likely be yet another fork: one network will remain with the limit of 21 million, while the other will switch to the new model.

Personally, I do not think such a change will ever be accepted. But the topic itself prompts reflection.

What is more important for Bitcoin in the long term: an immutable limit or additional network security?

It would be interesting to read your opinion.