The number 21 holds a deep symbology to Bitcoiners. Aside from denoting the overall number of Bitcoins, in millions, that will be issued, it’s inspired scores of crypto merchandise designs, websites, and business names. Despite its assumed inviolability, several community members are opposed to the rigidly set 21 million Bitcoin supply.
During last week’s “Satoshi’s Roundtable” event, the possibility of increasing Bitcoin’s 21 million cap has been raised. Matt Luongo floated the proposal responding to a discussion on the anticipated Lightning Network (LN) adoption. Considering that the block reward halves every four years as well as the possibly low onchain transaction volume in the future should LN take off, miners would have little incentive to secure the network. It could result in it being vulnerable to 51% attacks which would ruin the trust instilled in the BTC network for several years.
There has also been an argument on raising Bitcoin Cash’s 21 million supply on similar grounds. Because of the network’s low fees, there will theoretically be a little economic incentive for miners to secure the network after the block reward diminishes.
Luongo’s proposal of increasing Bitcoin’s overall supply intends to incentivize mining in a future of minimal onchain volume and block rewards. Although there might be an economic and security case for doing such, the matter resonates greatly with a significant portion of the Bitcoin community. Some are motivated by mainly financial reasons. The fact that the number of BTCs will never exceed 21 million gives digital scarcity to the currency. Increasing the fixed cap could reduce the value of everyone’s holdings.
Several Bitcoin luminaries have joined the debate on Bitcoin’s supply after the Satoshi’s Roundtable discussion. Nick Szabo said the reduced hash power caused by lesser mining rewards would not significantly impact security. However, Szabo conceded “it may require recipients of very-high-value transactions to wait more blocks before relying on them.”
“There will only ever be 21 million bitcoins. If you have a problem with that, get the fuck out of our community because you aren’t welcome,” Cobra Bitcoin tweeted. Luongo responded to that saying:
“This stuff has to work … If the stars align and this becomes an issue do you sacrifice a core tenet of the community or the entire security of the chain?”
Nevertheless, 21 million has been among Bitcoin’s defining features, and any effort to meddle with the magic number can be considered heresy. The next generations of Bitcoiners may be more receptive to increasing the supply, but for now, that notion looks untenable.