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Here's why Bitcoin's Supply isn't Actually Limited to 21 Million.

CryptoWhale
CryptoWhale
One of the main selling points for Bitcoin is that its supply is apparently limited to 21 Million Bitcoin, and can never be changed. While this is partially true, Bitcoin actually works with a Consensus Mechanism, where node operators, miners, and developers must agree on something before making any changes to the code. With this system in place, the network isn’t solely controlled by a single entity, like with central banks.
Over the years, there have been many heated debates in the Bitcoin community to increase its supply. This has obviously been met with lots of resistance as it would totally destroy one of the key features of Bitcoin, and could significantly devalue the coin.
Bitcoin Supply Change is Unlikely But Still Possible
While there are no direct incentives for node operators to change Bitcoin’s supply as it would devalue the monetary value of everyone’s holdings, it can still happen, which could be a major issue in the future.
For a supply change, the users running fully validating bitcoin nodes would need to come to a consensus on protocol rule changes. As of now, most node operators would likely reject the idea of increasing the supply, but how do we know that will remain the case several years from now?
Hard forks are very common in altcoins and have been done dozens of times. For Bitcoin, we would need a large majority of node operations supporting an altered Bitcoin code that sets new rules to have a larger supply.
51% Attack on the Bitcoin Network
Another potential concern is if anyone successfully carries out a 51% attack, which would allow someone to double-spend bitcoin. This would result in an unlimited supply of money, rather than Bitcoin, and could significantly devalue its currency, because you could sit there all day, doubling your money by converting back and forth between BTC and fiat. 
A mining pool called GHash.IO Bitcoin Mining came close to 51% of the entire hash rate many years ago and has since capped it at 40%. The total hash rate of bitcoin currently is 137,712,000 TH/s.
Trying to do a 51% attack would require someone to generate 137,713,000 TH/s, which may seem unrealistic for 1 person, but imagine if an entire government attempted it.
Bitcoin is often praised for being decentralized, but almost 80% of its mining power is currently controlled in China.
The Chinese government is known for being ruthless, and untrustworthy. The fact that only 8 miners control that much of the network, which can easily be taken control of by the CCP, is very concerning to me.
Whether you like Bitcoin or not, this is definitely a concern that shouldn’t be ignored. If we’re ever in a global crypto war, China will definitely win with its major influence on Bitcoin.
Economist David Rosenberg recently told Bloomberg that he believes bitcoin is in a bubble and investors don’t understand how its supply works.
“Everybody seems to believe that we’re going to get to that 21 million cap on the supply constraint, but there’s really nothing in the protocol to suggest that the supply of bitcoin can’t go up once we hit that limit,” the economist said.
Bitcoin Supply Change Debate
In a 2019 Satoshi Roundtable event, there was a large debate between Bitcoin miners over whether or not to increase or decrease the 21M supply. 
Matt Luongo brought up the proposal, in response to a discussion about the anticipated “adoption” of the Lightning Network (LN). With the block reward halving every four years, and on-chain transaction volume likely to be low in the future should LN take off, there will be little incentive for miners to secure the network. This could lead to it being vulnerable to 51% attacks that would undo the trust instilled in the Bitcoin network over many years.
Nick Szabo insisted that decreased hash power due to lower mining rewards would not have a significant impact on security, but conceded that “it may require recipients of very-high-value transactions to wait for more blocks before relying on them.” 
Cobra Bitcoin took a more combative approach, tweeting “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.” 
To this, Matt Luongo responded:
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?
The money supply replacement theory
By limiting its maximum supply, and slowing the rate at which new Bitcoin comes into existence, Satoshi intended each individual Bitcoin unit (known as a satoshi) to appreciate in value over time.
According to an email purportedly shared between Nakamoto and Bitcoin Core contributor Mike Hearn, Satoshi reasoned that if 21 million coins were to be used by some fraction of the world economy, 0.001 BTC (1 mBTC) could be worth around €1. This prediction came true back in 2013 when Bitcoin first broke through the €1,000 price point.
Although Satoshi compares the price of Bitcoin to the Euro in his email, some simple mathematics indicate that he may have had a much grander vision for Bitcoin — better explaining why the 21 million maximum figure was chosen.
At the time of Bitcoin’s creation, the entire world’s money supply stood at approximately $21 trillion. This figure, known as the M1 money supply, is made up of the total value of all the physical money in the world, including cash, coins, travelers’ checks, and more.
In 2021, the global money supply has almost doubled and reached an estimated $40 trillion, which is significantly more than when Bitcoin was first introduced. 
Possible Additional Hard Forks Once Supply Runs Out
While it’s true that only 21,000,000 Bitcoins will ever be created, people love to play up the fixed supply argument and downplay its potential reversal.
With Bitcoin, you don’t need to buy a full one. Instead, you can purchase as little as one Satoshi, which is equivalent to 1 / 100,000,000 (one hundred millionths) of a bitcoin. In other words, we have 2,100,000,000,000,000 Satoshis, or 2,100 trillion units to trade.
Compare that with 5.8 billion ounces of gold in the world, or 1,885 paintings by Picasso and you realize this supply is not so scarce after all.
Additionally, the Bitcoin community can ‘split’ at any point to create a new currency that shares the transaction history with Bitcoin up to a certain time and date but duplicating all future supply. Bitcoin has already encountered several forks in the past.
Given that there was no mention of Bitcoin’s proposed supply in Satoshi’s seminal whitepaper, perhaps the number itself was never particularly significant to him. Whatever the case, 21 million has come to be one of Bitcoin’s defining features, and any future attempts to meddle with the magic number could be disastrous to Bitcoin’s future.
To claim Bitcoin will never see a successful 51% attack, or that its code will never be altered by a hard fork is gullible thinking. The Bitcoin community’s values have definitely shifted drastically over the last decade, and I wouldn’t be surprised if we see more debates about this over the coming years.
Thanks for reading!
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