Only 3 million bitcoins remain to be mined, with the 18 millionth coin having been mined this week.
That, combined with the upcoming “halvening” of the Bitcoin inflation rate from 12.5 to 6.25 coins per 10 minutes, has people wondering exactly how strong Bitcoin’s “supply cap” really is.
Supply Cap Potentially Lays Groundwork For Eventual Second Hardfork Event
Bitcoin, like all blockchain networks, relies on the rules of consensus to keep it in check.
As long as everyone follows the same rules, or is forced to by the consensus of the mining nodes, you have a relatively fair network to partake in.
What if this network of nodes, down the line, agreed that an increase in the sum total of circulating BTC was necessary?
Certainly stranger things have happened.
The immediately obvious answer, if history is any judge, is that the network would hardfork. We can look to the example of the Bitcoin Cash hardfork in August of 2017 as an example of this. While some would agree that the change was necessary, some would not.
What would determine the new version of Bitcoin? Well, whichever direction the majority went.
If the majority of miners agreed to keep inflation at its current, constant rate, then the network with more hashpower would remain Bitcoin Core.
However, if a majority of miners decided to extend the lifetime of their industry, and increase the total supply of bitcoins, then those proposing to keep the limit in place would effectively fork into a minority chain.
Like anything else in crypto, it would be inadvisable to consider it “impossible.”
Other networks, like Monero, have already considered the question of inflation and decided to embrace it. In the case of Monero, there’s a “tail emission” phase that follows the initial mining era, in which a fixed supply of XMR will be released with every block in perpetuity.
Bitcoin Beyond 21 Million: The Fallout
It’s unclear how the market might respond to the news that Bitcoin was underoing an agreed-upon inflationary event.
When the crypto community found out that Tether Limited does not actually have the billions of dollars required to “back” the USDT stablecoin, many stalwart Bitcoin supporters were apologetic for both the exchange and Bitfinex, who were involved.
If the supply cap of Bitcoin were suddenly limited, and the network of miners supported the change, where would trader loyalties subsequently lie?
Like the Bitcoin Cash hardfork, people on both sides of the argument would be endowed with new tokens, be they “Classic” or “Core” or whatever they may end up being called.
People who held Bitcoin and did not support the Bitcoin Cash hardfork were still credited with tokens, as the nature of a hardfork doesn’t take into account one’s “support” or lack thereof.
That means that, to date, Satoshi Nakamoto is one of the richest holders on Bitcoin, Bitcoin Cash, and Bitcoin SV.
What do you think, dear reader? Would Bitcoiners ever consider raising the supply cap?