The issue around Bitcoin’s supply cap of 21 million BTCs is one that has been around for quite some time now. The debate was pushed into the limelight as recently as February, when heated discussions about the subject made their way to Twitter. Vitalik Buterin, the Co-founder of Ethereum, became the latest person to give his two cents on the digital gold’s supply cap.
During a recent Reddit Q&A, the Russian-Canadian programmer was asked how he felt about Bitcoin’s supply cap, in light of the falling block rewards that would follow the cryptocurrency’s halving in 2020, newsBTC reported.
Buterin did not mince his words, stating that “there was something dishonest to this decreasing rewards schedule concept.” Citing Bitcoin’s 21 million supply cap, Buterin said that imposing such an upper limit was disingenuous as it presented two diametrically and contradictory ideas at once.
“You’re using the present level of issuance of the system and the system’s ability to operate under the present level of issuance as a proof that the system is safe. But then you’re using the fact that it has this baked in decreasing reward schedule as a proof that it’s finite supply. But then if its finite supply, then the reward schedule is going to decrease and we have no evidence that the system is going to be safe under the decreased awards. “
Buterin’s comments questioning the safety and security of a chain with reducing emission rates incited a lot of diverse reactions online. Founder of Mythos Capital, Ryan Sean Adams, was one of the people to come out in support of Buterin. He said,
“Completely agree. Supply caps are good for the meme, but ultimately disingenuous when implemented too early.”
Others, however, were not that kind. John Carvalho, the CCO of Bitrefill, called Buterin’s example illustration of Bitcoins dishonest. He further added,
“..he ignores that the fees miners need are measured in their own capex, not in bitcoins. If price doubles at a halving, everything is fine.”
The reaction to Vitalik Buterin’s comments on Bitcoin’s supply cap is a continuation of the debate that ensued after February’s Satoshi Roundtable. Matt Luongo, the Founder of Fold, had then proposed the raising of Bitcoin’s supply cap. Luongo said that doing so was only logical as with block rewards halving, miners won’t have any incentive to secure the network and protect it against a 51% attack.
Like Buterin, Luongo’s arguments incited a heated discussion as well. Bitcoin Cobra, the Co-founder of Bitcoin.org, responded,
“Anyone who dares suggest we raise the supply of Bitcoin should be ostracised and chased out of the community. 21 million Bitcoins will be minted, no more.”
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Jibin M George is a graduate in International Relations and Law with a growing interest in the world of cryptocurrency and blockchain technology