The Bitcoin’s 21M supply cap represents a core tenet of the Bitcoin network, aiming to establish a sense of scarcity. This scarcity is intended to contribute to the perceived value and long-term stability of Bitcoin.
While Bitcoin developers theoretically have the capability to remove the 21-million-Bitcoin supply limit from the source code, the practicality of such a change remains questionable. This limit is a foundational principle of the Bitcoin network, emphasizing scarcity in the face of limited resources and unlimited wants.
The 21-million supply cap is explicitly not stated in the open-source code by Bitcoin’s anonymous creator, Satoshi Nakamoto, but can be found in the “validation.cpp” file under the code section “GetBlockSubsidy.” The code implies that miners’ rewards will eventually decrease to zero after 33 Bitcoin halvings, occurring approximately every four years.
Although Bitcoin’s source code can be modified in theory, any changes must be accepted by the network’s miners to be implemented effectively, according to Josef Tětek, a Bitcoin analyst at the hardware wallet firm Trezor. Tětek highlights that node runners, individuals worldwide running Bitcoin full nodes, have a significant say in accepting changes.
Tětek cites the “Blocksize War” in 2017 as a historical precedent, where a proposed increase in Bitcoin’s block size was rejected by node runners due to concerns about greater centralization. More than 1 million unique individuals are estimated to be mining BTC.
Many in the Bitcoin community express confidence that miners would not support the removal of the 21-million supply cap, as indicated by comments on the Bitcointalk forum. The consensus-driven nature of Bitcoin is emphasized, with the need for agreement among network participants for any significant changes.
These discussions come in response to JPMorgan CEO Jamie Dimon’s recent skepticism about the finality of the 21-million Bitcoin supply maximum, criticizing BTC for alleged use cases like “sex trafficking, tax avoidance, Anti-Money Laundering” in a CNBC interview on January 17. Despite Dimon’s criticism, JPMorgan has been involved in the crypto space, with its securities division named as one of the authorized participants for BlackRock’s Bitcoin-tracking exchange-traded fund.
