Bitcoin Supply Cap Proposal Sparks Debate Among Crypto Leaders

Eli Ben-Sasson, CEO of StarkWare and co-founder of Zcash, recently proposed changing Bitcoin's supply policy. The current protocol limits the total number of BTC to 21 million, but Ben-Sasson suggests replacing this cap with a maximum annual issuance rate of 4%. This would result in minting approximately 804,000 BTC in the first year alone and more each subsequent year.

Ben-Sasson argues that lost credentials are causing coins to be removed from circulation, effectively reducing the usable supply over time. However, this proposal is unlikely to gain traction as it would devalue existing coins, whose value relies heavily on scarcity.

The current block subsidy, which pays miners 3.125 BTC per new block and halves every four years, may also need adjustment to incentivize mining in the long run. Ben-Sasson's idea addresses this issue but faces significant hurdles as it would require a hard fork of the chain and miner buy-in.