Bitcoin devs can undo 21M supply cap but can’t force changes

[mocacinno]

I have a stupid question:

With all the new ETF Funds coming on the market, what happens if the funds buy all the existing 21 million bitcoins, in hope of future price increases ?

If no fund is selling bitcoins and no new bitcoins are created,there is no market,  that could lead to a major sell off, because nobody wants to be the last seller with the lowest price...

So will be interesting to see how the ETF Approval will play out finallly....

Bitcoin doesn't have a set FIAT price... It's supply and demand... There'll always be people willing to sell if the price is high enough, and people to buy when it's low enough.
If the ETF funds are hell-bent on buying 21.000.000 BTC, it would be impossible, since a big chunk is either lost or not yet mined as coinbase rewards. But even if they wanted to buy every available BTC, they'd probably have to pay billions of USD per BTC for the last satoshi's.

If the demand is bigger than the supply, the price will rise... And that's the situation you're describing. If an ETF fund is hell bent on buying up all the BTC on the exchanges, sellers will increase the price since there is a limited supply and ETF funds and "normal" investors have to outbid each other to get their hands on some BTC. At some point, long time holders will be enticed to exchange their holdings aswell.

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[avikz]

I have a stupid question:

With all the new ETF Funds coming on the market, what happens if the funds buy all the existing 21 million bitcoins, in hope of future price increases ?

If no fund is selling bitcoins and no new bitcoins are created,there is no market,  that could lead to a major sell off, because nobody wants to be the last seller with the lowest price...

So will be interesting to see how the ETF Approval will play out finallly....

A good amount of Bitcoin are yet to be mined. Also a lot of Bitcoins are lost and almost 1.1 million Bitcoins are locked in a wallet which is believed as Satoshi's wallet. So there is no way these fund houses will be able to buy the entire circulation. Every buy transaction needs a seller as well. If big fund houses starts buying Bitcoin in bulk, majority of the minors will probably choose not to sell them. The situation is lot more complicated than we can think.

If there is no circulation, Bitcoin's price may come to zero. Because any currency system thrives on how much it is being used and not on how much is on holding. So there is a very high possibility of the market collapse if one or two corporates try to capture the entire circulation of Bitcoins.

[stompix]

That way they could own more bitcoin and get richer.

Simple example why more doesn't mean richer:



Hope that settles this and don't have to write 500 lines and reasons why this is wrong!

Oh also:

“The node runners rejected such change, as it would lead to greater centralization of Bitcoin,” Tětek stated. According to estimations from the website Buy Bitcoin Worldwide, there are likely more than 1 million unique individuals mining BTC.

This is BS!
Bitcoin hashrate is around 5 million worth of S19, to think there are more than 1 million unique individual miners in the world is nuts.

[bobbybkk]

I have a stupid question:

With all the new ETF Funds coming on the market, what happens if the funds buy all the existing 21 million bitcoins, in hope of future price increases ?

If no fund is selling bitcoins and no new bitcoins are created,there is no market,  that could lead to a major sell off, because nobody wants to be the last seller with the lowest price...

So will be interesting to see how the ETF Approval will play out finallly....

A good amount of Bitcoin are yet to be mined. Also a lot of Bitcoins are lost and almost 1.1 million Bitcoins are locked in a wallet which is believed as Satoshi's wallet. So there is no way these fund houses will be able to buy the entire circulation. Every buy transaction needs a seller as well. If big fund houses starts buying Bitcoin in bulk, majority of the minors will probably choose not to sell them. The situation is lot more complicated than we can think.

If there is no circulation, Bitcoin's price may come to zero. Because any currency system thrives on how much it is being used and not on how much is on holding. So there is a very high possibility of the market collapse if one or two corporates try to capture the entire circulation of Bitcoins.

OK, valid points- so lets just talk about the available Bitcoins and the Bitcoins that will be mined in the future.

If funds control a large chunk of the available Bitcoins, and maybe only 10 percent of the Bitcoins are waiting to be mined in the future. Then the funds will maybe look at their options.

Funds are generally set up to make a return of investment, lets say they look for 10 percent per year. If the prices for Bitcoins deliver this on average the funds will be happy - all cool. But if the prices go so high that the trading volume goes seriously down, that indicates at this high price level there are very few buyer willing to pay this level

. So maybe as a fund manager if you see this coming you will try to get out early, as long as there are enough buyer for all your bitcoins at the current price level......

So in my view there are certain risks regarding Bitcoin prices going up forever....

[CryptoHeadlineNews]

The more people write about how the 21 million limit can be changed, the more its going to get into peoples' heads that maybe it should be changed. That way they could own more bitcoin and get richer. That's how they would think about it.

So what then is the essence of convincing people about what's only theoretically proven but not practically proven could be change? Because the truth of the fact remains  that the limitation place on the total amount of Bitcoin in circulation is simply the reason why Bitcoin has the value it has today. That is due to the law of demand and supply, which illustrate that the "when the demand of a product is higher than it's supply, then the price goes up" but "when the supply of a product is higher than it's demand, then the price decreases". Hence I support developers need to leave Bitcoin the way it was initially created, because we never can tell, a slight modification can alter a different thing altogether.

[larry_vw_1955]

Changing that limit would be a hard fork... Especially if you'd also change the rules for the block reward (which you would HAVE to do to increase or remove the supply limit).

woah. are you sure? if it requires a hard fork then i guess that offers a bit more protection to the bitcoin community.

Nodes running the "old" fork (with a ~21.000.000 supply limit) will start to reject all blocks whose block reward does not conform to the "old" rules (block reward halving every 210.000 blocks, starting with 50 BTC),and since the "new" fork will need to adjust this logic to replace (or remove) the supply limit, they'll actually HAVE to change this rule.

yeah i don't know how they would get around that.

[philipma1957]

Forfeit of stale addresses will get pushed bigly down the road.

And address not doing a withdrawal after 40 or 50 years is stale and is forfeited back into rewards.

To me this may happen in 2060 or later not now.  I can see the argument of why it will be done. Also every argument against it is meh to me.

I will be 103 in 2060 it would be fun to get that old just to see if I am right.

[BlackBoss_]

It will end up in this list https://github.com/bitcoin/bitcoin/forks

If someone really think they can change the protocol, they should try by themselves to make pull request and let's see what the response they will get from the developers.

They will end in a list of Bitcoin forks that are all altcoins, not Bitcoin. Most of those forks are dead projects or not dead but can not succeed like Bitcoin because they lack of competent and skillful developers and strong communities which are vital elements for successful projects.

List of Bitcoin forks
How many Bitcoin forks are there

We can quickly check quality of those projects by checking their Githubs that lack of development activities (commits) and surely can not compare with serious development activities on Bitcoin Github.

[Smack That Ace]

Is anyone here like me, I find it a bit strange that since the bitcoin ETFs was approved, topics and questions about bitcoin supply have been appearing more and more? There are even more proposals to change the bitcoin supply.

Bitcoin Spot ETFs need to buy many bitcoins but I believe they know that increasing the total supply is not good for them and for all. The value of Bitcoin is from its total supply and of course other factors but it's undeniable that with only 21M bitcoins in total supply, it helps Bitcoin and Bitcoin Spot ETFs are unique. The only Spot ETF type with limited supply.

Bitcoin Spot ETF Tracker. Investors in Grayscale exits but other investors are participating in and we will have more new investors, more new big capital to join this market.

https://www.coinglass.com/pro/gray/Grayscale

Or according to another hypothesis, someone deliberately wants to destroy bitcoin so they made this proposal. Previously there was virtually no way to stop the growth of bitcoin, and no one could destroy bitcoin. But with the idea of increasing the supply of bitcoin, that would make bitcoin more centralized and it would be easier to destroy bitcoin. I don't think this kind of idea being spread has any good intentions and it's clear that someone hasn't given up on destroying bitcoin.

Really bad things will happen if developers and miners agree to increase the bitcoin supply.

[thecodebear]

https://cointelegraph.com/news/bitcoin-devs-can-undo-21-million-cap-but-cannot-force-changes

Bitcoin developers can theoretically remove the 21-million-Bitcoin supply limit from the source code, but miners are unlikely to accept such a change, according to one analyst.

I'm sure this comes as a huge relief for all of you guys.

Then they go on to say this:

Like most other codes, Bitcoin’s source code can be modified, meaning the 21-million limit is theoretically changeable. However, such a change will have to be accepted by miners to be effective, according to Josef Tětek, a Bitcoin analyst at the hardware wallet firm Trezor.

The more people write about how the 21 million limit can be changed, the more its going to get into peoples' heads that maybe it should be changed. That way they could own more bitcoin and get richer. That's how they would think about it.

I don't know why so many topics about changing 21 million bitcoins have been posted lately just because Dimon said it would be changed. Anyone who knows anything about Bitcoin already understands how this works. Yes, the core devs, or you, or anyone, can change the limit, and in doing so it would be a hard fork which would create an altcoin and Bitcoin would keep going with the 21 million cap.

Dimon's statement about changing the cap was so stupid nobody should even be thinking about it for a second, you just laugh off the crazy lies Dimon says about Bitcoin. Really no need for people to go on and on about changing the cap just because one bitcoin hater lied about it recently. Everyone in Bitcoin knows the cap can't be changed, all you can do is create an altcoin with a different cap.

[Julien_Olynpic]

As far as I know, Satoshi himself included in the Bitcoin code the removal of the limit on 21 million bitcoins in 2140 after the end of mining. This is a little-known feature of the code. But as far as I know, this was cut from the code early on in Bitcoin. Now we can only argue whether this is good or bad. In general, we would not have lived to see this period in any case. After all, 2140 is very far away. Even our grandchildren will not live to see it. And it is unknown whether Bitcoin itself will remain by that time. Perhaps by then its technology will be outdated and we will, for example, carry out transactions with the power of thought).

[thecodebear]

I have a stupid question:

With all the new ETF Funds coming on the market, what happens if the funds buy all the existing 21 million bitcoins, in hope of future price increases ?

If no fund is selling bitcoins and no new bitcoins are created,there is no market,  that could lead to a major sell off, because nobody wants to be the last seller with the lowest price...

So will be interesting to see how the ETF Approval will play out finallly....

This will never happen. For various reasons, but the most obvious one is that your hypothetical would mean there is literally nobody interested in owning or continuing to own bitcoin, while for some reason people interested in the ETFs have numerous trillions of dollars to pump into BTC ETFs. And of course there are plenty of people who simply would keep on holding on to bitcoin as the price rises, maybe sell a little bit and get rich off that and keep holding long term.


Anyway the market for Bitcoin ETFs is tiny compared to the entire market cap of bitcoin. Maybe ETFs end up owning a tenth of the supply in the long run.

And, If there was no market for bitcoin there would simply be no market for bitcoin. This would have already happened. There is no reason why ETFs existed would suddenly make it so there was no longer any market for bitcoin. Why would tens of millions (eventually hundreds of millions, and billions) of people suddenly decide they no longer want bitcoin just because ETFs exist, while at the same time billions of people decide that they want bitcoin but only wrapped in an ETF package. This sort of thing just doesn't happen in economics. You're essentially asking what if there was no market for bitcoin, well then bitcoin would be at zero already, which it isn't, and ETFs don't do anything to make that happen.

[thecodebear]

I have a stupid question:

With all the new ETF Funds coming on the market, what happens if the funds buy all the existing 21 million bitcoins, in hope of future price increases ?

If no fund is selling bitcoins and no new bitcoins are created,there is no market,  that could lead to a major sell off, because nobody wants to be the last seller with the lowest price...

So will be interesting to see how the ETF Approval will play out finallly....

A good amount of Bitcoin are yet to be mined. Also a lot of Bitcoins are lost and almost 1.1 million Bitcoins are locked in a wallet which is believed as Satoshi's wallet. So there is no way these fund houses will be able to buy the entire circulation. Every buy transaction needs a seller as well. If big fund houses starts buying Bitcoin in bulk, majority of the minors will probably choose not to sell them. The situation is lot more complicated than we can think.

If there is no circulation, Bitcoin's price may come to zero. Because any currency system thrives on how much it is being used and not on how much is on holding. So there is a very high possibility of the market collapse if one or two corporates try to capture the entire circulation of Bitcoins.

OK, valid points- so lets just talk about the available Bitcoins and the Bitcoins that will be mined in the future.

If funds control a large chunk of the available Bitcoins, and maybe only 10 percent of the Bitcoins are waiting to be mined in the future. Then the funds will maybe look at their options.

Funds are generally set up to make a return of investment, lets say they look for 10 percent per year. If the prices for Bitcoins deliver this on average the funds will be happy - all cool. But if the prices go so high that the trading volume goes seriously down, that indicates at this high price level there are very few buyer willing to pay this level

. So maybe as a fund manager if you see this coming you will try to get out early, as long as there are enough buyer for all your bitcoins at the current price level......

So in my view there are certain risks regarding Bitcoin prices going up forever....

That's really not how human psychology ever works. People WANT to buy when something becomes more valuable. Bitcoin going up forever, first of all assumes people keep buying, and also as a result they will keep buying because people want to own assets that grow their wealth.

Funds, ETFs, people, companies, govts, etc, they are all just market participants. There is no "funds" that acts as a single entity. You're talking about what happens when a significant amount of market participants decide the price is too high and they sell. Well we know what happens, and it is completely normal. We see it all the time in Bitcoin, we see it all the time in any asset. The price goes down, and people who understand the value of the asset buy in cheaper. This literally happens in a big way every four years with Bitcoin. It's not some hypothetical, just look at the market cycles. Hell just look at the monthly volatility. just look at what happened this month. Price dropped 20% because people decided to get out for a bit. That's all you are describing. You aren't describing some doomsday scenario when people suddenly decide they don't like owning assets that increase their wealth and everyone sells bitcoin to zero for the reason that it is so successful haha. ;p

[bobbybkk]

That's really not how human psychology ever works. People WANT to buy when something becomes more valuable. Bitcoin going up forever, first of all assumes people keep buying, and also as a result they will keep buying because people want to own assets that grow their wealth.

Funds, ETFs, people, companies, govts, etc, they are all just market participants. There is no "funds" that acts as a single entity. You're talking about what happens when a significant amount of market participants decide the price is too high and they sell. Well we know what happens, and it is completely normal. We see it all the time in Bitcoin, we see it all the time in any asset. The price goes down, and people who understand the value of the asset buy in cheaper. This literally happens in a big way every four years with Bitcoin. It's not some hypothetical, just look at the market cycles. Hell just look at the monthly volatility. just look at what happened this month. Price dropped 20% because people decided to get out for a bit. That's all you are describing. You aren't describing some doomsday scenario when people suddenly decide they don't like owning assets that increase their wealth and everyone sells bitcoin to zero for the reason that it is so successful haha. ;p

Thank you for your reply. It is just for a short time now I have a more detailed look at Bitcoin. What I learned is that there are plenty of angles to Bitcoin.....

Actually in 2013 I was asked to buy some Bitcoins, but I was doubtful about the future of Bitcoin, my main concern was to go to bed wealthy and wake up and Bitcoin could be worthless because of a hack or so.

Anyway good luck for all here

[JollyGood]

In the scenario you mentioned in the OP, if there is no hard fork there would be no alteration to the supply. It would split the chain again and those that wanted the newer increased chain to be what they deemed to be the real Bitcoin would use it and those that rejected it would keep using the chain that is being used now.

As an example, when BTC was forked to create BCH (under the guise of it being the real Bitcoin) the supply remained 21 million but as time went by it was clear BCH was rejected by the masses and was never considered as the real Bitcoin and I would be inclined to think the same would happen if there was another fork but this time to increase the supply.

Changing that limit would be a hard fork... Especially if you'd also change the rules for the block reward (which you would HAVE to do to increase or remove the supply limit).

woah. are you sure? if it requires a hard fork then i guess that offers a bit more protection to the bitcoin community.

[larry_vw_1955]

In the scenario you mentioned in the OP, if there is no hard fork there would be no alteration to the supply.

Can you prove that statement? I'm not sure if we know for sure that there couldn't be some way to inflate the supply in a controlled manner without doing a hardfork.

Forfeit of stale addresses will get pushed bigly down the road.

And I don't think there's anything wrong with that. technically though it doesn't really increase the total supply of 21M. it just makes more of it useable.

And address not doing a withdrawal after 40 or 50 years is stale and is forfeited back into rewards.

As it should be. Someone that doesn't touch their money for 40 or 50 years clearly doesn't need it. Let it be used by people to do some good.

I don't know why so many topics about changing 21 million bitcoins have been posted lately just because Dimon said it would be changed. Anyone who knows anything about Bitcoin already understands how this works. Yes, the core devs, or you, or anyone, can change the limit, and in doing so it would be a hard fork which would create an altcoin and Bitcoin would keep going with the 21 million cap.

I'm not sure anyone said it WOULD be changed, they just said it COULD be changed. Theoretically. Now maybe they are trying to stir up a bit of controversy by even bringing it up to make bitcoin look worse than it actually is but that's a different issue I guess.

I don't think the bitcoin network has any way of counting how many bitcoin all the utxo's add up to other than adding them up the long way and if they happened to add up to more than they should for this particular point in time, I don't think there's anything they could do about it. You might say that can't happen that they add up to more than they should for this particular point in time. Hopefully not but if they did then something went wrong and it can't be fixed. 

[hatshepsut93]

I'm sure this comes as a huge relief for all of you guys.

Huge relief from what? Anyone who learned the basics of Bitcoin always understood this. We don't need any analysts to tell us that. This could only be interesting to some outsiders who are thinking about buying Bitcoin, or to those who bought BTC without doing any research.

[JollyGood]

If it is a question just to hypothetically inflate/increase the numbers then I would be speculating but it probably could be amended and pushed out as an update without the need for a fork. In reality, if the supply was to be altered those holding the current coin should be able to select which fork is the chain they accept with consensus.

It would be interesting to read what a developer thinks is or is not possible about altering the supply cap.

In the scenario you mentioned in the OP, if there is no hard fork there would be no alteration to the supply.

Can you prove that statement? I'm not sure if we know for sure that there couldn't be some way to inflate the supply in a controlled manner without doing a hardfork.

[larry_vw_1955]

If it is a question just to hypothetically inflate/increase the numbers then I would be speculating but it probably could be amended and pushed out as an update without the need for a fork. In reality, if the supply was to be altered those holding the current coin should be able to select which fork is the chain they accept with consensus.

not every change to the bitcoin core necessarily results in a hard fork. people just go along with many of the changes. i could see something like that happening where most of the people using bitcoin were oblivious to how it worked or anything like that and a very tiny group of people just snuck in changes however they wanted them to be. and that would be that!

It would be interesting to read what a developer thinks is or is not possible about altering the supply cap.

we are a very tiny minority (here on this forum) of all the people using bitcoin. the more popular bitcoin becomes, the more tiny we get. and the public at large wouldn't even know anything about how bitcoin works. so if that's the type of audience that the core devs have to work with then they might be able to sneak in a max supply increase. it wouldn't really affect them (the public) anyway to the extent that they would really notice (not at first!). if the government can print money out of thin air then i guess bitcoin can too.

not to get too far OT but isn't that what all this Bitcoin ETF is about, pretending like you're buying bitcoin on a stock exchange but in reality no one really knows if that bitcoin really exists...so in a sense, there's some overinflation possibility already. but its fake overinflation but that can still hurt people.

[pooya87]

I'm sure this comes as a huge relief for all of you guys.

Just because some fraudulent bankster said something somewhere that nobody even heard, it doesn't mean anybody had any concerns to be relieved now

As for the supply, there are certain things that are considered Principles of Bitcoin, capped supply is one of them and it is impossible to change any of these principles specially without any reason.

not every change to the bitcoin core necessarily results in a hard fork. ~ a very tiny group of people just snuck in changes however they wanted them to be. and that would be that!

Any change that is not backward compatible is a hard fork. Changing the supply is one of them and it is not a change that you can just "sneak in" without people noticing!!!