Nonsense about increasing the 21M supply cap

[NotATether]

Nowadays on Twitter we have individuals, and even companies like Blackrock, declaring that if BTC doesn't increase the supply cap (and thus become like Dogecoin [they don't say that but it's implied]) then it will eventually fall to 51% attacks.

Like these:

https://x.com/Justin_Bons/status/1869794558630146293
https://x.com/TheDesertLynx/status/1869445485548671270
https://x.com/liberlion17/status/1869480430074044483

The argument is a familiar one that has been hashed out several times in other threads and boards and is constituent of the well known "scaling problem" as its called. Except in this case, it is the security at debate here. Miners not getting paid enough rewards in transaction fees so either the price of bitcoin must double constantly or the hashrate crashes massively as miners quit and makes attacking nodes feasible.

We know that Bitcoin L1 is not going to scale up any time soon.

In my opinion, I see one of two things happening:

1. Bitcoin L1 stays at the same fee rates as they are today, but does not achieve mass adoption. There is no hashrate exodus, or attack. Prices eventually cap at some price in the distant future.
2. Bitcoin L1 gets mass adopted either through using the UTXOs themselves or by using some project on L1 like Ordinals, Runes. Fees skyrocket to 100+ sats/vbyte, and regular people use Lightning instead. (This would copy Ethereum's outcome.) There is no hashrate exodus, or attack. Prices probably don't cap until 2140 or even later.

Notice how "increase the supply cap and print more bitcoins" is not an option.

That's because it's practically guaranteed to never happen. Nobody who owns Bitcoin will agree to let it become a money printer.

[tromp]

Miners not getting paid enough rewards in transaction fees so either the price of bitcoin must double constantly

That doesn't really help, since the potential profits of a 51% attack also scale linearly with the value of bitcoin. For proper security, the daily miner revenue must be a minimum fraction of the total market cap.

The *only* way to preserve security in the face of halving block rewards is to similarly keep doubling the fee dollars (i.e. maintaining the sat/vbyte feerates).

That's because it's practically guaranteed to never happen. Nobody who owns Bitcoin will agree to let it become a money printer.

Immutability and a 21M hardcap are core principles of Bitcoin. Only shitcoins betray their principles.

[ABCbits]

2. Bitcoin L1 gets mass adopted either through using the UTXOs themselves or by using some project on L1 like Ordinals, Runes. Fees skyrocket to 100+ sats/vbyte, and regular people use Lightning instead. (This would copy Ethereum's outcome.) There is no hashrate exodus, or attack. Prices probably don't cap until 2140 or even later.

3. Block size limit (on Bitcoin L1) got increased. Fee rate doesn't skyrate so much, where people split between using L1 or something else (LN, sidechain, L2, etc.).

[ranochigo]

Nowadays on Twitter we have individuals, and even companies like Blackrock, declaring that if BTC doesn't increase the supply cap (and thus become like Dogecoin [they don't say that but it's implied]) then it will eventually fall to 51% attacks.

Like these:

https://x.com/Justin_Bons/status/1869794558630146293
https://x.com/TheDesertLynx/status/1869445485548671270
https://x.com/liberlion17/status/1869480430074044483

The argument is a familiar one that has been hashed out several times in other threads and boards and is constituent of the well known "scaling problem" as its called. Except in this case, it is the security at debate here. Miners not getting paid enough rewards in transaction fees so either the price of bitcoin must double constantly or the hashrate crashes massively as miners quit and makes attacking nodes feasible.

We know that Bitcoin L1 is not going to scale up any time soon.

Increasing the max block reward isn't a bad thing, but it shouldn't be done because it is widely accepted that the limit is set in stone. Tail-emission would be an alternative that could be proposed, this ensures a steady supply of reward over time. However, I don't think it would be done, too much work and uncertainty.

Also, Dogecoin has no supply cap.

1. Bitcoin L1 stays at the same fee rates as they are today, but does not achieve mass adoption. There is no hashrate exodus, or attack. Prices eventually cap at some price in the distant future.

Prices should probably still increase steadily, since you want the purchasing power to remain comparatively similar to today. For it to also be viable, the prices would have to also increase massively, which also potentially invite attention from adversary with considerably more resources.

2. Bitcoin L1 gets mass adopted either through using the UTXOs themselves or by using some project on L1 like Ordinals, Runes. Fees skyrocket to 100+ sats/vbyte, and regular people use Lightning instead. (This would copy Ethereum's outcome.) There is no hashrate exodus, or attack. Prices probably don't cap until 2140 or even later.

I hope this is the solution eventually. L1 should increase in capacity, but majority of the users should be using L2 regardless. Settlement on L1 gets expensive but doesn't ruin the utility of Bitcoin for all.

[BlackHatCoiner]

Miners not getting paid enough rewards in transaction fees so either the price of bitcoin must double constantly or the hashrate crashes massively as miners quit and makes attacking nodes feasible.

The hashrate is an irrelevant metric as rightly said in the first tweet. What matters is the cost to attack, which is directly related to the reward in terms of purchasing power.

2. Bitcoin L1 gets mass adopted either through using the UTXOs themselves or by using some project on L1 like Ordinals, Runes. Fees skyrocket to 100+ sats/vbyte, and regular people use Lightning instead.

Those who will broadcast the majority of on-chain transactions in the future will either be large holders or L2 providers. For example, Ark servers, Lightning server providers, exchanges. Multiple transactions can be batched in one on-chain, and therefore ordinary users will just pay a fraction of the cost.

[apogio]

That's because it's practically guaranteed to never happen. Nobody who owns Bitcoin will agree to let it become a money printer.

Not strictly true, because ownership doesn't necessarily mean knowledge.
Luckily enough, we 're not shitcoins like ethereum and we use PoW instead of PoS.
Because with PoS the richest decide, which is kinda the same that happens with FIAT anyway.
We could say that PoW is synonym to "we don't give a damn about you and your money".

[garlonicon]

if BTC doesn't increase the supply cap

It will not. Because it will be a hard-fork, leading to just another altcoin.

However, you don't need changes in supply. All you need, is just changing proportions. So, you can have a subnetwork, which will use different amounts, and it can work on top of Bitcoin, as long, as you can make it backward-compatible, and represent on-chain amounts correctly.

For example: Lightning Network introduced millisatoshis. Every on-chain satoshi is converted into 1000 millisatoshis, and then, it is converted back from 1000 millisatoshis, into a single satoshi. However, there are no technical barriers, which would stop people from introducing non-linear dependencies, where you could have 21 billion coins limit, and where it could be possible to create more coins, out of thin air, which would exist only in a particular L2. So, for now, we have a constant 1:1000 peg. But: it is possible to make "a different tail supply L2 network", which will have different rules.

Miners not getting paid enough rewards in transaction fees

Minimal on-chain fees are set into 1 sat/vB as a de-facto standard. It was not changed for a long time, and it seems, that it will not change in the future. Assuming 4 MvB fully filled blocks, it means getting at least 0.04 BTC per block in fees. So, after next halvings, the basic block reward will go below 0.04 BTC, but fee rules may be left unchanged. Then, is 0.04 BTC per block not enough, if the basic block reward will be lower than that?

We know that Bitcoin L1 is not going to scale up any time soon.

Some people underestimate changes like full-RBF. If you have two on-chain transactions, where one is spending coins from the other, and you have a chain of unconfirmed transactions, then you can batch them, and increase feerate, without adding new coins. If you have one transaction taking 1 kvB, and another transaction taking another 1 kvB, then by batching both transactions, the batched version could take for example 1.5 kvB, which would also bump fees, so miners would have an incentive, to include batched version instead.

I think sooner or later, we would need something like "batched mempool explorer", where instead of seeing, that "we have 650 MB transactions waiting", people could see for example "we have 400 MB transactions waiting, if all of them will be batched".

Bitcoin L1 stays at the same fee rates as they are today, but does not achieve mass adoption.

Why do you think, that "fee rates" is the barrier? For example, I sold almost all of my BTCs, because of new KYC/AML rules, being enforced since 30 December 2024. I used BTC in 2019-2024, sometimes fees were higher, sometimes lower. But usually, it was not a big issue to use Bitcoin.

Also, I tried LTC for a while, when fees were higher on BTC, but finally, it turned out, that if I would just stick with BTC instead, then it would be much more profitable for me, even if I would pay higher fees, because of that.

by using some project on L1 like Ordinals, Runes

It is good, that fees are stopping some users from pushing Ordinals on-chain. It is by design. And more batching should be also implemented, to let regular transactions compete with Ordinals, by using optimizations like cut-through.

Notice how "increase the supply cap and print more bitcoins" is not an option.

People will try it anyway. However, fortunately, burning coins is easier, than making them out of thin air. Which means, that people should be ready to burn coins, if tail supply supporters will somehow produce too much. And fortunately, making it mandatory to burn everything, which will be overprinted, is a valid soft-fork.

Nobody who owns Bitcoin will agree to let it become a money printer.

You don't need 100% network support, to locally increase the supply.

Block size limit (on Bitcoin L1) got increased.

This will not happen, because then, it would be possible to push more on-chain spam, without making it easier, to push more regular transactions.

Also, Ordinals blocked any block size increase proposal for a while. And "quantum resistant addresses" will block it even further.

[NotATether]

3. Block size limit (on Bitcoin L1) got increased. Fee rate doesn't skyrate so much, where people split between using L1 or something else (LN, sidechain, L2, etc.).

This is also a possible option even though it's the least likely outcome, but even despite that, it still has more chance of happening than increasing the supply.

Also, Dogecoin has no supply cap.

That's exactly why I mentioned it. It is strongly unlikely that ultra-rich HODLers like Microstrategy and Blackrock would stop at one supply cap increase. They would increase the cap an arbitrary number of times if they could, effectively making Bitcoin like the dollar (unlimited supply cap, just like Dogecoin, but at least Doge is upfront and honest about it).

Note: that is not me saying I believe these entities are trying to destroy bitcoin, just that they are grossly misguided on how blockchains work.

[Synchronice]

Miners not getting paid enough rewards in transaction fees so either the price of bitcoin must double constantly or the hashrate crashes massively as miners quit and makes attacking nodes feasible.

I believe that increment of block size is the best solution because over time, Bitcoin and Bitcoin transactions are getting popular and sometimes we even have moments when the mempool is clogged. My idea is that if we increase the block size, many people will use Bitcoin for making transactions (today many people use altcoins because Bitcoin transaction fees are irregular and usually expensive) and the quantity and massive adoption will result in high transaction fees for miners.

Increasing of 21M supply is ridiculous to my mind. It's a serious threat to Bitcoin network because if they increase the supply for once, this means that there is a green light on that and they'll manipulate the supply for multiple times. I hope that this won't happen to Bitcoin.

[Primese]

The biggest problem is that as Bitcoin grows and the halvings continue, the ratio between the security budget to total value being protected trends downward over time. It becomes more and more profitable to attack Bitcoin or to execute minor harassment attacks to lower Bitcoin efficiency that can be done at 10% of the total hash rate (like censoring exchange transactions or producing empty blocks).

If the security budget no longer enough to sustain miners because transactions fees aren't high enough, the miners may choose to fork the chain to get rid of the supply cap so that they can remain profitable.

If this happens, the split chain would have all the largest miners, who could attack the 21M supply-cap at any time.

There's really nothing that the 21M supply-cap chain can do to prevent a 51% attack without making Bitcoin's security even worse. They can't change their mining protocol without causing all miners to abandon the change.

I suppose they could switch to Proof of Stake like Ethereum, but the community doesn't want to discuss that possibility. Getting rid of the supply cap is the easiest solution to fixing Bitcoin's long-term problems.

[pooya87]

This is a very old debate (read nonsense), it's just that now some "celebrities" are on board making the same nonsense up so it is trending once again. They also always forget that the miners who pay their electric and other bills in fiat are actually earning a lot more money every cycle even without the fees and with reward cutting in half.

For example in the halving before the last when miners were getting paid 6.25BTC per block (the reward alone) the price was barely $10k meaning they were earning $62,500 that is while today that they are earning 3.25BTC per block and price is $100k they are actually earning $325,000.

It is not just stupid to claim fee or block reward has to increase so that miners would stick around, but it is also malicious to say it because it is an attack on one of Bitcoin's main principles.

Fees skyrocket to 100+ sats/vbyte, and regular people use Lightning instead.

If fees skyrocket and stay up, the "regular people" would simply abandon bitcoin and use the next best thing. Bitcoin will be left with scammers turning it into another shitcoin like ethereum filled with nonsense while the number of nodes drop significantly pushing bitcoin toward centralization. Eventually developers who don't believe in not-scaling the blocks and don't believe that the "Ordinals Attack is a solution to scaling" would create a new Bitcoin and it replaces the old one...

[ranochigo]

That's exactly why I mentioned it. It is strongly unlikely that ultra-rich HODLers like Microstrategy and Blackrock would stop at one supply cap increase. They would increase the cap an arbitrary number of times if they could, effectively making Bitcoin like the dollar (unlimited supply cap, just like Dogecoin, but at least Doge is upfront and honest about it).

Note: that is not me saying I believe these entities are trying to destroy bitcoin, just that they are grossly misguided on how blockchains work.

I'm a little confused as to why they would be pushing for it. Anyone who is holding onto Bitcoins should be against any coin cap increase, because it would severely devaluate their current holdings. This doesn't seem like it would work in their favour, especially since they're hoarding tons of BTC.

I believe that increment of block size is the best solution because over time, Bitcoin and Bitcoin transactions are getting popular and sometimes we even have moments when the mempool is clogged. My idea is that if we increase the block size, many people will use Bitcoin for making transactions (today many people use altcoins because Bitcoin transaction fees are irregular and usually expensive) and the quantity and massive adoption will result in high transaction fees for miners.

There is an intricate balance between increasing block size by too much and too little. Ideally, you should create a situation where scarcity forces the transaction fees to be high to ensure that the total fees per block is high. If you're increasing the block size by too much or too little, the total fees would be lower than optimal. I don't think increasing block size would be the best solution, but it should be coupled with layer 2.

[ABCbits]

Block size limit (on Bitcoin L1) got increased.

This will not happen, because then, it would be possible to push more on-chain spam, without making it easier, to push more regular transactions.

Also, Ordinals blocked any block size increase proposal for a while. And "quantum resistant addresses" will block it even further.

Yeah, i can see people oppose if there's no action to prevent spam or make spam much more harder/expensive. Although since some QC signature cryptography i've seen have big signature size, which could be used as argument to increase block size.

3. Block size limit (on Bitcoin L1) got increased. Fee rate doesn't skyrate so much, where people split between using L1 or something else (LN, sidechain, L2, etc.).

This is also a possible option even though it's the least likely outcome, but even despite that, it still has more chance of happening than increasing the supply.

IMO it's only least likely on today's condition. IMO it's just matter of time until it happens, unless Bitcoin community doesn't want more people adopt/use Bitcoin.

[m2017]

Nowadays on Twitter we have individuals, and even companies like Blackrock, declaring that if BTC doesn't increase the supply cap (and thus become like Dogecoin [they don't say that but it's implied]) then it will eventually fall to 51% attacks.

What is the real reason for their desire to increase the number of bitcoins? I doubt they are worried about technical aspects (51% security). I think these guys want free money.

Notice how "increase the supply cap and print more bitcoins" is not an option.

Of course not. Otherwise, it would dilute the value of bitcoin into new coins. It would be like reissuing company shares on a traditional stock market for subsequent sale.

Question (hypothetical): from a technical point of view, is it possible to increase the number of bitcoins if (let's assume) all bitcoin developers agree to it? They will be able to change the source code?

That's because it's practically guaranteed to never happen. Nobody who owns Bitcoin will agree to let it become a money printer.

Large institutional investors preach a different point of view than ordinary bitcoiners. Therefore, they will try to lobby for "their vision". Therefore, one should be more careful in voicing what is guaranteed not to happen.

[Lucius]

Nowadays on Twitter we have individuals, and even companies like Blackrock, declaring that if BTC doesn't increase the supply cap (and thus become like Dogecoin [they don't say that but it's implied]) then it will eventually fall to 51% attacks.
~snip~

What to expect from a company that only wants profit at any cost? Even before the spot ETF was approved, they gave their opinion on what they would do in the event of a hard fork - and it all boils down to the conclusion that they will not necessarily follow the chain that would represent the original BTC, but the one that they believe is better by some of their standards.

No one can say that the involvement of such large companies is not positive for the price of BTC, but in the long term one should not expect that such companies will sit idly by and do nothing if the opportunity arises - because for them, BTC is not something that should be preserved at all costs as it is.

[notocactus]

Nowadays on Twitter we have individuals, and even companies like Blackrock, declaring that if BTC doesn't increase the supply cap (and thus become like Dogecoin [they don't say that but it's implied]) then it will eventually fall to 51% attacks.

These people don't understand about Bitcoin total supply, how it was capped by the Bitcoin founder, Satoshi Nakamoto, and how people dislike the idea of increasing the cap.

They don't understand that Bitcoin blockchain is Proof of Work, not Proof of Stake and if you hold more bitcoin, you don't have bigger power to attack the Bitcoin network.

How is the 21 Million Bitcoin Cap Defined and Enforced?
How many Bitcoin confirmations is enough?
Can Bitcoin's Hard Cap of 21 Million Be Changed?

Can the limit be changed?

Technically yes, though this is really a question of governance and incentives. Anyone can change the limits enforced by their own node - the hard part is convincing everyone else to do the same with their nodes.

[DaveF]

You are missing the other thing. It's going to be the 2017 forks all over again.

You can have the Blackrock Bitcoin shitcoin, the Tesla Bitcoin shitcoin, and all the others. And people dump all their money into them making the fork creators a lot of money.

The more things change....the more they stay the same.

-Dave

[bizeodal]

If there was a universal community consensus to have a tail emission (Peter Todd's proposal), then it would happen

But there are multiple flaws in the "security" and "51% attack" claims

Bitcoin mining is not "security" in the sense that the hash rate must be never be allowed to fall. The reward falls. Fees are always small, because the fee is set by the sender, not the miner. The hash rate will fall, and will fall far enough that there will one day be more idle hashes available to an attacker than the hashes in the mining network

But a 51% attack has no reward. And if a 51% attack happens, Bitcoin keeps on working

A tail emission is a small amount, not high enough to prevent the rise of idle hashing power sufficient to 51% attack. A tail emission might move the timing of this hashpower "flippening" a few months forward, not prevent it

What is the real reason for their desire to increase the number of bitcoins? I doubt they are worried about technical aspects (51% security). I think these guys want free money.

Conspiracy claims are always misguided

The "security budget" argument claims that if the hashrate falls, there will be enough spare, idle hashes to 51% attack
And then, why are people frightened of a 51% attack?
Mostly, this question goes unanswered
When it is answered, it is answered in prejudicial terms - Bitcoin would stop. Actually, Bitcoin won't stop. Miners will keep hashing. Nodes will keep verifying newly-mined blocks. So what is "Bitcoin will stop" code for?

Investors will lose confidence and the price will fall  to zero

Whether that's true or not (BTG still exists, and it's price isn't zero, after two 51% attacks), there's a more fundamental contradiction between "Bitcoin" and "the Bitcoin price market"

Bitcoin developers have never changed Bitcoin in order to protect Bitcoin's market price
Bitcoin developers will never change Bitcoin in order to protect Bitcoin's market price

Investors can accept that Bitcoin is a risky investment, or try to claim its price is some sort of protected species

The fallacy is in the investor's belief that Bitcoin is a synonym for "the price of Bitcoin"
and the corollary that the software should be changed to prevent the price from falling

Never going to happen


Just for fun, a different conspiracy claim ...

The "security budget" and tail emission claims were common in some forums 2 or 3 years ago. The proponents in those forums were always non-players, people with no history of participating in Bitcoin discussions. They were paid to disrupt the conversation. They didn't seriously want a change to the controlled supply schedule. They only wanted to create conflict within Bitcoin

Why pay PR lowlifes to disrupt the Bitcoin discourse? Because the finite supply schedule is a big justification for "buy more Bitcoin, it can only get scarce" and "Bitcoin is a hedge against unlimited supply inflationary fiat". The PR scum plant the seed and run away. If the seed takes root - genuine Bitcoin proponents proposing an unlimited supply schedule, then the scarcity argument is weakened

After about the fourth iteration of one of these debates, I noticed that the proponent always disappeared after a week - a sign of the paid non-player. I challenged the next one with this - you're only going to be here a week, who is paying you. He deleted the post

Those people have vanished. But they left the conflict simmering behind them, like the burglar who shits on the bed while robbing a house

When they bothered to engage, after running out of arguments, they always claimed that large Bitcoin holders will support high hash rates by deliberately overpaying fees, because they have the most to lose if the market gets a fright and their investment value collapses, and they would do this collaboratively, a kind of "Bitcoin high-fee Association"

The argument is a familiar one that has been hashed out several times in other threads and boards and is constituent of the well known "scaling problem" as its called. Except in this case, it is the security at debate here. Miners not getting paid enough rewards in transaction fees so either the price of bitcoin must double constantly or the hashrate crashes massively as miners quit and makes attacking nodes feasible

They claim a security problem due to the risk of 51% attacks making the price fall


Changing the supply schedule is not related to the scaling issue. The scaling issue is driven by the decentralization design ...

• There must be a substantial delay between blocks, so that all the nodes are able to remain synchronized
• The block size must be limited, so that it is affordable to run a node

These limits - 600 seconds and 4 million weight units - determine how many transactions can be processed per day

The supply limit is very, very high (2.1 quadrillion money units) so is not relevant to scaling

[apogio]

You can have the Blackrock Bitcoin shitcoin, the Tesla Bitcoin shitcoin, and all the others. And people dump all their money into them making the fork creators a lot of money.

And that's essentially a scenario that will repeat itself in the future, over and over again.
This situation is definitely difficult to sustain.
So the biggest question is what can we do about it.

I 've been struggling with finding the optimal solution into teaching people that fast-money is a theory that almost always leads to massive poverty and huge money losses.
Today, I don't really care, because I think people need to change their whole financial mentality.

[BlackHatCoiner]

Is all this fuss happening due to that little disclaimer BlackRock put in here?

As mentioned in one of the replies in that tweet, this is for legal reasons, precisely because BlackRock does NOT control the matter being discussed. This makes sense, given that forks can spawn and then "bitcoins" in those forks can be more than 21 million.