Key facts
- StarkWare CEO Eli Ben-Sasson proposed replacing Bitcoin's 21 million coin cap with a 4% annual inflation rate.
StarkWare CEO Eli Ben-Sasson suggested replacing Bitcoin's 21 million coin cap with a 4% annual inflation rate, citing the loss of private keys over time. The proposal faced significant criticism from the Bitcoin community.
The proposal challenges a core tenet of Bitcoin's value proposition, potentially altering its 'digital gold' narrative and sparking debate about the cryptocurrency's long-term economic model and scarcity.
StarkWare CEO Eli Ben-Sasson has proposed replacing Bitcoin's fixed 21 million coin supply cap with a 4% annual inflation rate. Ben-Sasson argued on X that the current cap is illogical because private keys are lost over time, diminishing the usable supply as time progresses.
He suggested that a 4% annual issuance rate would roughly correspond to the growth of the human population. This proposal challenges Bitcoin's long-standing narrative as 'digital gold,' which relies on its scarcity to preserve purchasing power. Many Bitcoin proponents view the fixed cap as a fundamental aspect of Bitcoin's uniqueness.
Ben-Sasson's idea was met with significant backlash. Critics pointed to Bitcoin's divisibility into 2.1 quadrillion satoshis, arguing there would be enough Bitcoin to go around. However, Ben-Sasson countered that these units would also trend towards zero due to lost keys.
Some opponents argued that altering the cap would make Bitcoin similar to other cryptocurrencies. Ben-Sasson maintained that scarcity would be preserved if the inflation rate remained fixed. Zcash founder Bryce Wilcox suggested that Bitcoin developers consider a "Network Sustainability Mechanism" similar to one being explored for Zcash, which aims to maintain a fixed cap while reissuing burned tokens to support miner incentives.
Pick the topics you care about. Get only what matters, on your cadence.