The topic of Bitcoin's 21 million coin supply cap has resurfaced in the cryptocurrency community following a recent explainer video release by BlackRock.
Bitcoin's Supply Cap: Unyielding or Modifiable?
A new video by BlackRock has sparked debates over the potential change to Bitcoin's supply cap of 21 million. Released on December 17, the video highlights the fixed supply as key to Bitcoin's value as a deflationary asset but adds a disclaimer: 'There is no guarantee that bitcoin’s 21 million supply cap will not be changed'. This statement has prompted considerable discussion about Bitcoin's future.
Could the Supply Cap Be Changed?
Technically, Bitcoin's supply cap could be altered through a hard fork, requiring a broad consensus among network stakeholders. However, such a proposal would be contentious and complex. Historically, such changes have proven difficult to implement, as during the 'Blocksize War' of 2016–2017 when a proposed modification was rejected.
El Salvador's Bitcoin Initiative Reduction
El Salvador, the first country to recognize Bitcoin as legal tender, is scaling back its Bitcoin initiatives as part of securing a $1.4 billion loan with the IMF. This includes making Bitcoin acceptance by private merchants voluntary rather than mandatory.
The retention of Bitcoin's fixed supply cap remains central to its reputation as 'digital gold', although debates about potential changes persist. Meanwhile, El Salvador is reevaluating its Bitcoin approach, taking steps to stabilize its economy and reduce debt.
