BlackRock Allows Bitcoin's Final Number to be Changed. How Is It Possible?
How to increase the maximum number of Bitcoins and what consequences this might have.
How to increase the maximum number of Bitcoins and what consequences this could have.
BlackRock has questioned one of the main distinguishing features of Bitcoin compared to other assets and currencies: the strict issuance limit of 21 million Bitcoin coins. We explain how the number of Bitcoins could be increased and what the consequences would be for the leading cryptocurrency if this were to happen.
On the website of iShares, a BlackRock-owned company that manages dozens of exchange-traded funds (ETFs), there is a three-minute training video in the section dedicated to Bitcoin. Listing the benefits of cryptocurrency, including the strict issuance limit, the authors explained that "there is no guarantee that the 21 million Bitcoin limit will not be changed."
One of the options for a conditional increase in issuance was presented in early December by Synonym's chief executive, John Carvalho. He proposed that the Bitcoin community rename the smallest unit of Bitcoin to 0.00000001 BTC. The proposal was to change the name of 0.00000001 to 1 BTC, which, at the exchange rate of 19 December, would mean that 1 BTC is equivalent to $1.02.
"The current convention defines a BTC as 100 million smaller indivisible units. This representation requires working with eight decimal digits, which can be confusing and contribute to the false perception that Bitcoin is inherently decimal-based. This would reduce cognitive load, ensuring that users understand Bitcoin as discrete, numerable units, thus improving educational clarity and user experience,' Carvalho noted.
This is not the first time Bitcoin's unit name structure change has been discussed. In 2017, Bitcoin developer Jimmy Song proposed introducing 'bits' as a standard for naming 0.00001 BTC. This proposal was part of a long-standing debate about problems of understanding and errors in Bitcoin transactions. None of the proposals have so far been adopted by the community.
Another Approach
The proposal to change the name of the fractions of a Bitcoin is not radical, although it would require a huge effort to change the mechanisms of applications and wallets, as well as educational materials for users. However, this option preserves one of Bitcoin's main features: a limited issuance of 21 million BTC, regardless of what they are called.
This is what distinguishes it from traditional currencies and assets, for which inflation is a reality. Inflation implies an increase in the units of a currency in circulation.
From an economic point of view, moderate inflation is perceived as one way to encourage holders of a currency to spend it. However, from an investment point of view, inflation is seen as a hidden tax that gradually depreciates savings by increasing the price of assets.
BlackRock's statement in an educational video has, however, sparked a debate about whether bitcoin is really possible and what consequences this might entail.
Experts believe that it all depends on what exactly we consider bitcoin. Cointelegraph, quoting bitcoin developers from Super Testnet, wrote that any such change would lead to the creation of something different that would no longer be bitcoin.
"The inflation limit is what defines bitcoin. Remove it (the issuance limit), and what you have will no longer be Bitcoin," Super Testnet noted, referring to the document describing the concept of Bitcoin (the so-called white paper) by Satoshi Nakamoto.
Is it possible to modify the Bitcoin Supply Limit?
Theoretically, it is possible to modify the total Bitcoin supply by changing the Bitcoin base code. To do so, it is necessary for developers, major market participants and the community to reach an agreement to change the code. If such an agreement is reached, the developers will write the code to integrate the changes into Bitcoin Core (the software used to access the network).
To ensure reliability, the next step will be to make sure that all nodes in the network accept the changes or are forcibly excluded from the network. This will be an extremely difficult task, since Bitcoin was created as an autonomous system that does not require modifications. But even if all the operators of the network nodes accepted such modifications, there is another level where consent is needed: the users and investors. The founder of the Avalanche blockchain, Emin Gün Sirer, already in 2014 emphasised the power of users in adopting any changes.
The Bitcoin ecosystem includes many people, not just the miners and other participants who operate the nodes. Every single Bitcoin user, every person with a wallet, and every trader has a say in what changes need to be made. Gün Sirer's central thesis is that ordinary market participants 'vote' for changes with their own money.
In the most extreme cases, society could stop buying or using Bitcoin in other forms, even if it were technically possible to change the 21 million BTC limit.
"That's why ordinary users have great power in Bitcoin. It is the power of the network that determines the shape of the blockchain, not the power of mining (network nodes)," wrote Gün Sirer.
The Hyperliquid project distributes $9 billion worth of tokens to active participants. Which cryptocurrency projects have distributed the most tokens to the community?
How to increase the maximum number of Bitcoins and what consequences this could have.
BlackRock has questioned one of the main distinguishing features of Bitcoin compared to other assets and currencies: the strict issuance limit of 21 million Bitcoin coins. We explain how the number of Bitcoins could be increased and what the consequences would be for the leading cryptocurrency if this were to happen.
On the website of iShares, a BlackRock-owned company that manages dozens of exchange-traded funds (ETFs), there is a three-minute training video in the section dedicated to Bitcoin. Listing the benefits of cryptocurrency, including the strict issuance limit, the authors explained that "there is no guarantee that the 21 million Bitcoin limit will not be changed."
One of the options for a conditional increase in issuance was presented in early December by Synonym's chief executive, John Carvalho. He proposed that the Bitcoin community rename the smallest unit of Bitcoin to 0.00000001 BTC. The proposal was to change the name of 0.00000001 to 1 BTC, which, at the exchange rate of 19 December, would mean that 1 BTC is equivalent to $1.02.
"The current convention defines a BTC as 100 million smaller indivisible units. This representation requires working with eight decimal digits, which can be confusing and contribute to the false perception that Bitcoin is inherently decimal-based. This would reduce cognitive load, ensuring that users understand Bitcoin as discrete, numerable units, thus improving educational clarity and user experience,' Carvalho noted.
This is not the first time Bitcoin's unit name structure change has been discussed. In 2017, Bitcoin developer Jimmy Song proposed introducing 'bits' as a standard for naming 0.00001 BTC. This proposal was part of a long-standing debate about problems of understanding and errors in Bitcoin transactions. None of the proposals have so far been adopted by the community.
Another Approach
The proposal to change the name of the fractions of a Bitcoin is not radical, although it would require a huge effort to change the mechanisms of applications and wallets, as well as educational materials for users. However, this option preserves one of Bitcoin's main features: a limited issuance of 21 million BTC, regardless of what they are called.
This is what distinguishes it from traditional currencies and assets, for which inflation is a reality. Inflation implies an increase in the units of a currency in circulation.
From an economic point of view, moderate inflation is perceived as one way to encourage holders of a currency to spend it. However, from an investment point of view, inflation is seen as a hidden tax that gradually depreciates savings by increasing the price of assets.
BlackRock's statement in an educational video has, however, sparked a debate about whether bitcoin is really possible and what consequences this might entail.
Experts believe that it all depends on what exactly we consider bitcoin. Cointelegraph, quoting bitcoin developers from Super Testnet, wrote that any such change would lead to the creation of something different that would no longer be bitcoin.
"The inflation limit is what defines bitcoin. Remove it (the issuance limit), and what you have will no longer be Bitcoin," Super Testnet noted, referring to the document describing the concept of Bitcoin (the so-called white paper) by Satoshi Nakamoto.
Is it possible to modify the Bitcoin Supply Limit?
Theoretically, it is possible to modify the total Bitcoin supply by changing the Bitcoin base code. To do so, it is necessary for developers, major market participants and the community to reach an agreement to change the code. If such an agreement is reached, the developers will write the code to integrate the changes into Bitcoin Core (the software used to access the network).
To ensure reliability, the next step will be to make sure that all nodes in the network accept the changes or are forcibly excluded from the network. This will be an extremely difficult task, since Bitcoin was created as an autonomous system that does not require modifications.
But even if all the operators of the network nodes accepted such modifications, there is another level where consent is needed: the users and investors. The founder of the Avalanche blockchain, Emin Gün Sirer, already in 2014 emphasised the power of users in adopting any changes.
The Bitcoin ecosystem includes many people, not just the miners and other participants who operate the nodes. Every single Bitcoin user, every person with a wallet, and every trader has a say in what changes need to be made. Gün Sirer's central thesis is that ordinary market participants 'vote' for changes with their own money.
In the most extreme cases, society could stop buying or using Bitcoin in other forms, even if it were technically possible to change the 21 million BTC limit.
"That's why ordinary users have great power in Bitcoin. It is the power of the network that determines the shape of the blockchain, not the power of mining (network nodes)," wrote Gün Sirer.
Read Next
Mining Equipment Sold Out in China. Which Countries have the Highest Demand?
Chinese suppliers have run out of the most popular cryptocurrency mining devices, despite a significant increase in their cost.
Bitcoin's Rate Has Dropped by $5,000 After a New High. What Happened?
In a single day, cryptocurrency exchanges liquidated the positions of traders betting on cryptocurrency growth, to the tune of over $330 million.
NFT Project Pudgy Penguins has Launched the PENGU Token. What you Need to know
Who will receive the new cryptocurrency from a major cryptocurrency project that issues NFTs in the form of cartoon penguins?
Hyperliquid's Airdrop Became the Largest in History. Major Token Distributions
The Hyperliquid project distributes $9 billion worth of tokens to active participants. Which cryptocurrency projects have distributed the most tokens to the community?