Can The 21 Million Bitcoin Market Cap Be Pushed?
A major selling point for bitcoin is that it was designed to stray away from inflation. Its market cap of 21 million digital coins halts counterfeit coins from being produced, and too many from being “printed”.
Bitcoin Market Cap
What if more than 21 million bitcoins were allowed to exist? Would this be harmful or beneficial to the state of bitcoin?
BitFury’s George Kikvadze says that if more bitcoins were to be created after the initial 21 million, then the value of each coin should not be undermined.
During an interview, Kikvadze and BitFury’s CEO Val Vavilovs compared the printing of bitcoin to the printing of money. As more US bills replace older, worn out bills, the dollar is always worth the same amount. Bitcoin should be the same way.
Today, more than half of the total number of bitcoins have been mined (~12.6 million).
There is a misconception that if the majority of bitcoin users are willing to, the bitcoin market cap can be pushed to allow more bitcoins to be created and mined. Some argue that there is no need for more bitcoins. The worth of a bitcoin is really what matters. To clarify, there can not be more than 21million bitcoins as that is how Satoshi Nakamoto designed it. Bitcoin’s market cap will always be linked to the bitcoins in existence.
BitFury specializes in the development of mining chips, which are used to mine bitcoins. The company’s founder says his chips can also be used to mine other digital coins. As the difficulty to mine bitcoins increases, more powerful mining hardware will need to be made in order to generate each coin. Mining is a time consuming process and requires a lot of electricity.
In closing, Kikvadze says in the interview that he feels the Federal Reserve should have been abolished by now. The quality of money should be growing at a steady rate, not diminishing.
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What exactly is the “misconception?” If the majority of users decide to increase the cap and they install a software update that allows it then it can happen. If some people decided not to do it you would have a hard fork. This probably won’t happen but it is not impossible and it is not a misconception. Some have the misconception that a small group can decide to increase the limit and that it would be a fairly easy thing to do.
I think what was meant is that it wouldn’t be Bitcoin as we know it as how satoshi programmed it to be. It would be more of another alt coin than anything.. Unless you name it Bitcoin 2.0 inflated. That’d be like changing bitcoins nature essentially rendering it as another coin not to mention how that would cause dilution in bitcoins over all value. To me it’s impossible…
This is why alternate cryptocurrencies are so important. Nobody really knows the optimum solution. Different confirm times, different growth rates, different security scripts. The free market will decide the best. And everyone gets to watch the show. It is an exciting time to be alive.