Could Bitcoin have more than 21 million coins?
There are avenues to modify the total allowable supply of Bitcoin to exceed 21 million coins. However, before we look at this in-depth let’s summarise what are widely accepted as the principles of Bitcoin:
One of the attractive features of Bitcoin is knowing the total allowable supply (21 million), which in principle avoids inflation.
Bitcoin’s source code should be open source. This leaves it open for anyone to read, copy, share or assist in modifying the code.
The network should be open to all users. There should be no authority which prevents users, nodes or miners from accessing the network.
Each individual Bitcoin’s value should be equal and spendable.
Blockchain history should be immutable.
Users should be able to, if they wish, remain anonymous.
No individual or group should have the ability to stop transactions from being confirmed.
Decentralisation of Ledger
The Bitcoin ledger should have the ability to be widely distributed and available to anyone.
No central authority
Bitcoin should not have a central authority that is relied upon for transaction clearance.
When looking at this list (which is subjective and by no means exhaustive) most crypto enthusiasts would agree that these features are what have popularised Bitcoin to reach its current state. Although we can also see that some of these principles have been modified or eroded over time.
For example, in most countries’ users must supply identification to a crypto exchange in order for them to use the service to buy or sell Bitcoin. There are still ways to be anonymous when using Bitcoin, however some would argue whether this is ethical considering the legal issues around mass adoption moving forward.
As with the pseudonymous principle, the idea of limited supply is contested in some quarters also. The reasoning behind this is people’s fear about mining profits reducing and Bitcoin rewards not being sustainable. The counter argument is sound in theory. That is, if miners leave the network, the difficulty will adjust and miners will find profit equilibrium.
The concern is that until we reach the maximum supply point, we are only speculating on how this will affect the Bitcoin mining industry. Lower mining rewards would obviously scare away a sizeable portion of miners, which in turn would decrease decentralisation and potentially raise the amount of confirmations people would be happy to accept to ensure their transaction is ‘on-chain’.
For the total supply to exceed 21 million it would require the extremely difficult to achieve consensus from the current community. Although it is potentially possible.
My question is, would raising the total supply harm Bitcoin’s image beyond repair?