- StarkWare CEO proposed replacing Bitcoin’s 21 million supply cap with fixed 4% annual inflation.
- Ben-Sasson said lost private keys shrink Bitcoin’s supply and could weaken long-term security.
- Bitcoin supporters rejected the proposal, defending the 21 million cap as key to BTC’s scarcity.
StarkWare CEO Eli Ben-Sasson has suggested the Bitcoin network should replace its fixed 21 million supply cap with a permanent 4% annual issuance rate.
He argued that Bitcoin’s hard cap becomes less practical over time because private keys are constantly lost, permanently removing coins from circulation. Ben-Sasson also cited long-term concerns about Bitcoin’s network security.
Ben-Sasson Questions Bitcoin’s Fixed Supply
In a post on X, Ben-Sasson argued that Bitcoin’s fixed supply limit creates problems over the long term.
“Capping the supply of Bitcoin at 21M doesn’t make sense,” he wrote. He added that “as time goes to infinity, all keys will be lost.”
Instead of a fixed maximum supply, Ben-Sasson proposed a monetary policy with a permanent annual issuance rate capped at 4%. He said this would place an upper limit on inflation while ensuring enough Bitcoin remains available for future users.
He also argued that a 4% issuance rate roughly matches long-term human population growth. Beyond lost coins, Ben-Sasson warned that Bitcoin faces a long-term “security problem.”
Bitcoin Community Rejects the Idea
The proposal drew criticism from Bitcoin supporters. Many argued that the 21 million supply cap is one of Bitcoin’s defining features and a key reason it is viewed as “digital gold.”
Critics also pointed out that Bitcoin is divisible into 2.1 quadrillion satoshis. They argued that this makes concerns about running out of Bitcoin unnecessary. Ben-Sasson responded that those smaller units would also disappear over time as more private keys are lost.
Others warned that removing the supply cap would weaken Bitcoin’s scarcity and make it resemble inflationary cryptocurrencies. Ben-Sasson disagreed, saying Bitcoin could remain scarce as long as its inflation rate stayed permanently fixed.
The debate also revived a long-standing argument that permanently lost coins actually strengthen Bitcoin’s economics by reducing the liquid supply.
Strategy Executive Chairman Michael Saylor has previously said he plans to destroy access to his Bitcoin holdings after his death, arguing that doing so would increase scarcity for the remaining holders.
Zcash Proposal Offers a Different Approach
The discussion also drew comments from Zcash founder Bryce “Zooko” Wilcox, who highlighted a proposal currently being considered within the Zcash ecosystem.
Instead of increasing the maximum supply, the proposed Network Sustainability Mechanism would let users voluntarily burn ZEC. Those burned coins would then be gradually reissued as mining rewards over four years.
The proposal is designed to support long-term miner incentives while preserving Zcash’s fixed 21 million coin supply.
A similar change to Bitcoin would require broad agreement from developers, miners, node operators, and the wider community. Reaching that level of consensus would make such a protocol change extremely difficult under Bitcoin’s decentralized governance model.
Related: Why Are Public Companies Racing to Accumulate Bitcoin in Their Balance Sheets?
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