StarkWare CEO Eli Ben-Sasson criticized the Bitcoin supply model, saying the fixed design limit “doesn’t make sense.“
Eli Ben-Sasson, the co-founder and chief executive of StarkWare, the blockchain software company behind Starknet, challenged Bitcoin’s 21 million supply cap, arguing that a fixed inflation ceiling would make more sense than a hard limit on total coins.
In a Tuesday, July 7 post on X, Ben-Sasson claimed that Bitcoin’s headline cap is not the same as the amount of Bitcoin people can actually use, noting that if private keys are lost, the coins tied to those keys still exist on the ledger, though they effectively fall out of circulation unless the keys are recovered.
As the Starknet co-founder argued, Bitcoin should keep a strict monetary limit, but define it differently. Instead of fixing the total number of coins forever, he said the network should set a hard ceiling on future issuance:
“I strongly support a clear monetary policy with an absolute upper bound on the # of Bitcoins in the future. Say, fix a max issuance rate and you get that (a good choice is 4% a year, this is a reasonable upper bound on human population expansion).”
But such a move would dramatically change the existing economic design of the largest by market cap cryptocurrency.
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Bitcoin was programmed to release new BTC▲$62,630.00 through miner rewards that started at 50 BTC per block and get cut in half every 210,000 blocks, or roughly every four years. The latest halving in 2024 reduced the block reward to 3.125 BTC.
Ben-Sasson also pointed to miner security, saying miner-related risk is “looming large on the horizon,” as shrinking block rewards mean the network will increasingly depend on transaction fees to keep miners paid and the chain secure.
Zcash Founder Points to Alternative
In the replies, Zooko Wilcox, the Zcash co-founder and chief product officer at Shielded Labs, pointed Ben-Sasson to Shielded Labs’ Network Sustainability Mechanism, a proposal for Zcash that tries to address long-term issuance while keeping ZEC▲$465.18’s own 21 million coin cap.
The idea is to burn ZEC from circulating supply and allow those coins to be reintroduced later as future block rewards, keeping the 21 million cap while adding a way to support the network over time.
While Ben-Sasson found the proposal “interesting,” he still pushed back on the idea that users could burn ZEC as direct donations to support the network, saying “the donations are hard to quantify and the 60% burn might also be too small to lead to meaningful issuance,” and adding that “in addition to these, I think better to cap inflation rate, not total amount.”
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