StarkWare CEO Eli Ben-Sasson argued that Bitcoin private keys get lost over time, meaning the amount of usable Bitcoin will diminish. Many disagree.
The debate over whether Bitcoin's fixed supply cap should be lifted has resurfaced after StarkWare CEO Eli Ben-Sasson suggested Tuesday that it should replaced with a 4% annual issuance rate.
In a post to X on Tuesday, Ben-Sasson said the current 21 million cap “doesn't make sense” because private keys are lost over time and “as time goes to infinity, all keys will be lost.”
Crypto wallet hardware provider Ledger estimated in November that up to 4 million Bitcoin had been burned or permanently lost. Ben-Sasson said he still supports a hard upper bound on Bitcoin's supply, and that a 4% annual inflation rate roughly tracks the growth of the human population.
Bitcoin's fixed cap has long been one of its core selling points, underpinning the “digital gold” narrative and drawing on Austrian economics, where a fixed money supply protects against monetary debasement and, in theory, preserves purchasing power over time. Many Bitcoiners have argued that changing the cap would undo the very thing that makes Bitcoin unique.
Bitcoiners have also said the loss of private keys improves Bitcoin’s supply-demand dynamics because one can’t sell what one doesn’t have access to. One of the biggest advocates of this feature is Strategy executive chairman Michael Saylor, who plans to burn his Bitcoin private keys upon his death as a “pro-rata contribution” to other Bitcoin holders, making their coins scarcer in the process.
Ben-Sasson’s post was met with heavy criticism.
One X user argued that Bitcoin is divisible into 2.1 quadrillion base units, called satoshis, in an effort to counter Ben-Sasson’s claim that there won’t be enough Bitcoin “to go around.”
However, Ben-Sasson argued that those 2.1 quadrillion units would also trend toward zero over time because of lost keys.
Other opponents argued that lifting Bitcoin’s fixed cap would make it like other cryptocurrencies. However, Ben-Sasson said Bitcoin would retain its scarcity, provided that the inflation rate remained fixed.
Related: Bitcoin nears cycle bottom as over half of supply is held at a loss, says K33
Related: Bitcoin nears cycle bottom as over half of supply is held at a loss, says K33
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