Jamie Dimon, CEO of JP Morgan, remains skeptical of almost everything Bitcoin – including the idea that its total supply is limited to 21 million coins.
“How do you know it will stop at 21 million?” he asked while discussing cryptography with Squawk Box on CNBC Thursday. “Maybe it will be 21 million and Satoshi’s picture will come out and all of you will laugh.”
This isn’t the first time he’s questioned the sacred Bitcoin number – a characteristic often highlighted by the asset Biggest reinforcements. In theory, an absolute maximum supply would give bitcoin a scarcity greater than any government-issued currency on Earth, allowing it to be a store of value.
“Do you read all algorithms? Do you all believe that?” he said at an IIF event last October.
Bitcoin algorithms have already been read by many – they are open source and freely visible to the whole world. As Jameson Loeb, co-founder of bitcoin wallet company Casa, points out, the bitcoin supply cap is implicitly maintained with just five lines of code.
To be precise, Bitcoin is programmed to halve its issuance rate every 210,000 blocks, which is roughly every four years. While 50 new bitcoins were issued per block in 2009, only 6.25 bitcoins are attached per block today.
These events are calledhalvesThis should happen no later than the year 2141, said Luke DashJr, Bitcoin developer, assuming nothing changed before then. Decrypt. “After 10 halves, rounding errors start to reduce,” he specifies, referring to the problem of non-divisible block rewards after satoshis up to 2049. “So if there’s more constant precision, it better be 2049.”
The math behind this halving works such that Bitcoin supply cannot reach or exceed 21 million.
However, anything kept by code can technically be changed, as long as users agree to it. Many argue that the Bitcoin community will have to upgrade its software to produce more than 21 million coins, in order to provide consistent funds to support the mining industry.
Bitcoin has never generated meaningful transaction revenue relative to its security budget, which supports security heavily with block rewards.
The current model is not sustainable, which weakens its potential to become a global reserve currency.