Bitcoin is often lauded as the first truly decentralized digital currency, with its capped supply of 21 million coins serving as a cornerstone of its appeal. However, this assumption came under scrutiny recently when BlackRock, the world’s largest asset manager, released a promotional video highlighting Bitcoin’s features.
Amid glowing praise for Bitcoin’s monetary policies, a disclaimer caught viewers’ attention: “There is no guarantee that Bitcoin’s 21 million supply cap will not be changed.”
This statement, also found in BlackRock’s prospectus for its proposed spot Bitcoin exchange-traded fund (ETF), ignited a firestorm of reactions online. Critics labeled it “misinformation” and “FUD” (fear, uncertainty, and doubt). But what lies behind BlackRock’s cautious wording? Is the 21 million cap really at risk?
A Legal Necessity
The inclusion of the disclaimer in BlackRock’s ETF prospectus stems from legal prudence. According to U.S. Securities and Exchange Commission regulations, all investment risks—no matter how unlikely—must be disclosed to potential investors.
BlackRock’s filing reads: “Although many observers believe this is unlikely at present, there is no guarantee that the current 21 million supply cap for outstanding bitcoin, which is estimated to be reached by approximately the year 2140, will not be changed. If a hard fork changing the 21 million supply cap is widely adopted, the limit on the supply of bitcoin could be lifted, which could have an adverse impact on the value of bitcoin.”
While the possibility of the cap changing is remote, BlackRock’s legal team deemed it prudent to highlight this hypothetical scenario.
Exceeding the 21 Million
There are two primary ways Bitcoin’s supply could theoretically increase: a critical bug or a voluntary hard fork.
Bitcoin’s code has not been immune to errors. The most notable example occurred in August 2010, during the network’s infancy. Known as the “value overflow incident,” this bug briefly inflated Bitcoin’s supply to over 184 billion coins. Satoshi Nakamoto, Bitcoin’s enigmatic creator, resolved the issue within hours.
Since then, Bitcoin has operated without similar inflationary issues. Nevertheless, BlackRock’s filing points out that “it’s technically possible that someone might exploit an esoteric bug in the future and briefly alter its supply.”
This perspective reflects the reality of software vulnerabilities, particularly in systems as valuable as Bitcoin. With over $1.8 trillion in market capitalization, any bug that enables the creation of new coins would pose a significant threat to the network.
The second scenario is a voluntary change to Bitcoin’s supply cap through a hard fork. Bitcoin’s current rules, enforced by a global network of nodes, set the maximum supply at just under 21 million coins—20,999,817.31308491 BTC to be precise.
However, BlackRock’s prospectus acknowledges the possibility of a hard fork that could alter this rule. One potential justification for such a fork involves a proposal known as “tail emissions.” This concept suggests creating small, perpetual rewards for miners after the final Bitcoin is mined around 2140. Some versions of this idea propose recycling unspendable Bitcoin, while others suggest increasing the total supply slightly to incentivize miners to continue securing the network.
Despite these discussions, the likelihood of such a change remains slim. As BlackRock’s disclaimer notes, “many observers believe this is unlikely at present,” a sentiment echoed by most within the Bitcoin community.
Network’s Defense Mechanism
Bitcoin’s supply cap is more than just code; it is a social consensus enforced by the network’s participants. Currently, there are at least 67,000 Bitcoin nodes worldwide, of which approximately 19,000 are online at any given time.
These nodes collectively enforce Bitcoin’s rules, rejecting any block or transaction that violates the 21 million cap. This decentralized architecture ensures that any attempt to increase Bitcoin’s supply would require overwhelming support from the community—something that has consistently been absent in previous discussions.
“There will never be more than 21 million bitcoin,” is a refrain echoed by Bitcoiners.
For Bitcoin maximalists, the supply cap is sacrosanct. BlackRock’s disclaimer, however, reflects the cautious lens through which institutional investors view Bitcoin. From a legal standpoint, the asset manager’s acknowledgment of this remote risk is not an indictment of Bitcoin’s design but a compliance-driven measure to inform investors.
As one observer noted, “[BlackRock’s lawyers] would still prefer to note the risk — even if it is in fine print.”
Information for this story was found via Protos and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
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