StarkWare CEO proposes replacing Bitcoin's 21 million cap with a 4% annual inflation rate, sparking strong community opposition

On July 8, StarkWare CEO Eli Ben-Sasson posted on platform X, suggesting that the Bitcoin community adopt a fixed annual issuance rate of 4% to replace Bitcoin's hard cap of 21 million coins, citing that lost private keys will continuously reduce the available Bitcoin supply.

According to a report by Ledger, approximately 4 million Bitcoins have been permanently lost due to lost private keys, and it is believed that more keys will be lost over time.

Ben-Sasson emphasized that he supports setting a maximum issuance rate for Bitcoin's supply, as a 4% annual inflation rate is a reasonable upper limit for human population growth and can maintain its relative scarcity.

This proposal immediately drew strong criticism from the Bitcoin community. Opponents stated that 21 million Bitcoins can be subdivided into 2.1 quadrillion satoshis, and such fine granularity is fully capable of meeting global transaction demand.

Furthermore, the loss of private keys indeed reduces the circulating supply of Bitcoin, which in fact enhances Bitcoin's scarcity.

Strategy Executive Chairman Michael Saylor is one of the biggest proponents of this characteristic. He once planned to destroy his Bitcoin private keys upon his death, thereby "proportionally reducing" the total Bitcoin supply to make other holders' Bitcoins more scarce.

This scarcity is a key support point for Bitcoin's "digital gold" narrative. Based on this, changing Bitcoin's fixed supply cap would undoubtedly weaken its core value proposition.

In response, Zcash founder "Zooko" suggested that Bitcoin developers consider the privacy-focused "network sustainability mechanism" proposal currently being discussed in the Zcash ecosystem.

This proposal aims to keep ZEC's fixed cap unchanged but allows users to burn tokens, and these burned tokens will be gradually reissued as block rewards over a four-year period to alleviate miner incentive pressure without raising the hard cap.

However, due to Bitcoin's decentralized governance model, any protocol-level changes require consensus among developers, miners, and node operators, posing significant challenges to implementing such changes.

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