The arduous cap on Bitcoin is secured from alteration by its incentive construction and governance mechanism. The entities that govern Bitcoin’s ruleset have vital incentives to battle a change to the arduous cap due to the community’s structure, however those that want to change it don’t have any energy over the community.
The people with essentially the most incentive to switch Bitcoin’s arduous cap are the miners. Altering Bitcoin’s arduous cap might increase earnings for miners for a short while. Nonetheless, doing so would negate one of many fundamental arguments for investing in Bitcoin: its shortage.
The attractiveness of BTC for a lot of buyers is its predictable, mounted provide. Nonetheless, it isn’t in miners’ finest pursuits to take away the elemental driver of Bitcoin’s worth proposition. Though the modification will increase miner income in BTC phrases, it will result in a catastrophic and everlasting value fall, leading to a internet lack of miner income in fiat phrases.
Miners are extra involved with their fiat-denominated earnings than their Bitcoin-denominated income since virtually all of their prices — salaries, tools prices, and vitality payments — are paid in fiat. Consequently, if Bitcoin’s value falls, miners will lose cash.
The opportunity of altering Bitcoin’s arduous cap stems from two underlying misconceptions relating to BTC as a distributed, consensus-based community. To start with, there are dozens, if not a whole bunch, of various variations of the Bitcoin supply code. For instance, each node within the Bitcoin community runs a software program that rejects any incorrect blocks.
Whereas many nodes are operating the newest model of Bitcoin Core, some are nonetheless utilizing older variations and implementations. Consequently, whereas altering BTC Core’s supply code is straightforward, convincing tens of 1000’s of nodes to implement these modifications is considerably tougher.
Furthermore, miners don’t have any management over the community’s guidelines. As an alternative, miners are liable for creating new blocks and validating transactions. When miners submit a brand new block to the community, tens of 1000’s of nodes independently confirm it, guaranteeing that it generates an acceptable quantity of recent BTC, has legitimate proof-of-work and accommodates legitimate transactions. All blocks that break these standards can be rejected by nodes, implying that miners don’t have any management over Bitcoin’s ruleset.
When 95% of miners agreed to carry the block dimension restrict in 2017 in an try to permit Bitcoin to scale, this principle was confirmed by actuality. Alternatively, nodes and customers resisted the shift and efficiently pressured miners to modify to a special scaling technique.