Eli Ben-Sasson, co-founder and CEO of StarkWare, has sparked fresh debate within the cryptocurrency community after arguing that Bitcoin’s iconic 21 million supply cap is not sustainable over the long term.
In a series of posts on X, Ben-Sasson said Bitcoin’s fixed supply “doesn’t make sense” because millions of coins are gradually becoming permanently inaccessible as users lose their private keys. Instead of maintaining a hard cap, he proposed a monetary policy based on a maximum annual issuance rate of 4%, which he believes would preserve scarcity while ensuring the network remains economically sustainable for future generations.
Why Ben-Sasson Thinks Bitcoin’s Fixed Supply Is Flawed
Bitcoin was designed with a hard cap of 21 million BTC, making it the first major digital asset with a permanently limited supply. This scarcity has become one of Bitcoin’s defining characteristics and is often cited as the reason it is referred to as “digital gold.”
However, Ben-Sasson argues that the fixed cap ignores a practical reality: Bitcoin holders regularly lose access to their wallets.
“Capping the supply of Bitcoin at 21M doesn’t make sense. Because over time, keys will be lost. In fact, as time goes to infinity, all keys will be lost.”
He contends that while Bitcoin’s theoretical maximum supply remains fixed, its effective circulating supply continually shrinks as private keys disappear forever, making large portions of the network’s supply permanently unusable.
Proposal: Replace Fixed Supply With a 4% Annual Issuance Cap
Rather than advocating unlimited inflation, Ben-Sasson proposed replacing Bitcoin’s hard cap with a maximum annual issuance rate of approximately 4%.
According to him, this model would:
- Offset coins permanently lost through misplaced private keys.
- Maintain sufficient circulating supply over centuries.
- Support long-term network security by providing ongoing miner incentives.
- Preserve monetary predictability through a transparent issuance policy.
Ben-Sasson said he still supports a clear monetary policy with an upper limit but believes that limiting annual issuance, rather than total supply, is a more practical long-term solution.
Lost Bitcoin Continues to Reduce Circulating Supply
The proposal is based largely on the growing number of permanently inaccessible Bitcoin.
Because Bitcoin has no password recovery system, coins whose private keys are lost remain visible on the blockchain but can never be spent again.
Industry estimates suggest that between 2.3 million and 4 million BTC may already be permanently lost through forgotten seed phrases, discarded hard drives, or deceased owners whose recovery information was never preserved. Ben-Sasson argues that this trend will continue indefinitely, gradually reducing Bitcoin’s usable supply.
Security Budget Also Part of the Debate
Ben-Sasson also pointed to Bitcoin’s long-term security budget as another reason to reconsider its monetary policy.
Bitcoin miners are currently compensated through a combination of newly issued BTC and transaction fees. However, as block rewards continue halving approximately every four years, newly issued Bitcoin will eventually disappear around the year 2140, leaving transaction fees as the primary incentive for miners.
Some researchers have questioned whether fee revenue alone will be sufficient to maintain Bitcoin’s security over the very long term. Ben-Sasson believes a modest, predictable issuance schedule could help sustain miner incentives without significantly weakening Bitcoin’s scarcity.
Bitcoin Community Pushes Back
Ben-Sasson’s proposal was met with strong criticism from many Bitcoin supporters.
Critics argued that Bitcoin’s fixed supply is one of its most important economic properties and forms the foundation of its value proposition as a scarce digital asset.
Others pointed out that lost coins actually increase scarcity, benefiting remaining holders rather than creating a problem. They also noted that Bitcoin is divisible into 2.1 quadrillion satoshis, making concerns about insufficient units for global adoption largely irrelevant.
Alternative Ideas Without Removing the 21M Cap
Some members of the crypto community suggested compromise solutions that preserve Bitcoin’s maximum supply.
Among them is a proposal inspired by the Zcash Network Sustainability Mechanism, under which voluntarily burned coins could gradually be reissued through future mining rewards while keeping the overall maximum supply unchanged.
Although the idea differs significantly from Ben-Sasson’s proposal, it reflects broader discussions about balancing long-term network security with Bitcoin’s commitment to a fixed supply.
Could Bitcoin’s Monetary Policy Actually Change?
While Ben-Sasson’s comments have revived discussion around Bitcoin’s future, any change to the cryptocurrency’s monetary policy would require overwhelming consensus from developers, miners, node operators, businesses, and users.
Given that the 21 million BTC cap is widely regarded as one of Bitcoin’s foundational principles, analysts consider any change to the issuance schedule highly unlikely under current governance dynamics. Nevertheless, the debate highlights growing interest in how Bitcoin’s economics may evolve as the network matures over the coming decades.
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