Connect with us

Bitcoin

Bitcoin [BTC] supply expansion underway, claims Chinese news outlet; Dismissed as ‘speculation’

Avatar

Published

on

Bitcoin [BTC] supply expansion underway claims Chinese news outlet
Source: Unsplash

Just when the intense debate surrounding the increase in the total Bitcoin supply was fading, Jiang Zhuoer, the founder of the cryptocurrency mining pool BTC.TOP reportedly dropped the bomb on his Weibo handle that the development team of the Bitcoin Core camp has been targeting an increase to the previously set supply of 21 million BTCs.

In a recent report by a Chinese crypto outlet, Bitcoin core supporter Jiang claimed on his Weibo profile that the expansion process was underway. It further stated that:

“In Jiang’s opinion, Matt Luongo is the “mouthpiece” for the Bitcoin Core development team at the roundtable discussion.”

However, Luongo himself had some contrarian views. Matt Luongo, the founder of Thesis, retweeted the article published on the said website and said:

“Can anyone in the Chinese BTC community slide in there and correct him? Both on the big issue as well as the minor character assassination – I especially love the part where folks think I’m claiming to be a BTC core dev”

Previously, Luongo had tweeted:

“I was the guy that said we might have to one day raise the Bitcoin supply cap. Fight me.”

In a series of tweets last week, he clarified that there was no such proposal. The discussion was pure ‘speculations’ of a single person, he said. Further, the CTO of Casa, Jameson Lopp, who was also an attendee at Satoshi’s Roundtable, asserted that he was in the room and did not hear anyone agreeing to the proposal.

Matt Luongo further called out the Chinese tweet in a post stating:

“He’s taking the discussion out of context and pretending that it’s a widely held belief of BTC core devs. It isn’t. No one is seriously proposing raising the supply limit. I was only speculatively discussing how the free market might develop in the future relative to subsidies.”

A Twitter user, @crypto_zl, replied to the article tweeted by the news outlet in question, stating:

“Don’t make a rumor here, can you provide some real news? Shame on the Chinese.”

Luongo claimed that he had suggested an increase in BTC supply on rational grounds. He elucidated that the reward for mining a block halved every four years. So, the magnitude of transaction volume is expected to go down. This would leave very little incentive for the miners to validate the blocks and secure the network. This had not resonated well with the Bitcoin core community and had led to a heated debate online.





Subscribe to AMBCrypto’s Newsletter




Follow us on Telegram | Twitter | Facebook



Chayanika holds a Journalism degree and is currently working with AMBCrypto. She is inquisitive about everything that the Blockchain Technology has to offer.

Bitcoin

Is the scarcity principle a factor in Bitcoin’s valuation or is it just crypto white noise?

Biraajmaan Tamuly

Published

on

Is Bitcoin being scarce changes the way we put forward its valuation or is it just Crypto white noise?
Source: Pixabay

The aspect of scarcity is fundamental to the Bitcoin community, with its limited availability often seen as a virtue in a world where governments have unlimited power to print fiat currencies. With the value of Bitcoin increasing day by day, the virtual asset is getting close to its saturation point.

At press time, 17,763,712 BTC were in supply, very close to the 21 million Bitcoin supply cap. However, the last BTC will be minted on 7th May 2140. That is almost 100 years from now. So, there is still a significant period of time before Bitcoin’s production halts for good.

Many in the community have suggested that Bitcoin’s scarcity has genuine value because it makes the virtual asset “deflationary.” In light of Facebook’s announcement of “Libra” coin, it has been argued that it will not generate any circumstantial threat to Bitcoin, solely on the fact that Bitcoin was scarce and Libra was not.

A recent Medium article released by Forbes summed up the scenario. It stated,

“It will take time, but Facebook will greatly accelerate the pace of teaching people about cryptocurrencies. And when this happens, more people will turn to bitcoin for one simple reason — bitcoin is scarce, while Facebook’s cryptocurrency is not.”

Another aspect that explains the importance of Bitcoin’s scarcity value is its comparison with Gold, which is also a scarce commodity. A key model that explains Gold’s intrinsic value in the market is the Stock to Flow ratio.

The S2F ratio of a commodity explains the scarcity value as it is the amount of an asset that is available to the amount that is produced annually. Moreover, the higher the S2F value of an asset, the lesser the inflation rate attached to it. At press time, Gold had the highest S2F value, but Bitcoin was close behind and it was stated that by August 2020, Bitcoins S2F’s value would be 55.2 to Gold’s 62.

However, a significant counter-argument against Bitcoin’s scarcity in the community was put forth, with none other than legendary investor, Warren Buffet, claiming that Bitcoin had no “intrinsic value.”

Recently, Peter Schiff, CEO at Euro Pacific Capital, explained that Bitcoin was not scarce due to the availability of other crypto-assets which made Bitcoin’s scarce value quite redundant since crypto assets, with better properties and characteristics, could be created anytime.

The argument was widely opposed by a majority of the community, with certain crypto-enthusiasts deciding to respond to the post. Twitter user, @Sisko8, said,

“The Mona Lisa is not really scarce, as there is an infinite supply of other paintings with identical or superior painting techniques that can be created out of 3$ paint and canvas, including photocopies of the Mona Lisa.”





Subscribe to AMBCrypto’s Newsletter


Continue Reading

Trending