Vitalik Buterin Says Decreasing Miner’s Reward Schedule is Dishonest for Bitcoin
Vitalik Buterin, the co-founder of Ethereum (ETH), said that decreasing reward schedules are somehow dishonest for Bitcoin (BTC). There have been several discussions regarding Bitcoin’s supply cap of 21 million BTC. The debate has now included Buterin that has given his opinion on the matter.
Buterin Gives His Opinion About Bitcoin’s Issuance
Buterin said that there was something dishonest to the reward scheme in Bitcoin that drops every four years. As soon as in May 2020, Bitcoin rewards are going to drop to 6.25 BTC per block from 12.5 BTC that miners currently receive for their work. This deflationary reward schedule adjusts every four years reducing 50% of the new Bitcoin supply.
About it, Buterin believes that imposing an upper limit was something disingenuous since it presents contradictory ideas.
On the matter, he commented:
“You’re using the present level of issuance of the system and the system’s ability to operate under the present level of issuance as proof that the system is safe. But then, you’re using the fact that it has this baked in decreasing reward schedule as a proof that it’s finite supply.”
He then said that if the supply is finite, the reward schedule is going to decrease and the market will have no evidence that the system is going t be safe under the decreased rewards. Nowadays, Bitcoin fees are $140,000 a day. Meanwhile, miners receive also 1800 BTC per day, close to $7.2 million at current prices.
He then explained that if we take bitcoin’s mining power and divide it by a factor of 50, that means that the network would not be much stronger than what Ethereum Classic (ETC) currently is. Ethereum Classic was recently affected by a 51% attack that hit the network and its users.
The founder of Mythos Capital, a cryptoasset investment company, Ryan Sean Adams, mentioned that he completely agrees with it. Supply caps are good for the meme, he said, but disingenuous when implemented too early.
“I think people should view [supply caps] as less credible than people generally view them now.”@VitalikButerin on supply caps such as 21m Bitcoin
Completely agree. Supply caps are good for the meme, but ultimately disingenuous when implemented too early
Full text is good: pic.twitter.com/9dZzsv7no2
— Ryan Sean Adams – rsa.eth (@RyanSAdams) March 28, 2019
Back in February, after the Satoshi Roundtable meeting, Matt Luongo, the Founder of Fold, has proposed the raising of Bitcoin’s supply capitalization. Luongo explained that it was not logical to secure the network with falling rewards. Miners would not have any incentive to secure the network and protect it against 51% attacks.
Thus, increasing the supply of Bitcoin generated a controversial debate on social media that found several individuals against this proposal.
Satoshi Nakamoto created Bitcoin with a deflationary scheme that would help the network have a clear supply for the future. Moreover, it would make Bitcoin a deflationary asset that would only increase in price as demand grows while Bitcoin remains capped at 21 million.
Currently, each Bitcoin has a price of $4,220. The digital asset was able to surpass the $4,200 level in several cryptocurrency exchanges. This is a very important price level because it would mean that the bear market that started in January 2018 is over.