Recently, there has been a lot of buzz about Bitcoin issuance. The reason came from Satoshi Nakamoto's round table meeting, an external developer named Matt proposed to stop the Bitcoin halving mechanism: the reason is that during the process of Bitcoin's multiple halving, the reduction of miners' fees will lead to a sharp decrease in miners. It will cause the Bitcoin network to face severe 51 attack problems.
Many people in the industry said that the additional issuance of Bitcoin is pure nonsense, and Matt has nothing to do with the Core team. However, Jiang Zhuoer, the founder of LeBit, not only supports additional issuance, but also revealed in an interview with Odaily: "Behind Grin are several big names in Core, such as Maxwell."
On February 18, Jiang Zhuoer once again stated his position on Weibo regarding the Core team’s additional issuance behind the scenes: “How many people will be slapped in the future when it comes to the additional issuance of Bitcoin? If you feel terrified to issue additional Core, then you will thank me for everything.”
Hong Shuning, the former head of blockchain at the Suning Financial Research Institute, criticized tit-for-tat in the microblog: "Let's not talk about additional issuance. The handling fee is an extremely complicated game process, and it will affect the whole body. I hope there will be more academic research. It is supported by the results. Fortunately, there is still plenty of time, and in time, we will definitely find a better solution than Bitcoin’s additional issuance and shrinkage.”
Regarding the additional issuance of Bitcoin, in addition to triggering fierce confrontations among the bigwigs, the respective supporters of BTC, BCH, and BSV have specially established a WeChat group, arguing endlessly around whether Bitcoin can be additionally issued and the consequences of the additional issuance.
secondary title
Whoever supports the additional issuance of Bitcoin is a fool X
If the upper limit of Bitcoin issuance is revised, what will be the consequences for the blockchain industry?
The introduction to "Blockchain Apocalypse - Anthology of Satoshi Nakamoto" states that there is no way to prevent the upper limit from being modified. However, the modification of the upper limit of Bitcoin issuance requires the cooperation of most miners. At the same time, even if most miners agree to revise the issuance cap, it will lead to a hard fork of Bitcoin.
The result is two virtual currencies, a store of value "original bitcoin" whose version is called prime, and a "quantitative easing currency" whose value will decline.
For example, according to the above statement, if Bitcoin raises the upper limit of issuance, it is just another fork of Bitcoin, and the original Bitcoin is still "encrypted gold".
The modification of the issuance limit of Bitcoin means that Bitcoin will be issued unlimitedly according to a certain block reward. If it is not a conspiracy theory of interested parties, if it is not groundless, it is necessary to discuss the impact of modifying the issuance limit on the industry.
Bitcoin, as a cryptocurrency, has the attributes of currency and gold since its birth. Therefore, we can discuss the impact of the additional issuance of Bitcoin from these two aspects, so that the benevolent will see the benevolence and the wise will see the wisdom.
Gu Ya, the founder of The Force, does not think that whether Bitcoin is overissued or not will have too much negative impact on the blockchain industry, but it should be adjusted up and down according to the demand.
"If Bitcoin is used as a measure of currency, it is essentially a deflationary system, and it is stable. If 1 million coins are issued a day, 10 million coins will be issued in 10 days, and so on: What is the inflation rate on the first day? ? What is the inflation rate the next day? The inflation rate is falling every day, and eventually the newly issued currency accounts for less and less money, which is the same as the issuance of the US dollar.”
Bitcoin is essentially a deflationary system, which Satoshi Nakamoto has long asserted.
Liu Changyong, founder of Zhimi University, said in an interview with Odaily: "If Bitcoin stops halving in the future, it means that the total amount will exceed 21 million and continue to grow. This subverts people's belief that the total amount of Bitcoin is limited, The common sense of deflationary currency has a great impact. However, since the new part is still reward mining, mining has costs and is close to perfect competition. If the community consensus can be achieved, there will be no actual negative impact. If Bitcoin It’s still deflationary if apps grow faster than releases.”
At the Satoshi Nakamoto roundtable meeting, an external developer named Matt proposed to stop the halving of Bitcoin. The reason is that when Bitcoin miners have no coins to mine in the future, the sharp drop in miners will make Bitcoin face the risk of a 51 attack. The cost is greatly reduced.
In this regard, Liu Changyong believes: "Stopping the halving is a trade-off for currency holders. On the one hand, additional issuance will cause the value of the currency to shrink, and on the other hand, additional issuance will make the entire ecological security more secure."
Cypherpunks use encryption technology to solve the problem of distrust, but in the ten years since the birth of Bitcoin, it has not only been praised by a small wave of cryptographers who contributed theories and technologies such as Byzantine fault tolerance and asymmetric encryption, but also by early speculators. , the influx of capital from capitalists, and the capital and technology blessings of Internet giants have gradually established the consensus and foundation of Bitcoin.
Gu Ya gave the following views from the speculative attributes and demand attributes of Bitcoin:
1. The price of Bitcoin will only affect those speculators. Miners are infrastructure builders and real long-term investors. For them, I don’t think it has much impact. There is no upper limit for Ethereum mining. Will it affect the value of Ethereum?
2. Existing people are speculators and investors, they only care about the currency price. Good currency does not need to be hoarded. The more people use it, the more valuable it is. As a medium of exchange, the more people use it, the price will increase, and the less it is used, the less valuable it will be.
3. Even if Bitcoin dies, it will not shake the foundation of blockchain. The foundation of the blockchain is not the price of the currency. Blockchain technology solves the problems of the industry. This is the foundation of the entire industry, not the price of the currency. Currency itself is not worth investing in.
Jiang Zhuoer, the founder of Leibit Mining Pool, clearly expressed his support for modifying the Bitcoin upper limit for the same reasons as Matt: "The small income of miners means that the total scale of the mining industry is small, and the cost of attackers is reduced. In the future [Bitcoin Market Value]/ [The total scale of the mining industry] When it is large enough, someone must choose to short first, and then spend a small amount of money to make a profit by attacking 51. Even mining capital may have this kind of internal motivation: I attack once, and I can get mining machine change Scrap iron 10 times, 100 times the income, why not do it?"
But the miners don’t seem to buy into the account of Jiang Zhuoer and others. For the miners, mining is a long-term and high-cost investment, and many people don’t understand their belief in the value of Bitcoin.
Odaily interviewed a number of old miners hidden in the mountains and asked about the impact of the additional issuance of Bitcoin on the mining industry. These miners refused to give an answer, and made it clear that it is completely meaningless to discuss this matter. One of the 11-year-old miners, Xin Zhao, said dissatisfiedly: "Whoever supports (Bitcoin issuance) is stupid."
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Eat Bitcoin, smash Bitcoin
Hong Shuning, the former head of blockchain at the Suning Financial Research Institute, firmly opposes the revision of the Bitcoin upper limit: "Additional issuance will seriously damage the public's trust in Bitcoin. The 21 million upper limit of Bitcoin is fixed, which has won the majority of people consensus."
"Once the additional issuance hard fork is successfully split into two chains, it will be a strong blow to the users of the two chains, the currency price will drop sharply, and may even return to zero successively, and the unissued chain will also be dragged down by the additional chain. "
In addition, the currency price is based on the miners' expectations for the future. The mining industry is at the top of the entire cryptocurrency industry chain, which is the bottom of the industry, and the value of Bitcoin comes from its general acceptance (also known as the consensus), This consensus is based on user confidence.
Hong Shuning said: "Once miners lose confidence due to the additional issuance of Bitcoin, the price of Bitcoin will seriously depreciate or even return to zero. This is not worth the loss to the miners who support the additional issuance, unless most miners are blinded or lose their minds."
"The rate of currency price decline must be much higher than the rate of additional issuance. The history of legal currency can prove that, such as Zimbab, Venezuela and other countries, but there is no cost to print money in legal currency. Miners are different. Miners are both issuers and Token holders and miners have sunk costs invested in mining machines and mines, and a drop in currency prices will cause miners to go bankrupt.”
"Once the miners go bankrupt, the current large-scale mining activities will be broken. At this time, more independent miners will be recruited. Relatively speaking, this will also affect the business of the mining pool."
In addition, Hong Shuning also believes that the additional issuance of Bitcoin will have a double-sided effect on other public chains:
"On the one hand, after the public has extreme distrust of cryptocurrencies, there may be a substitution effect, and a certain public chain will replace Bitcoin as the new leader."
"On the other hand, the entire public chain may follow the collapse of Bitcoin. The reason for the additional issuance of Bitcoin is the Lightning Network, but after the additional issuance of Bitcoin, how will the Lightning Network be attached? BCH and other public chains also cannot be completely eliminated The possibility of additional issuance, so there is a high probability that they will die together, not alone."
Can the additional issuance of Bitcoin really cause the above consequences? Hong Shuning gave his logic:
"The public chain is first used to issue encrypted currency. A good currency needs to ensure scarcity, security, damage resistance and high liquidity. This is the foundation. Then various encrypted assets can be issued on the currency standard and developed Related DAPP."
"Under free market conditions, good money drives out bad money. No one is willing to accept bad money, and bad money will soon be forced out of the market. Not only is it retrogressive, Bitcoin is an industry benchmark, and once it is issued, it is likely to lead to the end of the industry , the ideal of decentralization is shattered, the blockchain as a technology has no meaning of existence, additional issuance is only a superficial phenomenon, and the core is whether decentralization is feasible."
"The essence of the blockchain is decentralization, and there is no meaning other than that. The decentralized technology before the emergence of the blockchain failed because there was no feasible incentive mechanism. The blockchain introduced cryptocurrency as an incentive. The first This makes the ideal of decentralization feasible for the first time, and if the currency fails due to additional issuance, then the blockchain is meaningless.”
Dr. Victor Fang, the founder of AnChain, supported Hong Shuning's point of view: "The economy of the public chain is actually supported by BTC. If BTC is issued additionally, it will no longer be the subject of gold. If other public chains are not good in the short term, it will definitely collapse."
In this regard, Hong Shuning emphasized: "The worst result of the additional issuance of Bitcoin is that all currency prices quickly return to zero, and the blockchain becomes a historical legend. Confidence currency gold is important. If this industry can survive, it will take a long time. Slowly restore public confidence, perhaps over decades."
Hong Shuning appealed: "The discussion triggered by this incident will have a great impact on the future. It will allow more people to understand Bitcoin and realize that only more people participate in Bitcoin governance, rather than a small number of developers and mining pools. Only by making a decision can you protect your own interests. Especially miners, as the security guards of Bitcoin, must have a deep understanding of the technical principles of Bitcoin, and don’t be fooled into supporting wrong proposals.”
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How feasible is it to increase the issuance of Bitcoin?
As of 2018, in the past 9 years, the total output of Bitcoin has exceeded 80%, and the remaining number is less than 4 million. By 2028, it is estimated that only 650,000 Bitcoins can be mined.
This result will lead to, by 2028, the cost of money and time for Bitcoin mining will increase sharply, the number of Bitcoin miners will drop sharply, the ratio of mining scale to the market value of Bitcoin will become smaller and smaller, and the network security of Bitcoin will be unsustainable , the so-called 51 attack, many people expected to happen at this time.
Hong Shuning is also frank: "Bitcoin issuance is a missing point in our early science education process. Although this possibility is extremely small, it is not completely impossible. For some currencies with low computing power or high concentration , the possibility of additional issuance is still relatively high, and more attention should be paid to it. Before the additional issuance, miners should actively speak out and see the future more clearly, and long-term interests are the real interests.”
Although the scarcity of Bitcoin at this time will lead to a sharp increase in transaction fees, Jiang Zhuoer believes that there is an upper limit to the increase in service fees: "Users would rather spend more than a few hundred or even thousands of dollars in fees. Time and energy, choose other methods such as off-chain transactions, second-layer networks.” Therefore, the number of miners will still drop sharply, and the security of the Bitcoin network is still not guaranteed.
Zhu Wei, the founder of Biyin, said: "Bitcoin is unlikely to be issued additionally. The domestic public opinion atmosphere is mixed. I feel sorry for the newcomers who came in after 2017. It is really not easy for everyone to find real information in this environment."
Zhu Wei’s understanding of miners’ fees is different from Jiang Zhuoer’s. He believes that there is no upper limit on the fees: “Even if there are fewer and fewer Bitcoins mined, the value of the mined Bitcoins is getting higher and higher. .Now a block is 12.5 BTC, and the peak value is less than two million. In the past, a block was 50 BTC, and the value was only tens of thousands of dollars. There are no miners who can support it.”
Zhu Wei believes that large-amount transactions are the use of Bitcoin, so it does not affect miners' income: "He (Jiang Zhuoer) still adheres to the concept of using daily payments as on-chain transactions. A handling fee of 500 yuan or 1,000 yuan is of course not worth the loss. But big companies and consortiums don’t think so when they make payments. If a payment of 10 billion yuan costs 1 million yuan in handling fees, what’s the problem? "
The additional issuance of Bitcoin requires Core developers, miners, mining pools and other stakeholders to reach a consensus. Consensus is the foundation of their belief in Bitcoin. From this point of view, Zhu Wei thinks that additional issuance is impossible: "Think about it, it took so long to expand capacity. How long will it take to expand from 1 trillion to 2 trillion, and then to 8 trillion. We started talking about it in 2014, 15, In 2016, the debate was fierce, but BCH was forked in 2017, and the decision-making on small things took a long time, so how could such a big issue be passed quickly?"
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Additional issuance is the aftermath of the bitcoin expansion debate
"The total number of coins is 21 million, which is halved every 4 years and will be mined in 2140." For most bitcoin investors, the "political program" of bitcoin is sacrosanct. They are waiting for the next wave of bull market to come and achieve exponential riches again.
If Bitcoin soars again to 100,000, or even 1 million, investors can realize their desire for a well-off life of "common prosperity". If the road to getting rich is not going away, what is the reason for raising additional issuance?
The deep-seated reason may not be the 51 attack. In an interview with Odaily, Guya said many times that the 51 attack only exists in theory, but there are economic means to sanction it. For miners, 51 attacks are fatal to Bitcoin, and the costs and benefits outweigh the gains. Therefore, the actual 51 attacks do not exist.
According to Nakamoto's original vision, Bitcoin opens up the block size limit according to the growth of demand. Liu Changyong told Odaily that the original Bitcoin expansion debate actually changed the direction of Bitcoin’s development, and the economic model of Bitcoin has changed.
Gu Ya said: "Bitcoin has been made into what it is today because of these short-sighted people. The Bitcoin block is so small, of course, the rewards will be less and less. It used to be 1 trillion, but now it is changed to 300 K. Then What transfer fees do miners get? The network is so congested, your Lightning Network is a centralized network that can be banned at any time.”
"A good blockchain network, its system token is used as Gas to pay for the entire chain, and the stable currency and Token issued on it are its value. Super issuance is just a reform of the supply test, and it does not solve the more essential The demand problem. Who will use your blockchain? Now the good blockchain supply model is doing very well, but the problem is that the user experience is too poor.”
Stopping expansion and limiting the block size means that miners face the problem of insufficient rewards. Liu Changyong believes that it is precisely for this reason that the seemingly impossible "bitcoin issuance" event has become the focus of controversy.
Liu Changyong told Odaily: "With the Bitcoin main chain limited to 1M, if the Lightning Network succeeds, the entire ecological value will be great, and more computing power will be needed to ensure system security. However, the halving has led to a decline in miners' new block rewards. , and the transaction volume of the main chain is difficult to increase, and the transaction fee remains unchanged, so the growth of computing power will lag behind the growth of the entire ecological value, and the security risk will become greater and greater.”
Therefore, stopping the halving of Bitcoin is just an effective measure to solve Bitcoin network security based on the future Lightning Network. But this also gave the BCH community a footnote on the authenticity of the issue of additional issuance as the rationality of expansion—that is, expansion is the kingly way, so why limit blocks to engage in the Lightning Network?
Qiu Shaoxian, a staunch supporter of BSV, commented:
"Whether Matt's proposed modification of the upper limit or Lurk's proposed reduction to 300K, in essence, this is BTC's attempt to solve the problem of insufficient supply incentives for Bitcoin in the later stage through a planned economy."
"I personally think that the size of the block should be determined by the market itself rather than an artificial upper limit. This is actually the difference between the expansion group and the core group."
“If the system is maintained only by relying on the skyrocketing price of Bitcoin and allowing future generations to take over, in my opinion, this is actually no different from a Ponzi scheme.”
Bitcoin additional issuance serves the future Lightning Network to solve the problem of insufficient block rewards. The BCH community and the BSV community stand on the same front at this time: limiting the block size to implement the Lightning Network is not as good as block expansion to solve practical problems.
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(The author, Wu Yan, focuses on mining and blockchain reports. You can add WeChat BIG-BYE for communication. Please note your position and reason.)
