JP Morgan CEO Jamie Dimon remains skeptical about just about everything related to Bitcoin, including the idea that the total supply is capped at 21 million coins.
“How do you know it will stop at 21 million?” he asked while discussing cryptocurrencies on CNBC’s Squawk Box on Thursday. “Maybe it will hit 21 million and there will be a picture of Satoshi laughing at all of you.”
It’s not the first time Dimon has questioned Bitcoin’s sacred number, a feature often highlighted by the asset’s biggest proponents. In theory, an absolute limit on supply would give Bitcoin greater scarcity than any other government-issued currency on Earth, boosting it as a store of value.
“Bitcoin itself is a hyped-up fraud,” says @jpmorgan CEO Jamie Dimon. “Crypto is a decentralized Ponzi scheme…It’s a pet rock.” pic.twitter.com/9KQfckty8f
— Squawk Box (@SquawkCNBC) January 19, 2023
“Does everyone know how to read algorithms? Does everyone believe in them? I don’t know, I’ve always been skeptical about these things,” he said last October at an Institute of International Finance event.
Indeed, many have read Bitcoin’s algorithms, which are open source and freely available to all. As Jameson Lopp, co-founder of the Bitcoin wallet company Bitcoin Casa, pointed out, Bitcoin’s supply limit is implicitly imposed by just five lines of code.
Bruh it's like 5 lines of code. https://t.co/DWxPHFsgJs pic.twitter.com/ssripW7tVy
— Jameson Lopp (@lopp) October 11, 2021
To be precise, Bitcoin should cut the bidding rate in half for every 210,000 blocks, which is roughly equivalent to once every four years. While 50 new BTC were issued per block in 2009, today only 6.25 BTC are being issued per block.
These events, referred to as “halving,” are expected to occur only 33 times, after which the reward per Bitcoin block will be reduced to zero. This is expected to occur in the year 2141, assuming nothing changes before then, Bitcoin developer Luke DashJr. told Decrypt.
“After 10 cents, rounding errors start to truncate,” he specified, referring to the problem of block rewards not being able to split Satoshi over by the year 2049. “So if more accuracy per hardfork is introduced, ideally by 2049.
The math behind this halving works in such a way that the Bitcoin supply cannot touch or exceed 21 million.
That said, anything imposed by the code can technically be modified, as long as users give their consent. Many argue that the Bitcoin community will be forced to upgrade its software to produce more than 21 million coins in order to provide constant funding to support the mining industry.
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Bitcoin aims to become the global reserve currency.
Ethereum aims to become the infrastructure of a global digital economy.
The TAM of both visions is enormous, so the better comparison is the likelihood that either network gains respective market share.
— Dan Smith (@smyyguy) January 10, 2023
Although the supply of Bitcoin is limited, it is still infinitely divisible. Small units of the coin could continue to be used for small transactions, even if its price reached seven figures.
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