StarkWare CEO Suggests Replacing Bitcoin's Fixed Cap with 4% Annual Inflation Rate

StarkWare CEO Eli Ben-Sasson has proposed replacing Bitcoin's fixed supply cap of 21 million with a 4% annual inflation rate. He argued that the current cap 'doesn't make sense' because private keys are lost over time, and as time goes to infinity, all keys will be lost.

Ben-Sasson cited Ledger's estimate in November that up to 4 million Bitcoin had been burned or permanently lost. He claimed that a 4% annual inflation rate roughly tracks the growth of the human population, implying that it would maintain scarcity.

The proposal was met with heavy criticism from the community, with some arguing that lifting the fixed cap would make Bitcoin like other cryptocurrencies. Others pointed out that Ben-Sasson's solution would still result in a loss of private keys over time.

Ben-Sasson also suggested that Bitcoin developers consider Zcash's proposed 'Network Sustainability Mechanism', which would allow users to burn tokens, gradually reissuing them as block rewards over four years. However, implementing such a change would require consensus among Bitcoin developers, miners, and node operators.