When Satoshi Nakamoto created Bitcoin, he set a strict limit on the number of bitcoins – 21 million. This limit, known as the hard cap, is encoded in the source code of bitcoin and enforced by network nodes. The hard cap is crucial to Bitcoin value as a currency and investment tool.
Some critics of Bitcoin argue that because it is nothing more than software, the rules of the network can be easily changed. They believe that miners who spend resources on the production of new bitcoins will try to protect their revenue streams by increasing supply limits to more than 21 million bitcoins.
Why won’t Bitcoin’s hard capital change?
Bitcoin’s hard capital is protected from changes in its incentive system as well as its governance model. Due to the bitcoin architecture, entities that control the set of bitcoin rules have strong incentives to resist changes to the hardcore constraint, and those who may want to change it are unable to control the network.
Despite these compensatory incentives, changing the maximum supply of bitcoin is still theoretically possible using a variety of manipulative tactics. However, in the 13 years of cryptocurrency’s existence, no one has been able to break this restriction.