Key Takeaways
- Unchained co-founder Dhruv Bansal suggests all 21 million Bitcoin were created in 2009 and are being unlocked over time.
- This framing shifts the focus from miners creating to purchasing Bitcoin, explaining increasing mining difficulty.
- Bitcoin's base layer consists of two markets: Layer zero for security and unlocking supply, and Layer one for transactions.
Most people understand that Bitcoin has two forms:
- the asset with a fixed supply
- and the secure, unbreakable network.
Dhruv Bansal, in a podcast with Peter McCormack, introduced a new way of viewing Bitcoin’s fixed supply.
He suggests that all 21 million Bitcoin were created on January 3, 2009, and are being gradually unlocked over time, rather than being created anew.
The significance of this framing
This framing shifts the focus from miners creating Bitcoin to miners purchasing Bitcoin from an existing supply.
It provides a rationale for the increasing difficulty in mining, as it aligns with the growing value and security of the Bitcoin network.
This perspective could potentially change negative perceptions of Bitcoin mining as being wasteful.
Two markets of the Bitcoin base layer
Bansal claims that there are two markets operating in Bitcoin’s base layer:
- Layer zero
- Layer one
Layer zero is the security and monetary policy layer, where Bitcoin is unlocked through mining auctions.
Layer one is the transaction layer, where users pay to include their transactions in a block.
Over time, as all Bitcoin are unlocked, the Layer zero market will fade, leaving Layer one to secure the network through transaction fees.
