The regulations that control the generation of bitcoins, or “mining”, to 21 million units will one day be tweaked if most of its users agree, said George Kikvadze, an advisor and board member of Bitfury, one of the largest bitcoin mining companies in the world.
In a Monday interview with CNBC’s Squawk Box, he said that if the concept of a finite number of bitcoins was ever changed, it would not affect its value. He compared this to when “governments go in and print money’. Currently, around 12.6 million bitcoins are circulating.
In an apparent response to anxiety by bitcoin fans about regulation by authorities, he said its supports the idea as it will make the currency gain more recognition as a peer-to-peer payment method.
“We need the regulation to get to that stage. Look at the Internet in ’93 and ’94, [bitcoin] is in the early stage of adoption,” he said. “Regulation is good.”
The Internal Revenue Service said last month that it will classify bitcoins and other cryptocurrencies as property, rather than currency for taxation purposes.
Separately, New York’s Department of Financial Services superintendent Benjamin Lawsky has revealed that he plans to draw the regulations that will make New York the first U.S. state to supervise virtual currencies.
“We want to be at the negotiating table as these new regulations and rules are developed,” Kikvadze said, in reference to Lawsky’s plans.
With the right hardware and software, anybody can “mine” for bitcoins. This process is slow and its protocols demands that it should be created at a decreasing and predictable rate-automatically reducing by half until 21 million bitcoins have been created.
Kikvadze expects the time when such bitcoins have been created to be in the next 15 to 20 years. The digital currency, which was established in 2009, has no regulatory supervisor such as a central bank.
To contact the reporter of this story; Deepak Tiwari at Deepak@forexminute.com