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Not Surprisingly, Tail Emission is Inflationary

  1. Divisibility: money must be able to subdivide into small parts with ease without losing its value.
  2. Fungibility: All units have the same value (they are indistinguishable from each other)
  3. Durability: circular in the economy in an acceptable state for a reasonable time.
  4. Portability: holders must easily transport money with substantial value.
    Controlled emission: maintain its value, but without stopping the economy by insufficient supply, or accelerating it by surplus offer.
  5. Recognition and security: It is easy to identify, easy to hide and difficult to confiscate or falsify.
  6. Universal acceptance

Tail Emission

The debate

  • Hard bifurcation is not required: Videu suggests that a soft bifurcation can create new bitcoins imbueting transactions outputs that pay zero satiShis with a special meaning. For example, when a node that Opt for bifurcation sees an output of zero SAT, look for the transaction otherwise the transaction. This creates two kinds of bitcoins, but presumably soft bifurcation would provide a mechanism to convert bitcoins inherited into modified bitcoins.
  • There is no reason to believe that perpetual broadcast is sufficient: Anthony Towns posted on the mail list, and Gregory Maxwell posted in Bitcointalk, that there is no reason to believe that paying the miners a number of currencies equal to the average rate of coins losses will provide sufficient Pow security. If a perpetual emission cannot guarantee security, and if it has a significant probability of producing additional problems, it seems preferable to stick to a finite subsidy that, although it cannot guarantee security, at least it does not generate additional problems. Maxwell also points out that, on average, Bitcoin miners obtain significantly higher value through transaction rates than many Altcoins pay to their miners through the combination of subsidies, rates and other incentives. These Altcoins are not suffering fundamental power attacks, which implies that it could be the case that sufficient value is paid only through transaction rates to maintain Bitcoin’s security. In summary, it is possible that Bitcoin has already passed the point where he needs its subsidy to obtain enough Pow security. Maxwell describes how the loss of coins could be eliminated almost completely by allowing anyone to automatically opt for using a script that would donate any of its coins that have not moved during, say, 120 years, far beyond the expected useful life of the owner of the owner original and its heirs.
  • Censorship resistance: the developer ZMNSCPXJ expanded an argument of Eric Voskuil that the transaction fees improve the resistance to censorship of Bitcoin. For example, if 90% of the block reward comes from the issuance and 10% of the transaction rates, then the largest amount of income than a miner that censures directly is 10%. But if 90 % come from rates and 10 % of subsidies, the miner could lose directly to 90 %, a much stronger incentive to avoid censorship. Peter Todd responded with the opinion that a perpetual broadcast would raise more money for Pow’s security than “insignificant transaction rates”, and that a higher block reward would increase the cost that an attacker would have to pay to the miners to censor transactions.
  • Fee Sniping: Bram Cohen published about the problem of Fee Sniping and suggests keeping transaction rates in approximately 10% of the total rewards of the block (the rest is a subsidy) as a possible solution. He briefly mentions some other possible solutions, but others provided additional suggestions in more detail.
  • Anticipated Rate Payment: Russell O’Connor presented an old idea that miners could calculate the maximum amount of rates they could collect from the main transactions in their group of members without encouraging the reduction of rates. Then, they could offer any additional fee that charged the next mining to build the next block in a cooperative way instead of competitive. The participants of the discussion went through several iterations of this idea, but Peter Todd pointed out that a fundamental concern with this technique is that smaller miners would have to pay further bribes than the largest miners, creating economies of scale that could still centralize plus Bitcoin mining.
  • Improving market design: Anthony Towns suggests that improvements in Bitcoin software, and user processes could significantly level rates, which would make the rates less likely.

My criticisms

  • The number of blocks per 4 -year cycle: 6 blocks per hour x 24hs x 365 days x 4 years halving = 210.240 ~ 210,000
  • Adding all block reward sizes = 50 + 25 +12.5 + 6.25 + 3,125… = 100
  • Multiplying both 210,000 x 100 = Btc 21,000,000



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