Author: PJ Fitzpatrick 2018-07-13 10:11:27
Published on: 2018-07-13T10:11:27+00:00
In an email exchange between PJ Fitzpatrick and Jakub Trnka, Fitzpatrick proposed a method to derive digital scarcity from bitcoin transactions. The idea is that coins are created from transactions if their hash is among the closest n to the non-zero portion of the block hash, with only one coin created per transaction regardless of its size. This results in n coins being created per block. The initial coin supply and addresses can be fully determined by the existing blockchain, and coins are scarce as they can only be produced through transactions. Fitzpatrick suggested that building some overlay scarcity and value on top of the bitcoin blockchain would incentivize people to transact more, resulting in an equilibrium between paying transaction fees and mining new coins. This approach could effectively borrow scarcity from bitcoin in a sidechain. Fitzpatrick plans to start a discussion about this on bitcointalk.
Updated on: 2023-06-13T03:58:17.612331+00:00