Author: John Tromp 2022-07-09 14:57:57
Published on: 2022-07-09T14:57:57+00:00
Peter Todd, a Bitcoin developer, has written a new blog post explaining that Tail Emission is disinflationary and not inflationary. According to him, the yearly supply inflation steadily decreases toward zero in a Tail emission. He also states that many cryptocurrencies including Dogecoin have a fixed reward. Initially, Dogecoin had random rewards up to 1 million doge per block, which halved every 100,000 blocks until the fixed reward of 10,000 doge came into effect at height 600K.Todd argues that for any coin without a premine, it starts with infinite inflation. For example, Bitcoin had yearly inflation rates of inf, 100%, 50%, and 33% in its first four years, so deciding on a maximum amount of inflation is essentially deciding on a premine. He suggests that if an existing coin decides to implement tail emission as a means to fund security, choosing an appropriate emission rate is simple. One should decide on the maximum amount of inflation they are willing to have in the worst-case scenario and set the tail emission accordingly.Todd also mentions that while in the long term, a capped supply doesn't meaningfully differ from an uncapped supply, the 21 million limit is central to Bitcoin's identity. Removing this limit would result in something that can no longer be called Bitcoin. A relevant article by John Tromp supporting Todd's argument is provided in the context.
Updated on: 2023-06-15T22:29:18.770180+00:00