Author: Jacob Eliosoff 2022-07-10 10:18:17
Published on: 2022-07-10T10:18:17+00:00
In a new blog post, Peter Todd argues that tail emission is not inflationary. He explains that due to lost coins, a fixed block reward converges to a stable monetary supply that is neither inflationary nor deflationary, with the total supply proportional to the rate of tail emission and probability of coin loss. Todd notes that this result was observed by Monero developer smooth_xmr a few years ago, and there are probably others who have also made the connection. Todd discusses the economic considerations and short-term dynamics related to tail emission, including how Monero has introduced tail emission as a means to fund security at an apparent 0.9% monetary inflation rate. However, adding tail emission to Bitcoin would be a hard fork, and it's unclear if it could ever achieve consensus for the much larger Bitcoin community. The article discusses the possibility of adding tail emission to Bitcoin, which would involve creating new coins as rewards for miners even after the maximum supply limit has been reached. This proposal is controversial, as many in the Bitcoin community believe that the fixed supply limit is a key feature of the cryptocurrency's design. The author notes that any changes to the Bitcoin protocol would require widespread agreement among users and developers, as well as the continued operation of full nodes to ensure the network's security. Ultimately, the decision to add tail emission to Bitcoin will depend on whether the community views it as a necessary change to address issues such as miner incentives and transaction fees.
Updated on: 2023-06-15T22:30:22.102839+00:00