Author: Peter 2022-07-12 15:08:41
Published on: 2022-07-12T15:08:41+00:00
Bitcoin creator, Satoshi Nakamoto, outlined in the early days that mining would trend to where energy is free, and during the bootstrapping stage, a security budget is needed to prevent nation-state attacks. In the future, miners will need to lose money mining Bitcoin to prevent the reemergence of a fiat reserve currency. The emission curve lasts for over 100 years because Bitcoin's success requires it to be entrenched globally. Gold isn't a deflationary currency due to physical limitations, but Bitcoin is digital and deflationary. Today, people are spending some of their Bitcoin to protect the remainder of their wealth, and this is expected to continue into the future. To grow support for Bitcoin in local jurisdictions, some people give away Bitcoin, which is another form of securing it. Increased adoption powers deflation, protecting deflationary wealth increase. In the future, all miners will be energy producers, with governments likely being the primary energy producers. A potential solution is to take 1% of Bitcoin annually to secure the network for the promise of a 10% deflation increase in purchasing power, which large holders are more likely to do. There will be free riders, as there are today, who receive part of Bitcoins via tax collection and welfare. In the future, they will receive free deflation instead and will be incentivized to save Bitcoin to receive this stipend. Bitcoin doesn't need a security budget because existing holders have the ability, means, and incentive to secure their funds. The major players in mining will likely be large holders, and advertising this fact should be a priority for Bitcoiners rather than keeping it a secret.
Updated on: 2023-06-15T22:46:59.299033+00:00