Author: Manuel Costa 2022-07-13 13:29:43
Published on: 2022-07-13T13:29:43+00:00
A proposal was made on the bitcoin-dev mailing list to burn all fees and keep a block reward that would smooth out, while keeping the ~21M coins limit. However, this would go against the rules of the coinbase transaction following the usual halving schedule. To achieve a similar result, it was suggested that a rule be added where fees have to be sent to an anyone can spend output with a timelock. The proposed solution involves splitting blocks into 144 (about a day), where a mined block takes all the fees and distributes them equally into 144 new outputs (anyone can spend) time-locked to each of the 144 blocks of the next day. The following day, for each block, an amount equivalent to the previous day's total fees/144 would be available, smoothing out the previous day's fees. The proposal has benefits such as miners still being incentivized to collect higher fees transactions with the indirect perspective to generate more reward in the future, revenues being equally distributed over time to all participants, increased velocity of money reducing the immediate supply of bitcoin cooling down the economy, and reduction of velocity having an impact on miners only if it perseveres in the long term but short-term perceiving the buffered reward. However, the implementation of the proposal is yet to be determined. In terms of proper distribution, the shape of the emission curve matters more than how long the emission lasts. Bitcoin's expected time of emission equals six years, which is not ideal compared to Monero whose tail emission yields an infinite expected time of emission, but when looking at just the soft total emission, Monero is worse than Bitcoin due to emitting over 40% in its first year and halving the reward much faster. Ethereum is much worse still with its huge premine and PoS coins like Algorand are scraping the bottom with their expected emission time of 0. There is only one coin whose expected (soft) emission time is larger than Bitcoin's, and it's about an order of magnitude larger at 50 years.
Updated on: 2023-06-15T22:49:14.599078+00:00