Author: Zac Greenwood 2022-07-13 18:29:53
Published on: 2022-07-13T18:29:53+00:00
In a Bitcoin-dev discussion, it was pointed out that Peter Todd's proof relies on an unrealistic assumption; the constant rate of coin loss. However, tail emission can asymptotically decrease the inflation rate to zero, even if the rate at which coins are lost is irrelevant. The rate of inflation required for keeping Bitcoin useful highly depends on the value of the token since a tail emission of 1 BTC per block ensures safety within a few blocks for even large amounts. The supply will have to grow much larger before an equilibrium can be reached in low-deflation scenarios than in moderate deflation scenarios. Additionally, the rate of inflation will tend to an equilibrium with the tail emission, even if the rate at which coins are lost is not constant. It was also mentioned that predicting the ultimate total supply of coin may be undesirable, but the rate of inflation declines to zero when it matches the rate of deflation due to coin loss.
Updated on: 2023-06-15T22:31:04.935391+00:00