Author: Peter Todd 2022-06-23 19:17:37
Published on: 2022-06-23T19:17:37+00:00
A discussion on Bitcoin's Proof of Work (PoW) security has been raised, with the argument that it benefits all users in proportion to their BTC holdings. It has been suggested that paying for this security on a per-transaction basis is not practical due to inconsistent demand and could result in decreased value for all BTC holders. The idea of implementing a demurrage tax has been proposed instead, which involves a decay in UTXO balances over time to balance fees between receipt, holding, and spending. However, this approach could make protocols like Lightning more complex and is not compatible with existing implementations. The economic properties of both demurrage and inflation are similar, as they both involve a tax on savings, with the only difference being the implementation method.
Updated on: 2023-06-15T21:27:53.758813+00:00