Author: Billy Tetrud 2022-06-28 03:55:56
Published on: 2022-06-28T03:55:56+00:00
The discussion on the bitcoin-dev mailing list revolves around the security costs of Bitcoin and who should bear them. One person argues that those who hold bitcoins benefit from its utility as a store of value, while those who transact realize the avoidance of barter costs. However, it's not helpful to consider those who throw their bitcoins into a bottomless pit and never retrieve them. Another person suggests that the cost of security should be balanced between holders and spenders. While demurrage may be superior, it could make protocols like Lightning much more complex and is not compatible with existing implementations. Demurrage and inflation have identical economic properties - both are a tax on savings - with the only difference being the way the tax is implemented. The idea of decaying UTXO value is interesting to consider, but it would not solve the economic distortion that monetary inflation causes.
Updated on: 2023-06-15T21:25:38.656520+00:00