Post
Topic
Board Development & Technical Discussion
Re: "Surprisingly, Tail Emission Is Not Inflationary" -- A post by Peter Todd
by
tadamichi
on 10/07/2022, 20:39:35 UTC
That's not true. If you are a miner of block number one, you have 50 BTC. And there are only 50 BTC in existence, so you have 100% of the coin supply. Then, over time, you have less and less percent of the supply, until reaching the total fixed supply, then you have a constant fraction of the supply. Later, coins are lost or burned, so if you still have your keys, then you have bigger and bigger fraction of all coins. So, hodling Bitcoin is a long time strategy that always works by design.
It works, but then the limit is how long you are alive, there will be enough people bringing coins in circulation and if they dont, it wont impact the economy, as they’re like lost coins for the time theyre not being used. Its unrealistic to think that a human will never spend/ invest any considerable amount of money in their lifetime, when they have the opportunity to do so. And if theres a few people who saved till the end of their lifes, then idk if theres a justification for devaluing their wealth artificially, just because of this.

Also i get that inflation is an economic tool to incentivise spending, but we shouldnt act like it doesnt work without it. No inflation works as an incentive for wiser spending, and i prefer this alternative as its something the world could really need.

But if there would be tail emission, then it would be the same as with fiat currencies: we would start with 21 million coins. Then people would find out, that "we need more coins, because <put anything here>". And then, more coins will be produced. Then, people will come and say: "this is still not enough". So, there will be endless "bailouts", not for banks, but for miners this time, and we will return to the point when we started, so burning coins will be proposed as a solution, because "hey, we have more coins, and the situation is not better, let's burn some of them, to make our coins worth more". And regular coin burning is what you can see on many altcoins.
Could possibly happen, but then a coin with fixed supply might attract more people again, just like now.