Post
Topic
Board Development & Technical Discussion
Re: "Surprisingly, Tail Emission Is Not Inflationary" -- A post by Peter Todd
by
NotATether
on 11/07/2022, 04:47:53 UTC
It is all about proportions. You can have two systems:
1) with fixed supply, where everyone will lose some satoshis in explicit way, and they will be taken by miners, because of tail emission
2) with infinite supply, where everyone will lose some satoshis in obscured way, because miners will be always rewarded by new coins, because of tail emission

Maybe you can't see that, so I will try to make some more extreme example, you can adjust numbers to reach some real-life scenarios:

Imagine there are 21 million coins, distributed to many different users, and the block reward is zero. Then, imagine that 21 million coins are produced, because of tail emission. Then, you can have two systems:
1) with fixed supply, where everyone will lose half coins in explicit way, and they will be taken by miners, because of tail emission: 10.5 million coins will remain in users' hands, 10.5 million coins will be taken by miners, 21 million coin limit is untouched
2) with infinite supply, users will have exactly the same amounts, but they will be worth 50% less than before, because miners will be always rewarded by new coins, because of tail emission

Which one of these would be desireable to the people, if they had to choose between them? Of course, it would be the first alternative, because nobody likes their supply converging towards infinity, hence the value of a single coin converging to 0, because this assumes that all users will continuously be subsidised by equal amounts (scams and theft alone prevent this from being possible); Just ask DOGE developers how that enterprise is doing.