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authorvjudeu <vjudeu@gazeta.pl>2022-08-19 07:34:25 +0200
committerbitcoindev <bitcoindev@gnusha.org>2022-08-19 05:34:36 +0000
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Re: [bitcoin-dev] Surprisingly, Tail Emission Is Not Inflationary
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+To: Billy Tetrud <billy.tetrud@gmail.com>,
+ Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>, ,
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+ Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
+Date: Fri, 19 Aug 2022 07:34:25 +0200
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+Subject: Re: [bitcoin-dev] Surprisingly, Tail Emission Is Not Inflationary
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+
+> If we actually wanted to solve the potential problem of not-enough-fees t=
+o upkeep mining security, there are less temporary ways to solve that. For =
+example, if fees end up not being able to support sufficient mining, we cou=
+ld add emission based on a constant fraction of fees in the block. For exam=
+ple, every block could emit new bitcoin amounting to 10% of the fees collec=
+ted in that block. This would tie coinbase rewards to the real world (since=
+ the fee market is tied to the real economy) and ensure higher block revenu=
+e indefinitely - ie not just for another 50 years.
+
+Miners can game this system by moving their own coins in 100% fees transact=
+ions, just to produce more coins. You have one million BTC? No problem, jus=
+t move them as fees, and you just created 100k BTC out of thin air, just be=
+cause you are a wealthy miner. And even if that amount will be stolen, when=
+ some other miner will reorg your block, then still, miners will keep creat=
+ing coins by moving them as fees, and the strongest miner will get the whol=
+e pot. And guess what: 100 blocks later you can reuse newly created 100k BT=
+C to make another 10k BTC, so it will exponentially explode as (amountOfCoi=
+ns*(1+0.1))^n function. And guess what: (1.1)^8 is 2.14358881. That means, =
+after eight moves, you can double your coins, if you are a wealthy miner. A=
+nd you can start with smaller amounts, to play it safe, but eventually, thi=
+s system will degrade into "coin doubler after 800 blocks" or something sim=
+ilar.
+
+
+On 2022-08-18 18:45:43 user Billy Tetrud via bitcoin-dev <bitcoin-dev@lists=
+.linuxfoundation.org> wrote:
+While constant tail emission does in fact converge to 0 inflation over time=
+ (which bitcoin's halvings do as well mind you), tail emission does *not* s=
+olve the potential problem of mining rewards, it only delays it. A tail emi=
+ssion of 200,000 btc/year (~1% of the=C2=A0current supply) would be equival=
+ent to halvings every ~50 years rather than every 4 years. Were we to imple=
+ment this kind of thing right after the last non-" destructive" halving, it=
+ would buy us 46 years of extra time. Nothing more, nothing less.
+
+
+While its mildly interesting to know that tail emission converges to a stab=
+le point, while no inflation implies monetary deflation at the rate of loss=
+, this feels very likely to be an insignificant problem. I think 1% loss ra=
+te per year is an absurdly high estimate these days, and the loss rate is l=
+ikely to decrease as methods of storing bitcoin mature. Imagine bitcoin was=
+ worth $1 trillion (not so hard, since it was not too long ago), then try i=
+magining people losing $10 billion of bitcoin every year. Highly unlikely I=
+MO. A rate of loss of 0.01%/year might be more realistic for a near-future =
+mature bitcoin. That's not going to be enough to make a significant differe=
+nce=C2=A0even over 100s of years.=C2=A0
+
+
+If we actually wanted to solve the potential problem of not-enough-fees to =
+upkeep mining security, there are less temporary ways to solve that. For ex=
+ample, if fees end up not being able to support sufficient mining, we could=
+ add emission based on a constant fraction of fees in the block. For exampl=
+e, every block could emit new bitcoin amounting to 10% of the fees collecte=
+d in that block. This would tie coinbase rewards to the real world (since t=
+he fee market is tied to the real economy) and ensure higher block revenue =
+indefinitely - ie not just for another=C2=A050 years.=C2=A0
+
+
+But its also worth saying that blockchain security (which mining revenue co=
+rrelates with) does *not* need to increase indefinitely. There is some amou=
+nt of security (and therefore some amount of mining revenue) that is suffic=
+ient, beyond which additional security is simply unnecessary, unwarranted, =
+and wasteful (you wouldn't buy a $1000 safe to store $1000 of valuables). D=
+o we, as the bitcoin community, have some good idea how much security we ne=
+ed? Do we have some idea how costly a 51% attack must be where we can be co=
+mfortable it will never happen? I'm curious to hear what people think about=
+ that. Because without having some kind of estimates of what "enough securi=
+ty" is, there's absolutely no way of evaluating whether or not its likely t=
+hat bitcoin fees alone will be able to sustain enough security.=C2=A0
+
+
+
+
+
+
+On Wed, Aug 17, 2022 at 9:31 AM Jaroslaw via bitcoin-dev <bitcoin-dev@lists=
+.linuxfoundation.org> wrote:
+
+On one scale you puts the Trust to the large stakeholders (why we avoid ple=
+nty of small stakeholders, btw),
+and on the other side I put game theory and well defined Prisoner's Dilemma.
+
+Again: large stakeholders WILL NOT incentivised to mine, they will have the=
+ hundreds excuses why not to switch-on Antminers back.
+That's how it simply works.=C2=A0 Bitcoin would fail miserably if Satoshi w=
+as based his concept mainly on existence of idealists.
+
+If we will observe lack of hashrate recovery four years after some halving =
+and still unprepared like today
+- means the trust in large stakeholders was a very costly mistake.
+
+
+Superiority of Proof of Work against Proof of Stake has been discussed enou=
+gh either
+The overall conclusion with what I fully agree=C2=A0 is: swapping PoW to Po=
+S - would be a degradation.
+You can stop talking about degradation to proof of stake, but just: degrada=
+tion.
+
+Degradation of Bitcoin, due to human greed.
+
+Now you mine and you have an INSTANT gratification.
+Then you will mine and it will cost you real money, but simple switch - and=
+ you have a DELAYED, maybe some day in the future, maybe only a tiny - puni=
+shment.
+And The Punishment Won't Be Tiny.
+
+
+"If the pain after hitting the hand with a hammer would appear after a mont=
+h - people would notoriously walk with swollen fingers"
+100% (^2)
+
+Regards
+Jaroslaw
+
+
+
+W dniu 2022-08-17 13:10:38 u=C5=BCytkownik Erik Aronesty <erik@q32.com> nap=
+isa=C5=82:
+
+> you can stop talking about=C2=A0 the "security of the system" as meaningf=
+ul
+> this has been discussed enough
+> if fees are not sufficient, clearance times increase and large stakeholde=
+rs are incentivised to mine=C2=A0
+> in the best case, fees are sufficient
+> in the worst case, it degrades to proof of stake
+> i'm sure you can see how that's fine either=C2=A0way
+
+
+
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