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10 sats \ 13 replies \ @netstatic 6 Sep 2023 \ parent \ on: Tail Emissions Are A Terrible Idea bitcoin
I've never read that post but I think it's pretty dumb. He solved a differential equation to show that the supply will always be a proportion of growth divided by loss, but implicit to his calculation is the loss of Bitcoin continuing until the supply reaches 0.
It's obvious that if the loss of Bitcoin continues every year at a non-zero rate, it will eventually hit 0. The differential equation wasn't needed at all, and I feel like inserting math where it isn't needed makes someone look too desperate to seem smart lol.
So because Bitcoin's fiat value has historically fluctuated mostly up, and because Bitcoiners are okay with double digit down swings today, we should be okay with whatever double digit inflation rate tail emissions might incur?
It's obvious that if the loss of Bitcoin continues every year at a non-zero rate, it will eventually hit 0
What do you mean? 0.5^n approaches zero, but never reaches it.
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The amount of money someone holds is not continuous and in the context of losing Bitcoin, you either lose Bitcoin or you don’t. If there was only 1 utxo with 1 sat (which is impossible with today’s policy rules), and I said there was a non-zero rate of loss that year, then that means that person has lost that utxo.
When working with discrete everyday things, constant values like .5^n as n approaches infinity just doesn’t make sense as there will always be a point where subdivision is impossible.
It’s the same reason why the dichotomy paradox’s thought experiment can’t actually be done. There gets to a point where it’s impractical/impossible to move half of a set distance.
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Bitcoin is not gold, which you can't divide beyond the individual atom, making it discrete at the micro scale.
Bitcoin is code. By the time Bitcoin's supply is a miniscule fraction of what it is now due to lost coins, we'll have forked it to divide 1 sat into micro- or nano-sats. Also, when the supply is that small, tx fees will be denominated in nano or pico sats.
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Forking to make sats more divisible is almost like raising the 21 million cap and equally distributing the new coins. Either way you shouldn't assume either is the direction the project will go.
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More divisible is nothing like raising the 21m cap. Going from one to two pizzas is different from cutting your one pizza into 4 pieces instead of 2.
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Comparing pizzas to Bitcoin doesn't make much sense because pizza is not money and its economic mechanics don't work the same.
Let's take the simplest example of a world with only 2 sats, one held by you and one held by me. We both valued our respective sats at some defined value X. If both you and I decided to make a rule that allowed the doubling in value of all utxos, we would now have 2 sats respectively.
This would be an instance of inflation, but because both of us received sats according to our existing distribution it acts as a halving of value among all sats. Since each of us now have a monetary unit worth X/2 we can effectively treat that as a division of sats. In wallet interfaces, I can even halve the display value of sats such that when someone sends 1 sat, it shows .5 sats instead.
Going back to the pizza analogy, it doesn't make sense in this context because the value of pizza isn't in its usefulness as money. Pizza is typically seen as useful because it provides calories/nutrients/etc. If I were to double everyone's amount of pizza then they would double their value in calories/nutrients/etc. Applying this logic to money would mean everyone benefits from inflation, which we know is not the case.
I thought it was widely accepted that's the direction the project would go. No controversy here at all.
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