Imagine it’s the year 2140 and the last sat has been issued. Let’s assume tail emissions are unnecessary, so the supply of Bitcoin is forever capped.

Let’s now assume that one day later, the world collectively decides that the purchasing power of Bitcoin in aggregate is 50% of global real wealth. No one is poorer as a result of this decision. Buyers and sellers simply update their internal willingness to pay for the asset.

Let’s now assume that the world reaches this consensus not in 2140 but in 2024. With a block reward of 3.125 (post-halving), ~3.125% of the total Bitcoin supply will be issued over the next 4 years. As a result, miners will receive approximately ~1.5% of global real wealth over this period.

Riskless profit does not exist in equilibrium, so rationally, the world will invest ~1.5% of global real wealth in mining operations. This means real human capital, real natural resources, and real productive potential being diverted from other uses, with no real gain.

Rationally, for this reason, humanity is better off waiting until the block rewards run out before ascribing significant purchasing power to Bitcoin. On its own, ascribing more purchasing power is harmless, but ascribing too much too soon could seriously hurt humanity’s real wealth.

From this perspective, block rewards are like a tether, which is loosened every 4 years, and eventually released.

To be somewhat provocative, would Bitcoin be better off if that tether was released today?