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Peter Todd on the bitcoin inflationstreamable.com/d45ti1
139 sats \ 10 comments \ @m4 25 Jul 2022 bitcoin freebie
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161 sats \ 0 replies \ @02d10975a1 25 Jul 2022
He is right in economic sense, but adding inflation would be a precedent for more changes in the future. It would break the idea of predetermined scarcity. Bitcoin is scarce, not because there are only 21 million of them, but because the rule which enforces the limit is unchangeable.
Incentives make this thing work. Incentive to protect the 21 million supply must be larger than the incentive to change rules and add inflation. If that can be guaranteed, then unchangeability is guaranteed.
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149 sats \ 0 replies \ @sp 25 Jul 2022
From what I've read in the long discussion on Twitter, we have two remedies and a fact:
  1. the fact - it's something that may become more urgent in a decade if not more, at least two/three halving away at the current exchange rate (corrected by inflation, just because, you know).
  2. less efficient miners will shut down for negative profit margin, until the network will be running at break-even + positive margin for a smaller (with stronger energy efficiency) set of validators. Hashcash difficulty will also go down.
  3. if the network is exposed to double-spend attacks by any of the kicked out validators, we may just wait more blocks (12? 24?) to accumulate enough PoW and deem any transaction safe. Suboptimal, yet a strong incentive to pay higher fees ;)
On the other hand, inflation means infinite money supply. Which means infinite buying pressure to balance the selling pressure from mining. Which would require some Keynesian stuff to dynamically adjust the rewards, based on the market movements if the supply wouldn't be enough to support the existing set of block producers (or the minimum-viable set of hashpower). Cringe.
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103 sats \ 1 reply \ @dergigi 25 Jul 2022
Terrible take.
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1045 sats \ 0 replies \ @ermicin 25 Jul 2022 freebie
Is it though? You can see on this app how a failure of the network could occur: https://www.btcsecuritybudget.com/
Tinker with the success/failure thresholds if you want but you get the general idea.
Peter Todd's idea to solve the problem may not be necessary. Maybe spacechains or some other similar solution can provide enough funding for miners, but I do agree that we're essentially gambling the most important asset on what is essentially a meme.
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100 sats \ 0 replies \ @lrz 25 Jul 2022
Central planner mentality.
The block reward has been declining since the inception of Bitcoin and it has worked out pretty well. What makes it different now?
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11 sats \ 2 replies \ @moel 25 Jul 2022
Eventually, the block rewards will be too low to support the energy costs and price of buying new mining equipment.
Most/all profits from mining will have to come from transaction fees.
This plays nicely into another hot topic: We should make blocks smaller to keep miner fees up!
The base layer should not be too cheap (to prevent spamming) and not be too expensive, lest no-one will use it at all and only do Lightning/Liquid/federations.
In a couple of years, we should have a block size scaling (to smaller blocks) that is flexible, like the difficulty is scaling right now.
Let's say that the current ±1,7 MiB block size limit that we currently have, is the maximum, but we want to aim for blocks having a total "mining reward" of 1 BTC.
  1. Every time the average mining reward of the last 2016 blocks falls below 1 BTC, we make blocks a corresponding % smaller.
  1. Every time the average mining reward of the last 2016 blocks rises to 1 BTC, we make blocks a corresponding % bigger (till we hit the current 1.8MB size).
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110 sats \ 0 replies \ @m4 OP 25 Jul 2022
The main reason to keep block small is decentralization. Decentralization is the first measure of bitcoin security.
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100 sats \ 0 replies \ @based 25 Jul 2022
2.0 MB blocks are not too uncommon during congestion thanks to increasing segwit usage.
https://bitcoin.stackexchange.com/questions/98810/whats-the-blocksize-limit-after-segwit-and-how-do-legacy-nodes-deal-with-segwit
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0 sats \ 0 replies \ @faithandcredit 26 Jul 2022
Its possible someone will fork Bitcoin over the next couple years to one that has a constant tail emission. It will be another fork war, which one will gain more hashrate, and attract more users?
I will stay with the one that does not have tail emission. Even if it crashes to shocking levels.
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0 sats \ 0 replies \ @k00b 25 Jul 2022
If you believe fees won't rise in 100 years, which is a huge assumption, then perhaps this makes sense.
It's kind of like starting with "the Earth is flat" and concluding astronomy is a lie and astronomers are scammers. It's like yeah, but what makes you certain the Earth is flat?
The premise is a prediction, not fact.
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