149 sats \ 0 replies \ @sp 25 Jul 2022 \ on: Peter Todd on the bitcoin inflation bitcoin
From what I've read in the long discussion on Twitter, we have two remedies and a fact:
- 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).
- 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.
- 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.