For fiat currencies like the USD, inflation is usually measured as a percentage of the total monetary supply.
Monero's block reward emission is constant, so its inflation (as a percentage of total coins) will decrease asymptotically to zero as time goes on. There will be less monero than bitcoin until 2040.
Bitcoin's emission is finite, which will cause the network to eventually break down unless miners can collect enough in fees for them to secure the network.
Of the three, I think monero is the safest store of value.
1 - You are comparing Monero to USD, which has lost 97% of its value in the past 50 years? That's why Monero would be a good store of value?
2- Bitcoin's issuance amount is halved every 4 years asymptotically to zero until the year 2140. There will be only 21 million bitcoin for the rest of history after that point. Monero sounds like a fiat currency with the constant influx of new coins forever.
3 - In 2140 and beyond, Bitcoin miners will still have to verify transactions and secure the network. They will still earn transaction fees, but the main reason for mining at that point will be securing the already highly valuable (and ever appreciating) network.
2- The constant influx of coins is necessary for network security. The miners need to get paid. Right now the BTC block reward is >95% of the miner income, with fees accounting for less than 5% of the BTC that miners recieve. You can't keep slashing block reward without breaking security and making bitcoin worthless.
3- You can't subsidize miners from fees like this because the upfront costs will be too prohibitive to use as an actual currency. You cannot use the LN if the fees are too high because you won't be able to open or close channels. The only way BTC succeeds as an international payment network is if >90% of the users are working with custodial bitcoins. So much for saving the world
1 - Incorrect, USD inflation is changed year-to-year, month-to-month, dictated by a small group of people who get to decide how much to print during whatever time for whatever reason. (The percentage changes constantly)
2 - Incorrect, the miners do not need to get paid. They will be rewarded transaction fees after the block subsidy goes to zero, but the majority of their reward will be having the ability to access a secure, immutable and distributed blockchain.
3 - Bitcoin miners can run off renewable resources, they wont even need to be subsidized in the future. Bitcoin can stay at the "store of value" stage of money forever, it doesn't ever need to be used en masse as a day-to-day currency. It might end up being used as the base layer of major financial transactions of the future.
1 - Incorrect, USD inflation is changed year-to-year, month-to-month, dictated by a small group of people who get to decide how much to print during whatever time for whatever reason. (The percentage changes constantly)
Sure, but the US Gov. needs to have a balanced budget. In order to fund their operations though printing money, they will need to print money at a rate that is proportional to the rest of the monetary supply. This is not comparable to monero's emission schedule which is just constant and does not grow with respect to the monetary supply.
2 - Incorrect, the miners do not need to get paid. They will be rewarded transaction fees after the block subsidy goes to zero, but the majority of their reward will be having the ability to access a secure, immutable and distributed blockchain.
That's great bro, but that isn't enough to prevent opportunistic attacks on the network, especially with all this extra unprofitable ASIC mining hardware lying around at the end of the emission.
3- Bitcoin miners can run off renewable resources, they wont even need to be subsidized in the future.
It's irrelevant because you still have the time-value cost of owning mining hardware.
Bitcoin can stay at the "store of value" stage of money forever,
Bitcoin isn't like gold where it can just sit in a vault forever. It's a list of transactions. If you don't have miners constantly adding proof-of-work, then an attacker can go back and mine to re-order blocks in their favor to double-spend.
it doesn't ever need to be used en masse as a day-to-day currency. It might end up being used as the base layer of major financial transactions of the future.
There is no need for any "multi-layer" cryptocurrency technology. This is a concept that many shitcoiners like etherium do not understand, and in fact it's probably the only thing that I can agree with most bitcoiners about. Cryptocurrency has had literally only one job since the beginning, and that's to transfer money. The only thing that additional layers will do is add complexity, decrease security and invent new middlemen to leech off of the users. This is why bitcoiners are skeptical of any possible change to the bitcoin network.
The base layer of bitcoin is dysfunctional because there is not enough bandwidth (read: blocksize) for everyone in the world to use it, even on some second layer like LN. Bitcoin mining has been dominated by ASIC mining which has a centralization effect due to its economy of scale: ASIC miners are now corporate operations that are easily regulated (see the latest Tornado Cash crackdown- the Gov can simply prevent miners from including transactions from addresses they don't like). Lastly, there is no built-in fungibility in the base layer: https://sethforprivacy.com/posts/fungibility-graveyard/
There are also a number of smaller issues with bitcoin that are fixed in newer cryptocurrencies- they are too numerous and insignificant for me to list them all here.
By making bitcoin dysfunctional, (e.g. high fees, gimped block size, no fungibility, LN) you will recreate the existing financial system by forcing users to use a custodial and centralized form of bitcoin. Banks, exchanges, etc. will be able to lend out more of these custodial "paper coins" than they have access to, essentially becoming the fractional reserve banking system that bitcoin was designed to stop in the first place.
A) So you are saying monero's ever-present rate of inflation is constant and fixed. Hmm. Sounds like something else which is constant and fixed - the supply of Bitcoin. Nothing new here then.
B) It will be plenty enough to defend attacks on the network, as that will literally be the reason they are mining. More power will be devoted to securing it as the network grows, basically becoming too big to fail. Bitcoin incentivizes fairness - playing by the rules.
C) The usefullness of bitcoin far outweighs any future costs to build and maintain mining machines, which in turn maintain and secure the network. Your argument is like defending Horse + Carriage against the Motor Vehicle by saying "But now you need to repair those engines and there are more parts that can break down" but you are forgetting the leap forward in technology the thing brings. It has parts and needs to be maintained, but that is a feature, not a bug.
D) Blocks can be mined without transactions. Bitcoin can literally sit in a vault forever, with very few or no transactions happening, and still be secure.
E) The base layer is the most sound money standard the world has ever seen.
So you are saying monero's ever-present rate of inflation is constant and fixed. Hmm. Sounds like something else which is constant and fixed - the supply of Bitcoin. Nothing new here then.
It's not some sort of great breakthrough, but it has decreasing inflation and it will prevent the network from collapsing in a decade, so it's a pretty good idea if you ask me.
It will be plenty enough to defend attacks on the network, as that will literally be the reason they are mining. More power will be devoted to securing it as the network grows, basically becoming too big to fail. Bitcoin incentivizes fairness - playing by the rules.
The usefullness of bitcoin far outweighs any future costs to build and maintain mining machines, which in turn maintain and secure the network. Your argument is like defending Horse + Carriage against the Motor Vehicle by saying "But now you need to repair those engines and there are more parts that can break down" but you are forgetting the leap forward in technology the thing brings. It has parts and needs to be maintained, but that is a feature, not a bug.
The usefulness to whom? Will miners protect the network purely out of the good of their heart? I wouldn't count on it.
This metaphor is not applicable, because the work that miners do for the network benefits everyone while costing themselves, while the work that attackers do against the network hurts everyone while benefiting themselves.
It would be more analogous to a public transport system that is maintained for free by some good samaritans, but can also be ransacked by thieves at the cost of the passengers.
Blocks can be mined without transactions. Bitcoin can literally sit in a vault forever, with very few or no transactions happening, and still be secure.
Okay, but why would you mine blocks without transactions? It's because of the block reward of course, as there's no fees to subsidize your mining operations. If there are no transactions and no block reward, the hashrate will tank and attackers will be able to reverse transactions.
The base layer is the most sound money standard the world has ever seen.
I wouldn't count on it. Ever heard of something called gold?
Having a tail emission opens up the possibility of tweaking the inflation rate for some reason ("let's account for more lost xmr") at some point in time. Having a fixed supply as a cornerstone of your monetary policy is hence a better way of protecting scarcity.
Shilling tail emission is just another attack on Bitcoin.
Monero also carries way more regulatory risk, which makes it a bad choice as SoV.
Can we ban some of these Monero posts? It's fine to have some discussion, but I don't want to see the same Monero arguments constantly on a Bitcoin-focused site.
Having a tail emission opens up the possibility of tweaking the inflation rate for some reason ("let's account for more lost xmr")
I don't think that follows. We haven't manually adjusted the difficulty curve every hard fork, we've stuck to this emission schedule for a while. We wouldn't need to raise the emission in the future (e.g. "to account for lost coins") because it's constant (the response to that would be "lost coins? just mine some more like the rest of us!"). This argument would make more sense if the emission was finite and we bumped it up every six months, which isn't the case in monero, but might be the case if bitcoiners need to re-adjust the network every once in a while to keep miners running.
Shilling tail emission is just another attack on Bitcoin.
To do otherwise is to endanger the network in the long run for for your short term greed.
Monero also carries way more regulatory risk, which makes it a bad choice as SoV.
Monero also carries more resistance to regulation, it is the dominant coin on the DN, every major wallet has builtin Tor/I2P supprt, there are no central "CPU mining farms" for the government to bust. When satoshi designed bitcoin, was he trying to overthrow the banking system or was he fretting over "regulatory risk"?
Can we ban some of these Monero posts? It's fine to have some discussion, but I don't want to see the same Monero arguments constantly on a Bitcoin-focused site.
We are all stackers here. I see this as a sort of cope: if bitcoiners were willing to improve the network and copy monero's good tech, then bitcoin would take over the world and leave monero in the dust. But in the bitcoin world, skeptical discussion is banned so I have to choose between network effects (bitcoin) or better tech (monero).
Having any tail emission makes it more prone to changes in the future, it's as simple as that. Going from 0.6% to 1% is a much smaller step than destroying a fundamental property of Bitcoin, the capped supply.
There are other ways of guaranteeing a security budget (e.g. limiting block space) that don't attack Bitcoin's fundamentals. Also, this hypothetical problem is many years away. There isn't any indication that block space will not be in demand. Nor is anybody taking into account what can still be innovated in the coming years (not tail emission). Why is there so much fud around it now then? It's because Monero had its tail emission and wants to show that it's better than Bitcoin. It's just another desperate attack by Monero shills.
I didn't say Monero cannot resist gov attacks. I said it carries a higher regulatory risk, which makes it a bad SoV. Or do you think storing your money in a small niche coin that has no adoption beyond DNM is a good choice for your savings?
Many bitcoiners see Monero as a research experiment. At some point, certain Monero features might get implemented. But let bitcoiners decide what is good tech, not Monero shills. Attacking a fundamental property of Bitcoin is simply an attack on Bitcoin (for the benefit of any Xmr bags?). It's as if Bitcoin has to become Monero to be "good enough". Not all bitcoiners want complete obfuscation on the base layer. The whole point of Bitcoin is that it's auditable. We want private transactions sure, but it should be a balanced approach (not like Monero).
Bitcoin devs are working on Lightning, CoinSwap, etc. All privacy enhancing features. No need to be so black and white. Bitcoin has network effects and excellent tech. Feel free to support the Bitcoin devs like Chris Belcher to make it even better.
Having any tail emission makes it more prone to changes in the future, it's as simple as that. Going from 0.6% to 1% is a much smaller step than destroying a fundamental property of Bitcoin, the capped supply.
What is the significance of the 0.6% and 1% figures here?
Also, bitcoin would be perfectly functional without a capped supply. It is not a fundamental property of bitcoin regardless of what bagholders would like to believe.
There are other ways of guaranteeing a security budget (e.g. limiting block space) that don't attack Bitcoin's fundamentals.
Limiting the block space will not increase total fees, because you are also limiting the amount of transactions you can collect fees from. At some point, the fees will just become too prohibitive and people will stop using bitcoin.
If at some point tail emission is increased from 0.6% to 1% (e.g. "to better guarantee mining security, as 0.6% is apparently too low"), you open the door to further changes in your inflation rate. Having an arbitrary % of tail emission opens the door to changing it for whatever reason seems fit. Going from no tail emission to tail emission is however a much bigger leap.
The 21 million cap is as fundamental as it gets. If you don't see that, you don't know much about Bitcoin.
Limiting the block size is just an example. If you limit the block size, fees per block will increase if there is enough demand for the block space. During periods of mania (not enough block space for the demand), you can see that fees exploded higher. It's not that a higher fee and less tx means they cancel each other out. When there is high demand for block space, people will pay more and the total fee goes much higher (cf. mania phases).
Oh right, you have a crystal ball and can predict that no one is willing to pay more fees 10-20 years from now.
The tail emission will never be increased, this is the same emission schedule agreed upon back in 2014. And the tail emission is not 0.6%, as I said earlier it's 0.6. It's just a constant 0.6 monero/2 min, not a percentage of supply.
I don't have a crystal ball, but I do have a functioning brain that tells me that 7 on-chain transactions per second is not enough if you are trying to make a financial system that takes over the world.
Monero has an unlimited supply, while Bitcoin is finite.
A good store of value is scarce.
Of the three, I think monero is the safest store of value.
1 - You are comparing Monero to USD, which has lost 97% of its value in the past 50 years? That's why Monero would be a good store of value?
2- Bitcoin's issuance amount is halved every 4 years asymptotically to zero until the year 2140. There will be only 21 million bitcoin for the rest of history after that point. Monero sounds like a fiat currency with the constant influx of new coins forever.
3 - In 2140 and beyond, Bitcoin miners will still have to verify transactions and secure the network. They will still earn transaction fees, but the main reason for mining at that point will be securing the already highly valuable (and ever appreciating) network.
1- No, USD inflation is proportional to the USD monetary supply (it is a constant percentage of the total supply). Monero inflation is a constant 0.6 XMR per each 2-minute block so as a percentage of the total supply, it will decrease asymptotically to zero (the inflationary effect). See graphs here: https://monero.stackexchange.com/questions/1516/comparison-of-monero-and-bitcoin-money-supply-and-block-reward-schedules
2- The constant influx of coins is necessary for network security. The miners need to get paid. Right now the BTC block reward is >95% of the miner income, with fees accounting for less than 5% of the BTC that miners recieve. You can't keep slashing block reward without breaking security and making bitcoin worthless.
3- You can't subsidize miners from fees like this because the upfront costs will be too prohibitive to use as an actual currency. You cannot use the LN if the fees are too high because you won't be able to open or close channels. The only way BTC succeeds as an international payment network is if >90% of the users are working with custodial bitcoins. So much for saving the world
1 - Incorrect, USD inflation is changed year-to-year, month-to-month, dictated by a small group of people who get to decide how much to print during whatever time for whatever reason. (The percentage changes constantly)
2 - Incorrect, the miners do not need to get paid. They will be rewarded transaction fees after the block subsidy goes to zero, but the majority of their reward will be having the ability to access a secure, immutable and distributed blockchain.
3 - Bitcoin miners can run off renewable resources, they wont even need to be subsidized in the future. Bitcoin can stay at the "store of value" stage of money forever, it doesn't ever need to be used en masse as a day-to-day currency. It might end up being used as the base layer of major financial transactions of the future.
Sure, but the US Gov. needs to have a balanced budget. In order to fund their operations though printing money, they will need to print money at a rate that is proportional to the rest of the monetary supply. This is not comparable to monero's emission schedule which is just constant and does not grow with respect to the monetary supply.
That's great bro, but that isn't enough to prevent opportunistic attacks on the network, especially with all this extra unprofitable ASIC mining hardware lying around at the end of the emission.
It's irrelevant because you still have the time-value cost of owning mining hardware.
Bitcoin isn't like gold where it can just sit in a vault forever. It's a list of transactions. If you don't have miners constantly adding proof-of-work, then an attacker can go back and mine to re-order blocks in their favor to double-spend.
doubtful if the base layer is so dysfunctional.
Chiming in here:
Care to elaborate? If anything, Bitcoin's base layer is probably the most functional ledger in existence (including fiat-based ledgers).
There is no need for any "multi-layer" cryptocurrency technology. This is a concept that many shitcoiners like etherium do not understand, and in fact it's probably the only thing that I can agree with most bitcoiners about. Cryptocurrency has had literally only one job since the beginning, and that's to transfer money. The only thing that additional layers will do is add complexity, decrease security and invent new middlemen to leech off of the users. This is why bitcoiners are skeptical of any possible change to the bitcoin network.
The base layer of bitcoin is dysfunctional because there is not enough bandwidth (read: blocksize) for everyone in the world to use it, even on some second layer like LN. Bitcoin mining has been dominated by ASIC mining which has a centralization effect due to its economy of scale: ASIC miners are now corporate operations that are easily regulated (see the latest Tornado Cash crackdown- the Gov can simply prevent miners from including transactions from addresses they don't like). Lastly, there is no built-in fungibility in the base layer: https://sethforprivacy.com/posts/fungibility-graveyard/
There are also a number of smaller issues with bitcoin that are fixed in newer cryptocurrencies- they are too numerous and insignificant for me to list them all here.
By making bitcoin dysfunctional, (e.g. high fees, gimped block size, no fungibility, LN) you will recreate the existing financial system by forcing users to use a custodial and centralized form of bitcoin. Banks, exchanges, etc. will be able to lend out more of these custodial "paper coins" than they have access to, essentially becoming the fractional reserve banking system that bitcoin was designed to stop in the first place.
A) So you are saying monero's ever-present rate of inflation is constant and fixed. Hmm. Sounds like something else which is constant and fixed - the supply of Bitcoin. Nothing new here then.
B) It will be plenty enough to defend attacks on the network, as that will literally be the reason they are mining. More power will be devoted to securing it as the network grows, basically becoming too big to fail. Bitcoin incentivizes fairness - playing by the rules.
C) The usefullness of bitcoin far outweighs any future costs to build and maintain mining machines, which in turn maintain and secure the network. Your argument is like defending Horse + Carriage against the Motor Vehicle by saying "But now you need to repair those engines and there are more parts that can break down" but you are forgetting the leap forward in technology the thing brings. It has parts and needs to be maintained, but that is a feature, not a bug.
D) Blocks can be mined without transactions. Bitcoin can literally sit in a vault forever, with very few or no transactions happening, and still be secure.
E) The base layer is the most sound money standard the world has ever seen.
It's not some sort of great breakthrough, but it has decreasing inflation and it will prevent the network from collapsing in a decade, so it's a pretty good idea if you ask me.
That's hopeful thinking, but the numbers are not in your favor: https://eprint.iacr.org/2020/094.pdf
The usefulness to whom? Will miners protect the network purely out of the good of their heart? I wouldn't count on it.
This metaphor is not applicable, because the work that miners do for the network benefits everyone while costing themselves, while the work that attackers do against the network hurts everyone while benefiting themselves.
It would be more analogous to a public transport system that is maintained for free by some good samaritans, but can also be ransacked by thieves at the cost of the passengers.
Okay, but why would you mine blocks without transactions? It's because of the block reward of course, as there's no fees to subsidize your mining operations. If there are no transactions and no block reward, the hashrate will tank and attackers will be able to reverse transactions.
I wouldn't count on it. Ever heard of something called gold?
How many monero are there?
Be precise please
The recently-completed "main emission" was ~18.132 million monero
The remaining "tail emission" is a constant 0.6 monero every two minutes, forever.
Graph: https://i.stack.imgur.com/dSoK0.png
https://monerodocs.org/technical-specs/#emission-curve
Prove it
Having a tail emission opens up the possibility of tweaking the inflation rate for some reason ("let's account for more lost xmr") at some point in time. Having a fixed supply as a cornerstone of your monetary policy is hence a better way of protecting scarcity.
Shilling tail emission is just another attack on Bitcoin.
Monero also carries way more regulatory risk, which makes it a bad choice as SoV.
Can we ban some of these Monero posts? It's fine to have some discussion, but I don't want to see the same Monero arguments constantly on a Bitcoin-focused site.
I don't think that follows. We haven't manually adjusted the difficulty curve every hard fork, we've stuck to this emission schedule for a while. We wouldn't need to raise the emission in the future (e.g. "to account for lost coins") because it's constant (the response to that would be "lost coins? just mine some more like the rest of us!"). This argument would make more sense if the emission was finite and we bumped it up every six months, which isn't the case in monero, but might be the case if bitcoiners need to re-adjust the network every once in a while to keep miners running.
The way I see it, tail emission is necessary to keep the network secure against selfish mining attacks: https://www.cs.cornell.edu/~ie53/publications/btcProcFC.pdf
To do otherwise is to endanger the network in the long run for for your short term greed.
Monero also carries more resistance to regulation, it is the dominant coin on the DN, every major wallet has builtin Tor/I2P supprt, there are no central "CPU mining farms" for the government to bust. When satoshi designed bitcoin, was he trying to overthrow the banking system or was he fretting over "regulatory risk"?
We are all stackers here. I see this as a sort of cope: if bitcoiners were willing to improve the network and copy monero's good tech, then bitcoin would take over the world and leave monero in the dust. But in the bitcoin world, skeptical discussion is banned so I have to choose between network effects (bitcoin) or better tech (monero).
Having any tail emission makes it more prone to changes in the future, it's as simple as that. Going from 0.6% to 1% is a much smaller step than destroying a fundamental property of Bitcoin, the capped supply.
There are other ways of guaranteeing a security budget (e.g. limiting block space) that don't attack Bitcoin's fundamentals. Also, this hypothetical problem is many years away. There isn't any indication that block space will not be in demand. Nor is anybody taking into account what can still be innovated in the coming years (not tail emission). Why is there so much fud around it now then? It's because Monero had its tail emission and wants to show that it's better than Bitcoin. It's just another desperate attack by Monero shills.
I didn't say Monero cannot resist gov attacks. I said it carries a higher regulatory risk, which makes it a bad SoV. Or do you think storing your money in a small niche coin that has no adoption beyond DNM is a good choice for your savings?
Many bitcoiners see Monero as a research experiment. At some point, certain Monero features might get implemented. But let bitcoiners decide what is good tech, not Monero shills. Attacking a fundamental property of Bitcoin is simply an attack on Bitcoin (for the benefit of any Xmr bags?). It's as if Bitcoin has to become Monero to be "good enough". Not all bitcoiners want complete obfuscation on the base layer. The whole point of Bitcoin is that it's auditable. We want private transactions sure, but it should be a balanced approach (not like Monero).
Bitcoin devs are working on Lightning, CoinSwap, etc. All privacy enhancing features. No need to be so black and white. Bitcoin has network effects and excellent tech. Feel free to support the Bitcoin devs like Chris Belcher to make it even better.
What is the significance of the 0.6% and 1% figures here?
Also, bitcoin would be perfectly functional without a capped supply. It is not a fundamental property of bitcoin regardless of what bagholders would like to believe.
Limiting the block space will not increase total fees, because you are also limiting the amount of transactions you can collect fees from. At some point, the fees will just become too prohibitive and people will stop using bitcoin.
If at some point tail emission is increased from 0.6% to 1% (e.g. "to better guarantee mining security, as 0.6% is apparently too low"), you open the door to further changes in your inflation rate. Having an arbitrary % of tail emission opens the door to changing it for whatever reason seems fit. Going from no tail emission to tail emission is however a much bigger leap.
The 21 million cap is as fundamental as it gets. If you don't see that, you don't know much about Bitcoin.
Limiting the block size is just an example. If you limit the block size, fees per block will increase if there is enough demand for the block space. During periods of mania (not enough block space for the demand), you can see that fees exploded higher. It's not that a higher fee and less tx means they cancel each other out. When there is high demand for block space, people will pay more and the total fee goes much higher (cf. mania phases).
Oh right, you have a crystal ball and can predict that no one is willing to pay more fees 10-20 years from now.
The tail emission will never be increased, this is the same emission schedule agreed upon back in 2014. And the tail emission is not 0.6%, as I said earlier it's 0.6. It's just a constant 0.6 monero/2 min, not a percentage of supply.
I don't have a crystal ball, but I do have a functioning brain that tells me that 7 on-chain transactions per second is not enough if you are trying to make a financial system that takes over the world.