Subject: Re: [bitcoin-dev] Surprisingly, Tail Emission Is Not Inflationary

From: Tobin Harding <[email-masked]>
Date: Sun, 10 Jul 2022 12:10:40 +1000

Hi Peter,

Interesting blog post. 

On Sat, Jul 09, 2022 at 11:31:26AM -0400, Peter Todd via bitcoin-dev wrote:
> On Sat, Jul 09, 2022 at 08:24:51AM -0700, Eric Voskuil wrote:
> > To clarify, price inflation is not caused by market production. Attributing the observed lack of inflation (eg fee %) to loss is an assumed relation.
> 
> My article is a mathematical proof that has nothing to do with observations of
> inflation.
> 
> What I did is prove that if there is tail emission/fixed supply, the coin
> supply will converge towards a fixed amount because the coin supply dependant
> rate of coin loss balances out the fixed rate of coin production.
> 
> That proof has nothing to do with market dynamics and would happen in any
> system, economic or not, with similar underlying dynamics.

I'm not a mathematician but I think your models assumption that coin
loss is proportional to number of coins misses something, correct me if
I'm wrong but as value of coins goes up is it not reasonable to expect
coin loss to go down as people are more careful (not to mention
improvements in tooling and education).

Is it really possible to model coin loss as exponential decay
considering such things (I'm not being facetious, that is a real
question, like I said I'm not a mathematician)?

Cheers,
Tobin.