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

From: Dave Scotese <[email-masked]>
Date: Mon, 11 Jul 2022 11:44:46 -0700

I believe it's foolish to attempt objective definitions of things that we
define collectively, like "Bitcoin."  The best any one of us can do is to
be consistent with a subjective personal definition.  I believe most people
do that with the term "Bitcoin" and that the capped supply is intrinsic to
their subjective definitions.  It is to mine.  Leading bodies, such as the
Bitcoin core team, the Ethereum foundation, and every government, are
constantly in danger of confusing objective reality with their own
decisions.  Since people have autonomy, the best a leading body can do is
recommend their decisions.  The common error is one made by governments,
where they react violently to defiance of the definitions they make.
Shadows of that error show up in nongovernmental leading bodies as
ostracism, criticism, and even sometimes illegal activity against such
defiance of decisions.  What I mean here is that John is right in a sense
(" removing this limit results in something that can no longer be called
Bitcoin.  "), but I don't think the way he expressed it is as helpful as it
could be.  There are many who will not call it Bitcoin, and I am among them.

On Sat, Jul 9, 2022 at 8:13 AM Peter Todd via bitcoin-dev <
[email-masked]> wrote:

> On Sat, Jul 09, 2022 at 04:57:57PM +0200, John Tromp via bitcoin-dev wrote:
> > > New blog post:
> > >
> https://petertodd.org/2022/surprisingly-tail-emission-is-not-inflationary
> >
> > A Tail Emission is best described as disinflationary; the yearly
> > supply inflation steadily decreases toward zero.
>
> _Apparently_ inflation. True monetary inflation includes lost coins - both
> intentionally and accidentally lost. It's quite possible that even with
> tail
> emission Monero is currently a monetarily deflationary coin, as the lost
> coin
> rate might be higher than the 0.8% apparent tail emission rate.
>
> We just don't know. Doubly so in the case of monero where its privacy
> features
> hide coin activity.
>
> > > If an existing coin decides to implement tail emission as a means to
> fund security, choosing an appropriate emission rate is simple: decide on
> the maximum amount of inflation you are willing to have in the worst case,
> and set the tail emission accordingly.
> >
> > Any coin without a premine starts with infinite inflation. Bitcoin in
> > its first 4 years had yearly inflation rates of inf, 100%, 50%, and
> > 33%. So deciding on a maximum amount of inflation is deciding on a
> > premine.
>
> Hence why I specified an *existing* coin.
>
> > While in the long term, a capped supply doesn't meaningfully differ
> > from un uncapped supply [1], the 21M limit is central to Bitcoin's
> > identity, and removing this limit results in something that can no
> > longer be called Bitcoin.
>
> Personally I think basing your identity on a technical point that isn't
> even
> correct is stupid. And I suspect than when push comes to shove, if in ~10
> years
> or whatever Bitcoin turns out to be unstable without a reward, the market
> as a
> whole will be happy to redefine Bitcoin to remove the 21M limit. Whether
> or not
> it can do that fast enough to avoid Bitcoin dying first is an open
> question.
>
> --
> https://petertodd.org 'peter'[:-1]@petertodd.org
> _______________________________________________
> bitcoin-dev mailing list
> [email-masked]
> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>

-- 
I own Litmocracy <http://www.litmocracy.com> and Meme Racing
<http://www.memeracing.net> (in alpha).
I'm the webmaster for The Voluntaryist <http://www.voluntaryist.com> which
now accepts Bitcoin.
"He ought to find it more profitable to play by the rules" - Satoshi
Nakamoto