Replying to Avatar calle

Sometimes I wonder what would have happened to Bitcoin if Satoshi hadn't chosen a hard cap but instead an ever-growing supply.
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Rusty Russell 1y ago

It wouldn't have attracted the hard money maximalists, and the early marketing would have suffered. (Remember the one in a million club?). But bag holders generally use rationality to justify their beliefs, not the other way around, so I don't expect much would have changed.

And economically we wouldn't see any difference yet. We would avoid another economic transition: Bitcoin would be "done".

Long term, the difference is significant, so I would never advocate for it now: that would be a rug pull.

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ᴛʜᴇ ᴅᴇᴀᴛʜ ᴏꜰ ᴍʟᴇᴋᴜ 1y ago

technically speaking the existing emission mechanism could be smoothed out without changing the long term parameters, but it's not a neat exponential, flat percentage decay, it's some kind of power of 2 based logarithm

talking about the tail of it is pretty funny when you consider we are in the 5th epoch of halving, and there is 32

i seriously doubt that there will be the same denomination of 100M sats per bitcoin by a decade from now, the need for precision as the userbase increases is inevitable

Mises talks at some length about the difference between further increase of division of the denomination of a currency versus increasing the supply and concludes that you get a better net result in terms of incentives if you increase precision versus increasing supply (perverse fiat money spigot control problem).

i mean, lightning already has added a further 3 zeroes to the precision of bitcoin... when we reach dollar/sat parity i think everyone will agree it's time to add some bits to the denomination

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ponymontana💜⚡ 1y ago

find a good way to do the sats fission will be the new atom fission

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ᴛʜᴇ ᴅᴇᴀᴛʜ ᴏꜰ ᴍʟᴇᴋᴜ 1y ago

lightning already does it, just that there's not really a need for it when sats are still smaller than cents

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Peter Todd 1y ago

The hard money maximalists were just fine with gold, which has no supply cap.

If Bitcoin has been 1₿/block forever, the sound money people would have just said it's digital gold, and the issuance schedule emulates mining forever.