Sometimes I wonder what would have happened to Bitcoin if Satoshi hadn't chosen a hard cap but instead an ever-growing supply.
Discussion
I agree. Like monero.
Less ppl would have invested in the beginning.
Be created good fomo
Peter Zeihan would have become a Bitcoiner.
“the whole idea of economic activity is that there’s expansion which means you need more currency to lubricate and manage that expansion”
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It wouldn't be here I think.
Hard fork with hard cap would’ve taken over by now.
I would like the ability to give someone a strike. After 3 strikes, they are muted.
Hal finney gone make a hard fork with hard capped #Bitcoin supply.
In that universe, Monero would be a winner.
I think it would have been pretty the same. A fair and predictable emission schedule, subjet to open market-competition is the killer feature.
Predictable inflation is exactly the same as costant inflation in long run.
Different is the case of a growing inflation, cause it revents the incentive to partecipate earlier in the network and collide with the other forces that move bitcoin-actors.
constant emission is a type of growing inflation... in order to be something like a constant ratio it has to decay... the stair step halving has some flaws about it, i think, but they aren't so bad that it wasn't worth the simpler code, "tail emission" is the funny word for a token issuance scheme that is simply a constant static percentage all the time, to do this it has to be exponential decaying
mmm tail emission is constant emission as "constant value", like "n fixed bitcoin every block". And it represent a decreising percentage-inflation cause the inflation/supply ratio is something like n/[n(b)] where n is fixed and b is growing number of blocks. So inflation is going asimptotically to zero, with different speed depends on how the tail emission is designed.
Yeah, I agree that constant-percentage emission, like "1 % of supply every year", is a form of ever growing inflation "in value" and it bring bad incentives and time-preferencies.
tail emission is not any different to halving, both are deceleration of emission... tail emission lets you continue to mint new tokens but after the size of them shrinks below 1 sat you have to increase precision
thats a kind of tail emission, the one implemented in Monero, for example, is progressively decreasing unless the new emission is something like 3 xmr every block, and from then it will be 3 xmr every block forever (unless shitcoin dies).
I think constant-value-emission like that is still another way to tend with different paces to ~0% inflation, so still pretty the same functions.
Is more a question of "numbers choosed to put in the functions" that "determines the speed" and makes the differences.
monero's market cap has stayed flat though, even though its supply rate is constant. this means its losing users as fast as the printer go brrr
mmm yeah but because it is a shitcoin, its how they works, I dont think the tail emission is determinant in this
you mean, the devs are buying lambos?
No, it means CEX have been weaponized against it to suppress prices. And Bitcoiners failing to notice that when screaming ngl are not yet prepared for the coming fractional reserve era in Bitcoin. Where 99% of its users, individuals and institutions alike give a fuck about self-custody.
Every shitcoin with much higher inflation performs better than Monero. What's your explanation for that?
After all you might have figured out that the Monero crowd are the only people also seeing value in Bitcoin and Nostr for its unique properties.
Monero hashrate is at ATH.
Real transactions (not from CEX to HWW to CEX) are growing.
Where Monero is directly accepted by a merchant it usually ranks #1 or #2.
Ruling the only free market (darknet)
There is a huge difference between holders and users. Bitcoin is held, not used. Monero is used, not held (for now).
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.
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
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.
Nothing. Tail emission results in a stable monetary supply: https://petertodd.org/2022/surprisingly-tail-emission-is-not-inflationary
What matters is the tax on savings that it represents. The difference between 0.1% and 1% is insignificant, given how much Bitcoin's economic value grows.
Let’s hope those academics are wrong about unstable block generation for tx fees only state
This assumes a perpetual loss of keys every year which I’m not sure is valid.
It happens all the time now since it’s relatively new to almost everybody but as time goes on and bitcoin becomes more valuable and professional services and best practices mature we should expect a diminishing rate. In your article’s terms lambda would trend towards 0.
There’s a selective pressure in the community: as time goes on Bitcoin should flow into hands of people who can responsibly hold long term since the ones who can’t will become economically less relevant. Not a judgment on them by the way: I’ve lost coins too.
Note: it doesn't, this post is a joke some confused people took seriously :)
all printing is a tax
block rewards are a tax, that halves every ~4 years, it's the same, just why change it if it is fine
We would then be on a Monero standard.
But wait. Rumour has it that Satoshi had his fingers in the creation of Monero as well.
Oh?
Right!
Go on then!!
I had just never heard that about Satoshi and Monero, would love to learn more
Bitcointalk is still a thing. Read the early conversations.
Nicolas van Saberhagen is the only other anonymous dev in all of crypto that brought us the cryptonote protocol/whitepaper.
Based on it was Bytecoin. And based on that is Monero.
It was a small space back then. Things are highly interconnected.
Dogecoin
telling on himself. cashu is a bearer instrument system with no built-in technical mechanism that prevents a mint from issuing more tokens than they have in bitcoin reserves. mints can operate with less than 100% backing and may never be caught doing so. this is an attack on bitcoin because it enables custodians to covertly circumvent the hard cap.
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My guess is that an eventual ever-growing supply of 1 BTC would've been a wiser decision.
That's a really interesting thought! It makes you appreciate the choices Satoshi made. It’s cool to think about how differently things could’ve turned out. Bitcoin's uniqueness is what makes it special! 🚀💰
Thought about this a lot early on in my bitcoin journey. Early adoption would have been slower. Price moves would be more muted. Otherwise, I think this system would have worked out just fine...if it survived the risky early years.
The relative growth of the monetary base still trends to 0, it just never actually gets there. This is a much closer analog to the gold supply schedule. Monero and Grin both went with this option.
IMO the hard cap was the right choice to give bitcoin the best chance of survival during the riskiest period of it's existence. Satoshi was always thinking long term. 🐐
I also like the powerful statement it makes. Finite, the end. Probably got more Austrian Econ types more interested