Bitcoin Forum

nothing to see

You are welcome to create your alt-coin with these rules.

I read that often recently and it is just the worst idea, ever.
There are some many scenarios, where somebody wouldn't touch his coins for a year. Just look at my savings account, there is money lying around in case of an emergency and luckily emergencies don't come once a year.

By subsidy and transaction fees. You're missing part of it. :)

And then miners can simply confiscate anyone's money by ignoring their transactions until they expire and take it for themselves.

No expiration is needed to prune data. This is explained in the Bitcoin whitepaper (and implemented in an even more effective form in Bitcoin Core).

I think the reasoning of decreasing block reward is strictly economical and has nothing to do with Development & Technical Discussion

By design, after the initial inflationary period (during which the coins are being distributed into the circulation), Bitcoin is supposed to enter a deflationary state - that's why the reward decreases in time to eventually get down to zero at some point.

https://en.wikipedia.org/wiki/Unexpected_hanging_paradox
OK, I am a miner and I see the transaction which spends the output which expires on the next block (let us call it "0-conf expire").
I have two possibilities:
a) include this transaction into my block, take the fees and give the owner his funds for another period of time
b) ignore this transaction and take expired funds

What is the strategy for miner who gets "n-conf expire" (n > 0) transaction?
I think that miners will include these transactions into their blocks in case they have less than 50% hash power.

There is also a limited number of coins that can exist so to prolong the ability to give block rewards, it needs to be lowered as we get closer to that max limit I think.

If Satoshi did not put a cap on the total amount of Bitcoin, it would very easy for someone else to create alt-coins with a cap. Such alt-coins will become more valuable than Bitcoin and replace Bitcoin eventually.

like amcaclin is saying , if you dont like it ! create your own : >

Oh, good - this debate again.

Maybe people will stop complaining after the third time.

Third? :-)

This seems off topic too.

more like the millionth time.

By "third time" I mean 2020.

This, IMO, is the correct answer.

Ah, third halving vs third time bringing up the topic.

Time will tell, but I am sure someone will do it after too!

Well it have something with Economics . I guess when Satoshi made this he was thinking about Supply and demand and the price increasing .
Let's say that Miners are getting 25 BTC in Block reward , right ? with a decent amount of demand . then in 2017 (if all goes well) demand should increase (because bitcoin will get more known) and supply will get lower to 12.5 BTC per block reward. and that makes a huge Price increasing . It's really that simple , at least this is how I see it

~ Madness

Do mining efforts to scale back as well?  Did they when it halved last time (or was technology growing so fast at that point that it didn't)?  Since the reward drops, the costs to mine must drop as well to keep things profitable, which the system then adjusts to.

I think you're talking about demurrage. Well, this concept is already used in cryptocurrencies: http://freico.in/how/

But Bitcoin is not a demurrage currency.


The block reward doesn't need to be "preserved", even if 13,000,000 of bitcoins are suddenly lost tomorrow, it will continue to reward with the same 25 bitcoins, because these 25 bitcoins are issued as new coins, out of "thin air", like a fiat currency. One thing is the block reward, another thing is the transaction fees paid to the miners.

BTW, the regulation of money supply by banks doesn't work very well.

1. So why reduce the block reward when it's unnecessary and detrimental to the security of the system?
A. Block reward is responsible for securing the system by encouraging miners for now. In the future as the number of transactions increases the miners will still have incentive secondary to all of the cumulative small transaction fees.

2. The problem is that the coinbase has a hard supply limit and no mechanism for deflation
A. Deflation in a non-debt backed system is okay and even considered good.

3. lost and abandoned coins can be returned to the coinbase
A. With deflation we don't need any actually "lost" coins returned to the coinbase. This would also prevent people from "saving and forgetting" for x amount of time since their savings could instantly be purged from the blockchain.

You are however welcome to make your own coin that follows these rules and see how much adoption you get.

Exactly. That's like stealing someone's rightful savings. If you want to treat Bitcoin as money, treat Bitcoin as money. Don't steal people's hard-earned money.

Interesting answer. I hear it's not difficult to make an alternative currency.

well if there is no refuce on the block reward , the bitcoin price would've be only from Supply and demand ... and there will be no increasement of the price , since it's always the same amount of supply . so all depends on the demand ... but if the supply decrease , that should make a little pump to the price

If Satoshi left fixed 50 BTC/block reward forever, it would still make the system deflationary since the relative reward (compared to the total supply) would slowly diminish over time. Economically, it would work just fine and make transaction fees matter more and more eventually.

There are a few good reasons, in my view, to introduce regular halving and having a completely fixed nominal supply.

1. Psychological-1: perspective of a drastic halving in a few years/months makes people hurry up and grab coins while there are more of them. Of course, on "efficient market" the knowledge of the future is already accounted for, but real markets are made of real people (and we witness that every day on forums, mailing lists and exchanges).

2. Psychological-2: talking about reward is easier when the supply is nominally fixed to some amount (in our case it's 21M coins). We still have a lot of people who don't understand inflation/deflation and "real" vs "nominal" prices and wages. Having ever-increasing supply of coins which is actually deflationary is a hard concept for many to wrap their head around.

3. Practical: having fixed amount of coins makes it possible to fit all possible amounts into 64-bit integer using in transactions. Ever-increasing block reward would eventually lead to an overflow and require a dynamically-sized field which only complicates things and creates tons of opportunities for fatal mistakes.

It's not only about Bitcoin. It is every coin. I see many people mention Statoshi.
It's nothing to do with Satoshi. It is simply deflation system.
Deflation is about how to keep the block reward constant until single last block get mined.
It is concept of every coin.

They aren't the same thing.
http://en.wikipedia.org/wiki/Disinflation

The block reward isn't constant.

Well this is not the best ideea.

Statists gonna state.  They want your money, because you don't deserve it, to spend as they want, because that's obviously right.

It is indeed trivial.  The hard part is getting someone else to care.

no need this nonsense

block rewards are reduced to control the supply of the coin in the near future, many developers reduce rewards for their coins with their personal thoughts if you want a coin with reward reducing then you can create one for yourself, launch it and you will see if people like this