So the survival of Bitcoin seems to very much depend on the decline in block reward coinciding with an increase in transaction volume. Can anyone say why Satoshi chose the 2 year period as amount of time after which the block reward halves? Wouldn't it have been safer to choose, say 4 years, to allow more time for adoption before block rewards are lowered?
Perhaps it wouldn't even have to be hardcoded at 2 or 4 years-- why not have a dynamic formula based on number of transactions and amount of BTC being transferred (or something to that effect)?
I though about that too, but I came to the conclusion that it's important to be able to predict the future supply of a currency. If something can happen that all of the sudden can make the currency inflate crazily - by a lot of Bitcoin being produced - it is not a safe store of value. Right know we know how many Bitcoins will be in existence at any point in time. That's comforting.
So the survival of Bitcoin seems to very much depend on the decline in block reward coinciding with an increase in transaction volume. Can anyone say why Satoshi chose the 2 year period as amount of time after which the block reward halves? Wouldn't it have been safer to choose, say 4 years, to allow more time for adoption before block rewards are lowered?
It
is 4 years.
The reasoning behind only 4 years is that what Satoshi really envisioned is a stable monetary base without inflation. Some inflation at first is necessary, but he wanted to "get over with it" as quickly as possible.
I see. I guess it's impossible to tell what just the right amount of time should be anyway. Only time will tell if 4 years were appropriate.
