"Surprisingly, Tail Emission Is Not Inflationary" -- A post by Peter Todd

[odolvlobo]

This is an interesting post: Surprisingly, Tail Emission Is Not Inflationary

This article will show that a fixed block reward does not lead to an abundant supply. In fact, due to the inevitability of lost coins, a fixed reward converges to a stable monetary supply that is neither inflationary nor deflationary, with the total supply proportional to rate of tail emission and probability of coin loss.

I think his analysis is a little naive, but it could be the start of something interesting.

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[BusinessChain]

The problem with fixed reward is that you don't know whether you are actually rewarding the miners properly. What kind of politics will determine what the right amount of block reward would be? Do we even want such politics in Bitcoin? I don't.
When you have transaction fees only, it is purely the market who decides how much miners earn. I think that is the right way to go.

[jackg]

The lost coin constant is going to be a hard one to get a good estimate for and also a thing I think is a bit impractical.

I'd hope an inflation that barely touches the monetary supply over a long enough period of years while compensating miners enough for their work is reachable. I don't think unstable rewards in bitcoin would deter people from mining too much if the fees either occasionally paid well or were fairly consistent (it might be taken on quite a bit as a hobby or by companies that need to keep it secure to enable their business by that time).

[gmaxwell]

This has been a monero marketing point for a long time.   To some extent I think it's kind of pointless navel gazing.

Imagine a currency that was perpetually inflationary by having everyone's holdings equally increase by 10% every year.  Other than some logistic impacts with pricing and contract terms and some psychological effect, this would be a complete economic no-op: no one would be richer or poorer because of it.  The "inflation" isn't what matters economically, what matters economically is how the inflation is distributed.

In light of that, I feel that the answer given by Todd and Monero promoters is answering the wrong question.  When people are concerned about inflation they're really concerned about two things:  Inflation unpredictability/uncertain, because unpredictable inflation can't be efficiently compensated for, and the cantillon effect-- the fact that the normal ways of creating inflation enrich parties close to the source of the money at the expense of the rest of the economy.

My toy example lacks both those issues: since it's predictable and everyone is proportional 'close' to the new money, which is why it's an economic no-op even though it is "infinite inflation". By contrast "nocturnal[1]tail emission" fails both of those criteria and so it has an economic impact even if you accept that the argument that the supply of circulating coins is finite. ... a conclusion that shouldn't be at all surprising since if it has no economic effect no one would argue for it to begin with: having an economic effect is the point.

([1] Aside, the fact that many altcoins have been created by eastern Europeans seems to have resulted in using the word 'emission' instead of 'subsidy', but the word in the singular form is very uncommon in American English (rather than 'emissions', which is more common). For many people the immediate sophomoric association is the titter inducing "nocturnal emission".  Advocates of these schemes would do themselves a favor to call it "tail subsidy" instead as subsidy was the established term for the ex nihilo mining reward before altcoins started calling it 'emission'.  I think it's more economically honest too-- as it is indisputably subsidy, and advocates for it ought to be explaining why miners need to be subsidized)

So any discussion of it should really be about the economic effect and its merits or harms-- the discussion about an "infinite" circulating supply is just a pure red herring.

But I'll embrace the red herring for a bit to highlight some of its limitations:

The convergent inflation argument has some striking similarities with Rizun's "A Transaction Fee Market Exists Without a Block Size Limit", in which Rizun effectively argues that Bitcoin there is some block size where the marginal increase in orphaning risk for a transaction makes it unattractive to add transactions paying under some threshold fee.

Rizun's argument is known to be fallacious due to its assumption that there is a marginal increase in orphaning risk.  But any such risk is a technical artifact in how blocks are propagated and validated by miners and can be made arbitrarily low by centralizing mining or even eliminated completely by changing how block propagation works (and there are concrete schemes described that accomplish this).

Similarly, the convergent inflation argument assumes there is some consistent coin loss-- but that isn't a fundamental property of the system!  One could easily imagine a future where long lived entities like states offer people payments (or discounts) if they encumber their coins with CSV-like releases if they go 1-2 lifetimes without being moved.  In such a future coin loss could become arbitrarily small, maybe even effectively zero (if, e.g. standardness rules were put in place to avoid accidental losses).  In some hyperbitconized future it would make a lot of sense for things to move in this direction.

(At one point I even drafted up a mailing list posts suggesting that Bitcoin core should consider offering an option for people to dedicate their long lost coins to development help fund future development, but never finished it because I figured it would generate too much drama for the amount of benefit it would provide.)

Rizun's argument is also flawed in that at best it only makes a case that an equilibrium exists (and it also requires endless mining subsidy, but I'll ignore that), not that that the equilibrium is an acceptable one:  It might only be achieved at transaction levels far beyond any conceivable demand or only at a level where the computational costs of running a node would be unreachable by practically anyone.  The convergent inflation argument is somewhat better in that it seems clear that the equilibrium would eventually be reached (where Rizun's doesn't even achieve that), but the equilibrium point might further out than the lifespan of our sun.

Unlike Rizun's argument I don't think these points are strong enough to demolish the idea that continued subsidy could be convergent entirely, but I think they do point out limits in the argument.

But as I said above, I think the argument that the supply of circulating coins converges is really a red herring.  Instead, we should consider the economic effects:

Is it desirable, much less moral, for a percentage of the world's wealth be continually diverted to support mining?   I wouldn't take an absolute hard line position that it wasn't desirable, or even that it wouldn't be moral (at least in so far as it was a system people consented to use)-- but the reasonableness of this depends critically on the amount.   Would 0.001% be acceptable?  I suppose! would 10%? Absolutely not.  And here the convergence from loss argument actually makes a case against the policy it intends to support:   It admits and depends on uncertain coin loss, but by that same token we can't know the rate.  It's completely credible that after some major war or disaster that suddenly a large percentage of coins could be lost at once (particularly if the above mentioned recovery schemes hadn't been widely implemented yet).  If that happens the "transitory" inflation might become extremely market distorting, ultimately harming civilization by directing an unconscionable share of resources to mining or (more likely) causing the system to be abandoned.

I think it's also worth considering that the total supply of non-lost coins and the circulating economy are quite distinct things.  Our civilization has undergone a couple centuries of tremendous sustained growth as a result of technologies such as fossil fuel and the haber process-- and I think it may be giving us a rather biased perspective on the dynamics of mankind's economies in the far future: There are straightforward thermodynamic reasons that an expansion of our economy (much less an accelerating expansion) shouldn't be expected for indefinitely long time. Even if you assume we'll someday populate the stars, absent new physics that makes FTL travel possible, the size of an interconnected economy is finite (though perhaps quite large!).  Fanciful speculation aside, even in our current economy we go through periods of higher and lower activity, and so if the miner's income doesn't depend on the current circulating economy (which could be a fraction of the stashed wealth) it could easily become distortingly large during slow periods-- which should be common in a less expansionary economy (and may last generations!).

The uncertainty of the amount works in the other direction too:  Continued subsidy isn't guaranteed to be enough to support security in any meaningful sense, it could be too small to achieve its intended goal as well as too large.  Because of economic cycles the same scheme could even be both, disruptively overpaying during economic slumps (diverting resources to excess security) and disastrously underpaying during economic booms (failing to achieve the security goals).  Without thinking carefully you might think that sometimes underpaying would still be better than zero subsidy but that isn't clear to me because unpredictability in security is itself a problem because it interferes with compensating behaviors.

With these points in mind I think Satoshi made a very good decision.  Bitcoin's tail subsidy scheme of zero is the unique amount of tail subsidy guaranteed to (eventually) never overpay. It is the value with the minimum amount of economic uncertainty, excluding security considerations.   It does make a weaker argument for long term network security, but since tail subsidy schemes are unable to make a strong argument that they're actually able to meaningful improve security (much less guarantee it!) I don't find that weakness particularly compelling.   There are many uncertainties about Bitcoin's security and long term income for mining being insufficient is one of them (probably not even the most concerning one).  Making the economic policy clear and simple is worth it, especially since security isn't going to be clear regardless.  I'm pretty confident that if Bitcoin originally had perpetual subsidy the market would just be further diluted by variants that had different amounts of it. Zero is a pretty strong attractor in the design space, 0.01 vs 0.02% is far less clear.

I think our experience so far makes a basic case for Bitcoin's security: Bitcoin generates fee income today which is greater than the total (inflation subsidized) income of many altcoins that seem to be going without attack.  Is this a security guarantee?  No, but it's the first test and Bitcoin appears to be passing it.  Assuming it does work I think we're obviously better off with it as it is-- I don't think anyone arguing for tail subsidy would still argue for it if they were confident the system would be secure without it: The only time you can make a clearly moral case for forcing someone to pay someone else is on the basis of necessity.  If Bitcoin's scheme turns out to not work out then users in the future will have many alternatives they could consider-- including adopting Bitcoin variants that are created that have constant subsidy (as tail subsidizers propose) or attempt to achieve security through other means.   To those people, should that future ever come to exist, the discussion will be much simpler though because they'll know if Satoshi's simple economic-effect minimizing scheme works or not, they'll know if alternatives are necessary.

The subject just creates drama today because we all clearly signed up for a system with a particular economic policy, for better or worse.  It would be immoral in the extreme to try to coerce people onto a different one. And since for the moment Bitcoin does work I think it's hard for some people to see conjecture on this subject as anything but a call for coercion. Fortunately, for the same reason I think it would be impossible to do so, unless it turns out that Bitcoin isn't viable-- and in which case it wouldn't be that big a deal because few would want to stick to a system that wasn't working.  If Bitcoin users didn't think a non-cocersive system was extremely valuable they wouldn't be using Bitcoin to begin with.  I think Todd's post acknowledges this out too,  but people seem quick to ignore that point because they'd rather stress themselves out over the drama (presumably this propensity was also a factor why Todd stopped developing bitcoin many years ago. ).

[NotATether]

Notwithstanding all the other points made on this thread, there are still going to be ignorant or otherwise narrow-minded people attempting to point out: "See? Bitcoin went down during the Fed's inflation; that means its not inflation resistant either." and they (and us, and everyone else who is a common person not working in the Treasury Department) is missing part of the picture here.

That part is that the inflation rate of the US economy is quite volatile as well, but most of the smaller inflation cycles are not reflected into the Fed's cutting or raising interest rates, which can be viewed as the equivalent to "interest rates for miners aka. block subsidy" - I do not include fees in this measure because it is more of an secondary way of getting interest independent of the Federal Reserve (aka. the network consensus).

So anyway, there are various local peaks and troughs in the economy within a short timespan as people engage in commerce more or less, and which go unnoticed by most people because they do not know the metrics that represent economic inflation. Sure, most people know about the "inflation rate", but I doubt that people have paid much attention to it, much less made a graph of the culmunative inflation rates (so that the model can be compared more accurately to a cryptocurrency price).


And all those cuts and raises would represent larger cycles, due to the percentage changes in the economic subsidy, not necessarily -50%, but something comparatively lower.

So the smaller cycles of economies are not even modelled, the larger cycles are the one noticed by people.

So with this thinking by people that "everything must be a long cycle", they view every change of a coin's price as a long cycle, including the ones that happen to be a short cycle. So that is what is causing people to think of such incorrect statements such as "bitcoin is not inflation resistant". Bitcoin is long-term inflation resistant; against the short cycles it can resist with nothing.

That is why each successive halvening has only increased the peaks and troughs of the price to larger values, never to smaller ones (the Dec 2017 charge and subsequent collapse can be attributed to a huge increase in users and miners when the supply and demand of BTC could not support so many users back then (via the block subsidy), but can now as can be observed. As a matter of fact, the reason we didn't hold $60K is because the block reward could not sustain the supply and demand of all the new users - hence why miners always feel like they are running out of money these days).

People also think that Fed's long cycles must coincide with cryptocurrency's long cycles. They do not, because their economies are different. That is the second reason (in addition to "thinking everything is a long cycle") that people make the erroneous inflation conclusion about Bitcoin.

[tromp]

Is it desirable, much less moral, for a percentage of the world's wealth be continually diverted to support mining?

This entirely misses the point of the block subsidy. It is for *distributing* coins, the only way to bring coins into existence.

Is it desirable, much less moral, for a percentage of the world's wealth to be in the hands of some early whales?

Absolutely not. If in 2140 when the last satoshi is mined, we look back at how all the bitcoin in existence have been distributed, then only 0.4% have been distributed in the prior 100 years, across 5 generations. That makes little sense economically.

It's also completely different from how gold mining behaves, which to a first degree has a linear emission in our lifetimes. Would you characterize gold mining as undesirable and immoral?

Similarly, the convergent inflation argument assumes there is some consistent coin loss-- but that isn't a fundamental property of the system!  One could easily imagine a future where long lived entities like states offer people payments (or discounts) if they encumber their coins with CSV-like releases if they go 1-2 lifetimes without being moved.  In such a future coin loss could become arbitrarily small, maybe even effectively zero (if, e.g. standardness rules were put in place to avoid accidental losses).  In some hyperbitconized future it would make a lot of sense for things to move in this direction.

That is just wishful thinking. Coin loss will never be arbitrarily small. Any rules that guard against accidental loss are themselves a risk of abuse, and a nontrivial if not large fraction of users will keep relying on memorized passwords and well hidden seed phrases that will often go unrecovered upon accidental death. You also underestimate the ability of humans to screw things up. It's just not realistic to think that the yearly loss rate would ever drop below 0.01%. More likely it will remain above 0.1%.

offering an option for people to dedicate their long lost coins to development help fund future development

How would that even work technically? Coins whose keys have been lost cannot be moved...

Making the economic policy clear and simple is worth it, especially since security isn't going to be clear regardless.  I'm pretty confident that if Bitcoin originally had perpetual subsidy the market would just be further diluted by variants that had different amounts of it.

If bitcoin had a fixed block reward of 600 since launch, then its emission of 1 coin per second forever would be recognized as the ultimately simple and fair emission. It would take 2-5 decades for its yearly supply inflation to become competitive with fiat, but what's the hurry? At least the high initial inflation rates would keep the speculators at bay, and bitcoin could focus on its *intended* purpose: use as a *currency*.

Variants that distribute less or nothing to later generations would be rightly seen as forms of grift and speculation vehicles. Those later generations would have every incentive to reject all these alternatives and prefer the more fairly distributed coin which in time will have negligible inflation anyway.

[garlonicon]

Is it desirable, much less moral, for a percentage of the world's wealth to be in the hands of some early whales?

Imagine a system, where in every block, every miner could get one satoshi per 0.01 BTC on that address. In fact, there is no difference between a system with tail supply, and a system with fixed supply, where you can take someone's coins. Because that's what inflation is about: proportions. That's the only thing that matters. So, no hard forks are really needed to create a tail supply, you can instead force all users to pay a "tail supply fee", for example one satoshi per each 0.01 BTC. Then, miners could be forced by a soft-fork, to lock those "tail supply fees" to some future block number, just by using OP_CHECKLOCKTIMEVERIFY, to increase future block rewards.

And because it is something that can be solved by changing fee policy, no forks are needed to introduce that.

How would that even work technically? Coins whose keys have been lost cannot be moved...

You can always create a timelocked transaction, that could be mined after block number N. And then, you can publish it, then there are two options:
1) you will move your coins before block N, so the broadcasted version will be invalid
2) you will lose your keys, so after block N, miners will pick it (miners, if it will require no keys, but you can of course decide, what conditions are needed to take it)

[cr1776]

... At least the high initial inflation rates would keep the speculators at bay, and bitcoin could focus on its *intended* purpose: use as a *currency*.
...

Regarding Peter Todd's post there is plenty handwaving about the assumptions for lost coins.  This isn't so much a proof as a hypothesis based on the assumptions because there is no way to use math to prove that coins are lost at a certain rate.  Are Satoshi's coins lost?  They haven't been moved.  I have coins not moved since late 2010, but they aren't lost.  Garbage in, garbage out.

Likewise, continuing the block reward via tail emissions would seem to empower censorship and weaken censorship resistance: instead of the larger percentage penalty for censoring transactions and their fees, a tail emission mitigates that loss to miners.

Finally as far as the quotation above stating that the "intended purpose" is use as a currency things like "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" indicate that the intended purpose might not have been solely as a currency, but to cut out the state and banks from being able to destroy the value of a currency by profligate spending via bailouts and others.  Among other things.

If an inflation coin is desirable or a different block subsidy is desirable, the answer is to fork the code and blockchain with these new rules and convince a sufficient number of people that the resulting inflatecoin is desirable.

[vjudeu]

And because it is something that can be solved by changing fee policy, no forks are needed to introduce that.

Exactly. Just do it. If you think that the block reward for the block 1000000 is too low, then you can send your coins to "1000000 OP_CHECKLOCKTIMEVERIFY OP_DROP OP_TRUE". So, to make it standard, all you need is sending coins to bc1qqph8gusf2x7ch4xjs8vnp7hy449r929wnv5jggmy678gam85l6rqgajus9. No forks needed, and the block reward for that block will be increased.

Or you can propose a soft-fork, if you want to force people to do that, but I guess you can start with block numbers around the current date, to check if any solo miner or any pool will pick it.

[o_e_l_e_o]

Without thinking carefully you might think that sometimes underpaying would still be better than zero subsidy but that isn't clear to me because unpredictability in security is itself a problem because it interferes with compensating behaviors.

But with zero tail emission, is security not inherently unpredictable since it depends solely on the fee market at the time? We may still have periods of over security, with mempools packed with transactions paying high fee rates, and periods of under security, with empty mempools with a handful of low fee transactions.

So, no hard forks are really needed to create a tail supply, you can instead force all users to pay a "tail supply fee", for example one satoshi per each 0.01 BTC.

All addresses? Or all transactions? If it's the former then it breaks things like timelocked transactions and Lightning by meaning that pre-signed transactions would no longer be valid since the value of the inputs is now lower than that of the outputs.

[garlonicon]

All addresses? Or all transactions?

In tail supply, it is "all addresses", but you cannot see that directly, because it is obscured. Enforcing "all transactions" is easier, because enforcing that on "all addresses" would require things like coinage-based fees (for example, that for every 0.01 BTC you have, your tail supply fee will increase in one satoshi per each block).

But even if it will be "all addresses", then it is still solvable, two things are needed:
1) using SIGHASH_ANYONECANPAY, to make transactions open for adding fees (no fork required)
2) using SIGHASH_PREVOUT_ANYONECANPAY, to make signatures, that will be still valid, no matter what coins will be added to the previous transaction (soft-fork required)

[o_e_l_e_o]

In tail supply, it is "all addresses", but you cannot see that directly, because it is obscured.

Sure. But in both cases the outcome is the same, in that people holding bitcoin will have their holdings effectively taxed, either by losing 1 satoshi per 0.01 BTC as per your example, or by having a constant low-level block reward. Not that I think we should have either, but if you were going down this path then I think that the constant block reward would be the simpler (and more emotionally acceptable to most people) of the two to implement.

Enforcing "all transactions" is easier, because enforcing that on "all addresses" would require things like coinage-based fees (for example, that for every 0.01 BTC you have, your tail supply fee will increase in one satoshi per each block).

Enforcing "all transactions" rather than "all addresses" creates a tax on transactions, though, which disincentivizes bitcoin's use as a currency.

[garlonicon]

Enforcing "all transactions" rather than "all addresses" creates a tax on transactions, though, which disincentivizes bitcoin's use as a currency.

Exactly. So, if someone really wants a tail supply, then funding addresses like bc1qqph8gusf2x7ch4xjs8vnp7hy449r929wnv5jggmy678gam85l6rqgajus9 is an option, as vjudeu said. And if someone really wants to make it a consensus rule, then it can be simply done by getting all transaction fees, and then making a soft-fork that will lock some part of the coinbase transaction into some future block number (for example, the current block number plus 210000). That's all what is needed to make a tail supply.

[BlackHatCoiner]

Three questions:

• If mining incentive is the problem, isn't it preferable to rise the block size instead?
• Isn't tail emission preferable when there's little transaction activity? Isn't the exact opposite happening on bitcoin?
• Wouldn't a tail emission be a direct attack on one of the principles, which is non-arbitrary inflation schedule?

you can instead force all users to pay a "tail supply fee", for example one satoshi per each 0.01 BTC.

How can you force a user pay a "tail supply fee" in a no hard-fork way? Don't you need their signature?

And if someone really wants to make it a consensus rule, then it can be simply done by getting all transaction fees, and then making a soft-fork that will lock some part of the coinbase transaction into some future block number

Isn't this going to just delay the miners' reward? As far as I understand, you're taking the current reward (transaction fees) and send it to a future block.

[garlonicon]

If mining incentive is the problem, isn't it preferable to rise the block size instead?

No, it is preferable to rise the transaction flow instead, by compressing things, and by joining transactions. It doesn't matter if you have one transaction paying 0.01 BTC fee, or if that transaction was created by joining many small transactions into one. If you have a single user paying 0.01 BTC, or if there are 1000 users, paying 1000 satoshis each, it doesn't matter, if the size of that transaction is identical.

Isn't tail emission preferable when there's little transaction activity?

Exactly, tail emission is preferable, when blocks are almost empty, so there are almost no fees, and if the block subsidy is zero, then there is a problem, because there is no incentive to keep mining.

Isn't the exact opposite happening on bitcoin?

Also true. If you assume 1 sat/vB as the minimal fee, and if you assume 4 MvB as the maximum block size, you will get 0.04 BTC per block. And by looking at coinbase transactions, you can quickly notice that the current fees are higher than that. I guess even locking 0.01 BTC per block for the future rewards will be rejected, but if someone wants to do that, then that person can start mining, and then see, how it is to voluntarily reject some reward, and lock it for the future. And if someone is not a miner, then that person can try to do that as a user, because anyone can send coins to addresses like bc1qqph8gusf2x7ch4xjs8vnp7hy449r929wnv5jggmy678gam85l6rqgajus9, then miners could claim that later by creating a transaction that will send all of that as a fee. Also, using timelocked transaction with some high fee, and publishing that, will have the same effect. It is a matter of fee policy, adding anything to the minimal 1 sat/vB, and creating any rule to lock N satoshis out of all fees to M block would solve that, without any hard-fork.

Wouldn't a tail emission be a direct attack on one of the principles, which is non-arbitrary inflation schedule?

Yes, it is in practice an attack. Imagine a situation, where you will have 1 BTC, and you will lose single satoshis, one-by-one, because of some soft-fork. That would be exactly the same situation, if you will have tail supply, the difference is that if you have a fixed supply, you will explicitly see that you lose something, but with the infinite supply, the same thing is done in a more obscure way.

How can you force a user pay a "tail supply fee" in a no hard-fork way? Don't you need their signature?

Any miner can require a minimal fee of X. Currently, we have 1 sat/vB as a reasonable default. But nothing stops miners from saying, that for example now we will have 0.5 sat/vB minimal fee for them, and 0.5 sat/vB locked for the future. As you can see, no fork is needed.

Isn't this going to just delay the miners' reward?

Exactly. But you don't know, which miner will pick that later, because any miner will have a chance to do that.

As far as I understand, you're taking the current reward (transaction fees) and send it to a future block.

Exactly. And the best thing is that you can do that as a user, and you can do it now, so no forks are needed to start it.

[o_e_l_e_o]

And if someone really wants to make it a consensus rule, then it can be simply done by getting all transaction fees, and then making a soft-fork that will lock some part of the coinbase transaction into some future block number (for example, the current block number plus 210000). That's all what is needed to make a tail supply.

That doesn't really solve the problem, though. Let's say you want the tail emission to be a fixed amount, for example 0.01 BTC per block. After the 13th halving, the block subsidy drops to 0.00610351 BTC, meaning you can no longer commit that amount to future blocks. If you say instead that you want the tail emission to be a variable amount, and to commit 10% of all transaction fees from each block to block n+6,000,000 (for example), then there will still be plenty of blocks which are empty or near empty and therefore can only lock up trivial amounts or none at all for future blocks.

Even if you decide to commit 10% of the total block reward (subsidy + fees) to future blocks, really you are just delaying the inevitable. If fees alone are not sufficient to sustain the network, then simply taking a cut of those insufficient fees and allocating them to the future will not be sufficient either.

[garlonicon]

After the 13th halving, the block subsidy drops to 0.00610351 BTC, meaning you can no longer commit that amount to future blocks.

I don't know if on-chain transaction fees will drop below 1000 sats/kvB. What if they won't drop, forcing people to use second layers, like Lightning Network and sidechains, to not pay 1000$ for coffee?

Another thing is that even if tail subsidy will win, then coins still could be always burned. Adding new coins to the system is hard, but possible (see: zero satoshis). Removing coins from circulation is easy and straightforward, you can burn them by using OP_RETURN, or burn them by taking less amount in the coinbase transaction. So it is perfectly valid to join any inflationary network, and start burning coins. Because that's what will be eventually needed: tail supply will cause problems, that will eventually require a solution, for example based on burning coins.

And of course, claiming more coins explicitly in the coinbase transaction will obviously not work, because it will be unnecessary hard-fork, where there are soft-fork or no-fork solutions available.

[stwenhao]

This has been a monero marketing point for a long time.

I think we should burn more Monero, for two reasons:
1) to show them that finite supply is better
2) to protest against such proposals
I don't know if Monero has some OP_RETURN equivalent (to avoid spam, because sending to some trap address will force all nodes to process that), but if they don't have anything like that, then it may be possible to burn them in a coinbase transaction, so it could be publicly noticed, how many coins were burned.

[BlackHatCoiner]

How can you force a user pay a "tail supply fee" in a no hard-fork way? Don't you need their signature?

Any miner can require a minimal fee of X.

If the tail supply fee is redacted from the transaction fee, then there's no actual tail emission, as described by o_e_l_e_o. The supply remains 21 million.

[garlonicon]

If the tail supply fee is redacted from the transaction fee, then there's no actual tail emission, as described by o_e_l_e_o. The supply remains 21 million.

It is all about proportions. You can have two systems:
1) with fixed supply, where everyone will lose some satoshis in explicit way, and they will be taken by miners, because of tail emission
2) with infinite supply, where everyone will lose some satoshis in obscured way, because miners will be always rewarded by new coins, because of tail emission

Maybe you can't see that, so I will try to make some more extreme example, you can adjust numbers to reach some real-life scenarios:

Imagine there are 21 million coins, distributed to many different users, and the block reward is zero. Then, imagine that 21 million coins are produced, because of tail emission. Then, you can have two systems:
1) with fixed supply, where everyone will lose half coins in explicit way, and they will be taken by miners, because of tail emission: 10.5 million coins will remain in users' hands, 10.5 million coins will be taken by miners, 21 million coin limit is untouched
2) with infinite supply, users will have exactly the same amounts, but they will be worth 50% less than before, because miners will be always rewarded by new coins, because of tail emission

And then, imagine more real-life numbers. What result you will reach? You can do some simulations, then you will see that taking single satoshis from all accounts, and building new block rewards from that, is an equivalent to tail emission. It is the same, if you know all addresses and all amounts, then you can exactly calculate, what percentage of the total supply each user has, and then you can calculate, how many coins each user should own, to reach an equivalent situation, in a fixed supply coin.

It is simple. The total supply does not matter, all that matters is that is a fixed number. You can create a coin, where all amounts will be numbers from [0;1] range, then you can add fractions, and then you will explicitly see, that if we have 21 million coins, and if you burn 10.5 million coins, it is the same situation as doubling all balances on all accounts. And by contrast, if we have 21 million coins, and if you produce additional 21 million coins, it is exactly the same, as halving all balances on all accounts.

Then you should understand, that adding for example 0.01 BTC to the system as a tail emission, is effectively the same situation, as taking single satoshis from all accounts, and giving that to the miners. The difference is simple: it is done in a more obscure way.

[BlackHatCoiner]

Then you should understand, that adding for example 0.01 BTC to the system as a tail emission, is effectively the same situation, as taking single satoshis from all accounts, and giving that to the miners.

You don't get single a specific amount of satoshis from all accounts, though. As you said, from the transaction fee, 0.5 sat/vb goes for the tail emission and the other 0.5 sat/vb for the reward. This means that only those who make transactions are those who fund the future reward. And since you can't charge satoshis from all the addresses without the respective signatures, increasing the supply is the fairest option.

[garlonicon]

I think people don't understand that clearly. Maybe there is a need to create a calculator, where people will type some amount in satoshis, and they will see, how fractions change over time. For example:

Code:

gettxoutsetinfo
{
  "height": 743620,
  "bestblock": "000000000000000000068e2d0b92c9ea69618b5c8c1d4c7721d3493556b18976",
  "txouts": 82609969,
  "bogosize": 6165045008,
  "hash_serialized_2": "c83a32587a725662e438e29276181233f24418aa2dc7c30eac669e3d49f79287",
  "total_amount": 19084917.17823438,
  "transactions": 49217478,
  "disk_size": 5201648608
}
gettxoutsetinfo
{
  "height": 743625,
  "bestblock": "000000000000000000025c4c50d6ec225b90f1d100fc31fd31f1543cb27f700b",
  "txouts": 82608545,
  "bogosize": 6164937399,
  "hash_serialized_2": "0b4c2b13d9ca59d09ee688c4135579e3c4a44f894af5a704b1c2afc23c174f14",
  "total_amount": 19084948.42823438,
  "transactions": 49218712,
  "disk_size": 5195808511
}

And then, some messages like that would make it more clear:

Code:

You have 100000000 satoshis. As of block 743620, there are 1908491717823438 satoshis in circulation. That means, you own 0.00000005239739793 coins in [0;1] range.
You have 100000000 satoshis. As of block 743625, there are 1908494842823438 satoshis in circulation. That means, you own 0.00000005239731214 coins in [0;1] range. Since block 743620 you lost 0.00000000000008579 coins in [0;1] range, because 3125000000 satoshis were mined in the meantime.

Then, they should click on "show tail emission", and see this kind of messages:

Code:

You have 100000000 satoshis. As of block 743625, there are 1908494843823438 satoshis in circulation. That means, you own 0.00000005239731211 coins in [0;1] range. Since block 743620 you lost 0.00000000000008582 coins in [0;1] range, because 3125000000 satoshis were mined in the meantime. You also lost 0.00000000000000003 coins in [0;1] range, because 1000000 coins were mined in a tail emission.

This means that only those who make transactions are those who fund the future reward.

That's another problem, but to get the full picture, you can add punishments in a reversed way than coinage: the older coins you have, the more coins you have to pay to move them. And to preserve old signatures, it should be possible to require paying as a fee, no matter who will pay that, so for example if some old address has to pay 0.01 BTC, then it should be checked globally on the coinbase level, to make it possible to delegate payment to someone else, without invalidating old signatures from old transactions.

Edit: Let's see how many decimal digits are needed to express that precisely enough:

Code:

totalSupply=2100000000000000
satoshi=1
fraction=0.00000000000000047619047619047619
totalSupply=2100000000000001
fraction=0.00000000000000047619047619047596

Yes, 32 decimal places seems to be a good choice for the start. But maybe reversed uint256 as a fraction would be better, or maybe some difficulty-like system, it is still an open question, how to display it easily, maybe storing amounts in satoshis and calculating it on the fly is the simplest solution, but still, there is a need to always display all fractions precisely enough to show, how it really works, because users should see, how their coins are affected by inflation, instead of seeing the same amounts and falsely thinking they don't lose anything from tail emission.

[Peter Todd]

Is it desirable, much less moral, for a percentage of the world's wealth be continually diverted to support mining?   I wouldn't take an absolute hard line position that it wasn't desirable, or even that it wouldn't be moral (at least in so far as it was a system people consented to use)-- but the reasonableness of this depends critically on the amount.   Would 0.001% be acceptable?  I suppose! would 10%? Absolutely not.

Let's suppose a truly devastating war somehow kills half of the global population. For reference, WW2 only managed to kill about 3-4%. We'll also suppose that every single person who was killed lost their private keys, and absolutely no-one left backups to surviving relatives.

If 10% of the world's wealth/year was going to mining after that catastrophic event, 5% of the world's wealth/year must have been getting destroyed in boating accidents.

Sorry, but that's a ridiculous example. And not because of the specific amount: the proportions mean that to get a measly doubling of reward - a reward so low it matches what people lose by accident - half the entire coin supply has to somehow be lost in a massive catastrophe.

If that happens the "transitory" inflation might become extremely market distorting, ultimately harming civilization by directing an unconscionable share of resources to mining or (more likely) causing the system to be abandoned.

In no world is 2x unconscionable where 1x was just fine. Especially when the 1x happened to be what people lose by accident on a regular basis.

The uncertainty of the amount works in the other direction too:  Continued subsidy isn't guaranteed to be enough to support security in any meaningful sense, it could be too small to achieve its intended goal as well as too large.  Because of economic cycles the same scheme could even be both, disruptively overpaying during economic slumps (diverting resources to excess security) and disastrously underpaying during economic booms (failing to achieve the security goals).  Without thinking carefully you might think that sometimes underpaying would still be better than zero subsidy but that isn't clear to me because unpredictability in security is itself a problem because it interferes with compensating behaviors.

Again, there is no way that we can be "disruptively overpaying" with a tail emission approximately equal to what people lose by accident.

...and yes, obviously the continued subsidy isn't guaranteed to be high enough to support security. But as long as Bitcoin is in the billions to trillions market cap range, the level of threat a 0.1% to 1% subsidy is protecting against is the kind of very expensive outside attack that's difficult to predict anyway. All you can do is spend an affordable level of wealth to protect yourself, and hope it'll be enough.

If it's not, there's a good chance that Bitcoin is entirely nonviable anyway, as it's just worth enough to be worth protecting. If Bitcoiner's need to spend 10%+ per year of their entire wealth to protect the network, it may not be worth it at all.

With these points in mind I think Satoshi made a very good decision.  Bitcoin's tail subsidy scheme of zero is the unique amount of tail subsidy guaranteed to (eventually) never overpay. It is the value with the minimum amount of economic uncertainty, excluding security considerations.

That's absurd. Overpaying isn't a concern when you're paying a tiny % of your wealth. What Satoshi did was take a perfectly good system, and build into it a massive long-term unknown in how we'll pay for security.

It's notable that people regularly pay hundreds of times more than strictly necessary in fees. Just look at any block explorer: https://mempool.space/block/000000000000000000030da833111fd3c4ade500b3b96963fadb4523475fe529

That block has a median fee of 15sat/vB, yet some transactions are paying as much as 2007sat/vB. Why? When you're moving millions of dollars fixing your fee estimator to save $10 isn't high on the priority list.

I sure don't care about spending 0.1% or 1% per year of my wealth to keep Bitcoin secure. But I do care that everyone else also chips in so we don't have a tragedy of the commons.

It does make a weaker argument for long term network security, but since tail subsidy schemes are unable to make a strong argument that they're actually able to meaningful improve security (much less guarantee it!) I don't find that weakness particularly compelling.   There are many uncertainties about Bitcoin's security and long term income for mining being insufficient is one of them (probably not even the most concerning one).  Making the economic policy clear and simple is worth it, especially since security isn't going to be clear regardless.  I'm pretty confident that if Bitcoin originally had perpetual subsidy the market would just be further diluted by variants that had different amounts of it. Zero is a pretty strong attractor in the design space, 0.01 vs 0.02% is far less clear.

If you were right, that'd still be happening in alt-coins. So where are the examples?

Being first is much stronger attractor than zero... Especially when "first" in this case could also have just as easily marketed itself as "zero"

I think our experience so far makes a basic case for Bitcoin's security: Bitcoin generates fee income today which is greater than the total (inflation subsidized) income of many altcoins that seem to be going without attack.  Is this a security guarantee?  No, but it's the first test and Bitcoin appears to be passing it.  Assuming it does work I think we're obviously better off with it as it is-- I don't think anyone arguing for tail subsidy would still argue for it if they were confident the system would be secure without it: The only time you can make a clearly moral case for forcing someone to pay someone else is on the basis of necessity.  If Bitcoin's scheme turns out to not work out then users in the future will have many alternatives they could consider-- including adopting Bitcoin variants that are created that have constant subsidy (as tail subsidizers propose) or attempt to achieve security through other means.   To those people, should that future ever come to exist, the discussion will be much simpler though because they'll know if Satoshi's simple economic-effect minimizing scheme works or not, they'll know if alternatives are necessary.

Yes, and by seeding the alternatives in peoples' minds now, it's much easier to have that discussion later. It's also more likely that alternatives will exist that don't make the mistakes Satoshi did.

[garlonicon]

I sure don't care about spending 0.1% or 1% per year of my wealth to keep Bitcoin secure.

You are free to send coins to addresses like bc1qqph8gusf2x7ch4xjs8vnp7hy449r929wnv5jggmy678gam85l6rqgajus9. It has "1000000 OP_CHECKLOCKTIMEVERIFY OP_DROP OP_TRUE" script, so it can be claimed after a block 1000000 by any miner.

But I do care that everyone else also chips in so we don't have a tragedy of the commons.

So make it a soft-fork proposal, where N out of M coins are locked in every coinbase transaction, to cover future rewards. It will have higher chances of being deployed than any other hard-fork, and will also increase future mining rewards. You want to get a 0.01 BTC tail emission? No problem, just send 0.01 BTC to block 1000000, then 0.01 BTC to block 1000001, and so on.

So where are the examples?

What about RSK? Of course it is not an altcoin, but it works only on transaction fees.

Edit: It is also possible to raise funds for each block by encouraging people to join. Let's test it on testnet3:

Code:

02000000000101beee5a704e225ce3084f18efeed14b47c78dab989923bf302d407969f46060730000000000fdffffff0140420f000000000022002067dec8c93c964ebb8c907f559de42fc3348276e88ba037cf0e58b4d62ae10d25024730440220424ecafa5fc9a9cec7254211b663e209ff70fbcdcd207c39d48fea8fc0fe8457022000ac784bf2934523ff5f26e39d3b79d89ed660e1c16cb34d6309a681e5124a48832103c30ceb531aa44417234df50acd798b25c5cd6bb062b74700b5b30e0523624d8a00000000

It simply means: "I agree to donate my 0.00071000 tBTC to the block 2360000, if other people will also put their coins in, and we want to collect 0.01 tBTC as a tail supply for that block". And it can be done for each block number separately, no fork is needed. But if some soft-fork will be deployed, and if some current fees will be locked for the future, the effect will be the same. Of course, to fully implement tail supply as a soft-fork, getting single satoshis from hodlers is also needed, but that can be achieved by increasing their fees as a punishment, then they will have a choice: hodl and not pay anything, or move coins, and pay a tax called "tail supply".

[o_e_l_e_o]

It is all about proportions. You can have two systems

What you've described here is different to what you have described previously. Taking a fee from every address, proportional to the amount of bitcoin being held on each address, and attributing it to future blocks is very different to taking a proportion of the transaction fees and attributing those to a future block. The former is sustainable, as you are always taking the same proportion of the same amount of bitcoin (21 million), creating a constant tail emission. The later is unsustainable, as you eventually reach a point where x% of the fees from the current block that you are locking for the future is smaller than the x% of fees previously locked which can now be claimed. With this arrangement you would eventually reach the point where the whole network is secured by fees alone (albeit with a small proportion of those feels delayed to a later block), which is the very thing you start out by saying is unsustainable.

You either have to create new coins and breach the 21 million limit, or you have to siphon coins from somewhere other than the block fees.

[gmaxwell]

Let's suppose a truly devastating war somehow kills half of the global population.

I wouldn't be surprised if a dozen well placed high altitude EMP optimized nuclear bombs couldn't destroy access to substantially more than half of all coins without killing anyone (well, okay, killing some through long term fall out, but not directly).

It also doesn't have to happen all at once to result in totally distorted rates over time, though obviously all at once makes it worse. 4 25% loss events is a 70% loss.

In no world is 2x unconscionable where 1x was just fine. Especially when the 1x happened to be what people lose by accident on a regular basis.

Not sure who you're responding to here, since nowhere did I say that AFAICT.

Again, there is no way that we can be "disruptively overpaying" with a tail emission approximately equal to what people lose by accident.

"Equal to what people lose by accident" is only an equilibrium reached after an unspecified, arbitrary, and potentially very long time.

...and yes, obviously the continued subsidy isn't guaranteed to be high enough to support security.

Right.  So what problem does it solve?   As far as we know today: none.  You can conjecture situations where some specific proposal might do something useful, but the concept as a whole doesn't by itself.  

the level of threat a 0.1% to 1% subsidy is protecting against is the kind of very expensive outside attack that's difficult to predict anyway. All you can do is spend an affordable level of wealth to protect yourself, and hope it'll be enough.

By the same argument you've made-- that the supply and circulating supply aren't fixed-- a tail subsidy cannot achieve any specific inflation rate.  

If it's not, there's a good chance that Bitcoin is entirely nonviable anyway, as it's just worth enough to be worth protecting. If Bitcoiner's need to spend 10%+ per year of their entire wealth to protect the network, it may not be worth it at all.

The same argument could be made if it weren't viable without an additional "0.1%" subsidy: that if it doesn't work without it, there is a reasonable odds that it's not viable with it.

That's absurd. Overpaying isn't a concern when you're paying a tiny % of your wealth.

You've posted an overly technical argument that after an unspecified timeframe constant subsidy will eventually match coin loss.  Yet in this discussion you are acting as though your conclusion guarantees that the subsidy is a tiny % of your wealth,  it doesn't.  This is a slight of hand.   I get that you intuitively and informally believe that would be the case, and I would agree that it's possible for it to be the case.  But it is also unambiguously possible for it to be very much not the case.

build into it a massive long-term unknown in how we'll pay for security.

Which would also be true in the presence of tail subsidy, particularly if it's not set to a conservative rate to increase the confidence that the rate won't become unacceptable in the face of coin loss or economic contraction.

I sure don't care about spending 0.1% or 1% per year of my wealth to keep Bitcoin secure. But I do care that everyone else also chips in so we don't have a tragedy of the commons.

People chip in when they transact.   How about spending 1% of your wealth to unnecessarily pay people to burn energy with no practical benefit to your security?  Or 0.1% of your wealth and still have the result be insecure?  And it's not just "everyone chips in"-- someone is profiting from this at your expense.  Again:  You argue as if its clear that a credible level of tail subsidy would have make a meaningful improvement to security-- we don't know that.  It might, or it might not.  Right now, as I pointed out, Bitcoin current fee income already produce income greater than the total subsided income for a number of altcoins which are going without attack.  While that's far from conclusive, it's evidence that a subsidy level of 0 may be currently viable.

If you were right, that'd still be happening in alt-coins. So where are the examples?

There have been many altcoin forks to change inflation rates, including several of ethereum's, as the highest profile and highest value example.  (there have been many others that have been forked to change the subsidy schedule, there was even an attempt to create a 50 BTC forever fork of bitcoin back around the first halving).

This entirely misses the point of the block subsidy. It is for *distributing* coins, the only way to bring coins into existence.

There are many possible ways to bring coins into existence.

The subject being discussed here is redirecting wealth from the existing users of the system in the long term in order to subsidize providing security to the system.

Is it desirable, much less moral, for a percentage of the world's wealth to be in the hands of some early whales?

Tail subsidy as discussed by the author of this article doesn't solve that except to the extent that it forever enshrines an additional industry in that privileged position.

That is just wishful thinking. Coin loss will never be arbitrarily small.
Any rules that guard against accidental loss are themselves a risk of abuse,

The potential for abuse can be irrelevantly small.

For example, allowing your coins to be spent by another party if they go 120 years-- which will cover the expected lifetime of the owner *and* their heir-- without moving appears to me to have an inconsequential risk for abuse (and the risk could be mitigated by making it somewhat longer).  And it would be economically rational for a very long lived entity to pay people small amounts to encumber their coins accordingly, and economically rational to accept those offers.

It's just not realistic to think that the yearly loss rate would ever drop below 0.01%. More likely it will remain above 0.1%.

I think I've given a completely realistic way that it could become extremely low.  I think it's inevitable that if bitcoin continues to be widely used that such schemes will be adopted at some scale, though I admit I'm less confident that they'd be universal.

offering an option for people to dedicate their long lost coins to development help fund future development

How would that even work technically? Coins whose keys have been lost cannot be moved...

At the time what I'd considered was writing far-future timelocked spends as soon as the coins were received and sending them off via tor to a host that collected them.  Though today that kind of thing is better accomplished by having an alternative spending path with a relative timelock on it.

If bitcoin had a fixed block reward of 600 since launch, then its emission of 1 coin per second forever would be recognized as the ultimately simple and fair emission. It would take 2-5 decades for its yearly supply inflation to become competitive with fiat, but what's the hurry? At least the high initial inflation rates would keep the speculators at bay, and bitcoin could focus on its *intended* purpose: use as a *currency*.

How's that been working out for you so far?    Speculation brings its own varrious annoyances, but it's an important part of adoption too.  I believe that a high inflation rate Bitcoin would never have taken off at all-- and, if anything, just been replaced by a low inflation coin.

It is, of course, impossible to prove such conjectures about alternative histories-- but as far as I can tell every high inflation rate altcoin  (or things with similar economic policy) have been total adoption failures so far.  I can't attribute this to Bitcoin's first mover advantage because they've been unsuccessful compared to other bitcoin alternatives not just bitcoin, including when they had more to offer.

I take it you would argue that this trend will reverse in the long term.  I doubt it: I think network effect is more important than jealousy (not that this doesn't conflict with the above: network effect doesn't happen until something is already successful).  It's just a fact of life that the people that came before you had myriad opportunities you missed.  Imagine how wealthy you could have if you bought apple shares in 1985 and held it till today, San Francisco real-estate in 1982, or traded your silver for gold in the year 1200?

[And you could apply this argument to real estate-- $/acre can differ by 1000 fold based on just the network effect of people already in a location.  Those who were there first are enriched by this.  People could abandon the high price place and go elsewhere-- they do to some extent, but seldom enough to change which places are expensive and which places are cheap.]

Economic activity diffuses wealth over time-- particularly if some systematic effect isn't sticking it back in the hands of the few as our central banks do today or as tail subsidy might in some cryptocurrency schemes. It might not diffuse as quickly as we might like.  The OP's argument was fine with reasoning about the state of the system arbitrarily far in the future: if we adopt that approach we can argue it doesn't even matter how the wealth was initially distributed, since at some arbitrarily far point in the future it won't matter.  But that doesn't hold true in the presence of tail subsidy:  Tail subsidy will always continue to enrich the mining industry (and those close to it in the economy) at the expense of everyone else, creating a "winner" that can't be displaced by diffusion.

[tadamichi]

This entirely misses the point of the block subsidy. It is for *distributing* coins, the only way to bring coins into existence.

Is it desirable, much less moral, for a percentage of the world's wealth to be in the hands of some early whales?

How would tail emissions solve distribution? As whales with that much economic power will be able to acquire more mining equipment/ can afford the best suited locations and then getting more subsidies additionally. This could actually have the opposite effect, more concentration of wealth in the hands of early whales, than without tail emissions.

Absolutely not. If in 2140 when the last satoshi is mined, we look back at how all the bitcoin in existence have been distributed, then only 0.4% have been distributed in the prior 100 years, across 5 generations. That makes little sense economically.

As Bitcoin grows in adoption, hodling will bring less and less gains, forcing these old hodlers to participate in actual economic activity/ spending if they want to benefit from their wealth, which will jump start redistribution even without tail emissions.

It's also completely different from how gold mining behaves, which to a first degree has a linear emission in our lifetimes. Would you characterize gold mining as undesirable and immoral?

The problem might be the cost of mining in the future, making it too expensive for locations without close to 0 energy costs. If mining will be too centralised, a tail emission might not impact security as much, as it doesnt matter if the same small group of miners can afford to run more machines. And it might not actually be able to allow for better distribution of mining in the first place.

[garlonicon]

You either have to create new coins and breach the 21 million limit, or you have to siphon coins from somewhere other than the block fees.

Getting coins from other place than transaction fees means that you have to take them from the hodlers. And that can be done by using reversed coinage: you can check, in which block number some coin was created, and take a fee based on the number of confirmations. So, if you want to take one satoshi per 0.01 BTC from everyone, then if someone has 1 BTC, it means taking 100 satoshis per block. So, that means all coins will be taken after 1000000 blocks. That means, on average after 10 million minutes (around 19 years), each hodler will lose everything. Then, that hodler will have a choice: sign those coins, and send them as fees, or not sign those coins, and effectively get them excluded from the circulation.

So, that simple example means that getting a fixed tail supply fee as a single satoshi per 0.01 BTC in every block is too much. You can change amounts, make it percentage-based, again, it is all about proportions.

Edit:

As Bitcoin grows in adoption, hodling will bring less and less gains, forcing these old hodlers to participate in actual economic activity/ spending if they want to benefit from their wealth, which will jump start redistribution even without tail emissions.

That's not true. If you are a miner of block number one, you have 50 BTC. And there are only 50 BTC in existence, so you have 100% of the coin supply. Then, over time, you have less and less percent of the supply, until reaching the total fixed supply, then you have a constant fraction of the supply. Later, coins are lost or burned, so if you still have your keys, then you have bigger and bigger fraction of all coins. So, hodling Bitcoin is a long time strategy that always works by design.

But if there would be tail emission, then it would be the same as with fiat currencies: we would start with 21 million coins. Then people would find out, that "we need more coins, because <put anything here>". And then, more coins will be produced. Then, people will come and say: "this is still not enough". So, there will be endless "bailouts", not for banks, but for miners this time, and we will return to the point when we started, so burning coins will be proposed as a solution, because "hey, we have more coins, and the situation is not better, let's burn some of them, to make our coins worth more". And regular coin burning is what you can see on many altcoins.

[tadamichi]

That's not true. If you are a miner of block number one, you have 50 BTC. And there are only 50 BTC in existence, so you have 100% of the coin supply. Then, over time, you have less and less percent of the supply, until reaching the total fixed supply, then you have a constant fraction of the supply. Later, coins are lost or burned, so if you still have your keys, then you have bigger and bigger fraction of all coins. So, hodling Bitcoin is a long time strategy that always works by design.

It works, but then the limit is how long you are alive, there will be enough people bringing coins in circulation and if they dont, it wont impact the economy, as they’re like lost coins for the time theyre not being used. Its unrealistic to think that a human will never spend/ invest any considerable amount of money in their lifetime, when they have the opportunity to do so. And if theres a few people who saved till the end of their lifes, then idk if theres a justification for devaluing their wealth artificially, just because of this.

Also i get that inflation is an economic tool to incentivise spending, but we shouldnt act like it doesnt work without it. No inflation works as an incentive for wiser spending, and i prefer this alternative as its something the world could really need.

But if there would be tail emission, then it would be the same as with fiat currencies: we would start with 21 million coins. Then people would find out, that "we need more coins, because <put anything here>". And then, more coins will be produced. Then, people will come and say: "this is still not enough". So, there will be endless "bailouts", not for banks, but for miners this time, and we will return to the point when we started, so burning coins will be proposed as a solution, because "hey, we have more coins, and the situation is not better, let's burn some of them, to make our coins worth more". And regular coin burning is what you can see on many altcoins.

Could possibly happen, but then a coin with fixed supply might attract more people again, just like now.

[tromp]

How's that been working out for you so far?

Grin, at 3.5 years since launch, is only 3.5% into its soft total supply [1].
Compare that to Bitcoin, which at 3.5 years after launch was already 44% into its total supply,
Or to Monero, which was already over 80%.
Grin's emission is over an order of magnitude slower than any other coin.
So yeah, it will do miserably on marketcap for many more years to come.

Bitcoin reached the same 3.5% of its total supply in less than 3.5 months,
distributing only to a handful of people, and trading for fractions of cents.

I don't measure Grin's success by its marketcap, but by its elegance, simplicity [2], scalability, and long term survival.
For the short term, it may be only of academic interest in a crypto world that's rather dominated by speculation.

Tail subsidy will always continue to enrich the mining industry (and those close to it in the economy) at the expense of everyone else, creating a "winner" that can't be displaced by diffusion.

You have this weird idea that a coin's distribution is split into  a later phase of distribution to the "mining industry" which is enriching itself, preceded by an earlier phase of distribution to "everyone else", who are now being unfairly diluted.
Never mind that in Bitcoin "everyone else" were receiving much larger block rewards at much lower effort.

The "winner" that can't be displaced by dilution in their lifetime is Satoshi, not some tail mining operation that in a competitive market makes a few % profit at best and would need many lifetimes to match Satoshi's stack.

Miners are simply the mechanism that helps to fairly distribute coins to more people, and in Grin's case to more generations of people.

[1] https://john-tromp.medium.com/a-case-for-using-soft-total-supply-1169a188d153

[2] https://www.reddit.com/r/CryptoTechnology/comments/kyhgcv/are_there_any_public_cryptocurrencyblockchain/

[oryhp]

But that doesn't hold true in the presence of tail subsidy:  Tail subsidy will always continue to enrich the mining industry (and those close to it in the economy) at the expense of everyone else, creating a "winner" that can't be displaced by diffusion.

I don't see how this isn't true for Bitcoin's model as well. This miner "enrichment" seems to be a function of security in $ value.
It doesn't matter whether the miners get their reward from the block subsidy, transaction fees or a combination of both. If you end up with a secure PoW system, then you must be enriching miners.
As far as I can tell, the only difference is that Bitcoin's long term plan is to do this only through transaction fees. The assumption is that we'll have a constant backlog of high fee paying txs that will substitute the vanishing block subsidy.
Even if this turns out to be correct, the miner reward will stay the same (assuming the same security). I'd argue the fee-only model might be worse on that front because transaction fees directly transfer value from the existing
users to the miners while block subsidy prints new coins. Unless I'm missing something, the latter seems to be less of an enrichment.

[tadamichi]

I don't see how this isn't true for Bitcoin's model as well. This miner "enrichment" seems to be a function of security in $ value.
It doesn't matter whether the miners get their reward from the block subsidy, transaction fees or a combination of both. If you end up with a secure PoW system, then you must be enriching miners.
As far as I can tell, the only difference is that Bitcoin's long term plan is to do this only through transaction fees. The assumption is that we'll have a constant backlog of high fee paying txs that will substitute the vanishing block subsidy.
Even if this turns out to be correct, the miner reward will stay the same (assuming the same security). I'd argue the fee-only model might be worse on that front because transaction fees directly transfer value from the existing
users to the miners while block subsidy prints new coins. Unless I'm missing something, the latter seems to be less of an enrichment.

There is one small difference, the block subsidy affects the circulating supply. It doesn’t matter if the total circulating supply stays under 21 million, or doesnt inflate, for this effect to take place.

As a non-miner:

• If the circulating supply increases, your piece of the pie decreases over time in this model(tail emissions).
• If the circulating supply stays constant, you missed out on some increasing value you would have gotten otherwise from deflation.
• If the circulating supply decreases, your increase in value would have been less than otherwise.

This affects all coins ever created regardless if they get used or not. In this scenario miners get enriched and have a kind of cantillon effect playing into their favour. Transaction fees might depend more on the fact that blocksize is limited and would be high anyways due to the limited space, this wouldn’t be lessened trough tail emissions. Just because we’re paying miners subsidies doesn’t mean we get cheaper fees. So i would argue tail emissions is the bigger enrichment, but the real downside is what i listed above. It affects monetary properties directly.

The Transaction fees only model doesn’t have this, that is the advantage, it’s not the enrichment that would be the danger. Even small changes can have big effects over longer periods of time.

And then we don’t even know if tail emissions would even be enough in the end. But if we as a community open the doors to trying to print our problems away, then people in the future might be tempted to take it even further. The best solution would be transaction fees only, if we want to keep Bitcoin the soundest money possible. It won’t be impossible to compensate miners when the most sound money in the world depends on it. So in my opinion keeping the original properties is more important, than trying to lessen some uncertainties now.

[vjudeu]

And again, Paul Sztorc was right. But I didn't expect that any Bitcoin users will go into violating the limit that fast: https://www.truthcoin.info/blog/security-budget-ii-mm/#f-the-trilemma

[NotATether]

It is all about proportions. You can have two systems:
1) with fixed supply, where everyone will lose some satoshis in explicit way, and they will be taken by miners, because of tail emission
2) with infinite supply, where everyone will lose some satoshis in obscured way, because miners will be always rewarded by new coins, because of tail emission

Maybe you can't see that, so I will try to make some more extreme example, you can adjust numbers to reach some real-life scenarios:

Imagine there are 21 million coins, distributed to many different users, and the block reward is zero. Then, imagine that 21 million coins are produced, because of tail emission. Then, you can have two systems:
1) with fixed supply, where everyone will lose half coins in explicit way, and they will be taken by miners, because of tail emission: 10.5 million coins will remain in users' hands, 10.5 million coins will be taken by miners, 21 million coin limit is untouched
2) with infinite supply, users will have exactly the same amounts, but they will be worth 50% less than before, because miners will be always rewarded by new coins, because of tail emission

Which one of these would be desireable to the people, if they had to choose between them? Of course, it would be the first alternative, because nobody likes their supply converging towards infinity, hence the value of a single coin converging to 0, because this assumes that all users will continuously be subsidised by equal amounts (scams and theft alone prevent this from being possible); Just ask DOGE developers how that enterprise is doing.

And again, Paul Sztorc was right. But I didn't expect that any Bitcoin users will go into violating the limit that fast: https://www.truthcoin.info/blog/security-budget-ii-mm/#f-the-trilemma

I personally do not mind if the transaction fees soar exorbiantly high as long as the LN is in a standardized state by then. And at the very least, I'd like for Bitcoin Core software in the distant future, to create an LN implementation inside the daemon based on the common standard - and then all standardness problems will be solved for good. If someone goes out right now and makes another client, you just create the N+1 problem. What has to be done is to build a library based on strigent security measures, and then convince core developers to use that (like libsecp256k1: In fact, libbitcoin the consensus rules library is built as such a target. I don't see why a liblnconensus is not possible as well.)

[stwenhao]

I am surprised that this topic grabbed that much attention. But if that's the case, then in this triangle we can see three scenarios:

1) block size increase, a huge attack, it should be solved by compression, to be stopped once and for all, if not, then block size will be always increased, causing future problems
2) violate coin limit, another huge attack, it should be stopped by burning all coins created by the attackers
3) merged mining, it should be deployed correctly (not like NameCoin, there should be a single chain of the heaviest headers that all coins are attached into), that would stop two previous attacks

What has to be done is to build a client based on strigent security measures, and then convince core developers to use that.

True, sidechains based on this idea are ongoing: https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-June/020532.html

[tromp]

nobody likes their supply converging towards infinity

Your statement can be rephrased as "nobody likes their share of the pie to be decreased".

At first sight, that's seems obvious.

But on closer inspection, it's not so obvious.

For the pie to be useful, you want as many people as possible to have some share.
And you want this pie to be more attractive to people than some other pie.

So you don't want the pie ownership to be too concentrated. Maybe, if you believe in fairness,
you want future generations to have some share of the pie as well.

That's why you want the supply to keep growing. Preferably not by too much though. Just a percent or two per year.
That makes you not lose too much of your share while allowing many more people their fair share....

[NeuroticFish]

nobody likes their supply converging towards infinity

Your statement can be rephrased as "nobody likes their share of the pie to be decreased".

At first sight, that's seems obvious.

But on closer inspection, it's not so obvious.

For the pie to be useful, you want as many people as possible to have some share.
And you want this pie to be more attractive to people than some other pie.

So you don't want the pie ownership to be too concentrated. Maybe, if you believe in fairness,
you want future generations to have some share of the pie as well.

That's why you want the supply to keep growing. Preferably not by too much though. Just a percent or two per year.
That makes you not lose too much of your share while allowing many more people their fair share....

I've thought the same in the rather early days of Dogecoin: tail emission gives everybody the chance get hands of the coin, tail emission makes it much more suitable for being an actual currency since in every currency money lost do happen.
However, in those days Dogecoin price went down and no recovery seemed to be at the horizon (I never expected the 2021 comeback, but I still don't know if it was good or just manipulation).
Now I consider Dogecoin tail emission overly big.


Is tail emission good? Maybe, but it's overly difficult to get it right. Bitcoin is better as investment and only time will tell if its lack of tail emission is a real problem or not. For now we're okay and in the near future the existence of 8 digits after the decimal point can do the job. Then we (or actually one of the next generations) will see...

[tromp]

Now I consider Dogecoin tail emission overly big.

So you have a problem with Dogecoin's yearly inflation rate, but not with its wealth concentration?

[NeuroticFish]

So you have a problem with Dogecoin's yearly inflation rate, but not with its wealth concentration?

It was an example based on a coin I knew. Right now I don't care at all neither about Dogecoin's tail emission, nor its wealth concentration.
My point was that it's hard to get tail emission right.

[tromp]

My point was that it's hard to get tail emission right.

If there is only one way to get it right, then it would be tail emission from launch.
In gmaxwell's words, that's a pretty strong attractor in the design space, with nothing arbitrary about it.

It's the most fair possible coin distribution.
Which is exactly why many (most?) people don't like it, because they want to have an edge over later adopters.
In that way, Grin is the only altruistic coin...

[NeuroticFish]

If there is only one way to get it right, then it would be tail emission from launch.
In gmaxwell's words, that's a pretty strong attractor in the design space, with nothing arbitrary about it.

It's the most fair possible coin distribution.
Which is exactly why many (most?) people don't like it, because they want to have an edge over later adopters.

Any such change done at a later point can disappoint greatly the early birds. I can see why any later such change can be seen as bad. And I think that you know that such a change done now in bitcoin can easily trigger a fork. Yes, it's all about money/investment, much more than we'd like to admit. The use-as-a-coin is somewhat secondary.

Whether tail emission is fairer or not compared with what Bitcoin has is highly debatable imho. I expect the two different models come with completely different models for price evolution. So imho, in a way or another, both are fair.


For now Monero seems to have its tail emission right, but I don't know the details well enough, hence I may be wrong. And they've had this from start too.

[stwenhao]

Your statement can be rephrased as "nobody likes their share of the pie to be decreased".

I can rephrase it further: Bitcoin users don't like their share of the pie to be decreased in some obscure way.

Tail supply can be used to hide the fact that users lose their "share of the pie". It is not instantly obvious to everyone. But if you introduce any fee policy, when it will be required to send some of your coins directly to the miners, or your coins will stay unconfirmed if you won't adjust to the rules (so the final effect will be the same as if they would be burned), then it is crystal clear that tail supply is taken from all accounts and given to all miners. It should be crystal clear from the very beginning, that tail supply supporters want to take single satoshis from everyone, and make a new block reward out of it. And all details would then be only about the whole algorithm that will decide, how many coins have to be taken from each account.

My point was that it's hard to get tail emission right.

Yes, and because it is hard to do it right, then it should be solved by Merged Mining. You want to get new coins? No problem, just mine Bitcoin, and get Bitcoin and BitcoinWithTailSupply at the same time. Then, you will get additional coins outside of the chain, and then all users will choose, which coin they want to use. But I expect that BitcoinWithTailSupply will have many problems, and will sooner or later burn some coins, because of overproduction. It is hard to get all amounts right, so it should be dynamically adjusted, for example by Merge-Mined sidechains.

You want more coins? No problem, just create a new Merge-Mined altcoin, and distribute coins, based on Bitcoin shares. You want less coins? Then it's even easier: just burn them.

[tromp]

For now Monero seems to have its tail emission right, but I don't know the details well enough, hence I may be wrong. And they've had this from start too.

Yes, you're wrong; they didn't have tail emission planned at launch. It was hard-forked in later.

Your statement can be rephrased as "nobody likes their share of the pie to be decreased".

I can rephrase it further: Bitcoin users don't like their share of the pie to be decreased in some obscure way.

They don't like any departure from the 21M bitcoin limit. Which makes perfect sense.
Bitcoin has always been branded as the ultimate hard money, because of its immutable supply cap preventing dilution.
Once you start changing that (even if there remains another effective cap implied by ongoing coin loss), then it's hard to take any claim seriously. Like Ethereum's "code is law", but worse, since that was never part of Ethereum's consensus model.

While I'm a big fan of Tail Emission, I'm an even bigger fan of immutability of such core properties as emission, so I disagree with Peter that Bitcoin should add one.

Bitcoin is stuck with the 21M limit no matter what. It will just have to find some way other than tail emission to deal with the future uncertainty of having possible periods of precariously low security budget.

I do think that hard forks will be made adding a tail emission, but they won't be entitled to the BTC ticker, and won't fare much better than Bitcoin Cash.

[vjudeu]

You want more coins? No problem, just create a new Merge-Mined altcoin, and distribute coins, based on Bitcoin shares.

Exactly. A chain with 0.01 BTC tail supply would need one million blocks (around 19 years) to produce 10k BTC. That should be slow enough to play it safe. The current block reward is 6.25 BTC plus fees. Let's assume that some block has 7 BTC reward. Then, you can grant miners 0.01 BTC for merged mining 700 times easier blocks on such sidechain. The difficulty of your altcoin can follow Bitcoin headers, it is that simple. And if 700 times easier difficulty is still too hard, then you can give miners less coins for mining easier blocks, and keep 10 minutes as a sidechain block time. Then, all miners will try to get tail supply of 0.01 BTC, and some of them will push your sidechain forward, if they hit a Bitcoin block at the same time.

It will just have to find some way other than tail emission to deal with the future uncertainty of having possible periods of precariously low miner incentives.

Then look again at Paul Sztorc's triangle, and choose wisely: Merged Mining or big blocks? And if something else, then what it would be?

[tadamichi]

Which is exactly why many (most?) people don't like it, because they want to have an edge over later adopters.

I don’t think it’s about having an edge over others, but about Bitcoin itself and their own piece of the pie ofc. We also don’t know what effect tail emissions would have on potential late adopters, as there will be many competing assets without it, and having some sort of inflation mechanism could make Bitcoin less competitive. Leading to less adoption again and then potentially devaluing the amount miners would have earned too(1 BTC in transaction fees only, could be worth more than the same amount in a tail emission model). We can’t assume Bitcoin will have won it all already. The value proposition Bitcoin offers now, will be huge even to late adopters, if we compare it to other assets.

Also the security budget is important, but we don’t know if the absolute amount is the only relevant metric to consider yet. The access to attractive locations and the distribution of mining should be considered too. There is places with close to 0 electricity costs, and as Bitcoin rises in adoption and the potential price increases become less. Mining might become so competitive(barely profitable) that it could just be possible for a few big players anyways, and be almost exclusive to locations like this. Which will also make attacks from the outside harder again, without access to these locations(it could make it more expensive than the security budget itself). Or even make it hard for new miners to join, as it will be hard to get access to locations like this. A tail emission also doesn’t change how mining will be distributed as it becomes more and more competitive. The more competitive mining becomes the less relevant the absolute security budget could be.

[o_e_l_e_o]

Then, that hodler will have a choice: sign those coins, and send them as fees, or not sign those coins, and effectively get them excluded from the circulation.

Leaving out the specifics of how much you would take, if you want to go down this route then you would need to create some kind of automatic mechanism to take these coins from people, and not rely on them spending them as enforced fees, as there would be an incentive for individuals to let these coins be excluded from the circulation as it would make their other coins more scarce and therefore more valuable.

Then look again at Paul Sztorc's triangle, and choose wisely: Merged Mining or big blocks? And if something else, then what it would be?

So, given that the majority of bitcoin blocks are already taking part in one or more merged mining protocols, what are the main arguments against using merged mining to create security once the block subsidy is insufficient? Is there any ongoing discussion or work on blind merged mining protocols (such as BIP 301)?

[tromp]

So, given that the majority of bitcoin blocks are already taking part in one or more merged mining protocols, what are the main arguments against using merged mining to create security once the block subsidy is insufficient?

If merge miners only make a small fraction of their revenue from bitcoin, then it becomes rather cheap to bribe them to mine censoring bitcoin blocks.
In that sense, the security of the bitcoin blockchain against censorship seems to depend on just the bitcoin block rewards.

[garlonicon]

Leaving out the specifics of how much you would take, if you want to go down this route then you would need to create some kind of automatic mechanism to take these coins from people, and not rely on them spending them as enforced fees, as there would be an incentive for individuals to let these coins be excluded from the circulation as it would make their other coins more scarce and therefore more valuable.

Yes. And this should show clearly, what tail supply is really about: it is about taking single satoshis from all accounts, no matter what, no matter if coins are burned or not, no matter if someone wants that or not. So, it is all about creating an invisible tax on all addresses. If some coins are fully burned, for example by using OP_RETURN, then they cannot be moved. But tail supply is about taking single satoshis from those addresses as well.

So, you know what is needed: zero satoshis. Then, it is possible to create some additional outputs, send zero satoshis there, and use "<anyStandardScript> <newAmount> OP_DROP" as an output script (or this "<newAmount> OP_DROP" could also be placed inside witness script, or as an input, many things are possible). It could be handled in the same way as Segwit vs NonSegwit: if it was possible to create a situation, where old nodes cannot see new signatures, then it is also possible to create a situation, where old nodes will not see new amounts (there could be many reasons, for example if hiding amounts will ever be introduced, then it is reasonable to put zero for backward compatibility, but the same solution can be used to introduce any coins to the system, because the size of the UTXO set is not limited). And then, it is all about human factor: if those zero satoshis will be really used to move real values, then they could be traded, bought, sold, and used in real life. If it is possible to create NFTs out of thin air and sell them for millions, then why producing coins out of thin air and selling them for real goods and services wouldn't work as well?

what are the main arguments against using merged mining to create security once the block subsidy is insufficient?

The main arguments are that sidechains can be unsafe. So, that means they will be created anyway, there are many options, how exactly it would happen:
1) it can be deployed on altcoins
2) it can be deployed on second layers like the Lightning Network
3) it can happen on centralized websites, like exchanges or casinos
4) it can turn out that homomorphic encryption is sufficient to deploy sidechains on the main network
5) other features can enable sidechains by mistake, just because developers can be unaware that some feature enable more things than intended
So, I think it will happen anyway, that way or another. Definitely, homomorphic encryption is a powerful tool, because it can enable new features in a permissionless way.

Is there any ongoing discussion or work on blind merged mining protocols (such as BIP 301)?

Yes, you can talk directly with Paul Sztorc and other people on Telegram.

Edit:

If merge miners only make a small fraction of their revenue from bitcoin, then it becomes rather cheap to bribe them to mine censoring bitcoin blocks.

It depends. If other networks will have 1:1 peg into Bitcoin, then even if you can see that some miner received zero satoshis on-chain, that miner could get more satoshis in other networks, and everything could be just finalized on Bitcoin. I think a situation, where there would be only 21 million coins, that could be splitted ad infinitum, and where single satoshis will be placed in many different sidechains, is a beautiful picture, definitely better than when you have a lot of altcoins, where each of them create new coins out of thin air. Then, you could create an altcoin, and have it backed up by Bitcoin, so you could avoid a speculation attack, where your coin is pumped and dumped during early days.

To sum up: currently you have coin A with feature A, and coin B with feature B. What about adding feature B to coin A instead, and have a coin A with features A and B? That's what sidechains are about, so by supporting them, you can get new features without causing too much inflation.

[abcd7890]

Break Bitcoin now because it might break at some unspecified time in the future. Great idea

[BusinessChain]

The problem with fixed reward is that you don't know whether you are actually rewarding the miners properly. What kind of politics will determine what the right amount of block reward would be? Do we even want such politics in Bitcoin? I don't.
When you have transaction fees only, it is purely the market who decides how much miners earn. I think that is the right way to go.

I quote myself here.
It's funny, I said the problem with fixed rewards is that it induces politics... and look what happened after my thread: A lengthy political discussion. 

[garlonicon]

Break Bitcoin now because it might break at some unspecified time in the future. Great idea

True. It is just another attack on Bitcoin, and it should be stopped, also by informing people, what it is truly about.

A lengthy political discussion.

Well, Paul Sztorc correctly predicted that those three options will be on the table. Block size increase was discussed many years before, increasing supply is now, so maybe it is a chance to introduce Merged Mining as the solution to kill those two ideas, before they will grow further? Also, people should be aware that tail supply is basically the same as taking single satoshis from everyone, from every address, no matter what, and passing that to the miners. It is effectively the same, just done in a more obscure way.

Fortunately, we can reject any hard-fork by default, because BTC in 2017 chose the path of rejecting hard-forks if they are unnecessary. And fortunately, any tail supply soft-fork will reveal the true nature of that change: it will require producing zero satoshis, or moving coins from users to miners, or locking coins by miners. So it will truly reveal the whole process of taking satoshis from everyone, to form future rewards.

And by thinking, what is really needed if the supply will still be fixed, and if we want to get an equivalent of tail supply, everyone should clearly see, that such change has negative impact on Bitcoin, and should be stopped. Also, fortunately, introducing counter-proposals that will burn all additional coins, is easier than creating them, so it should be enough to resist this attack.

[NotATether]

My point was that it's hard to get tail emission right.

You can't get tail emission right. A good TE value in a certain market conditions is an awful TE in different market conditions. The success of tail emission depends entirely on whether the number of miners stay almost-constant thoughout the lifetime on the coin. Just like in economics, there is a break-even point in the number of miners where more miners joining the network will not see an increased reward - as the price (which is dependent on users buying and selling) works independently from miners.

By supplying Tail Emission you constrain the network to a certain number of miners, and since there is no noticeable increase in hashrate, there is no corresponding increase in coin scarcity either, hence no price increase - miners will have to support themselves on a block reward (i.e. TE value) which has a fixed USD value forever.

EDIT: Let me also clarify that when I said "Miners will not see increased prices on their rewards", I meant the mining difficulty will continue to go up but less blocks will be found by each miner due to increased competition, hence the profits for each miner decrease as competition increases, as the block reward and price stay constant. Hence the network security and therefore the user capacity is constrained (capped). Which is why coins like monero have a small market of people.

As I hinted in my previous reply here, the userbase capacity is tied to the block reward, which must decrease gradually in order to support more users over time. Rushing it will not bring the desired user capacity faster; it must occur natually every halvening.

In this case, the user capacity you have when the block reward converges to zero is the capacity you're going to end up with forever [assuming no protocol changes are made]. At the current rate of adoption, I'm estimating this capacity to be scores higher than VISA and Paypal (scalability is a different topic altogether). But we are most likely not going to utilize all that capacity - after all, there are only so many people in the world.
[END OF EDIT]


I don't like BMM not because of any technical problems with it, but for a political reason - it will confirm the association of bitcoin with other shitcoins, on a protocol level [bad press confirmed].

edit 2: spelling

[stwenhao]

it will confirm the association of bitcoin with other shitcoins, on a protocol level [bad press confirmed].

Yes, and that's why it should be introduced in a different way. The mainchain should not know, how many sidechains there are, and if there are any sidechains at all. It should be made in the "always was possible" way, for example by signing coins. By looking at some output, nobody should know, if it is a part of the sidechain or not, in the same way as you don't know, how many parties there are in a single Taproot address.

[NeuroticFish]

My point was that it's hard to get tail emission right.

You can't get tail emission right. A good TE value in a certain market conditions is an awful TE in different market conditions. The success of tail emission depends entirely on whether the number of miners stay almost-constant thoughout the lifetime on the coin. Just like in economics, there is a break-even point in the number of miners where more miners joining the network will not see an increased reward - as the price (which is dependent on users buying and selling) works independently from miners.

By supplying Tail Emission you constrain the network to a certain number of miners, and since there is no noticeable increase in hashrate, there is no corresponding increase in coin scarcity either, hence no price increase - miners will have to support themselves on a block reward (i.e. TE value) which has a fixed USD value forever.

I will get to Monero's case. There, iirc, there's "no" block size/limit. That might affect the equation - might make it different than what we have for Bitcoin, where miners can force (by plugging out vast quantities of hashrate now and then) a cluttered mempool and bigger block rewards (I know that they have to add that hashrate back before the difficulty change/detection, I know that's overly simplified and may be wrong, but it feels possible that Bitcoin miners would do dirty tricks for more money if need be).

So you're right, tail emission size may depend on more variables than we can now think of. I don't know if it's impossible to get it right ("never say never", you know), still, close to that indeed.

[ABCbits]

Your statement can be rephrased as "nobody likes their share of the pie to be decreased".

I can rephrase it further: Bitcoin users don't like their share of the pie to be decreased in some obscure way.

They don't like any departure from the 21M bitcoin limit. Which makes perfect sense.

--snip--

Exactly. Changing total Bitcoin supply would make Bitcoin immutability questionable. And if the community let such major change happen, IMO it's just matter of time before another major change happen.

I will get to Monero's case. There, iirc, there's "no" block size/limit.

Wrong, what they have is dynamic block size. It also has minimum and maximum allowed block size limit.

[o_e_l_e_o]

Just in case anyone has missed it, there is another relevant discussion taking place on the mailing list over the last 24 hours. It starts here: Security problems with relying on transaction fees for security

I was quite interested to read this snippet from Peter Kroll:

With 3000 Lightning open/ close tx per block and 6 billion adults it's 38 years of backlog to onboard the entire adult population. That's not including corporations.

It is similar to what I said in a post last year: https://bitcointalk.org/index.php?topic=5343858.msg57236745#msg57236745

So "all" that is required to ensure the long term sustainability of the security budget is to achieve global adoption. As things currently stands, this would guarantee consistently full blocks with a competitive fee market.

[garlonicon]

With 3000 Lightning open/ close tx per block and 6 billion adults it's 38 years of backlog to onboard the entire adult population. That's not including corporations.

It is true only if you assume 2-of-2 multisigs. But since Taproot, we have N-of-N multisigs, so we can onboard N users per address. And that's also another reason to think seriously about sidechains: scalability is directly related to compression. And better compression could be achieved if some users will stay on some second layers, for example inside LN. And as long as each user has to touch the main network directly, it is a bottleneck, and it needs some solution (for example sidechains, but I think it should be done in a bit different way than Paul Sztorc proposed, it should be unlimited and permissionless, so the mainchain should only track the UTXO set, and should be unaware of the number of existing sidechains, and their internal state).

[BlackHatCoiner]

for example sidechains

A CoinPool-like sidechain could provide Lightning's efficiency squared.

This topic raises the issue of whether it is desirable to have transaction activity in the main layer or to scale with sidechains. If we have the former, the system is sustainable but not operatable. If we have the latter, the opposite. Therefore, we have to find a way to make it both sustainable and operatable, but the solution is not to rely on the main layer (as it makes it non-operatable), but neither to push people on sidechains (as it makes it non-sustainable).

And the solution can't include changes to the inflation schedule as it makes it susceptible to arbitrary monetary policy.

[garlonicon]

Therefore, we have to find a way to make it both sustainable and operatable, but the solution is not to rely on the main layer (as it makes it non-operatable), but neither to push people on sidechains (as it makes it non-sustainable).

So, what is wrong with increasing block rewards by Merged Mining? If you have sidechains, you still need to handle transactions that will put coins in and out. If someone will move some coins on the main chain, then miners will earn some fees. If someone will move coins on the side chain, then miners will use Merged Mining to mine this sidechain, and will also earn some fees. So, why not Merged Mining?

[BlackHatCoiner]

So, what is wrong with increasing block rewards by Merged Mining?

I had talked about Merged-Mining with stwenhao, but that was Proof-of-Stake based.

Correct me wherever I'm wrong:

• Sidechain is a "child" of the main layer. Therefore, it inherits the same consensus algorithm.
• Sidechain blocks' hashes are included in the main layer's blocks' headers. Therefore, to mine from sidechain, you need to provide computational power to the main layer.
• Miners either find a hash that's lower from sidechain's target and higher from the main layer's target (and can only propagate it to the sidechain network), or find a hash that's lower from both and propagate their success to both networks.

So miners can mine on one chain, and the "wasted" hashes are used to secure another chain. It's reasonable to work as long as there's enough reward from the main layer. Correct?

[garlonicon]

Sidechain is a "child" of the main layer. Therefore, it inherits the same consensus algorithm.

Yes, it is based on the same consensus algorithm. But it can extend it, by adding more features, that are not present on the main chain (for example by using homomorphic encryption, then things can be first encrypted, then executed in a trustless way, and then decrypted and broadcasted to the main chain).

Sidechain blocks' hashes are included in the main layer's blocks' headers.

Some of them are, some of them are not. Because if the sidechain contains (tracks, traces, it has to be aware of it) the heaviest chain of SHA-256d headers, then it can be used to decide, how much work is needed to assign 0.01 BTC to some sidechain miner. It should be as hard as on Bitcoin, so (unlike Namecoin) it should be possible to 51% attack any sidechain only if you can 51% attack Bitcoin. Also, the sidechain can contain more block headers than Bitcoin, then each Bitcoin header is a valid sidechain header, but not the other way around, so only some sidechain headers push the whole sidechain forward, by adding commitments to the main chain.

Therefore, to mine from sidechain, you need to provide computational power to the main layer.

That is true, this is what Merged Mining is about: you want 0.01 BTC tail emission? No problem, just mine Bitcoin, and instead of receiving 7 BTC (6.25 BTC plus 0.75 BTC in fees), mine 700 times easier block, and get 0.01 BTC on the sidechain.

Miners either find a hash that's lower from sidechain's target and higher from the main layer's target (and can only propagate it to the sidechain network), or find a hash that's lower from both and propagate their success to both networks.

Exactly.

So miners can mine on one chain, and the "wasted" hashes are used to secure another chain.

Also true. Currently, those "wasted" hashes are passed to centralized pools for no reason, because technically, that problem could be solved in a pure P2P way, and that's what decentralized mining is about (using sidechains is just an option, you can decentralize mining by receiving rewards in LN as well, there are many possible solutions to that problem).

It's reasonable to work as long as there's enough reward from the main layer.

Not exactly, because you can get some sidechain fees, LN fees, or whatever fees there are in other networks. And if you are a small miner, it is reasonable to get for example 100 satoshis, by confirming some coffee-buying transaction, and it is not strictly necessary to push all of such transactions to the main chain directly. This is why other networks are needed: to allow further scaling, and to allow batching N small transactions into one huge mainchain transaction.

[BlackHatCoiner]

These two seem contradictory:

Sidechain blocks' hashes are included in the main layer's blocks' headers.

Some of them are, some of them are not.

it should be possible to 51% attack any sidechain only if you can 51% attack Bitcoin.

If some blocks are included in the main chain's block headers and some other represent "exclusively" sidechain's block headers that are not included in the main chain, then attacking the sidechain (by reversing sidechain "exclusive" blocks) is definitely easier to accomplish.

Currently, those "wasted" hashes are passed to centralized pools for no reason

"Wasted" hashes aren't passed to centralized pools for no reason. They work as shares, so that if one of the miners solves a block, the reward is distributed accordingly to the shares. Unless you meant those that don't work that way.

and that's what decentralized mining is about (using sidechains is just an option, you can decentralize mining by receiving rewards in LN as well, there are many possible solutions to that problem).

Decentralized mining does sound very cool. But, how will Lightning or a sidechain contribute to it? You still pass your shares to a third party which pays you via Lightning; isn't this the general idea?

Not exactly, because you can get some sidechain fees, LN fees, or whatever fees there are in other networks.

But, that's true as long as the system is sustainable. Sure, I can make a few sats by either staking or merged-mining in a sidechain, but since everything depends on the main chain, these are irrelevant to sustainability.

[garlonicon]

If some blocks are included in the main chain's block headers and some other represent "exclusively" sidechain's block headers that are not included in the main chain, then attacking the sidechain (by reversing sidechain "exclusive" blocks) is definitely easier to accomplish.

Why? You have one Bitcoin block with 7 BTC reward, and you have 700 sidechain blocks, 0.01 BTC each, and doing 51% attack to revert this 7 BTC should be as hard on that sidechain, as it is on Bitcoin. So, it is about tracking the difficulty, and about the same security for a given amount. You can measure that simply by relying on difficulty and amount: a combination of those two things should give you an answer about the security budget, and about the amount of work you need, if you want to reorg that.

On NameCoin, it is completely separated, where it should be joined: Merge-Mined chains should track the chain of the heaviest Proof of Work, and their block rewards should reflect that. So, NameCoin is an example of Merged Mining done wrong, because you can have a few percent of Bitcoin's hashrate, and they don't track all Bitcoin headers, but only those that are properly constructed, so you can attack them, even if you don't have enough power to attack Bitcoin. And that should be changed, to prevent that attack.

The same mistake was made by chains like BCH: if they have 1% of the BTC hashrate, then they should receive 1% of the coinbase amount, if that's what they need to maintain 10 minutes block time. Another mistake is that they splitted monetary base completely, instead of making transactions, that would be also valid on BTC, but would be just confirmed later, because of the block size limit.

"Wasted" hashes aren't passed to centralized pools for no reason.

I mean there is no reason to do that in a centralized way. There were some alternative ways, like P2Pool, and things should go further in that way, maybe also into LN rewards, sidechain rewards, and things like that.

But, how will Lightning or a sidechain contribute to it? You still pass your shares to a third party which pays you via Lightning; isn't this the general idea?

The difference is that it should be cryptographically secured. I thought about things like "pay to block hash address", when you could lock some coins on some address, and they could be taken, only by performing block validation. And I thought about compressing repeated parts, so something like that:

Code:

/---------------------------------------------------------------------------------------------------------------------------------------\
| normal address -> pay to block hash -> pay to merkle tree     -> pay to merkle proof    -> ... -> pay to transaction -> pay to output |
|                   (80-byte header)     (64-byte merkle proof)    (64-byte merkle proof)           (transaction data)                  |
\---------------------------------------------------------------------------------------------------------------------------------------/

But that's too heavy, so it should be simplified to some proofs that are more compressed, and take less space on-chain. Also, because transactions in mempools are similar, it is possible to validate repeated parts once, and then only track changes in some deterministic way. The main problem is about data compression, because technically it is possible to perform such "delayed validation" (and burn coins if someone will pass a fake block header hash or something). So, I can see two options:
1) validating basic things, and assigning coins to miners (or burning if they lied and are unable to provide a proof)
2) validating everything, and assigning coins to miners (if there are enough resources to validate everything on time)

but since everything depends on the main chain, these are irrelevant to sustainability

If you count all traffic on the main chain, all traffic inside LN, all traffic inside sidechains, and all Bitcoin-related traffic in general, and it is still not enough, then there are two options:
1) we live in a strange world, where there are no transactions at all, in any other monetary systems, because 99% people died or something
2) there are transactions in other networks, so we should think, if Bitcoin still has all needed features, and why people don't want to use it

[larry_vw_1955]

So a respected bitcoin developer is now putting out the idea that there should be more than 21 million bitcoin. Guess bitcoin's fixed supply is maybe just a pipedream...because as peter todd points out,

"An intuitive explanation for this result is that in the long run, the initial supply N0 doesn’t matter, because approximately all of those coins will eventually be lost."

too bad for people that thought the solution is just to subdivide bitcoin into smaller parts. those will eventually be lost too. and so on.

[garlonicon]

because approximately all of those coins will eventually be lost

Even if all coins will be lost or burned, then still, the system could work. By extending Script, you can treat Bitcoin as the source of Proof of Work, and execute any contract on that. Also, if all coins will be lost, then it is still possible to put "<amount> OP_DROP" inside zero satoshi outputs, and handle them correctly. And you can go far beyond that, you can use OP_ADD to sum amounts, you can execute the whole "a coin in a coin" scheme. So, losing all coins is not a limitation to the protocol.

But I think it is very unrealistic assumption that all single satoshis will be lost, and there will be no coins at all. Another thing is if we assume that, then it is possible to build another protocol on top of that, where burned coins will be treated as a one-way-ticket from Bitcoin to some altcoin, if it will be based on Proof of Burn. Because if someone is worried about matching lost coins properly, then that person should have any algorithm to predict, how many coins are truly lost. Counting OP_RETURN, taking less coins in the coinbase, and other obvious things is simple. But what about trap addresses? What about coins that didn't move for N years? It is an open question to those altcoin creators, how they want to count that.

[tadamichi]

Guess bitcoin's fixed supply is maybe just a pipedream...because as peter todd points out,

Its not, there will be enough nodes that will never accept this change, so there will always be a fixed supply Bitcoin.

"An intuitive explanation for this result is that in the long run, the initial supply N0 doesn’t matter, because approximately all of those coins will eventually be lost."

too bad for people that thought the solution is just to subdivide bitcoin into smaller parts. those will eventually be lost too. and so on.

Bitcoins are backed up in a physical way(Steel, paper, whatever) and stored like any other valuable item. Is all gold lost, if we stopped finding new one? I dont think so. There is maybe 2 kinds of different people, the people that dont manage to take care of it well enough, and people that find ways to do it, and never/barely lose anything.

Backups can also be found again/stolen, or Coins can be transfered into a new wallet with a new backup, if the backup was lost but theres still access to them. This assumption will probably fail in practice, lets prove it, instead of claiming the species that is hoarding the most ridiculous things, is unable to hoard Bitcoin back ups at all, that are actually valuable.

So then we also have new ways to eliminate single points of failure trough multi sig, you can store seeds in different places and it doesnt matter if you lost however many seeds you specified beforehand. This is something not even gold or anything else has, imagine you could recover a full 5 ounces of gold, if you just need to manage to store 3 of them safely(or 3 of 5 access keys, if we want to be more accurate). And then its always possible to update the security model by just transfering coins into another wallet for example, if you have already noticed that 1 seed is lost/ compromised.

If theyre backed up digitally, its also likely for them to get into some hand that knows how to store them safely, after enough tries.

Bitcoins success wil likey depend on the properties it offers and not on the amount of coins in circulation. It can store the same amount of value, no matter if theres 15 million or 5 million coins in circulation, then it just incentivises people to even take more care of their satoshis, as the value of each individual satoshi rises. And rewards the people that keep them secure. Bitcoin is highly divisible, the circulation can actually be handled by subdividing it into smaller parts, this wont mess people up, that didnt mess up themselves, that is the subtle difference to inflation.

A tail emission is like debasing a currency, if we start to mix copper into gold, we can act like we have gold more coins, but once people realise this they will switch into alternatives again and the value of each individual coin falls in value. And the properties of your currency changed, so more and more people might not even want it anymore. There has been many attemps troughout history to fix problems trough debasement, but it never brought desirable results for the majority of users and never lead to a ultimately successfull currency.

[fresheneesz]

The way I see it:

* tail emission of a fixed number of bitcoin trends towards 0 inflation and is therefore not different in the long run from a fixed supply.
* tail emission as a fixed percent of bitcoin is forever inflation. This does have an effect, but as noted by many in the "Bitcoin covenants are inevitable" email thread on the dev mailing list (which went off the rails as a discussion of blockchain security and targeting/funding of that security), doing this does increase the amount of security (all other things kept equal). However, choosing an arbitrary forever-inflation-rate does not ensure that blockchain security will always be sufficiently funded, unless we can find some upper bound on required blockchain security (in terms of percentage of total coin supply).
* Some have mentioned that people lose coins. I don't think this fact is worth considering - ie its not significant. The future rate of lost coins will decrease towards 0, and is likely already nearly 0 today.

If for some reason we determine that we *can't* sufficiently fund miners with fees alone (which I think is a very real, but unlikely possibility), then adding a percentage-based tail emission would be basically our only option. However, I agree with most that until we find that to be the case, its likely a very dangerous thing to attempt to do to bitcoin. Even tho there are reasons of economic efficiency for holders to pay some of the cost of bitcoin's security (via inflation) in addition to transactors (via fees).

[BlackHatCoiner]

Why? You have one Bitcoin block with 7 BTC reward, and you have 700 sidechain blocks, 0.01 BTC each, and doing 51% attack to revert this 7 BTC should be as hard on that sidechain, as it is on Bitcoin.

Oh. So sidechain's difficulty is based on main chain's difficulty. That makes sense.

I mean there is no reason to do that in a centralized way. There were some alternative ways, like P2Pool, and things should go further in that way, maybe also into LN rewards, sidechain rewards, and things like that.

P2Pool.io? I'll have to study further as I'm not knowledgeable enough on this field. My understanding goes as following:

• Pool gathers shares, until one of them is below the target.
• Miners work on hashing block headers that reward pool's address.
• Once a miner finds it, he sends it to the pool, and the pool rewards everyone accordingly to their shares.

Can't think of a decentralized alternative, but I'll read the link.

If you count all traffic on the main chain, all traffic inside LN, all traffic inside sidechains, and all Bitcoin-related traffic in general, and it is still not enough, then there are two options:
1) we live in a strange world, where there are no transactions at all, in any other monetary systems, because 99% people died or something
2) there are transactions in other networks, so we should think, if Bitcoin still has all needed features, and why people don't want to use it

That was not my point. My point was: For sidechain X to work properly, there has to be activity in the main chain. But, the usage of the sidechain X reduces the activity of the main chain, and therefore contributes to make itself useless.

For example, if every bitcoin user eventually switched to Lightning and made nearly zero transactions on-chain, the fees wouldn't be sufficient for the system's security. And if there's no security, there's no Lightning utility either.

Guess bitcoin's fixed supply is maybe just a pipedream...because as peter todd points out,

Just because we're criticizing it, it doesn't mean it's a "pipe dream". We're making discussion here.

[garlonicon]

then adding a percentage-based tail emission would be basically our only option

Why? Miners enforce fees, and they can make transactions with too low fees non-standard, it is a matter of changing some parameters in the Core client, no forks are needed at all to make fees lower or higher. Any node operator can do that, and any mining pool can enforce that. Then, whales will be forced to sell some of their coins, to invest into mining.

Another thing is that tail supply can be reached by taking coins from people, without increasing 21 million coins limit. Then, it will be obvious to everyone, what this proposal is truly about. Because if more coins will be produced, then it is more sneaky, because many people don't understand, how inflation works, but if they will start losing satoshis, then they will see that in a crystal clear way.

For sidechain X to work properly, there has to be activity in the main chain.

True, there will be some activity, related to peg-ins and peg-outs, in the same way, as LN channels are opened and closed. The same will happen in the sidechain. You can imagine a sidechain as a one, huge, N-of-N multisig, where you have a single sidechain output that is pushed forward. But it is not the whole picture, because more things are needed, to allow making the whole flow, without always interacting with all participants (because if someone has 1 BTC on the sidechain, and if that amount is left untouched, then no activity from that person should be needed to make changes in the sidechain).

But, the usage of the sidechain X reduces the activity of the main chain, and therefore contributes to make itself useless.

Not really, because even if you can see zero on-chain reward in the coinbase transaction, then the whole block is still needed as a Proof of Work confirmation for everything, that is attached into it. So, if the coinbase reward on-chain is zero, it doesn't mean that there is no activity. It could mean as well, that the whole activity is in connected networks, and then, if you reorg it, you will make all people angry, that are inside those networks, so the total security budget is the on-chain coinbase reward, plus all rewards from all connected networks.

To put it in other words: if you have a chain, where there are no coins at all, zero coin supply, only zero amounts are allowed by consensus rules (because some network started in that way, or because all coins were burned or lost, it doesn't matter), and you have block headers with 80 zero bits, then tell me: is that network strong? Because I think it is, even if it is just a source of the Proof of Work for things that are attached into it. Because to reorg a block, you need to mine another block with 80 zero bits. And it is hard, no matter if the coinbase reward is zero or one million coins. And imagine that those zero satoshi outputs could just trigger things on other chains, just by requiring a valid signature for that output. Is it safe? Because I think it is.

Just because we're criticizing it, it doesn't mean it's a "pipe dream". We're making discussion here.

True, and I think it will be easier to resist that "tail supply attack" than make it real. Or maybe people will be forced to make it in some less obscured way, when all additional coins will be explicitly listed, or when all additional coins will be explicitly taken from users, and passed to miners in a direct way, because that's what this proposal is about.

[BlackHatCoiner]

Miners enforce fees, and they can make transactions with too low fees non-standard

Miners can't force you to create transactions, though. That's what this problem is all about in the end. Not having enough transactions in the main chain.

Another thing is that tail supply can be reached by taking coins from people, without increasing 21 million coins limit.

Taking 1 satoshi for every 0.01 BTC (for example) is the same as having tail emission. It violates the resistance to arbitrary monetary policy.

So, if the coinbase reward on-chain is zero, it doesn't mean that there is no activity. It could mean as well, that the whole activity is in connected networks, and then, if you reorg it, you will make all people angry, that are inside those networks, so the total security budget is the on-chain coinbase reward, plus all rewards from all connected networks.

So, the idea is: Mine in the main chain with no main chain reward, but with X reward in sidechains. Therefore, we're talking about a slow transition to sidechains. So what will the sidechains' reward be if there cannot be any new coins brought into circulation?

And imagine that those zero satoshi outputs could just trigger things on other chains, just by requiring a valid signature for that output. Is it safe? Because I think it is.

What's this smell? Proof-of-Stake? 

[tromp]

Another thing is that tail supply can be reached by taking coins from people, without increasing 21 million coins limit.

The entire point of having a supply cap is to prevent dilution of one's bitcoin hoard.

Taking coins from hodlers to provide security while preserving this limit is thus sheer folly.

[garlonicon]

Taking 1 satoshi for every 0.01 BTC (for example) is the same as having tail emission. It violates the resistance to arbitrary monetary policy.

But monetary policy was never "arbitrary", when it comes to coin creation. Satoshi decided it should start from 50 coins, and be halved every four years. You agree on that by using Bitcoin, so it is not arbitrary from the very beginning. Another thing is "1 satoshi for every 0.01 BTC" or similar ideas can be introduced on transaction acceptance level, there is no need to enforce that on protocol level. So, one miner can require locking coins for future rewards, or simply demand higher fees, while another miner could require smaller fees. Then, it is all about competition.

What's this smell? Proof-of-Stake?

Well, zero satoshis have many use cases. I thought more about things like swapping coins, delaying amount calculation, or even Monero-like amount hiding. Also, any kind of P2P messaging could be built on top of that, and then only nodes supporting that will ever receive this kind of traffic.

Edit: Also, it was a general idea of "connecting scripts with AND logical operator". Because you can create dust (or better: zero satoshi) output, and take it as an input in some transaction, then you can concatenate scripts. So, it may be also about "<some> <scripts> <that>" AND "<are> <too> <long>" AND "<to> <fit> <in>" AND "<a> <single>" AND "<output>" AND "<script>". The best solution would be to just introduce OP_DO_SOMETHING, but when reaching consensus on that is hard, then there are two options:
1) use another network that is connected to Bitcoin, and execute it in a simplified way on that additional network
2) use Bitcoin directly, and pay for a longer (or just more complex) script
It is also about any protocols, when you consider dynamically changing spending conditions, based on circumstances, then you simply decide, which zero satoshi inputs you want to include in a given transaction, to decide, which conditions are signed, and which are not (and to also use UTXO to solve "require only one possible way" problem, so if some condition will be used and confirmed, then other parts will be automatically invalidated).

[BlackHatCoiner]

But monetary policy was never "arbitrary", when it comes to coin creation.

Monetary policy isn't coin creation. Coin creation is part of the monetary policy, and so is money distribution, which does not currently include a tail emission "tax".

So, one miner can require locking coins for future rewards, or simply demand higher fees, while another miner could require smaller fees. Then, it is all about competition.

But, this isn't sustainable, because part of the current reward is essentially put aside for the future. In other words, there's no continuous tail emission "taxation" similar to "inflating to infinity", because the miners informedly decide to use a finite part of their money for the future. What will the incentive be once that's re-rewarded? Nothing more than transaction fees, unless they perform some sort of "Transaction Fee Halving", which will gradually reveal weaknesses.

[larry_vw_1955]

because approximately all of those coins will eventually be lost

Even if all coins will be lost or burned, then still, the system could work.

No it couldn't. That's why a tail emission is needed, as he points out.

But I think it is very unrealistic assumption that all single satoshis will be lost, and there will be no coins at all.

It's a mathematical certainty...well almost.

Its not, there will be enough nodes that will never accept this change, so there will always be a fixed supply Bitcoin.

Miners are nodes and miners would go along with it because it helps prop up their income. They're going to need that oneday since block rewards go to 0. They'll be advocating for this too.

Bitcoins are backed up in a physical way(Steel, paper, whatever) and stored like any other valuable item. Is all gold lost, if we stopped finding new one? I dont think so. There is maybe 2 kinds of different people, the people that dont manage to take care of it well enough, and people that find ways to do it, and never/barely lose anything.

None of that matters because **almost** all of the original 21 million bitcoins will eventually be lost oneday. Doesn't matter how they are stored, on what medium, etc. Gold is different. some gold is probably lost in landfills but you can always dig more out of the ground. you can't do that with bitcoin. block rewards eventually equal 0.

[garlonicon]

No it couldn't. That's why a tail emission is needed, as he points out.

Then tell me, why it is so hard to mine on testnet3? Those coins are totally worthless, and still, you can see quite high difficulty on that network, so it is hard to mine it on CPU, except those moments, where the difficulty temporarily drops into one. I think a chain with zero supply could be a quite good test network, and could still work, because the whole Script is complex enough to provide "a coin in a coin" functionality.

It's a mathematical certainty...well almost.

I think it is not a mathematical certainty, because even if coins will be totally burned, then if a chain will have zero coins at all, it can still be pushed forward, when the Script by itself will protect some kind of transactions. Also, imagine a coin, where all coins are always burned. Guess what: reorging the last burned coin is profitable, and splitting that last satoshi into smaller fractions is enough to keep it alive. So, I don't think miners will burn the last satoshi that easily, unless they will be convinced by profits to do that.

Gold is different. some gold is probably lost in landfills but you can always dig more out of the ground. you can't do that with bitcoin.

You can. 1CounterpartyXXXXXXXXXXXXXXXUWLpVr is a valid trap address, and it is very likely that there is some matching key. So, it is hard to "dig more out of the ground", but mathematically speaking, it is very likely to be possible in the future, when some hash functions will be broken. Also, mining by itself is a constant, ongoing attack on SHA-256. But you can mine anything, you can mine a vanity address for someone, and sell it in a trustless way. Miners gonna mine, that way or another, unless you stop their computers remotely, and ban message encryption, because that level of censorship is needed to stop CPU mining.

What will the incentive be once that's re-rewarded? Nothing more than transaction fees

I think those fees alone will be more than enough, because you can use Merged Mining, and by mining zero satoshis on Bitcoin, you can also get N satoshis from some sidechain, at the same time, for the same work. Also, if some sidechain will have a fraction of the Bitcoin power, then those miners could be rewarded in a proportional fraction of the fees, collected from sidechain transactions, and the rest can be allocated for the future. So, you have 1 BTC sidechain fees, and you mined 100 times easier block than the mainnet difficulty? No problem, just take 0.01 BTC, and lock the rest 0.99 BTC for the future.

[BlackHatCoiner]

They're going to need that oneday since block rewards go to 0.

The block subsidy going to zero doesn't mean that the block reward will ever go to zero. Since the beginning, it was well known that after 2140, miners would only rely on fees. At some point after block 1,470,000 wherein the block subsidy will be 0.39062500 BTC, I speculate that the fees will become the main source of income.

None of that matters because **almost** all of the original 21 million bitcoins will eventually be lost oneday.

Do you have a proof for that?

Gold is different.

Gold isn't a good analogy, because it doesn't require transactions to operate.

[aliashraf]

It has been abundantly clear to me that most bitcoin issues like mining centralization, scaling, slow adoption, zero/little subsidy dilemma, regulatory/gov vulnerability concerns, … are reducible to one canonical issue: the topology problem. In this thread, so many people have come to the same conclusion, somehow, it is good news.

Glad to see how this sub-forum has improved in just one year,  thanks to people like @galonicon, @vjudue, @BlackHatCoiners, etc. who have brought fresh blood, no need to mention elder hands like @EtfBitcoin, @odolvlobo, @tromp, etc. or forget Greg Maxwell, Peter Todd, others.

I just finished reading every post and followed every single reference made here and found myself motivated enough to write down a summary and a conclusion (from my own point of view, of course).

I'll do so in a few hours, but for the time being can't help it not to express my (well, almost) complete support for what @galonicon is advocating here.
Actually I've been busy for months, designing/prototyping a framework for integrating a bitcoin centralization/scaling solution based on side-chains concept, where the main challenge is the existence of an impedance layer and the need for a strategy and commitment for dealing with this impedance.

It is an unexplored software engineering terittory: decentralized consensus based systems, where you have almost zero authority, no order/contract/PID while the system is up and running as a mission-critical one and at the same time resistant to change. Good luck succeeding without a framework and a clear roadmap.

P.S.
I was used to avoiding the term roadmap in this context. It reminded me of VB and his “Foundation” and what they did (and still are doing) with their Ethereum project. Now, I think it is better not to surround, so let's ignore the way they (mis)understand and (mis)use a decent engineering concept: roadmap.  

[tadamichi]

None of that matters because **almost** all of the original 21 million bitcoins will eventually be lost oneday. Doesn't matter how they are stored, on what medium, etc.

It matters, its like assuming all gold in fort knox will magically disappear from earth one day. There is already high security, remote facilities/ bunkers in the swiss alps storing billions in bitcoin, safe from atomic blasts and everything, so lets just assume they didnt think of eliminating human errors from the process, but everything else(totally realistic). These locations could possibly exist in more places in the world. Regular peoples Bitcoin back ups are most likely stored in some places that are way easier to access, than digging out some new gold. Its even possible to still use backups when only some words are missing/wrong, by bruteforcing, so they dont even have to stay in perfect condition to be recoverable.

We can assume that there is also an amount of Bitcoin that is being recovered/ will be recovered. For now its true that some Bitcoin is lost forever, but as long as humanity lives in a civilization, we can probably assume that the ratio of lost/recovered Bitcoin will get close to zero one day. Or that a big enough amount of Bitcoin will simply never be lost, if no more Bitcoin will be recovered(In a timeframe that matters for civilization).

you can always dig more out of the ground.

What theoretical scenario is there where all already digged out gold would vanish from earth forever, that humanity would survive? It just doesnt matter.

block rewards eventually equal 0.

The market value amount of the block reward counts. We already counted out the possibilty of all Bitcoins being lost now, in a scenario that matters for civilization. With a tail emission you risk lowering that market value as it is debasement of the currency. In the scenario where the added tail emission doesnt have enough market value to secure the network, you could fall into the same debasement spiral as any other currency that started debasement fell into. You will need more and more debasement to pay for security, but users will start to drop out, because their currency is becoming worthless and there would be better alternatives for storing value competing in that situation. Bitcoin is competing against many assets and currencies worldwide, we cant assume it has already won forever and tail emissions will simply pay miners more in any situation. The possibility that the current Bitcoin protocol can be more profitable to miners/ more beneficial to users is there, and more likely to me personally.

[larry_vw_1955]

The block subsidy going to zero doesn't mean that the block reward will ever go to zero. Since the beginning, it was well known that after 2140, miners would only rely on fees. At some point after block 1,470,000 wherein the block subsidy will be 0.39062500 BTC, I speculate that the fees will become the main source of income.

well that's a big speculation. what if the fees are too low then what? miners can't set the fees. competition for block space sets fees. it's certainly possible that bitcoin has a problem in this area and will have to come up with a solution to it.

None of that matters because **almost** all of the original 21 million bitcoins will eventually be lost oneday.

Do you have a proof for that?

No but peter todd does. if you read over his paper he proves it. it's a mathematical certainty. something you can't avoid. simple as that. the good news is if you have a tail emission equal in rate at which coins are lost then you can stabilize the bitcoin supply. that's the way to go. as he shows in his little whitepaper.

You can. 1CounterpartyXXXXXXXXXXXXXXXUWLpVr is a valid trap address, and it is very likely that there is some matching key. So, it is hard to "dig more out of the ground", but mathematically speaking, it is very likely to be possible in the future

Well if you're relying on addresses like this one to have a discoverable private key for the supply of bitcoin to not go to 0, then that doesn't seem like a very good thing to have to do to guarantee the bitcoin supply doesn't go to 0. Just think of that address as funds that are lost forever because most likely that is what they are. And the thing is if you can hack an address like that then bitcoin is broken anyway.

It matters, its like assuming all gold in fort knox will magically disappear from earth one day. There is already high security, remote facilities/ bunkers in the swiss alps storing billions in bitcoin, safe from atomic blasts and everything, so lets just assume they didnt think of eliminating human errors from the process, but everything else(totally realistic). These locations could possibly exist in more places in the world. Regular peoples Bitcoin back ups are most likely stored in some places that are way easier to access, than digging out some new gold. Its even possible to still use backups when only some words are missing/wrong, by bruteforcing, so they dont even have to stay in perfect condition to be recoverable.

peter todd assumed that there is a constant "loss rate" of bitcoin. so you're saying you disagree with that assumption? if it's not a constant rate then what is it exactly?

[garlonicon]

what if the fees are too low then what?

Then you have three options, where tail supply seems like the worst: you can increase block size (that is bad idea, and was discussed in the past, you can follow chains that did it, if you want), you can use tail supply (that is discussed now, but if you do that once, you will keep doing that forever, as it was done in fiat currencies), or you can use Merged Mining, create a separate chain, that will produce as many new coins as you want, and can easily follow the mainchain difficulty. So, if there are no coins, and the mainchain difficulty is X, then you can generate new_base/N coins by mining a block with X/N difficulty. It is that simple.

And then, I expect that if there will be two sidechains, one with tail supply, and one without, then the sidechain with additional coins will die. But I don't think tail supply supporters will be convinced to that: they should try, and see, how everything will play out. Fortunately, it is hard for tail supply supporters to attack the finite supply: any hard-fork can be easily rejected by not upgrading, so don't even think of it, because it will be unnecessary fork, and will quickly become an altcoin. When it comes to soft-fork, it is also hard, because then it is about taking single satoshis from everyone, including burned addresses, or about creating zero satoshis, and treating them as coins with non-zero value. And there is also a no-fork, when each miner can enforce its own fee policy, and lock as many coins as needed for the future.

miners can't set the fees

Well, they actually can. You have one satoshi per virtual byte only because it is de-facto standard, and reasonable defaults. But you can always convince miners, that they should set it to 100 satoshis per virtual byte. And if they simply change their configuration file, without changing any line of source code of the Bitcoin Core, then guess what: they will accept only those transactions! It is a matter of configuration, each node can enforce higher or lower fees, and still stay in the network. And if some node is a miner, then it can enforce that.

competition for block space sets fees

Maybe in altcoins, but not in Bitcoin, because the minimal fee is constant by default. You could have 50 MvB of transactions with one satoshi per byte. Then what? If you are in a hurry, you can pay more to increase those fees, by using RBF or CPFP. But there are alternatives: you can use LN, you can use altcoins, you can use fiat. If all of that works, then you are not in a hurry. People would be forced only if Bitcoin would be the only way to pay for something.

it's a mathematical certainty

No, it is based on assumption that coins will always be lost. And also on assumption that this is somehow bad. Guess what: we have too many coins, and new features are created on altcoins, instead of being based on Bitcoin. So, currently there are too many coins, and more can be created from a thin air. Altcoins caused a lot of inflation in the crypto world: we are not in a situation, when there are only 21 million coins in the whole world, and when all altcoins are sidechains: we are in a situation, where there are 21 million bitcoins, and where everyone can inflate that crypto world, trying to compete with Bitcoin, and lower its domination, so that sentence from Satoshi is still far from being real: "Instead of fragmentation, networks share and augment each other's total CPU power".

something you can't avoid

You can. Tail supply is just one of at least three options.

if you have a tail emission equal in rate at which coins are lost then you can stabilize the bitcoin supply

And what algorithm will be used to determine, if some coin is truly lost or not? Because producing wrong amount will result in having too much tail supply, or not enough tail supply.

if it's not a constant rate then what is it exactly?

It is random. You can track OP_RETURN outputs, you can track coinbase rewards, you can easily exclude provably burned coins. But there are a lot of trap addresses, when you don't know if someone has any access to those coins or not. You simply don't know. And you cannot assume that "this coin was not moved for 20 years, so let's grab it". It is like stealing. And producing tail supply is also stealing, the only different thing is stolen amount, and the fact that it is done from everyone.

[o_e_l_e_o]

Then you have three options

Fourth option: Large holders of bitcoin are incentivized to mine, even with minimal or zero fees or block subsidy, in order to protect both the security and the value of their bitcoin.

The outcome for these users would be little different than having a tail supply. With them mining for zero reward, they would be spending a small proportion of their money to secure the rest of their money. With a tail supply, they would be losing a small proportion of the value of their money to secure the rest of their money. Arguments against this is that it is effectively discriminating against the good will of the users who partake in mining, and of course the free rider problem.

[BlackHatCoiner]

miners can't set the fees

Well, they actually can.

They can't, for the same reason they can't enforce new rules: Demand. If there's demand for 1 sat/vb transactions, they ought to include them, otherwise it's their loss. Some other, smarter miners will select them to get advantage of their empty block space. As long as there are not enough transactions to compete for the block size, and there's demand for x sat/vb, there will be transactions with this pay rate.

If price breaks another milestone, I'm quite sure we'll (collectively) change this minimum value to something like 0.5 sat/vb.

Just think of that address as funds that are lost forever because most likely that is what they are.

This isn't right, and you know it. It brings subjectivity to the game. The counter party address is as valid as any other. The bitcoin sent in that address are part of the UTXO set, as any other.

[o_e_l_e_o]

They can't, for the same reason they can't enforce new rules: Demand. If there's demand for 1 sat/vb transactions, they ought to include them, otherwise it's their loss.

There is demand right now for 0.1 sat/vbyte transactions. If nodes started accepting these transactions and miners started including them, everyone would switch over to using this lower fee whenever block space was not limited. Why are there no smart miners accepting these lower fee transactions right now? Because they've collectively set a lower limit of 1 sat/vbyte.

If all nodes and miners decided that 10 sat/vbyte was the lowest fee rate they were willing to broadcast/mine, then the users would have to pay that.

Some other, smarter miners will select them to get advantage of their empty block space.

If a miner is considering only their own profit, then it is in their interest to accept transactions which pay any fee, since any fee is better than no fee at all. But no miner does this.

[NotATether]

There is demand right now for 0.1 sat/vbyte transactions. If nodes started accepting these transactions and miners started including them, everyone would switch over to using this lower fee whenever block space was not limited. Why are there no smart miners accepting these lower fee transactions right now? Because they've collectively set a lower limit of 1 sat/vbyte.

If all nodes and miners decided that 10 sat/vbyte was the lowest fee rate they were willing to broadcast/mine, then the users would have to pay that.

Looks like we are stuck the 1 sat/vbyte lower limit for the near future, because with the 8 decimal places of satoshis and the 21,000,000 maximum BTC amount, we can add a maximum 5 more decimal places to the satoshis amount before the uint64_t type that stores the balances overflows (21,000,000 BTC with 13 decimal places takes 61 bits of storage), but it will be quite a standards hell to collectively agree on a new name for this new smaller unit.

And that would be a hardfork anyway, since consensus rules are being changed, and inevitibly it will split the BTC community into half like Bitcoin Cash/segwit2x/block size conundrum did 5 years ago.

[o_e_l_e_o]

Looks like we are stuck the 1 sat/vbyte lower limit for the near future

What you've written is irrelevant to the minimum fee. The DEFAULT_MIN_RELAY_TX_FEE is expressed in satoshis per kvB, with a default setting of 1000. It is trivial to change this to 100, which would equate to 0.1 sats/vbyte. Further, minimum fee is a local setting, not a consensus rule.

Also, millisats are already widely in use on Lightning.

[aliashraf]

So, let's have a sort of summary for this thread:  
I'd split the discussion to two separate parts, in part 1 we have the security concerns raised when block subsidy is zero and miner income is discouragingly low, responded by continuous subsidy proposals, in part 2 inspired by some advocates, this response is generalized such that opens doors to exciting other proposals as well.

PART1

There is actually a problem, let's fix it

Peter Todd:
Unlike what has been said, tail emission (permanent block subsidy) is not an inflationary policy as long as it is done hastily. Two factors could be considered as justification:

PT1) In a very long future, the inevitable coin-loss will lead to a monetary system with zero coins. [He goes through an overly extensive mathematical proof for this, BTW.]

PT2) With subsidy being cut or negligible, the incentive mechanism for mining may fail to meet the security requirements of the network. This is because there is a cap on the maximum number of transactions, and the utility of the network degrades with transaction fees sky skyrocketing, i.e., high fees make the system useless, hence we got a dilemma.

Note:
As of (PT1): I've mentioned this issue years ago in a Github discussion as a mathematical abstraction arguing against a hard cap proposal for Ethereum offered by its boss. It is theoretically a valid argument, yet with no practical implication, I have to admit.

As of (PT2): It is the main issue, but the so-called 'tail-emission' solution is neither the only nor the most effective solution, not even a corect one regarding bitcoin status.

Gregory Maxwell:
GM0): First of all, let's use the correct, more common term 'block subsidy' instead of 'tail emission'.

GM1): Block subsidy is not about the sole volume of a currency, it is about paying to miners [e.g., by taxing the current holders]. It is absolutely possible that with overly subsidizing blocks, the whole "ecosystem" would find itself paying too much for security.

Is it desirable, much less moral, for a percentage of the world's wealth [to] be continually diverted to support mining?

GM2): There are options to avoid or reduce the rate of coin-loss substantially, anyway it takes TOO long to reach its mathematical destiny, hence falls out of the scope of any reasonably applicable consideration.
Note:
GM is absolutely right here.

GM3): there is no guarantee that the selected parameter for permanent block subsidy falls in a useful domain because the economical state of the market is both unpredictable and swingy, i.e., a setup suitable for today may become disastrous tomorrow, let's stick with Satoshi's choice of having a hard cap of 21M, also attacking this feature opens the way for further attacks.
Note:
Greg is right as far as we are considering the so-called tail "emmission", still he is dodging the main problem behind such proposals. IOW, he refutes the solution without offering any alternative, the classical guardian approach, no surprises.

@tromp:
As of (GM1), he misses the point of block subsidizing, which is the only way to bring coins to existence and to distribute wealth instead of overly rewarding first runners.

Is it desirable, much less moral, for a percentage of the world's wealth [to] be in the hands of some early whales?

Note:
@tromp wins this debate, no matter who is how much fond of GM, he is out of sync with bitcoin/open-source morality here, I suppose.


@garlonico:
Block subsidy is a covert way of taxing current owners, an alternative would be to tax them explicitly when they transact. No hard forks needed, and no extra coins are created, the extra fees could be locked for arbitrarily far future using a TimeLock with an AnyoneCanSpend opcode, to be claimed by miners.

Note:
Besides being a decent idea, it is a critical point in the discussion where the participants silently reach a consensus about the fact that something is to be done about what has made Peter to come up with his "tail-emission" article.


Hereafter, people are talking about the effectiveness and the details of the proposed solution and its alternatives. Nobody argues against the fundamental problem as being pointless.

I'll come with my take about the second phase of the discussions, where @vjudeu and @garlanico start to view the issue in the lights of more general ones like adoption and scaling. It is the good stuff, actually.

[NotATether]

Looks like we are stuck the 1 sat/vbyte lower limit for the near future

What you've written is irrelevant to the minimum fee. The DEFAULT_MIN_RELAY_TX_FEE is expressed in satoshis per kvB, with a default setting of 1000. It is trivial to change this to 100, which would equate to 0.1 sats/vbyte. Further, minimum fee is a local setting, not a consensus rule.

Also, millisats are already widely in use on Lightning.

Yeah but here's the thing: how are you going to get nodes to change their MIN_RELAY_TX_FEE to something lower, when the nodes have no incentive to change it?

See, this is how the nodes are thinking: 1000 sats/Kvb is equivalent to 1 sat/vb. Sure, I could lower the fee to 100 sats/Kvb or anything lower on my own node, if I was a miner, but I believe (and I can't confirm this without peeking into the codebase, but I stronly suspect this is its behavior) that the fractional (<1 sat) part of fees are discarded by the network as it can't be represented in 8 decimal digits anyway.

So if the miners cannot claim their fractional fees - and it would be relevant if the price of BTC goes very high - then why would they set their fee limit to something lower?

Sure, they could use LN as you suggest, but until LN usage becomes de facto with respect to L1's usage, it's out of the question for miners.

Because unlike with the Bitcoin Core codebase, which is written and verified in a completely decentralized manner, every major - emphasis on major - LN implementation has a company backing it (c-lightning: Blockstream, lnd - Lightning Labs). This means that these companies have greater influence over the supported protocol features of their own clients, and consequentally develop them to a dirction contrary to the desires of the community.


Let's draw a parallel with computer hardware so that others can get an idea about what I'm talking about:

VESA, USB Implementers forum and PCI all make hardware standards. Computer manufacturers implement these standard parts into their computers (all good).

But then suddenly, some company comes up with Thunderbolt that supersedes USB ports, from the point of view of hardware designers. Similarly, HDMI [proprietrary], competing with VESA's DisplayPort [open], in the old days you had Blu-Ray competing with HD-DVD standard, and so on. That is why all computers have a chaotic mixture of different-type ports and are missing others, depending on the model. Unlike say, back in the IBM PC days.


Obviously, it's in no-one's interest for this divergence to happen to Bitcoin. That's why I've been strongly advocating for a (pure) implementation of LN baked into Bitcoin Core directly, to make its association official. It's either that, or Bitcoin Core has to introduce a lower default fee minimum itself [with a corresponding increase in currency precision].

[mindrust]

People don’t really understand inflation at all.

Inflation means increasing the money supply. Nothing else. Tail emission is obviously going to create inflation because you are inflating the supply of that particular coin. Economists often explain inflation as price increases. That’s not true. Price increase is the result of inflation.

[garlonicon]

Nobody argues against the fundamental problem as being pointless.

Even if it is pointless, then still, we have to be well-prepared for "tail subsidy attack". And I think that we are, because:
1) if it will be some hard-fork, it will be unnecessary, and it will be rejected
2) if it will be some soft-fork, then additional coins could be burned, or locked in an endless loop, as vjudeu said: https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-July/020743.html
3) if it will be a no-fork, it will be voluntary (the best option, with the most flexibility, they could produce a separate chain with tail supply coins, and connect it with Bitcoin in a P2P way, and we can defend Bitcoin by burning or locking those coins, or just by speculating against it).

we can add a maximum 5 more decimal places to the satoshis amount before the uint64_t type that stores the balances overflows

It is not a problem, the reason is the same, why we can store targets for blocks as 32-bit values: https://bitcointalk.org/index.php?topic=5330102.0

but it will be quite a standards hell to collectively agree on a new name for this new smaller unit

What is wrong in using millisatoshis, microsatoshis, and so on?

And that would be a hardfork anyway

Why? When it comes to storing any amounts, zero is a nice value, that is backward-compatible. If you use zero satoshis, you can do anything, you can alter completely the current system of representing amounts, you can hide them in a Monero-like way, you can cause inflation, you can divide them into smaller units. Zero simply means "disable amount validation for all old clients", so any soft-fork can define any additional rules for those zero amounts.

Yeah but here's the thing: how are you going to get nodes to change their MIN_RELAY_TX_FEE to something lower, when the nodes have no incentive to change it?

Currently, there is already an incentive to enable lower fees, if you want to hear the traffic from zero-fee protocols.

then why would they set their fee limit to something lower?

Because it allows claiming more rewards, when your mempool is almost empty. If you set your fees to zero, then by calling getblocktemplate you will still get the highest fees first. But on the other hand, if your mempool will be empty, then you will include free transactions, or even just low fee transactions. You can accept one satoshi per transaction as a minimal fee, it will still be compatible with the network, no forks required.

Also, one transaction, that can serve 1000 users, and that will pay a single satoshi, would effectively mean, that each user has to pay a single millisatoshi. Another thing is that you can get fractional satoshis on-chain, when you have N-of-N multisig, and there is one satoshi on that address. If there are 1000 users, then each of them could have one millisatoshi, and it will be perfectly valid from the on-chain point of view.

[o_e_l_e_o]

Yeah but here's the thing: how are you going to get nodes to change their MIN_RELAY_TX_FEE to something lower, when the nodes have no incentive to change it?

I'm not, and that was exactly the point I was making to BlackHatCoiner. Nodes and miners are free to set their own lower limit for fees.

See, this is how the nodes are thinking: 1000 sats/Kvb is equivalent to 1 sat/vb. Sure, I could lower the fee to 100 sats/Kvb or anything lower on my own node, if I was a miner, but I believe (and I can't confirm this without peeking into the codebase, but I stronly suspect this is its behavior) that the fractional (<1 sat) part of fees are discarded by the network as it can't be represented in 8 decimal digits anyway.

Well yes. No one would actually be making transactions with fractional fees, but there is nothing stopping me accepting a transaction of 200 vbytes which pays a fee of 20 sats, for example.

Sure, they could use LN as you suggest, but until LN usage becomes de facto with respect to L1's usage, it's out of the question for miners.

I actually wasn't suggesting to use Lightning instead, simply pointing out that your point about naming is a non-issue since we already have a name for fractions of a satoshi.

[NotATether]

Do note that I am not criticising your suggestions, just reflecting on them.

we can add a maximum 5 more decimal places to the satoshis amount before the uint64_t type that stores the balances overflows

It is not a problem, the reason is the same, why we can store targets for blocks as 32-bit values: https://bitcointalk.org/index.php?topic=5330102.0

...using floating-point notation. Personally, floating-points are my pet peeve, because you cannot use them to accurately represent currency (which absolutely must be completely accurate down to the last decimal to be a real contender to banks, mind you). Furthermore, floating-point amounts could be used as ammunition by nocoiners to justify their claims that BTC cannot be a monetary system.

We actually don't have to resort to floating-point schematics anyway, there are already techniques to represent fixed-point decimal numbers using a proportional amount of dwords - these methods are already being used in database systems to represent DECIMAL(a,b) types that are being used by the current banking system anyway.

Once again, it is worth repeating that I do not think that more than 5 extra decimals will be necessary for a very long time. In fact, I think that LN's millisatoshi values (that's extra 3 decimal places) should be sufficient for this purpose. Hence, we do not have the above problem that I described two paragraphs up.

but it will be quite a standards hell to collectively agree on a new name for this new smaller unit

What is wrong in using millisatoshis, microsatoshis, and so on?

From my point of view, nothing. But I was trying to point out to other people might object to using such values (imagine for a second "Bitcoin", "millibitcoin", "microbitcoin", "satoshi", and "millisatoshi"... that's not going to look consistent to them).

And that would be a hardfork anyway

Why? When it comes to storing any amounts, zero is a nice value, that is backward-compatible. If you use zero satoshis, you can do anything, you can alter completely the current system of representing amounts, you can hide them in a Monero-like way, you can cause inflation, you can divide them into smaller units. Zero simply means "disable amount validation for all old clients", so any soft-fork can define any additional rules for those zero amounts.

That could actually be a good way to insert the sub-satoshi parts while only requiring a soft fork, and makes this whole enterprise much more realistic. The only question is "where in the txin/txout are we going to insert it". I suppose an extra field in the structures can be defined, similar to Witness Data in segwit.

[tadamichi]

peter todd assumed that there is a constant "loss rate" of bitcoin. so you're saying you disagree with that assumption? if it's not a constant rate then what is it exactly?

The first problem is that you can never know, how many Bitcoin are actually lost forever. Some might just not be moving it and it’s not even lost, some could be recovered in the future, then they’re not lost forever. It’s impossible to track this accurately, literally impossible. It can only be based on an estimation that has no real data, which is problematic when you want to introduce a rate of new coins that want to balance out coins being lost. Either it will be too much or not enough. If it’s too much you’re debasing the currency, if it’s not enough it didn’t prevent all coins being lost. But in any scenario you’re adding drawbacks to Bitcoins properties.

Also it’s not a constant and probably fluctuating, but we can’t even possibly know. What i think is that coin loss will slow down dramatically over time, and it will take so long till all would be lost, that it doesn’t matter for humanity anymore. Some coins are just secured too well, to be lost in a scenario that would matter. If something like coin loss abruptly reaches a critical level for whatever reason, people in the future can propose solutions to it, because a tail emission would not even be enough in any such scenario.

Tail emission also ignores factors as market value, distribution/ cost of mining. Or the effect debasement has on later holders too, also just giving miners new coins doesnt guarantee they will hit the market in the future and be distributed. Because if miners settle their bills in Bitcoin in the future these coins only reach asic producers and energy providers. So you risk a cantillon effect, where money isn’t even distributed to newcomers anymore. The less relevant fiat becomes, the more strong this effect will be.

[garlonicon]

because you cannot use them to accurately represent currency

Why not? You can use multiple outputs. If you have one digit, and you want to represent 2.3, then you can store 2.0 in one output, and 0.3 in another output. And here, by taking one byte, you will have 64-8=56 bits. It should be accurate enough.

imagine for a second "Bitcoin", "millibitcoin", "microbitcoin", "satoshi", and "millisatoshi"... that's not going to look consistent to them

Names will be invented as needed. In the past, there was no name for the smallest on-chain unit. Initially, in the code you had just "coins (1 BTC) and "cents" (as 0.01 BTC), because there was no need for smaller units. So, if there will be such need, then some names will be invented. And you can always use kilosatoshi (1000 sats) or megasatoshi (0.01 BTC), then total supply is just 2,100 terasatoshis.

where in the txin/txout are we going to insert it

Obviously in the script. You can use "<amount> OP_DROP" inside outputs, or "<amount> OP_DROP" inside inputs. Also, you can use other opcodes, like OP_ADD, to sum amounts, and do other calculations on them. If you use it inside outputs, then it would be fully compatible with existing system. And when it will be inside inputs, it will be delayed to the moment of spending (and could be invalid, that would mean such coins could be just unspendable).

[BlackHatCoiner]

There is demand right now for 0.1 sat/vbyte transactions.

Apparently, not enough. 1 sat/vb is incredibly cheap for median-size transactions. If that becomes expensive, full nodes may change their local settings.

If all nodes and miners decided that 10 sat/vbyte was the lowest fee rate they were willing to broadcast/mine, then the users would have to pay that.

And they would set that pay rate, if there wasn't a need to pay less. But, there's competition. Miners who announce they will process 5 sat/vb transactions, will have a greater profit, because there's more demand for 5 sat/vb. And they can confirm this, just by adjusting the limit.

If a miner is considering only their own profit, then it is in their interest to accept transactions which pay any fee, since any fee is better than no fee at all. But no miner does this.

I'm sure some do, it's just the full nodes that don't relay them to avoid DDoS.

Yeah but here's the thing: how are you going to get nodes to change their MIN_RELAY_TX_FEE to something lower, when the nodes have no incentive to change it?

The nodes have no incentive to change it? The nodes are the users. Those who pay the MIN_RELAY_TX_FEE.

[aliashraf]

Nobody argues against the fundamental problem as being pointless.

Even if it is pointless, then still, we have to be well-prepared for "tail subsidy attack".

What do you mean? Proposing something doesn't make it an attack to be or not to be well-prepared for.
It is so disappointing watching you being distracted from the focal point: The zero subsidy security dilemma.

And I think that we are, because:
1) if it will be some hard-fork, it will be unnecessary, and it will be rejected
2) if it will be some soft-fork, then additional coins could be burned, or locked in an endless loop, as vjudeu said: https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-July/020743.html
3) if it will be a no-fork, it will be voluntary (the best option, with the most flexibility, they could produce a separate chain with tail supply coins, and connect it with Bitcoin in a P2P way, and we can defend Bitcoin by burning or locking those coins, or just by speculating against it).

Nope. None of this is considered a preparation.
Even your favorite #2 scenario is not an answer, and surprisingly you already know why, just check your own posts above thread. So, why in the hell you should get distracted? It looks more like a tit-for-tat practice, someone says something, and you find yourself somehow obligated to follow the conversation.

As a matter of fact, the whole microSatoshi, nanoSatoshi, picoSatoshi, … stuff discussed in the latest posts is totally irrelevant and absurd, still you continue following the game as well as others. You showed good insight when you joined @vjudue in bringing forward the only solution to the zero-subsidy dilemma: merge mining  side-chains, which relates this issue to the more general problems such as scaling, mass adoption, and centralization.

[larry_vw_1955]

it's a mathematical certainty

No, it is based on assumption that coins will always be lost. And also on assumption that this is somehow bad.

that's because it IS bad. what if you applied that same logic to some other money supply like the us dollar? if they didn't replace lost money, eventually there would only be one person or a small group of people with "all the money" however much that was.

Guess what: we have too many coins,

why is that exactly?  i think people think that as more bitcoins are lost it makes their bitcoin go up in price but i'd argue that is just makes bitcoin less usable and available to people as a way to transfer digital cash.

And what algorithm will be used to determine, if some coin is truly lost or not? Because producing wrong amount will result in having too much tail supply, or not enough tail supply.

the algorithm is to add up all the coins in burn addresses, OP_RETURN outputs and stale addresses. stale addresses are a bit tricky but the longer a particular address hasn't been used then you would count a larger percentage of its balance. that gives you a total lost amount for the current block. subtract the previous block's total lost amount and you get the tail emission amount for the current block.
 

if it's not a constant rate then what is it exactly?

It is random. You can track OP_RETURN outputs, you can track coinbase rewards, you can easily exclude provably burned coins. But there are a lot of trap addresses, when you don't know if someone has any access to those coins or not. You simply don't know. And you cannot assume that "this coin was not moved for 20 years, so let's grab it". It is like stealing. And producing tail supply is also stealing, the only different thing is stolen amount, and the fact that it is done from everyone.

in my algorithm i described above, it could happen that something we thought was a burn address turned out to have coins spent from it. or some stale address that hadnt been used in a long time suddenly transferred some coins out. then for that particular block, the total lost amount could potentially be less in value than the previous block's total lost amount. could be. which in that case would mean the tail emission amount for the current block could become negative in value. this negative value would need to be brought back to 0 by burning transaction fees for as long as necessary.

i keep hearing in this thread people saying having a tail emission is equivalent to stealing satoshis from every single bitcoin address. stealing from everyone. that's a strange way to look at it. don't we want bitcoin to be useable by as many people as possible? if so then having bitcoin go up in price forever and ever shouldn't necessarily be the driving force.

[o_e_l_e_o]

Miners who announce they will process 5 sat/vb transactions, will have a greater profit, because there's more demand for 5 sat/vb. And they can confirm this, just by adjusting the limit.

So why is no miner currently announcing they will process 0.5 sat/vbyte transactions and making a greater profit right now?

There's more at play here other than "maximizing short term profits". Such a mindset would lead to a race to the bottom - if one miner sets their limit to 0.5 sats/vbyte to cash in on transactions in which 1 sat/vbyte is too expensive, then another miner might set their limit to 0.2 sats/vbyte for the same reason. And then yet another to 0.1 sats/vbyte, and so on, until every is sending transactions which only pay a couple of sats in fees. Miners have a collective incentive not to drop their minimum fee rate and cash in in the short term so as not to jeopardize their future profits.

the algorithm is to add up all the coins in burn addresses, OP_RETURN outputs and stale addresses. stale addresses are a bit tricky but the longer a particular address hasn't been used then you would count a larger percentage of its balance. that gives you a total lost amount for the current block. subtract the previous block's total lost amount and you get the tail emission amount for the current block.

This is incredibly inaccurate way of doing things, certainly nowhere near good enough to be used to calculate tail emission, since "stale" addresses are absolutely not lost. I have many such addresses which would be classified as stale and I can guarantee you they are not. How would this deal with the scenario where a few thousand "lost" bitcoin on a stale address suddenly becomes active again? You say to subtract the two totals, be left with a negative number and have to have negative tail emission? And how does that solve the problem of not enough block reward to maintain the security of the network, if you are now not only having no tail emission for a few hundred or even thousand blocks, but even forcing miners to burn all the fees from those blocks as well?

[BlackHatCoiner]

Miners have a collective incentive not to drop their minimum fee rate and cash in in the short term so as not to jeopardize their future profits.

So, why 1 sat/vb? Why don't they have it at 10 sat/vb? This should supposedly drop some of their short term profit and rise their long term profit. What did change in v0.8.2 and they lowered the limit from 50,000 sat/kb to 10,000 sat/kb? Let alone in earlier versions. Answer: Demand.

If the miners decided the minimum relay fee, it wouldn't be called "relay fee". The full nodes decide that, hereby the users. If you run bitcoin-cli getpeerinfo you might see some peers who've set their minfeefilter to 0.00000000. I'm connected with one.

[garlonicon]

Proposing something doesn't make it an attack to be or not to be well-prepared for.

Proposing breaking 21 million coins limit is very controversial. For me, it is an attack. On Reddit, it was marked as "contentious hard fork" and removed. On mailing list, it was accepted somehow, despite that more serious things were almost rejected, because they were considered "incomplete", even if the base layer is in fact complete, and can be used to form a complete test network. Here, this topic is widely discussed on bitcointalk, when it should be rejected instantly, and turned into a discussion about making it without touching fixed coin supply.

When it comes to the long term security, it should be obvious that any idea of inflating supply is malicious, and should be instantly rejected, and replaced by N other proposals to solve the same problem. But for some reason, it is not the case, and the whole discussion is still ongoing. So, I cannot take it seriously, if it is "contentious by the rules". And I cannot treat Peter Todd seriously talking about a contentious hard fork, when he also told us that soft forks are superior, and they can be used to upgrade things regularly (he also told us about evil soft forks, but for some reason, his tail supply proposal is a hard fork).

So, why in the hell you should get distracted?

1) because this topic is no longer serious
2) because there are promising proposals, like vjudeu's idea of no-fork sidechains, so they are complete enough to be implemented as a test network, and then we will see, what will happen next
3) because my brain works in a P2P way, where everything is connected with everything else
4) because people asked questions, and I just provided some answers, and some links, this is quite natural

It looks more like a tit-for-tat practice, someone says something, and you find yourself somehow obligated to follow the conversation.

That's why things should be moderated, by cutting offtopic, moving posts, and cleaning things up. But because this topic is not serious at all, maybe it is easier to let the whole mess happen inside, to not let it spread outside of this topic. Because this proposal is about drama and nothing else, and everyone knows about that from the start. Surprisingly, Reddit handled it in the best way, by removing that completely, because Peter Todd proposed a hard fork, so it should be rejected only for that reason everywhere, as long as there are alternative ways (and it is publicly known that the same thing can be done without any hard fork, even evil soft fork can handle that better than some hard fork).

As a matter of fact, the whole microSatoshi, nanoSatoshi, picoSatoshi, … stuff discussed in the latest posts is totally irrelevant and absurd, still you continue following the game as well as others.

See above: this topic was never serious, exactly like this one: https://bitcointalk.org/index.php?topic=5404222

You showed good insight when you joined @vjudue in bringing forward the only solution to the zero-subsidy dilemma: merge mining  side-chains, which relates this issue to the more general problems such as scaling, mass adoption, and centralization.

Yes, but it is complete, nothing new was added, no new questions appeared, when it comes to sidechains, so it seems people should see some working code, to talk more about it.

[larry_vw_1955]

This is incredibly inaccurate way of doing things, certainly nowhere near good enough to be used to calculate tail emission, since "stale" addresses are absolutely not lost. I have many such addresses which would be classified as stale and I can guarantee you they are not. How would this deal with the scenario where a few thousand "lost" bitcoin on a stale address suddenly becomes active again? You say to subtract the two totals, be left with a negative number and have to have negative tail emission? And how does that solve the problem of not enough block reward to maintain the security of the network, if you are now not only having no tail emission for a few hundred or even thousand blocks, but even forcing miners to burn all the fees from those blocks as well?

You say you have "many such addresses which would be classified as stale" but you don't even know how "stale" would be defined. It might be something where if funds were not moved from an address in one generation, say 100 years. So given that, none of your addresses would be considered stale. I think it's reasonable to expect someone that inherits bitcoin from someone else would attempt to do at least a small transaction to make sure things work.

[o_e_l_e_o]

You say you have "many such addresses which would be classified as stale" but you don't even know how "stale" would be defined. It might be something where if funds were not moved from an address in one generation, say 100 years. So given that, none of your addresses would be considered stale. I think it's reasonable to expect someone that inherits bitcoin from someone else would attempt to do at least a small transaction to make sure things work.

And yet, even after 100 years, you have no way of knowing that coins which haven't moved in that time are lost. I am unconvinced that it fees alone are not enough to maintain the security of the network, then fees + any coins which haven't moved in 100 years would be either. It might delay things, but as Gregory pointed out on first page of this thread, it is entirely possible for coin loss to be come so inconsequentially small that you would essentially just be back to relying on fees only, albeit with a delay of a couple of decades (as truly lost coins from the first several years of bitcoin's life were added to the block reward, provided they hadn't already been moved or stolen by some entity breaking the ECDLP).

There is no reason to do a small transaction "to make sure things work" - if you inherit a private key, you can tell exactly which addresses and which coins it will unlock without having to broadcast anything to the network.

[buwaytress]

There is no reason to do a small transaction "to make sure things work" - if you inherit a private key, you can tell exactly which addresses and which coins it will unlock without having to broadcast anything to the network.

Agree, just perhaps for him, as in my experience, anyone I've properly helped get on with Bitcoin always wants proof for themself that it works... from a 15-yr old kid (now 18 and still asks if we should try again) to a 44 yr old who isn't convinced that simply being able to access the wallet, or sign a message, proves it works.

Maybe it's the case that I don't explain well enough, but I almost kind of get that compulsion to just "test and see if it works".

That said, we're also probably more interested in the larger amounts of dormant coins -- and anyone holding that would probably broadcast as a last resort.

[larry_vw_1955]

The subject just creates drama today because we all clearly signed up for a system with a particular economic policy, for better or worse.  It would be immoral in the extreme to try to coerce people onto a different one.

Right. I can agree with that. But the problem is, how do you enforce the original "economic policy"? Bitcoin is not immutable code, it's not a smart contract. So you can never really enforce bitcoin except through people. And people can make decisions that go against the original economic policy. it is probably unlikely to happen in the immediate future but who knows what could happen someday. Bitcoin is not unchangeable, it can be changed. Some people think of that as a strength but in this particular case, it's a weakness. As Greg suggests by his use of the word "immoral". Maybe bitcoin should have been written as a smart contract so that it could never be changed.

[garlonicon]

how do you enforce the original "economic policy"?

By running a full node. You can enforce 21 million coins limit, but you cannot enforce that 1 BTC will be worth more than one dinner.

Bitcoin is not immutable code, it's not a smart contract.

That would not change anything, because no kind of contract will enforce that for 1 BTC you can buy a house.

So you can never really enforce bitcoin except through people.

You can say that about all monetary systems, including gold. Starving people cannot eat gold, the same with other popular coins.

Maybe bitcoin should have been written as a smart contract so that it could never be changed.

There is no such thing as "writing a coin in the way to make it change-resistant". To reach that, you have to block coin flow, so that all coins should be assigned to all owners from the start, and the whole blockchain should be fully deterministic. But that level of change-resistance would make it useless. Because guess what: if Bitcoin would have P2PK and absolutely no other features, and no Script at all, then it would be still possible to introduce things like tail supply.

[larry_vw_1955]

how do you enforce the original "economic policy"?

By running a full node. You can enforce 21 million coins limit, but you cannot enforce that 1 BTC will be worth more than one dinner.

ok, I never said I wanted to enforce a price on bitcoin. as far as running a full node, that's not enforcing anything beyond a shadow of a doubt. it's just casting your one single vote. I didn't ask "how do you HELP enforce..." I asked "how do you enforce..."

Bitcoin is not immutable code, it's not a smart contract.

That would not change anything, because no kind of contract will enforce that for 1 BTC you can buy a house.

whether 1 btc can buy a house is immaterial and irrelevant to this discussion. we're talking about how to enforce the 21 million btc limit without trusting people. the only way you can do that is with immutable code. hence a smart contract. or some other type of code that cannot be altered. there are downsides to a setup like that but that's what you have to accept to get immutability.

So you can never really enforce bitcoin except through people.

You can say that about all monetary systems, including gold. Starving people cannot eat gold, the same with other popular coins.

and we're not talking about gold. we're talking about bitcoin.

Maybe bitcoin should have been written as a smart contract so that it could never be changed.

There is no such thing as "writing a coin in the way to make it change-resistant". To reach that, you have to block coin flow, so that all coins should be assigned to all owners from the start, and the whole blockchain should be fully deterministic. But that level of change-resistance would make it useless. Because guess what: if Bitcoin would have P2PK and absolutely no other features, and no Script at all, then it would be still possible to introduce things like tail supply.

well I don't believe you about that. you can make an entire codebase immutable if you want to. so that a single bit of it could never be changed. and it would have to run the same way for all time. if you really want to enforce a 21 million bitcoin limit, you could do it then. because then no one could ever change it. no matter what.

[garlonicon]

ok, I never said I wanted to enforce a price on bitcoin

But that's why tail supply was proposed in the first place: as a payment for security. So, if you will have 21 million coins, and if you will have a consensus rule that 100% coins should be sent as fees, and then miners should collect those coins, and create outputs in the coinbase transaction, then you will have your fixed supply, but that kind of coin would be useless. And guess what: it is a perfect soft-fork.

I didn't ask "how do you HELP enforce..." I asked "how do you enforce..."

By running a node. It is really that simple, because Bitcoin is not ruled by miners.

whether 1 btc can buy a house is immaterial and irrelevant to this discussion

It is crucial, because if 1 BTC is worth $1 or even less, then the whole security is very low. You can see many altcoins with tail supply, and they have much lower security, because they have much lower difficulty (or no difficulty at all, when it comes to Proof of Stake, where the whole chain can be overwritten by getting enough signatures, and no additional work is needed).

the only way you can do that is with immutable code

No, you can enforce that only with immutable blockchain, because immutable code still allows for example soft-forks, or just tracing the chain by another chain ("a coin in a coin" model).

and we're not talking about gold. we're talking about bitcoin

I thought the whole topic is about tail subsidy, so also about securing the blockchain with no basic block reward. And that is directly related to how many goods and services each miner can buy for a given amount, mined in a coinbase transaction. If you can buy one sandwich for 1 BTC, then guess what, the whole security will be much lower, even if you will get 100% coins as fees.

well I don't believe you about that

You don't have to believe, you can simply read about previous soft-forks that are backward compatible. So, even if someone didn't upgrade the software, it is not enough to reach immutability. Can you stop Segwit by not upgrading? Can you stop Taproot by not upgrading? Of course you cannot stop it, because those changes are compatible. And some soft-forks or no-forks that can introduce tail supply are also unstoppable, when it comes to writing some data to the blockchain. So, the only barrier is the human factor.

Also, read about evil soft forks by Peter Todd, you will quickly see that any rules can be introduced in this way, including tail supply: https://petertodd.org/2016/forced-soft-forks

So what is a valid Bitcoin 2.0 block? It could be anything at all! For example, the inflation schedule can be changed to make the coin supply unlimited.

Surprisingly, Peter Todd wrote about unlimited supply in 2016.

[NotATether]

@aliashraf

Still waiting for your summary of the Part 2 "less important, miscellaneous proposals for tackling the tail emission problem" - Part 1 really hit the spot

[aliashraf]

@aliashraf

Still waiting for your summary of the Part 2 "less important, miscellaneous proposals for tackling the tail emission problem" - Part 1 really hit the spot

Actually, you are the first and the only one who cares (no merits, tho ) but it is ok, having one audience makes a huge difference, I'll do this in few hours, just for you 

P.S.
For other potential audiences: Part 1

[garlonicon]

you are the first and the only one who cares

No, you are the first who asked, but not the only one who cares. I was surprised that you mentioned me in your description at all, and I wonder, what else could be in part two.

[larry_vw_1955]

But that's why tail supply was proposed in the first place: as a payment for security.

well they should have thought of that in the first place. i thought the block reward and transaction fees pay for security. that's not good enough?

whether 1 btc can buy a house is immaterial and irrelevant to this discussion

It is crucial, because if 1 BTC is worth $1 or even less, then the whole security is very low.

well i don't know. its been so long since bitcoin was $1. but if it was $1, then i don't think it needs as much security as if it was higher price like $20,000.

No, you can enforce that only with immutable blockchain, because immutable code still allows for example soft-forks, or just tracing the chain by another chain ("a coin in a coin" model).

there are tokens on ethereum that are run on a smart contract. they cannot be changed. for better or worse. but it does form a guarantee that things cannot be changed. you don't get that guarantee with bitcoin. not unless it runs on a smart contract or something similar.

I thought the whole topic is about tail subsidy, so also about securing the blockchain with no basic block reward. And that is directly related to how many goods and services each miner can buy for a given amount, mined in a coinbase transaction. If you can buy one sandwich for 1 BTC, then guess what, the whole security will be much lower, even if you will get 100% coins as fees.

saying that bitcoin's security depends on bitcoins price doesn't sound so appealing. because that would mean if bitcoin price goes down then my bitcoin is not as secure as it used to be. and i need the price to go back up to have it be more secure.

Also, read about evil soft forks by Peter Todd, you will quickly see that any rules can be introduced in this way, including tail supply: https://petertodd.org/2016/forced-soft-forks

that's assuming the code is available for inspection and modification. that doesn't necessarily have to be the case for something that never changes. as long as people trust it and use it, they might not necessarily have access to the source code. for bitcoin they do but maybe not something else.

[garlonicon]

that's not good enough?

I think it is, but tail supply supporters seems to think that for some reason, fees alone are not good enough. I don't know why, because fees can be collected from the mainchain, from LN, from the Merged Mining, so if you add all of that, it should be enough. Unless there are no transactions at all in the whole Bitcoin network, but then, it is a different kind of problem.

then i don't think it needs as much security as if it was higher price

In the past, attacking was easier, because it was easier to reorganize a chain. Imagine you sent 10,000 BTC to buy pizza, and the block reward was 50 BTC. Then, you needed 200 blocks to have it well-covered by coinbase transactions. Of course, there were many reasons, why less confirmations were enough at that time, including the fact that the whole network was in its infancy, and everyone knew it.

they cannot be changed

They can, because of the DAO hard fork. Also, ETH is based on hard-forks, so anything can change at any time, and you cannot really control it. Imagine that you use ETH and you don't want some changes, what then? In Bitcoin, you have soft-forks, so changes are backward-compatible, in ETH, you are forced to upgrade, and if you don't, then you are landing in another network.

saying that bitcoin's security depends on bitcoins price doesn't sound so appealing. because that would mean if bitcoin price goes down then my bitcoin is not as secure as it used to be

It is not an instant change. It takes time to lower the difficulty. Imagine that the price is $1 again, what then? Then, the chain would simply stop, as more and more miners would turn their machines off. If you have 80 zero bits, it would take two months, instead of two weeks, to reach 78 zero bits. That means, if you want to go from 80 to 32 bits, you need 48 bits to be shifted, so that means 48/12=4 years of constant difficulty falling, to reach the minimal value. And if it would drop by more than 75%, then it would take even longer. Also, that means if you want to transact at all, then it is needed to constantly use Merged Mining to produce the same next block again and again, until reaching the mainnet difficulty. So, some kind of sidechain is needed to recover from a situation, where only CPU miners would handle all of that. And you know, what does it mean: hodlers would be forced to invest into mining, to protect their coins.

that's assuming the code is available for inspection and modification

But it is. You can clone the whole code, modify it, and publish it. It is not BSV, where the license says explicitly that you cannot use it anywhere else.

as long as people trust it and use it

That's the point: you can make a new version, but then, you have to convince miners to use it. Or invest in mining and use it alone. For example, if you want to enable free transactions, you have to convince some miner to change node settings, or you have to start mining, and change it in your own node.

they might not necessarily have access to the source code

There are countless places, where people have cloned the whole source code. Many bitcoiners have such copy, and most altcoin creators also have it, if it is based on BTC.

for bitcoin they do but maybe not something else

For "something else" it doesn't matter, because altcoins have separate rules, so if they want tail supply, they can discuss it in their own channels.

[TraderTimm]

Listen up, and listen good.

If you think changing Bitcoin's issuance or fee structure makes sense -- then I can tell you as someone who has been deeply immersed in this since 2011 that I'm not going to go along with it.

First -- no one is giving the original design a chance. Why in the fucking fuck are proposals to change something that hasn't even run a decent course in the first place? If you're bored, go program something in assembly, leave Bitcoin alone.

Second -- malleable monetary policy isn't why I'm involved with Bitcoin. You try to change this, I will evaluate and likely dump/leave. This also goes for proposals that try to pursue altcoin strategies for Miner Extracted Value..

I'm not alone, and I'd rather you fucking fuckers worked on problems that need solving instead of being tempted to twiddle the knobs on the best scarce digital asset on the planet. Seriously, what the fuck. Just fork it and make your own nightmare, thanks.

[garlonicon]

If you're bored, go program something in assembly, leave Bitcoin alone.

Surprisingly, those two topics could meet, when it comes to microcode in the Script: imagine treating OP_CHECKSIG as a bunch of opcodes, related to some ECDSA operations, having OP_SHA256 somewhere, or even just treating OP_HASH256 as a compressed version of "OP_SHA256 OP_SHA256". This topic is still open, it appeared some times in the mailing list, and I guess there will be some proposal like that in the future, also because Bitcoin Core is going further into descriptors, that would redefine the way we think about the Script (and could potentially redefine the rules of counting such opcodes into any computation-based fees, currently they are size-based, but they don't have to be, other things like UTXO-complexity, or even Script-complexity are possible, and guess what: 100 OP_CHECKSIGVERIFY opcodes are more complicated than 100 OP_2DROP opcodes, but the transaction cost could be identical).

worked on problems that need solving instead of being tempted to twiddle the knobs on the best scarce digital asset on the planet

True, the whole topic cannot be taken seriously. The only thing we can do is to prepare for any kind of tail supply attacks, and counter-attack by rejecting any such proposals, burning those coins, selling them if it will be profitable, or simply ignoring them at all, if they are harmless.

[larry_vw_1955]

Listen up, and listen good.

If you think changing Bitcoin's issuance or fee structure makes sense -- then I can tell you as someone who has been deeply immersed in this since 2011 that I'm not going to go along with it.

i don't think alot of people would go along with it but that's not the point. the point is bitcoin being opensource means people can look at and change the code and given that, we can pretty much assume every aspect of bitcoin will be put under a microscope and there will always be factions that want this change or that. one of the weaknesses of bitcoin not being immutable code...

[garlonicon]

i don't think alot of people would go along

I think it is more likely that people will stay with fixed supply, no matter what. Too many people entered the system because of that, so if there will be any proposal to make it mandatory to produce blocks with tail supply, I guess people will simply act against it, and such coin will end up being an altcoin.

one of the weaknesses of bitcoin not being immutable code...

If you think that it is really reachable by some kind of smart contract, then go on, and implement that. Then, if people will be interested, you will see, how soft-forks can alter your contracts. And you will also see, how easily someone could just take your code, and make a clone. Because, guess what, altcoins are more opened to hard-forks than Bitcoin, so the most likely scenario is that your code will be simply hard-forked. But it is also possible that if your code will be rock solid, then it will be soft-forked, no matter how "smart" your contract will be. If you will use for example any typical signatures, then you will open the door for commitments, and for soft-forks.

[aliashraf]

I'll do this in few hours, just for you  

I sincerely apologize for failing to be on-time.

From where we left in Part 1:
1- Peter Todd's "tail-emission" suggestion is settled as being strongly rejected as far as it is about a solution to the zero-subsidy dilemma, and as long as it is about bitcoin, @tromp nailed it.

If there is only one way to get it right, then it would be tail emission from launch.
In gmaxwell's words, that's a pretty strong attractor in the design space, with nothing arbitrary about it.

2- The security concerns he has about the issue, disincentivized mining industry, mostly, is recognized as being serious.
2- Different alternative approaches/mitigations are presented.
This part is a walkthrough of the latter class of posts: alternatives to continuous subsidy or mitigations to the problem for bitcoin where tail subsidy is cut.

PART 2

Don't Break Anything, There Is Hope

Before starting to summarize the two major alternatives to tail subsidy, discussed in this topic, let's take a look at a third, less vocal, yet important view:

Alternative #0: In Whales, We Trust!
In case, God forbid, bitcoin security becomes fragile because of a drop in the hashrate due to miners' marginal profits vanishing which in turn would be the result of subsidy decrease/cut, whales will do something about it, like by bribing miners/donating large fees, and so on as they have huge incentives to keep their wealth secure, no worries.

Actually, Gregory Maxwell has drafted the groundwork for this approach in his first post:

{} If Bitcoin's scheme turns out to not work out then users in the future will have many alternatives they could consider-- including adopting Bitcoin variants that are created that have constant subsidy (as tail subsidizers propose) or attempt to achieve security through other means.   To those people, should that future ever come to exist, the discussion will be much simpler though because they'll know if Satoshi's simple economic-effect minimizing scheme works or not, they'll know if alternatives are necessary.

Few posters have mentioned the whales solution, explicitly in the thread, not followed so much as it causes the discussion to be deferred infinitely, but taking into account Maxwell's mindset, I think it is where the community is for now: Nothing to worry about, it is working, miners are just stupid business people, whales and/or devs, God bless, will take care of us.

MY Take
Disclaimer: I hate whales because of jealousy or my left leaning mindset, or both.  
Objection 1: Bitcoin is not a stake based system, you can't leave its security in hands of holders, they are mostly a bunch of greedy bastards.
Rather than the hodling (ugh) discourse, a true bitcoiner is the one who depends on transaction processing, the one who accepts bitcoin for his or her goods/services. Miners are awarded the silver badge for burning their fortunes and securing the transactions, so providing the infrastructure for the hero merchants aforementioned.
Miners deserve more respect than what bitcoin cult leaders show, on the contrary, whales go never close to the top of the bitcoin respect list. BTW, read the disclaimer above, again.  
Objection 2: Since mass adoption is a critical priority, we need an established theory inclined toward newcomers and resilient against fiat-fed academic debunks, it can't include a whale based security justification.  


Now we examine the two major alternatives presented in the topic, they share the same idea that there is something to be fixed but ...
Alterntive #1:
Subsidize The Tail By Taxing The Head.
It is the first and the main trend proposed and supported firstly by @vujdue, @garlonicon (surprisingly, the same guys who presented the second approach as well ) The core idea being something like this:
It is possible to force, via a soft fork, an extra fee which is locked for long future, such that future miners, as a block builder, would be able to claim the reserved satoshis gradually, and as an extra income, a virtual block subsidy which infinitely continues without touching the 21M hard cap.

But I do care that everyone else also chips in so we don't have a tragedy of the commons.

So make it a soft-fork proposal, where N out of M coins are locked in every coinbase transaction, to cover future rewards. It will have higher chances of being deployed than any other hard-fork, and will also increase future mining rewards. You want to get a 0.01 BTC tail emission? No problem, just send 0.01 BTC to block 1000000, then 0.01 BTC to block 1000001, and so on.

An alturistic version of this is discussed (no soft forks) as well, where people voluntarily chip-in for the same purpose.

MY Take
Disclaimer: check the disclaimer above again
Objection #1: This works as a negative pressure towards mass adoption because of the fees being lifted.
Objection #2:  It fails to answer Greg Maxwell's original objection to Peter Todd, i.e.: How much tail subsidy is adequate and why?


Alternative #2:
Just follow Paul Sztorc!
It is the second trend, advocated (again!) by @vjudeu and @garlonicon. Putting it in the simplest sense, Sztorc says other than hard forking/ruining bitcoin by violating 21M hard cap or 1M block size limit, you have this beautiful option to support merge mined side-chains which provide new source of income hence incentives for miners.
@tromp, this wise guy, is the only one who has made a reasonable (though, mild) objection to the idea in this thread:

So, given that the majority of bitcoin blocks are already taking part in one or more merged mining protocols, what are the main arguments against using merged mining to create security once the block subsidy is insufficient?

If merge miners only make a small fraction of their revenue from bitcoin, then it becomes rather cheap to bribe them to mine censoring bitcoin blocks.
In that sense, the security of the bitcoin blockchain against censorship seems to depend on just the bitcoin block rewards.

Unfortunately, it didn't get enough attention let alone a proper answer, I'll fill this gap.

MY Take
Disclaimer: I've been busy for a long time working on a project based on the same ideas as what Paul Sztorc has been advocating for half a decade and more; DYOR!

As of @tromp objection:
If it is just about solving the subsidy dilemma, @tromp objection would be plausible. IOW, you can't solve just one problem by such a disruptive idea, you shouldn't. Leaving the situation with pools and BIG mining farms that has centralized bitcoin mining scene so much, as is, makes it impossible to fix/improve anything in bitcoin.

As of Paul, @vjudeu, @garlonicon, ..., and the whole idea of zero emission, side-chain:
I'm a believer, but you need to read my take against @tromp's argument as well: It should be presented as a complete package, a framework, a project, even a cult-fork (just made it up) with established roadmap for fixing most crucial bitcoin issues including, not limited to, the dilemma under consideration. The most important candidates would be mining centralization, scaling, and mass adoption. I'd add two covert problems as well: whale cult and hacktopia (again, made it up just now).


P.S.
Wish you guys find this part useful, if so, you are welcome to correct me in case I've missed or misrepresented anything.

[garlonicon]

surprisingly, the same guys who presented the second approach as well

It is not that surprising, because it is not a secret that we know each other.

It should be presented as a complete package, a framework, a project, even a cult-fork (just made it up) with established roadmap for fixing most crucial bitcoin issues including, not limited to, the dilemma under consideration.

What else is incomplete here? https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-June/020532.html

That idea is quite simple: you have the mainchain, you sign your coins, and then they appear on the sidechain. Then, you move those coins on the mainchain, and then they are destroyed on the sidechain. So, the whole problem is simplified into making the right output scripts.

If you think that technical description is incomplete, then you can try to see, what is really needed. To sign anything, it is needed to make an invalid transaction, that would prove you own some coins on the mainchain. To do that, you can use the signet way of signing blocks, just make "to_spend" and "to_sign" transactions, and place them on your sidechain. As far as I know, vjudeu is working on a technical description for signet-based signatures. Also, I noticed that it was recently touched on the mailing list, and BIP-322 is a good starting point, because it can be used to prove any funds, including Taproot outputs, that could contain some hidden TapScript branches, designed especially for things like sidechains.

mining centralization

It is a separate problem, I wrote some posts about it, but there are many possible solutions, and it is still discussed here and there (for example, making pay-to-block-hash address type could solve it, if it would be possible to claim such coins by using Taproot (if everyone agreed on everything), or use on-chain settlement as a fallback, and revealing enough data to make sure that miner X can claim N coins from such address). Another option is to always fully verify every share, but then I am not sure if there are enough resources for that.

scaling

Scaling is again a separate problem, and it is mainly about compression. One possible option to compress things, is to allow transaction joining, but some people are against it, because this kind of feature can also enable sidechains and other things, so it is hard to accept for those who are afraid that something will be activated, and that feature will have more, unintended consequences, that nobody is aware of now.

mass adoption

Again, it is entirely different problem, also because if there are no sidechains, then some features will happen only on altcoins. As long as there is no convenient, decentralized way, to try new things, users are forced to choose: use Bitcoin with its features, or sell Bitcoin, and buy something else, to get another features.

whale cult

It is possible only because of speculation, and endless fiat inflation. In normal circumstances, it would be possible to have a slow, stable growth, and then there would be no cult. But it is a human factor, that no source code will eliminate entirely.

hacktopia

Again, it is a different problem, related to something like "not everyone is a programmer, and it will never be the case".

[ABCbits]

the point is bitcoin being opensource means people can look at and change the code and given that, we can pretty much assume every aspect of bitcoin will be put under a microscope and there will always be factions that want this change or that. one of the weaknesses of bitcoin not being immutable code...

Are you trying to imply Bitcoin protocol and it's implementation should be closed source? I find it's ridiculous. Even Windows have to deal with people/company who reluctant to upgrade through WoW and LTSC.

mining centralization

Unfortunately Bitcoin miner not interested to use P2Pool[1] which development stopped on 2018[2]. Since Monero is mentioned here, i'd like to mention P2Pool for Monero is actively developed[3] with ~4.7% network hashrate[4].

[1] http://p2pool.in/
[2] https://github.com/p2pool/p2pool
[3] https://github.com/SChernykh/p2pool/
[4] https://p2pool.io/#blocks

[TraderTimm]

Allow me to simplify.

Don't fuck with my money.

This isn't an "experiment" anymore. The moment people incorporated it into their lives and DEPEND on it -- it ceases to be something that you can view as your personal petri dish.

Let me paint a theoretical picture for you:

You, enterprising software engineer have the itch to change Bitcoin. Maybe you do, through hook or crook, and the entire ecosystem falters.
Do you really want to be the idiot in the hotseat when millions of pissed off former Bitcoin holders come looking?
I'd think not.

Take this shit seriously, and don't propose changes just to soothe your ego. This is a real system that people depend on. We could give a shit about how clever you think you are.

Don't fuck with OUR money.

Got it?

[garlonicon]

Unfortunately Bitcoin miner not interested to use P2Pool

Because they cannot get the same things as in centralized pools. So, to convince them into P2P way, it should be possible to redirect the traffic first, and then miners should see, that they could switch from centralized pools to decentralized ones, and claim their rewards by themselves. Because even in 100% decentralized model, it is still possible to build centralized pools on top of that. So, miners first should redirect their shares, and mine in centralized and decentralized pools at the same time, and then they should see, that decentralized model is stable enough to fully switch into that. Because as long as centralized pools have more features, people won't switch. And because of Merged Mining, it is possible to mine on both, to see, how it works, and why decentralized pools can give miners more control over blocks they mine.

[aliashraf]

Allow me to simplify.
{something offensive}
Got it?

It is not your sub-forum buddy, keep calm and don't panic you lucky, greedy bastard

P.S.
For saving your BTCBTC from next crashes, I'm hardly working on a project on my exhausted personal budget, are you committed wise enough to donate like half a percent of your unfairly acquired old coins?  

Allow me to simplify:

• Govs all over the world are targeting bitcoin miners for imposing bans, extra taxes, etc. Meanwhile, PoS shills are aggressively promoting their stupid ideas about PoS being the next generation, environmentally correct, energy efficient alternative to PoW, blah, blah.  
• Bitcoin is not adopted as means of payment, not even in the horizon, instead ,speculators (people like you), along with gamblers and scammers are dominating the marketplace.
• Bitcoin is not even ready for mass adoption, right now with 4-5 TPS.
• ...

The most stupid and irresponsible thing would be ignoring everything and sticking to your stash, don't do this, help us as a reasonable stakeholder would.

Cheers and bye,

[aliashraf]

What else is incomplete here? https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-June/020532.html

That idea is quite simple: you have the mainchain, you sign your coins, and then they appear on the sidechain. Then, you move those coins on the mainchain, and then they are destroyed on the sidechain. So, the whole problem is simplified into making the right output scripts.

If you think that technical description is incomplete, then you can try to see, what is really needed. To sign anything, it is needed to make an invalid transaction, that would prove you own some coins on the mainchain. To do that, you can use the signet way of signing blocks, just make "to_spend" and "to_sign" transactions, and place them on your sidechain. As far as I know, vjudeu is working on a technical description for signet-based signatures. Also, I noticed that it was recently touched on the mailing list, and BIP-322 is a good starting point, because it can be used to prove any funds, including Taproot outputs, that could contain some hidden TapScript branches, designed especially for things like sidechains.

Reclaiming sidechain balance is an old problem and is not addressable easily, LN was originally designed to circumvent this problem without PoW, some people are so pissed with PoW, you know.  
1- THEY got LN, won't cooperate.
2- Using homomorphic signatures to validate transfer of funds in the sidechain, is not the way to go, the sidechain should've approved the transfer in its ledger by accumulating work, it is all about work, forget about the minerphobic talking points in the dominating bitcoin cult, it is just whale discourse.

The latter argument leads me to the most important point: Besides the vision,  we need a model, a universal one, for the way chains interact in a hierarchy, then we need a roadmap for fitting bitcoin in the model, on top of it. As of now I'm thinking of an impedance layer and special treatment, hence homomorphic signatures, convenants, coinpools, ...,  all are worth considering, but the model is to be established priorly.

mining centralization

It is a separate problem

No, it is not. I can't imagine full-fledged sidechains without mining decentralization and vice versa, long story.  

scaling

Scaling is again a separate problem, and it is mainly about compression.

No, neither the separation nor the compression argument is correct.
Sidechains are there to scale bitcoin as well, (otherwise what would be the source of the extra income of miners as discussed by Paul?
Actually, there is no decentralized solution to scaling other than sidechains, period.
And scaling is not about compression, you achieve throughput improvements by compression which are not scalable as it becomes harder exponentially to apply in each recursion.

Speaking about recursion and back to the model issue, I strongly believe that recursion is the most important characteristic of a software model and the key to scalability in both horizontal and vertical sense.

mass adoption

Again, it is entirely different problem, also because if there are no sidechains, then some features will happen only on altcoins.

Again, you are wrong. Altcoins don't help, as they are heterogeneous and maliciously governed. No sidechains, No mass adoption.  

[tadamichi]

For saving your BTCBTC from next crashes, I'm hardly working on a project on my exhausted personal budget,

Bitcoin needs a saviour?

are you committed wise enough to donate like half a percent of your unfairly acquired old coins?  

Im not even an early holder, but saying early coins were acquired unfairly is kinda insanity.

Govs all over the world are targeting bitcoin miners for imposing bans, extra taxes, etc. Meanwhile, PoS shills are aggressively promoting their stupid ideas about PoS being the next generation, environmentally correct, energy efficient alternative to PoW, blah, blah.  

How does this matter when you’re actually decentralized?

Bitcoin is not adopted as means of payment, not even in the horizon, instead ,speculators (people like you), along with gamblers and scammers are dominating the marketplace.

Cringe, when soft and hard money circulate together, the hard money will be hoarded and circulates less, aka bad money drives out good money. Until the soft money lost too much value and then hard money starts to be used as a means of payment, aka good money drives out bad money. Simple economic principles, no need to insult people for doing what’s rational or trying to fiddle with things that can’t be solved artificially. There’s speculators and gamblers but over 60% of Bitcoin is being hodld even now, ridiculous to assume the majority of people are gamblers or speculators. Simply storing value is a legitimate use case when inflation is over 10% and we’re still early in the adoption cycle.

Bitcoin is not even ready for mass adoption, right now with 4-5 TPS.

We didn’t even reach a point yet were TPS hindered mass adoption, mass adoption is a long process that depends on many factors outside of this. Just increasing tps alone isn’t what will make mass adoption happen overnight.

[aliashraf]

@tadamichi,
No offense, but don't play it this way, the guy comes here bragging about his money and insulting people, deserves a backlash, this is it. Let it go.

As of the old coins being fairly acquired or not:
Mining one bitcoin costs more than $15K nowadays, check for the costs in 2011 and make a judgment for yourself.

[vjudeu]

And scaling is not about compression, you achieve throughput improvements by compression which are not scalable as it becomes harder exponentially to apply in each recursion.

It actually is. If we would have sidechains, it would be the first real Layer Two (because Lightning Network is Layer One And A Half). And it is about compression, because you first peg funds in, then you transact inside, and then you peg funds out (and LN cannot "transact inside" if you never had a channel). It would be the same if you would have transaction joining on-chain, on mempool level, where you could send transactions to nodes, and where miners would mine A->Z transaction with a no-double-spending-proof, instead of mining A->B->C->...->X->Y->Z transactions. Another thing is that making the real Layer Zero is also about compression, because each sidechain should trace the heaviest Proof of Work chain, and distribute coins accordingly. So, if some attackers have 99% of the whole SHA-256d mining power, then the honest nodes should get only 1% of the coins, because in other case, it would be unsafe, and because of Merged Mining, those chains could be easily reorged (or lose a peg) if they would grant the full amount, and if they would have their own difficulty. That was another NameCoin's mistake.

No sidechains, No mass adoption.

From discussions on the mailing list, you should know, that it is very unlikely to get BIP-300, BIP-301, or similar proposals activated. And for that reason, it should be introduced as a no-fork, because it won't be accepted as a soft-fork, not to mention hard-forks, that would be instantly rejected (and they are also unnecessary in case of sidechains). And that's the point when I disagree with Paul Sztorc, because he still seems to believe that doing it in a soft-fork is reachable. Technically it may be, but practically it is unlikely. The mainchain should have no idea that there are any sidechains at all, and that's why the whole logic should happen on each sidechain separately. So, that means:

1) each sidechain should collect all SHA-256d headers, to get the heaviest Proof of Work chain
2) coins should be created by signing the mainchain coins (because any kind of peg is needed, to get 1 BTC = 1 sidechain_BTC)
3) it should be impossible to know, how many sidechains there are, and what is their internal state, from the mainchain perspective (because then they could be blocked by some kind of soft-forks)

You won't get sidechains by telling people that "sidechains are good, so we should activate them". Paul Sztorc tried that way and failed. Also, that way is not sufficiently decentralized, because it means that you need to reach some kind of "permission" to use sidechains at all. So, to make it permissionless, the best way is to find out, how to make it without touching consensus. One of those ways can be homomorphic encryption, but it is only one possible way. There are other ways, like adding new sighashes, that could also activate sidechains "as a side-effect". For example, it could be something like "if you want eltoo, you will also get sidechains", or "if you want SIGHASH_ANYPREVOUT, you will also get sidechains". I don't expect people will tell you "yes, we want sidechains". They probably won't choose that route, it is harder than that, and it is a test of decentralization: if you can introduce sidechains without going through any soft-fork procedure, then your solution is decentralized enough.

[NeuroticFish]

@tadamichi,
No offense, but

[~snip~]
 
Mining one bitcoin costs more than $15K nowadays, check for the costs in 2011 and make a judgment for yourself.

Indeed, there's a huge difference in mining costs. However, if one change is made wrong, Bitcoin price can easily go south badly. So bad that even mining price won't matter. So bad that you will look to <insert altcoin here> and sigh "bitcoin could have been even better".
This is always to be taken into account, hence you should not dismiss so easily people like @TraderTimm or @tadamichi (or their opinion), no matter how badly or offensive they express this reality.

Now, to @TraderTimm: don't worry, this discussion is more at academic level (i.e. ideas and nothing more), I don't expect anything really change.

[aliashraf]

where miners would mine A->Z transaction with a no-double-spending-proof

Actually, the only practical no-double-spend-proof is the ledger maintained by the sidechain, committed by work. Additionally, homomorphic DS has limited application in real-world applications, as the locked utxo is usually dispersed too much as a result of fee collection by sidechain miners on one hand and the rapid circulation of ligh txns on the other hand, it is hardly fit in coin-join model efficiently as it needs to have a set of consumed output exactly match the amount of the reclaimed balance, hard to achieve AFAICS.

Let's stay focused on this part, waiting for your reply. I'll come to the next part afterwards.

[tadamichi]

@tadamichi,
No offense, but don't play it this way, the guy comes here bragging about his money and insulting people, deserves a backlash, this is it. Let it go.

Maybe i took it differently, but fine let’s not discuss about this one.

As of the old coins being fairly acquired or not:
Mining one bitcoin costs more than $15K nowadays, check for the costs in 2011 and make a judgment for yourself.

I get it, but that’s just the nature of the thing. There’s certain opportunities to get something for way below it’s worth, but that’s only possible if you’re there earlier than most other people. They went in when it was barely worth anything and needed to hold it for a long time and trough a lot of uncertainty to make gains. I don’t think there’s another way to handle this, as you need some incentives for earlier holders so this thing takes off in the first place. These opportunities will be there again for other things, for people who missed this one. One door closes and another one opens. This only matters for people who wished to get rich from Bitcoin tho. To me that’s not the goal, i just think the soundest money will benefit society the most, no matter if average workers or millionaires. But the real benefit being for regular people.

On an individual level Bitcoin still offers the same properties to everyone in a time where it couldn’t be needed more, that’s valuable. Just having a money that won’t inflate over time could be huge for the average family over time. It doesn’t matter if someone holds 1000x more than us, because Bitcoin still serves everyone and the potential is still huge, with a lot less uncertainty than back then.

It could be considered unfair, the same way you could consider it unfair that older people had the opportunity to buy apple and amazon shares at pennies, but the future is uncertain and we have expenses in the present, there was a reason they were traded at this price in one point in time and people had to take real risks. I would focus on future opportunities instead of missed opportunities, as there will be plenty. Mining costs will even increase in the future and people will look the same way at us now and think it’s unfair and we’re lucky. But it’s not easy to just go in and mine for most people, even tho we know that we have a unique opportunity rn.

[vjudeu]

the ledger maintained by the sidechain, committed by work

And how the mainchain is informed about that ledger in Paul Sztorc's proposal? By voting. And that's all, because sidechain rules can be anything.

Additionally, homomorphic DS has limited application in real-world applications, as the locked utxo is usually dispersed too much as a result of fee collection by sidechain miners on one hand and the rapid circulation of ligh txns on the other hand, it is hardly fit in coin-join model efficiently as it needs to have a set of consumed output exactly match the amount of the reclaimed balance, hard to achieve AFAICS.

Yes, it is hard, but it is Worse is Better approach. You can decentralize mining by collecting all shares from all miners, so if there are 4 MB blocks, and you have 1000 miners, you can collect 4 GB of data, and validate them all. Excluding repeated parts, it will be smaller in practice, but as miners can include their own transactions, you have to be prepared for the worst case, where all miners will mine their own coinbase transactions, and they will include an artificial traffic between themselves, making transactions that won't repeat. So, it is not technically impossible, it is only inefficient. And blockchains are inefficient by design, if everything else will fail, then we will be forced to decentralize mining in such way, just by processing everything. Fortunately, on-chain settled data can be later pruned, because each sidechain has a mainchain, when it can be settled, and deeply confirmed. So, only the mainchain has a problem of "non-removable data". For sidechains, historical data can be removed, because they are only temporarily needed to handle disagreements.

[LegendaryK]

Allow me to simplify:

• Govs all over the world are targeting bitcoin miners for imposing bans, extra taxes, etc. Meanwhile, PoS shills are aggressively promoting their stupid ideas about PoS being the next generation, environmentally correct, energy efficient alternative to PoW, blah, blah.  
• Bitcoin is not adopted as means of payment, not even in the horizon, instead ,speculators (people like you), along with gamblers and scammers are dominating the marketplace.
• Bitcoin is not even ready for mass adoption, right now with 4-5 TPS.
• ...

The most stupid and irresponsible thing would be ignoring everything and sticking to your stash, don't do this, help us as a reasonable stakeholder would.

Cheers and bye,

Govs banning btc because of PoW mining energy bans, FUD FUD FUD, crys the bitcoin cultists.  

Reasonable people, see Proof of stake as the tech evolution needed to propel the tech to new heights of innovation.

Here is some reality for your digestion, take your time as it may be hard to swallow.  

PoS users don't care what happens with PoW coins, we moved on.
(Their are so few PoW coins left, and fewer every year, who cares.)
PoW users are way more obsessed about PoS Tech, ignore it, as we Ignore you.  

So your only real problem is
what is PoW BTC going to do to avoid government bans.
education program on how PoW energy waste is a good thing, good luck with that.  
(See BTC is more secure crys the bitcoin cultist.)  
I doubt that Texans will believe that when they are sitting in the dark for a year,
because the BTC PoW miners cause their power grid to collapse when their transformers exploded.
Kind of Proves China was smarter than Texas, since they already banned PoW mining.  
Texas would have to buy new transformers to repair the damage , wait for it, from China, (currently 1-3 year backlog.)  


BTC was designed to move from rewards based profit to transactions fee based profit.
Segwit , refusing to increase block size, offchain networks such as LN & Liquid have blocked that evolution of pay structure for the miners.
With limited blocksize , the PoW miners only option is to increase transaction fees to offset the loss of rewards.
This insures that the regular person will never transact onchain due to costs, and offchain networks are the only game in the house affordable to the normal people,
while the banks , whom LN and Liquid are really being made for , can still profit by making millions to trillions of transactions offchain, with only a single monthly onchain transaction to update their ledgers.
With that future as BTC goal, having an ridiculous low onchain transaction capacity becomes it's designated design, which is also why you see tons of research going into offchain , and basically none on improving onchain BTC. For actual onchain improvements you have to look to other coin networks.
 
FYI:
In an earlier comments, you mentioned what would happen if the whales took over.
Answer is apparent : They would make BTC network less expensive to maintain.
By one of the following.
1.  Regulate who was allowed to mine and how much % of the hash rate allowed, keeping the energy used down to a sustainable level.
    *This also allows regulated miners to control transactions, which would give control to the government to block btc transactions.*
or
2.  Switch to another algo.

FYI2:
Tail emission is a non-issue for btc, as lost coins are to be replaced not by new coins,
but by increasing the decimal points used to the right side of the decimal.
BTC currently uses 8 points to the right of the decimal,
LN will use 12 points  to the right of the decimal.
And that number can always be increased , which increases the usable units, while never increasing the actual coded 21 million supply.
It is a math scam that can only happen in a virtual setting, and is totally impossible to achieve in the physical world.
1/1 =1   usable unit
1/.1=10 usable units
1/.00000001 = 100000000 usable units
1/.000000000001  =1000000000000 usable units

micro and pico satoshis .  

[aliashraf]

the ledger maintained by the sidechain, committed by work

And how the mainchain is informed about that ledger in Paul Sztorc's proposal? By voting. And that's all, because sidechain rules can be anything.

In my model, and not Paul's, the mainchain, or to be more accurate, the upperchain, is not supposed to be informed about the ledger, only the work, and not even an SPV proof, whatsoever, just the mere fact that blocks coming up from the lowerchain, are consistently and continuously asking for the funds to be released.

I'll share this model asap, but it doesn't matter right now, just take it as an example of how a PoW network should be scaled: by PoW.

Additionally, homomorphic DS has limited application in real-world applications, as the locked utxo is usually dispersed too much as a result of fee collection by sidechain miners on one hand and the rapid circulation of ligh txns on the other hand, it is hardly fit in coin-join model efficiently as it needs to have a set of consumed output exactly match the amount of the reclaimed balance, hard to achieve AFAICS.

Yes, it is hard, but it is Worse is Better approach.

I couldn't find an answer to my argument, but I do strongly admit that software architecture and design is about elegance and simplicity and about restriction rather than utilization. It is all I have learned in the field where I used to be anti-fatware, since very beginning.

Back to the discussion, my point was something as follows:
For your proposal to work (as a cryptographic proof and still, not a cryptocurrency one), you need to track down the set of sidechain coins which are going to burn (in an outchain txn), to respective outputs of their genesis (inchain txns) such that they are quantitatively matched. How feasible is it without too many restrictions on the sidechain? Or something like dedicated bots, crawling exhaustively, hunting occasional matches etc.

You can decentralize mining by collecting all shares from all miners, so if there are 4 MB blocks, and you have 1000 miners, you can collect 4 GB of data, and validate them all ...

It is impractical because of propagation delay, let alone other stuff.  
Mining decentralization can be realized  without any chain (in any layer) being involved in (fully) validating anything other than its own blocks, it is a nutshell design principle, elegance and simplicity, remember?

Let's have a bit more elaboration:  
What makes the current, centralized mining pools, more efficient than a decentralized alternative like P2Pool, is that P2P designers were obsessed with full validation of the blocks, even though %95 of the shares are not going to the blockchain ever. As a result, P2Pool is not able to offer more than a 20 times leverage (the factor by which a pool reduces the target difficulty) to its participants, otherwise orphans and chain splits will show-up, hence as a participating miner, you need 5% of total bitcoin hashrate to hit a share in ~ 10 minutes. It'd be mostly useless, compared to what centralized pools offer, leveraging up to a factor of 10 million where home miners with a single average device are able to generate enough shares per minute to use the pool's dashboard for monitoring the device's online status!


From your post, I suspect you may be trapped in the same rabbit hole as P2P guys: the excessive verification discourse, which is crafted deceptively to undermine PoW, the true and the only source of value in bitcoin.

EDIT: the closing paragraph was bootstrapped.

[larry_vw_1955]

Allow me to simplify.

Don't fuck with my money.

that type of advocacy isn't going to go very far in convincing anyone that changes aren't necessary but anyhow.

This isn't an "experiment" anymore. The moment people incorporated it into their lives and DEPEND on it -- it ceases to be something that you can view as your personal petri dish.

bitcoin is an experiment. do your own due diligence before putting your money in. people are always going to be proposing changes to bitcoin.

Take this shit seriously, and don't propose changes just to soothe your ego. This is a real system that people depend on. We could give a shit about how clever you think you are.

Don't fuck with OUR money.

people are always going to be proposing changes to bitcoin. the reason they do that is to try and make it "better". that's what you signed up for when you put money into bitcoin. is that development process. DYODD.

Got it?

yeah, I got that you don't want a tail emission but unfortunately, just because you don't want that doesn't mean someone else is not going to be advocating for it and arguing its technical merits. you'll might want to argue against it based on technical reasoning. because saying "don't mess with my money" is kind of ridiculous sounding honestly. someone with the "don't f*** with my money mentality" probably should be keeping their money under their mattress.

[aliashraf]

Reasonable people, see Proof of stake as the tech evolution needed to propel the tech to new heights of innovation.

It is pretty much, off-topic, if not vandalism. There is a topic for PoW/PoS debate, Good luck convincing people about your blind faith in Proof of Sh*t.

[BlackHatCoiner]

Take this shit seriously, and don't propose changes just to soothe your ego.

You're here since 2011 and you've yet to understand that making discussion, proposing changes and producing consensus is what take the cake? We soothe no ego, and even if we do, that's how it works, sorry.

Bitcoin was not discovered. It was invented, and whatever is invented by a person can also be changed, recreated, molded by a person. We need none of your permission to do it. There's no such thing as democracy in this system. You're the one who's, crucially, responsible for your monetary policy, and who's an economic resource for those who follow that same policy. You don't gain this shit elsewhere. That's why it's so valuable.

We have a problem. We seek for a solution. You're free to disapprove it, and if the overwhelming majority acts likewise, then it's likely not a viable solution. But, discussion needs to be made, to reach to a conclusion. Otherwise your ecosystem might falter on its own. Granted, tail emission or any other change in mining economics cut no ice, but acknowledge that the system's security might be at some crisp risk in the future.

[NotATether]

Tail emission is a non-issue for btc, as lost coins are to be replaced not by new coins,
but by increasing the decimal points used to the right side of the decimal.
BTC currently uses 8 points to the right of the decimal,
LN will use 12 points  to the right of the decimal.

We can easily support up to 4 additional decimal points in L1, because the fee rate is 1000 sats/Kilobyte. So only a soft fork is needed to add a new entry in txin/txout, with the remaining 4 decimals and then lower the command line option of maxfeerate to 1 (sats/Kilobyte).

And that number can always be increased , which increases the usable units, while never increasing the actual coded 21 million supply.

Further precision increases are impossible unless the unit for fee rates is changed in all new clients (as the maxfeerate must be an integer), which will not be done. Besides, increasing the precision of the coins does not imply implementing tail emmission, because miners are already accepting these small values, but they can't do anything meaningful with them currently.

P.S. I do not like the idea of tail emission in the first place. I'm more of a "people will migrate to LN" guy.

[garlonicon]

Further precision increases are impossible unless the unit for fee rates is changed in all new clients

There is no such need, because you can allow free transactions, and then put more restrictions on top of that. Allowing free transactions is possible without any changes in code, the only needed change is in configuration file.

Code:

minrelaytxfee=0.00000000
blockmintxfee=0.00000000
dustrelayfee=0.00000000

Also note that if you have 1000-of-1000 multisig Taproot address, then you can have one satoshi on-chain, where everyone owns one millisatoshi off-chain, and then, all sub-units can be enforced by signatures. And if you want to have any on-chain representation of those fractional satoshis, you can use zeroes, and then connect those outputs in such transactions, then skipping any zero satoshi output in such transaction would make other signatures invalid.

But we have a separate topic for that: https://bitcointalk.org/index.php?topic=5330102.0

[NotATether]

Further precision increases are impossible unless the unit for fee rates is changed in all new clients

There is no such need, because you can allow free transactions, and then put more restrictions on top of that. Allowing free transactions is possible without any changes in code, the only needed change is in configuration file.

Code:

minrelaytxfee=0.00000000
blockmintxfee=0.00000000
dustrelayfee=0.00000000

Well yes, that is another way to implement that solution, as you've already mentioned to me in an earlier post.

[LegendaryK]

Reasonable people, see Proof of stake as the tech evolution needed to propel the tech to new heights of innovation.

It is pretty much, off-topic, if not vandalism. There is a topic for PoW/PoS debate, Good luck convincing people about your blind faith in Proof of Stake

Actually you mentioned PoS 1st.  

• Govs all over the world are targeting bitcoin miners for imposing bans, extra taxes, etc. Meanwhile, PoS shills are aggressively promoting their stupid ideas about
  PoS being the next generation, environmentally correct, energy efficient alternative to PoW, blah, blah.  
• Bitcoin is not adopted as means of payment, not even in the horizon, instead ,speculators (people like you), along with gamblers and scammers are dominating the marketplace.
• Bitcoin is not even ready for mass adoption, right now with 4-5 TPS.
• ...

The most stupid and irresponsible thing would be ignoring everything

Your one confusion is this , there is no PoS vs PoW anymore.
PoS won, and only a few PoW coins are left to evolve or die,
PoS supporters could care less about the dying PoW tech.

The Coming battle with PoW is this:
It is PoW vs People right to use affordable energy.
PoW vs Having an Air Conditioner
PoW vs Having electric Heat
PoW vs Having Lights
PoW vs Having Hot Water/Cook Food
PoW vs Playing Video Games
PoW vs Having Freezer/Refrigerator
PoW vs Basically anything else using electricity

Which is why PoW is a dead end, because eventually it prevents people from using energy for anything else.

FYI:  Be sure and sign the petition to stop btc PoW mining in Navarro county, Texas.
https://www.change.org/p/no-to-riot-bitcoin-mine-in-navarro-county

Navarro County/ Corsicana TX is looking to allow an industrial Bitcoin Mining operation to move here & use our resources.

We do NOT want this enormous burden on our already fragile infrastructure.

We do not want the increase in water and electricity bills.

We do not want the increase in environmental temperature in the immediate vicinity of the factory-that-produces-nothing.

We do not want the noise pollution that 500,000 computers running 24-7 will produce.

We do not want our county to facilitate in the illegal activity Bitcoin is used for, such as money laundering, child, human and sex trafficking, tax evasion and drug trafficking.

WE. DO. NOT. WANT. THIS. FACILITY. IN. NAVARRO. COUNTY.

This is NOT a done deal.

We have the power & authority to deny access to our municipal water supply.  We're in a drought and already experience brown-outs during the summer months.

This factory-that-produces-nothing will affect every single citizen of Navarro County and MUST BE STOPPED!

People are trying to ban PoW mining to save their communities.
 

[BlackHatCoiner]

nonsense

Which part of "it is off-topic" don't you get? Go whine about Proof-of-Work elsewhere. This isn't the proper thread.

[LegendaryK]

Reasonable people, see Proof of stake as the tech evolution needed to propel the tech to new heights of innovation.

It is pretty much, off-topic, if not vandalism. There is a topic for PoW/PoS debate, Good luck convincing people about your blind faith in Proof of Stake

Actually you mentioned PoS 1st.  

• Govs all over the world are targeting bitcoin miners for imposing bans, extra taxes, etc. Meanwhile, PoS shills are aggressively promoting their stupid ideas about
  PoS being the next generation, environmentally correct, energy efficient alternative to PoW, blah, blah.  
• Bitcoin is not adopted as means of payment, not even in the horizon, instead ,speculators (people like you), along with gamblers and scammers are dominating the marketplace.
• Bitcoin is not even ready for mass adoption, right now with 4-5 TPS.
• ...

The most stupid and irresponsible thing would be ignoring everything

Your one confusion is this , there is no PoS vs PoW anymore.
PoS won, and only a few PoW coins are left to evolve or die,
PoS supporters could care less about the dying PoW tech.

The Coming battle with PoW is this:
It is PoW vs People right to use affordable energy.
PoW vs Having an Air Conditioner
PoW vs Having electric Heat
PoW vs Having Lights
PoW vs Having Hot Water/Cook Food
PoW vs Playing Video Games
PoW vs Having Freezer/Refrigerator
PoW vs Basically anything else using electricity

Which is why PoW is a dead end, because eventually it prevents people from using energy for anything else.

FYI:  Be sure and sign the petition to stop btc PoW mining in Navarro county, Texas.
https://www.change.org/p/no-to-riot-bitcoin-mine-in-navarro-county

Navarro County/ Corsicana TX is looking to allow an industrial Bitcoin Mining operation to move here & use our resources.

We do NOT want this enormous burden on our already fragile infrastructure.

We do not want the increase in water and electricity bills.

We do not want the increase in environmental temperature in the immediate vicinity of the factory-that-produces-nothing.

We do not want the noise pollution that 500,000 computers running 24-7 will produce.

We do not want our county to facilitate in the illegal activity Bitcoin is used for, such as money laundering, child, human and sex trafficking, tax evasion and drug trafficking.

WE. DO. NOT. WANT. THIS. FACILITY. IN. NAVARRO. COUNTY.

This is NOT a done deal.

We have the power & authority to deny access to our municipal water supply.  We're in a drought and already experience brown-outs during the summer months.

This factory-that-produces-nothing will affect every single citizen of Navarro County and MUST BE STOPPED!

People are trying to ban PoW mining to save their communities.
 

Which part of "it is off-topic" don't you get? Go whine about Proof-of-Work elsewhere. This isn't the proper thread.

No one wants to use that proof of waste circlejerk topic you created , kat.
(It smells like old kitty litter.)

Why don't you put me on ignore, so you quit wasting my time,
or does that lower your payment in satoshis to spread propaganda?

Plus, I was not the 1st person to use the PoS term in this topic.  

Maybe you should just have the mods ban all posts with PoS in it, since you now want to claim btctalk owner status, kat.

Also you are one to talk about being off-topic.

Sorry if that's off-topic, but isn't the whole "use a watchtower" option obtuse? So, you prefer paying a third party monthly to watch the chain in case for cheating attempt, wherein there's trust involved and you don't gain the same level of privacy, and not paying for a power supplier, to be sure you'll be running 24/7? On top of that, you're connected with people who have a reputation to maintain. Not only won't they choose to cheat because of the loss of money (from the penalty transaction), but because of their fame preservation.

OK listen up everyone,
No one is allowed to Mention
PoS or Proof of Stake or any potential issues that are derogatory toward bitcoin.
According to a decree from blackhatcoiner/kat aka dumbhatcoiner.
See if we can't make kat happy.

aliashraf pay attention since you started all of this.

 

FYI:
There goes any debate, just sing hymns of praise to btc from now on.  
Well BTC is a cult, what did you expect?  

[Vlad BTCTKVR]

I've interviewed Peter about it, hope some of his answers contribute to this debate. Wish I read Greg's reply before hitting the "record" button 

YouTube video: https://youtu.be/27Bp9ZU2KWw

Audio podcast (no registration required, use Tor browser for privacy): https://bitcoin-takeover.com/audio/?name=2022-07-25_s11_e11_peter_todd_on_bitcoin_inflation__lightning__privacy.mp3

[werghb4562]

If proponents of perpetual debasement actually believed that such a scheme would result in more security they would fork off. The fact that they are not even considering it shows that they know such a fork would fail.

[larry_vw_1955]

If proponents of perpetual debasement actually believed that such a scheme would result in more security they would fork off. The fact that they are not even considering it shows that they know such a fork would fail.

i dont think bitcoin should be changed to have debasement but i also didn't like the idea that miners going to need to have higher transaction fees to maintain their income. who wants to have to pay higher transaction fees? they will just use something else if the fees gets too high, i would anyway. unless i was under some idea that the purpose of bitcoin is to hold it forever until it goes way up and then dump it.

[tadamichi]

If proponents of perpetual debasement actually believed that such a scheme would result in more security they would fork off. The fact that they are not even considering it shows that they know such a fork would fail.

i dont think bitcoin should be changed to have debasement but i also didn't like the idea that miners going to need to have higher transaction fees to maintain their income. who wants to have to pay higher transaction fees?

Debasement doesn’t reduce fees tho, these two aren’t correlated. You would pay the same fees, regardless of debasement or not. The concern of some people is that transaction fees alone wouldn’t be enough to compensate miners and thus secure the network.

Reducing fees wouldn’t be that simple, you need to let more transactions in. But this comes at the cost of decentralization, depending on how much throughput you let in, because it becomes much harder to run a node. And if blockspace isn’t scarce enough, transactions fees are less likely to be enough to compensate miners, because it’s based on a fee market.

they will just use something else if the fees gets too high, i would anyway.

Lightning or sidechain proposals that will likely come in the future. Lightning is more suited for daily payments anyways, because of the speed of transacting. But this doesn’t mean the actual chain becomes unusable for other kinds of transactions, even if the fees ar higher. Different kind of transactions require different levels of security.

unless i was under some idea that the purpose of bitcoin is to hold it forever until it goes way up and then dump it.

It’s not.

[dkbit98]

I've interviewed Peter about it, hope some of his answers contribute to this debate. Wish I read Greg's reply before hitting the "record" button  

I appreciate your effort, but instead of interviewing only Peter Todd it would be much better if you called someone else to join who thinks tail emission is a bad idea,
that way we could have a both sides talking about this and we could get a better idea of all the pros and cons for this proposal.
Maybe gmaxwell would be good candidate and he posted his views in this topic, but I am sure there are others you could call.

[larry_vw_1955]

Debasement doesn’t reduce fees tho, these two aren’t correlated. You would pay the same fees, regardless of debasement or not.

I don't know about that.

The concern of some people is that transaction fees alone wouldn’t be enough to compensate miners and thus secure the network.

That's a pretty generic statement. How would we know if the transaction fees were not compensating miners enough? Would a red light pop up on peoples' bitcoin core?

Reducing fees wouldn’t be that simple, you need to let more transactions in. But this comes at the cost of decentralization, depending on how much throughput you let in, because it becomes much harder to run a node. And if blockspace isn’t scarce enough, transactions fees are less likely to be enough to compensate miners, because it’s based on a fee market.

OK but again, the phrase "transactions fees are less likely to be enough to compensate miners" doesn't explain what happens if that's the case. Does a red light pop up on peoples electrum and refuse to allow them to do a transaction? And say "we're not being compensated enough to mine your transaction" ?

As well, who gets to decide if miners are being "compensated enough"? Do they have some type of minimum wage for bitcoin mining?

[odolvlobo]

Debasement doesn’t reduce fees tho, these two aren’t correlated. You would pay the same fees, regardless of debasement or not. The concern of some people is that transaction fees alone wouldn’t be enough to compensate miners and thus secure the network.

Reducing fees wouldn’t be that simple, you need to let more transactions in. But this comes at the cost of decentralization, depending on how much throughput you let in, because it becomes much harder to run a node. And if blockspace isn’t scarce enough, transactions fees are less likely to be enough to compensate miners, because it’s based on a fee market.

That statement demonstrates a misunderstanding about the economics of Bitcoin mining.

Here is how it works: If a miner feels that they are not being adequately compensated for mining (simply stated, they aren't making a profit), they will stop mining, and the difficulty will adjust to increase the compensation for the miners that remain. That process will continue until the remaining miners feel that they are being adequately compensated. So, only in an exceptional scenarios will transaction fees not be enough to compensate miners.

However, as @tadamichi also states, there is a danger that low transaction fees could become a security risk. It is the value of the block reward (and not the number of miners) that determines the level of security against a 51% attack.

[tadamichi]

Debasement doesn’t reduce fees tho, these two aren’t correlated. You would pay the same fees, regardless of debasement or not.

I don't know about that.

Thats how it is tho, it doesnt change anything about how transaction fees work.

The concern of some people is that transaction fees alone wouldn’t be enough to compensate miners and thus secure the network.

That's a pretty generic statement. How would we know if the transaction fees were not compensating miners enough? Would a red light pop up on peoples' bitcoin core?

We would know when too many miners started behaving dishonestly or too many couldnt afford to mine anymore, when honest miners cant keep outpacing attackers. The compensation just serves as an incentive for miners to stay honest, theres no fixed amount that determines whats enough for people to stay honest. It works on the basis that a majority stays honest, doesnt matter how.

Its a valid concern, but there are good counter arguments to this.

OK but again, the phrase "transactions fees are less likely to be enough to compensate miners" doesn't explain what happens if that's the case. Does a red light pop up on peoples electrum and refuse to allow them to do a transaction? And say "we're not being compensated enough to mine your transaction" ?

Higher risks of 51% attacks, so possible risk of double spendings, preventing transactions from getting confirmed etc.

As well, who gets to decide if miners are being "compensated enough"? Do they have some type of minimum wage for bitcoin mining?

If its extremely expensive to carry out these attacks, then its less likely to happen. Especially if it would be more profitable to work for the network than to attack it. If a majority remains honest regardless of compensation then they can still outpace any attacker, but they have running expenses so even someone honest will need compensation to keep mining. So if its profitable for a big amount of people, its likely that a big amount of people will mine honestly. No one wants to bite the hand that feeds them.

Debasement doesn’t reduce fees tho, these two aren’t correlated. You would pay the same fees, regardless of debasement or not. The concern of some people is that transaction fees alone wouldn’t be enough to compensate miners and thus secure the network.

Reducing fees wouldn’t be that simple, you need to let more transactions in. But this comes at the cost of decentralization, depending on how much throughput you let in, because it becomes much harder to run a node. And if blockspace isn’t scarce enough, transactions fees are less likely to be enough to compensate miners, because it’s based on a fee market.

That statement demonstrates a lack of understanding about the economics of Bitcoin mining.

Here is how it works: If a miner feels that they are not being adequately compensated for mining (simply stated, they aren't making a profit), they will stop mining, and the difficulty will adjust to increase the compensation for the miners that remain. That process will continue until the remaining miners feel that they are being adequately compensated. So, only in an exceptional scenarios will transaction fees not be enough to compensate miners.

However, as @tadamichi also states, there is a danger that low transaction fees could become a security risk. It is the value of the block reward (and not the number of miners) that determines the level of security against a 51% attack.

Ofc im not dumb, all i said is that its not easily possible to reduce fees without potential security or decentralization drawbacks. Idk if you correctly understood what i wrote. If there would be more blockspace than demand for it, there would be lower transaction fees than otherwise, its just logical. There would be no icentive to pay more than the minimum fee, when this one would always make it into the block anyways. So you need to maintain some level of scarcity, for achieving higher fees. Demand needs to outgrow blockspace, otherwise no one would choose to pay higher fees.  And when miners solely rely on fees for compensation, higher total fees will be a bigger incentive to keep miners honest/ enabling more miners to mine profitably, than lower ones.

I never said that fees wont be enough compensation, i think they will be. And ofc the number of miners matters too to a certain degree, if there was just 5 miners left, it couldnt seriously be considered secure anymore(ik this wont happen).

[PrimeNumber7]

Debasement doesn’t reduce fees tho, these two aren’t correlated. You would pay the same fees, regardless of debasement or not. The concern of some people is that transaction fees alone wouldn’t be enough to compensate miners and thus secure the network.

Reducing fees wouldn’t be that simple, you need to let more transactions in. But this comes at the cost of decentralization, depending on how much throughput you let in, because it becomes much harder to run a node. And if blockspace isn’t scarce enough, transactions fees are less likely to be enough to compensate miners, because it’s based on a fee market.

That statement demonstrates a misunderstanding about the economics of Bitcoin mining.

Here is how it works: If a miner feels that they are not being adequately compensated for mining (simply stated, they aren't making a profit), they will stop mining, and the difficulty will adjust to increase the compensation for the miners that remain. That process will continue until the remaining miners feel that they are being adequately compensated. So, only in an exceptional scenarios will transaction fees not be enough to compensate miners.

However, as @tadamichi also states, there is a danger that low transaction fees could become a security risk. It is the value of the block reward (and not the number of miners) that determines the level of security against a 51% attack.

This is not quite right. What you say is true only for economically rational miners, and only to the extent that the miners are strickly rational in regards to the economics of mining bitcoin.

One of the assumptions that satoshi made when designing the security of bitcon was that the majority of miners would be honest. Currently, it is very expensive for a bad actor to control a large percentage of the network hashrate, but if total block rewards (block subsidy plus transaction fees) become too low, it will become less expensive for a bad actor to control a majority of the network hashrate. I would also point out that if a miner was not being rewarded enough for their mining activities, in addition to turning off their equipment, they will also often attempt to sell their equipment.

Another thing is that tail supply can be reached by taking coins from people, without increasing 21 million coins limit. Then, it will be obvious to everyone, what this proposal is truly about. Because if more coins will be produced, then it is more sneaky, because many people don't understand, how inflation works, but if they will start losing satoshis, then they will see that in a crystal clear way.

That would not be a good solution. It would make L2 solutions like LN impossible to implement because the sum of the total inputs would always be changing. If it were decided to implement a tail supply, it would be superior to simply issue more than 21M coin.

Then you have three options

Fourth option: Large holders of bitcoin are incentivized to mine, even with minimal or zero fees or block subsidy, in order to protect both the security and the value of their bitcoin.

The outcome for these users would be little different than having a tail supply. With them mining for zero reward, they would be spending a small proportion of their money to secure the rest of their money. With a tail supply, they would be losing a small proportion of the value of their money to secure the rest of their money. Arguments against this is that it is effectively discriminating against the good will of the users who partake in mining, and of course the free rider problem.

I don't think a large holder would be acting rationally by doing this. I think this holder would be better off selling their coin if they were needing to provide security for everyone.

From an economics perspective, having modest inflation is generally a positive outcome. Modest inflation will encourage people to actually spend their coin on goods/services rather than simply hoarding their coin until they absolutatly need to spend it. Modest inflation should encourage additional adoption, as it will cause the bitcoin ecosystem/economy to grow.

[o_e_l_e_o]

I don't think a large holder would be acting rationally by doing this. I think this holder would be better off selling their coin if they were needing to provide security for everyone.

You say in your very next sentence that without a tail emission users are incentivized to hold on to their coin for as long as possible and not sell it. It would be entirely rational for a large holder to spend a very small amount of their coin on securing the network if they believe the value of the rest of their coin will be worth more in the future than it is worth to them if they were to sell everything now. You are also assuming that the only value that the large holder cares about is the fiat value of their bitcoin, and not about any of the other benefits bitcoin brings as a superior form of money.

[garlonicon]

That would not be a good solution. It would make L2 solutions like LN impossible to implement because the sum of the total inputs would always be changing.

There is no need to update it every second. The same with halvings, you have them every four years, not every block. And the same with difficulty adjustments, you have them every two weeks, not every block. And the same with the coinbase maturity, you have it set to 100 blocks. So, the sum of the total inputs can be calculated in the same way for a long time, and then be adjusted every sometimes, just like other parameters are adjusted. Also, coins can be timelocked to the future, so it won't be "I lock some coins now, and the next miner will get it". It should rather be: "I lock some coins now, and 210,000 blocks later, some miner will get it".

Another thing is that such things can be executed on a fee level, for example by adding a rule, that each miner has to collect at least 0.01 BTC in fees, and lock it for 210,000 blocks. Also note that if you want to get 0.01 BTC tail supply, then it doesn't matter if it would be 0.001 BTC paid by one user, and 0.009 BTC paid by another user, or if they both will pay 0.005 BTC. So, tail supply fees can be regulated in a free market way, for example by having minimal fees set to 0.5 sats/vB miner fee, and 0.5 sats/vB tail supply fee, then it will be perfectly compatible with 1 sat/vB fees.

So, it is all about how many coins each miner could get now, and how many coins should be locked to the future. Just by adjusting coinbase rewards today, you can change supply for the future blocks. And again: what about RSK, and their algorithm of smoothing block rewards?

[PrimeNumber7]

I don't think a large holder would be acting rationally by doing this. I think this holder would be better off selling their coin if they were needing to provide security for everyone.

You say in your very next sentence that without a tail emission users are incentivized to hold on to their coin for as long as possible and not sell it. It would be entirely rational for a large holder to spend a very small amount of their coin on securing the network if they believe the value of the rest of their coin will be worth more in the future than it is worth to them if they were to sell everything now. You are also assuming that the only value that the large holder cares about is the fiat value of their bitcoin, and not about any of the other benefits bitcoin brings as a superior form of money.

If the security of the network depends on a subset of the users of said network, over time, some of the people who "donated" to the security will stop doing so and will allow the remaining of those who is providing security to continue doing so. Over time, this will result in a small group of people being responsible for security.

That would not be a good solution. It would make L2 solutions like LN impossible to implement because the sum of the total inputs would always be changing.

There is no need to update it every second. The same with halvings, you have them every four years, not every block. And the same with difficulty adjustments, you have them every two weeks, not every block. And the same with the coinbase maturity, you have it set to 100 blocks. So, the sum of the total inputs can be calculated in the same way for a long time, and then be adjusted every sometimes, just like other parameters are adjusted. Also, coins can be timelocked to the future, so it won't be "I lock some coins now, and the next miner will get it". It should rather be: "I lock some coins now, and 210,000 blocks later, some miner will get it".

LN closing transactions are currently designed such that they can be broadcast at an arbitrary time in the future. Further, if coin is removed from (a subset of) the UTXO set at intervals less frequent than every block, there will be incentives to get transactions confirmed prior to this frequency, and as such, the cost of getting transactions confirmed will spike immediately prior to these block heights.

This issue can be entirely resolved by simply increasing the total supply of bitcoin. Tail Emission is already a major change, so if this change were to be adopted, you may as well adopt it in the most simple way, and increasing the total coin supply is the simplest way to achieve this.

[garlonicon]

LN closing transactions are currently designed such that they can be broadcast at an arbitrary time in the future.

This is not true, because they are based on some fee rate, and you have no guarantee that fees will be on that level in the future. So, if you assume that minimal fees will be lower than today, then you are safe. But if you assume they will be higher than today, well, then your transaction could be rejected as non-standard, or could require RBF/CPFP to be confirmed.

Further, if coin is removed from (a subset of) the UTXO set at intervals less frequent than every block, there will be incentives to get transactions confirmed prior to this frequency, and as such, the cost of getting transactions confirmed will spike immediately prior to these block heights.

We already have those spikes, they are called halvings. So, the solution is to make fees more smooth globally, by adjusting coinbase transactions, not by adjusting users' transactions.

increasing the total coin supply is the simplest way to achieve this

It is not the simplest way, because:
1) if it is a hard-fork, then it can be rejected by just doing nothing (I won't upgrade to the tail supply version, what then?)
2) if it is a soft-fork, then miners could say "no", and people could burn or lock coins, to resist "tail supply attack", and remain in the same network (I prefer locking, because it is more resistant to this attack, and people can always agree to spend coins, that are circulating in some loops, to keep those coins away from "the legacy supply"; expect every additional satoshi to be tracked and blacklisted, and to be used to counter-attack)
3) if it is a no-fork, then it has the highest chances to be introduced, and it is unstoppable at the same time, because you can keep it on the sidechain; then if tail supply enthusiasts are right, users will join them (I expect this chain would fail, or would need being "rescued" by burning all additional coins)

[Wind_FURY]

Playing the Devil's Advocate, does everyone truly believe that the fees alone would be enough to subsidize the miners when the block rewards go close to zero? Or is it a situation of "let's wait and see", because a hard fork to break Bitcoin's ethos will not be that worth it in "fixing" the "mining subsidy problem"? OR, it's not going to be a problem?

[BlackHatCoiner]

Playing the Devil's Advocate, does everyone truly believe that the fees alone would be enough to subsidize the miners when the block rewards go close to zero? Or is it a situation of "let's wait and see"

It's more like a "discuss, speculate, wait and see" situation. If the fees alone aren't enough to make the system survive, then it's probably because it's already dead.

To explain my previous utterly philosophical sentence that I'm proud of: If the fees alone can't sustain the network, it's probably because there's no activity at all (or much less). There are lots of halvings before the subsidy drop to minimum, and hence much time left to witness some serious recognition. If there's exponentially more activity in 10, 20, 30 years, we can be more assured about sustainability.

[a1 Hashrate LLC2022]

Reasonable people, see Proof of stake as the tech evolution needed to propel the tech to new heights of innovation.

It is pretty much, off-topic, if not vandalism. There is a topic for PoW/PoS debate, Good luck convincing people about your blind faith in Proof of Stake

Actually you mentioned PoS 1st.  

• Govs all over the world are targeting bitcoin miners for imposing bans, extra taxes, etc. Meanwhile, PoS shills are aggressively promoting their stupid ideas about
  PoS being the next generation, environmentally correct, energy efficient alternative to PoW, blah, blah.  
• Bitcoin is not adopted as means of payment, not even in the horizon, instead ,speculators (people like you), along with gamblers and scammers are dominating the marketplace.
• Bitcoin is not even ready for mass adoption, right now with 4-5 TPS.
• ...

The most stupid and irresponsible thing would be ignoring everything

Your one confusion is this , there is no PoS vs PoW anymore.
PoS won, and only a few PoW coins are left to evolve or die,
PoS supporters could care less about the dying PoW tech.

The Coming battle with PoW is this:
It is PoW vs People right to use affordable energy.
PoW vs Having an Air Conditioner
PoW vs Having electric Heat
PoW vs Having Lights
PoW vs Having Hot Water/Cook Food
PoW vs Playing Video Games
PoW vs Having Freezer/Refrigerator
PoW vs Basically anything else using electricity

Which is why PoW is a dead end, because eventually it prevents people from using energy for anything else.

FYI:  Be sure and sign the petition to stop btc PoW mining in Navarro county, Texas.
https://www.change.org/p/no-to-riot-bitcoin-mine-in-navarro-county

Navarro County/ Corsicana TX is looking to allow an industrial Bitcoin Mining operation to move here & use our resources.

We do NOT want this enormous burden on our already fragile infrastructure.

We do not want the increase in water and electricity bills.

We do not want the increase in environmental temperature in the immediate vicinity of the factory-that-produces-nothing.

We do not want the noise pollution that 500,000 computers running 24-7 will produce.

We do not want our county to facilitate in the illegal activity Bitcoin is used for, such as money laundering, child, human and sex trafficking, tax evasion and drug trafficking.

WE. DO. NOT. WANT. THIS. FACILITY. IN. NAVARRO. COUNTY.

This is NOT a done deal.

We have the power & authority to deny access to our municipal water supply.  We're in a drought and already experience brown-outs during the summer months.

This factory-that-produces-nothing will affect every single citizen of Navarro County and MUST BE STOPPED!

People are trying to ban PoW mining to save their communities.
 

POW is a hammer and hammer can be used to do wrong.

This thread is not about the misuse of a hammer in Texas by a bunch of rich motherfuckers.

Its about inflation and whether fixed block mining rewards are better than vanishing rewards.

I hodl a lot of DOGE

I think that

1x
2x 100% inflation
3x  50% inflation
4x  33% inflation
5x  25% inflation
.
.
.

10x
11x 10% inflation
.
.
.
.
20x
21x 5% inflation
.
.
.
50x
51x 2% inflation
.
.
.
100x
101x 1% inflation

in the case of Doge

may be better then no new coins in the case of BTC

I am 65 I won't live long enough to see if doge is better than btc.

If you are 20 consider buying 10000 doge and leaving them be only costs 700 dollars.


and please post on topic.

[tromp]

Its about inflation and whether fixed block mining rewards are better than vanishing rewards.
I hodl a lot of DOGE

I think that

1x
2x 100% inflation
3x  50% inflation
4x  33% inflation
5x  25% inflation
...
50x
51x 2% inflation
...
101x 1% inflation

in the case of Doge

You seem to be confused with Grin, which has a fixed reward from launch and therefore 1/n inflation after n years.
Doge had MUCH bigger rewards in the first year (emitting 100B DOGE, vs only 5B DOGE for every later year).

Curiously, 1 DOGE costs about the same as 1 Grin, even though the former emits at a 167x higher rate (10000 per minute vs 1 per second).

[larry_vw_1955]

I am 65 I won't live long enough to see if doge is better than btc.

If you are 20 consider buying 10000 doge and leaving them be only costs 700 dollars.


and please post on topic.

well why would doge be better than btc. btc has more development effort behind it. btc has more features than doge. i don't see any reason for doge coin to exist. other than for people to speculate and try and get rich at the expense of other people. need to transfer money? btc can do that. you got your answer, you're not too old to find out the answer now!

[PrimeNumber7]

Playing the Devil's Advocate, does everyone truly believe that the fees alone would be enough to subsidize the miners when the block rewards go close to zero? Or is it a situation of "let's wait and see"

It's more like a "discuss, speculate, wait and see" situation. If the fees alone aren't enough to make the system survive, then it's probably because it's already dead.

To explain my previous utterly philosophical sentence that I'm proud of: If the fees alone can't sustain the network, it's probably because there's no activity at all (or much less). There are lots of halvings before the subsidy drop to minimum, and hence much time left to witness some serious recognition. If there's exponentially more activity in 10, 20, 30 years, we can be more assured about sustainability.

In general, I would agree with this point.

I think the question of tail emission is more about who should pay for security. If someone is holding their coins for a long time, they have the benefit of the security of the network, while someone who is sending many transactions will need to pay transaction fees to the miners, which ultimately pay for this security. There is also the point that someone who is paying a transaction fee is also paying for the service of getting their transaction confirmed, and for the block space necessary to include their transaction in the blockchain.

[bkelly13]

This is an interesting post: Surprisingly, Tail Emission Is Not Inflationary

This article will show that a fixed block reward does not lead to an abundant supply. In fact, due to the inevitability of lost coins, a fixed reward converges to a stable monetary supply that is neither inflationary nor deflationary, with the total supply proportional to rate of tail emission and probability of coin loss.

I think his analysis is a little naive, but it could be the start of something interesting.

"... inevitability of lost coins"

That is a really interesting concept.  While not mathematically inevitable, human nature makes it, in practice, inevitable.  This should be given serious consideration.  But it will be very far from easy or simple. 

When are there two few coins?  That might be determined by some combination of the cost of coins becoming too high, and/or the churn/turnover rate of coins in circulation becomes very high.  Both of those are almost completely subjective.  But maybe some top-flight number crunchers can get together and make some objective criteria.

Once that is determined, then the path to resolve the situation needs to be considered.  I see a couple of possible solutions, but this conversation is already complex so omit that for now.

[larry_vw_1955]

I think the question of tail emission is more about who should pay for security.

well, i think it would be unfair to single out people that don't move their bitcoin very often and try and debit their accounts periodically aka an inactivity fee. banks do that and they'll take your account down to 0 over time.

If someone is holding their coins for a long time, they have the benefit of the security of the network,

yeah and they paid for it. or the person that sent them the bitcoin paid for it through transaction fees. end of story.

while someone who is sending many transactions will need to pay transaction fees to the miners, which ultimately pay for this security.

it doesn't matter how many transactions someone sends. each transaction stands on its own. it doesn't matter who it is attached to. that's how bitcoin was designed.

There is also the point that someone who is paying a transaction fee is also paying for the service of getting their transaction confirmed, and for the block space necessary to include their transaction in the blockchain.

everyone that has any bitcoin their bitcoins were put through that same procedure. they all paid.

it's one thing to start debiting inactive bitcoin addresses. it's another thing to have a tail emission. it's probably best to do neither. and leave it at that.

[Wind_FURY]

What if the Bitcoin community could get consensus on building another chain, let's call it "The Miner Chain", that's merged mined with Bitcoin to continue incentivizing the miners through the "Miner Chain" with block rewards, for them to keep securing the network? Would that be a possible solution? Or would it just be something that could make some problems on the incentive structure?

Effect in theory might be bad, but it might start something that could lead to a more feasible solution.

[o_e_l_e_o]

merged mined

There has been quite a bit of discussion on this already.

You might be interested in this article from Paul Sztorc: https://www.truthcoin.info/blog/security-budget-ii-mm/
There are also a number of posts discussing it in this thread. Start from here: https://bitcointalk.org/index.php?topic=5405755.msg60549860#msg60549860

[ABCbits]

What if the Bitcoin community could get consensus on building another chain, let's call it "The Miner Chain", that's merged mined with Bitcoin to continue incentivizing the miners through the "Miner Chain" with block rewards, for them to keep securing the network? Would that be a possible solution? Or would it just be something that could make some problems on the incentive structure?

It's possible and some pool already perform merge mining, BitMex wrote good article about it 3 years ago[1]. RSK sidechain even made claim their coin is most profitable merged mining[2].

[1] https://blog.bitmex.com/the-growth-of-bitcoin-merge-mining/
[2] https://mining.rsk.co/, section "3. Start Mining"

[Wind_FURY]

Shower thought. What if, instead of a Tail Emission or expanding Bitcoin's coin supply, Ordinals and the demand for block-space it brings would be the answer to the question, "Will the fees be enough to support the miners when all the coins have been mined"?

I'm NOT debating whether Ordinals is good for Bitcoin. I'm merely looking at the possibility that Ordinals might make Bitcoin a better network for what Ethereum is already doing if doing them in Bitcoin will make it cheaper, and if the Bitcoin blockchain is more reliable for them.

[larry_vw_1955]

Shower thought. What if, instead of a Tail Emission or expanding Bitcoin's coin supply, Ordinals and the demand for block-space it brings would be the answer to the question, "Will the fees be enough to support the miners when all the coins have been mined"?

the answer is... "Yes!"

I'm NOT debating whether Ordinals is good for Bitcoin.

oh, it's good alright. good for miners. anyone that is looking to cash in on larger transaction fees. it's even good for someone that wants to store a monkey permanently online so it can never be deleted but that's another story...

[vjudeu]

What if the Bitcoin community could get consensus on building another chain, let's call it "The Miner Chain", that's merged mined with Bitcoin to continue incentivizing the miners through the "Miner Chain" with block rewards, for them to keep securing the network?

Then, it would be the same situation, as it was with NameCoin, that produced completely separated coins, that were not connected with the main chain. Unless people deploying such things would make it better this time, and fix NameCoin's mistakes.

Would that be a possible solution?

Yes, if deployed correctly. And I think people are better at discussing things, than they are at writing code, and checking for themselves, what is possible, and what is not. And as long as this is the case, I don't expect any deployment related to tail supply in the nearest future.

Or would it just be something that could make some problems on the incentive structure?

It would create problems, if not deployed correctly, exactly in the same way as Ordinals created many problems, that some people try to fix now, by proposing LN-based alternatives.

What if, instead of a Tail Emission or expanding Bitcoin's coin supply, Ordinals and the demand for block-space it brings would be the answer to the question, "Will the fees be enough to support the miners when all the coins have been mined"?

You can always raise on-chain fees in many different ways, for example by uploading a lot of data. But then, if you won't deploy anything, that would help on-chain users, then they will pay for that misuse. If you won't give them cut-through-like features, to fight with congested mempools, then you will see gigabyte-sized mempools, or even terabyte-sized mempools. And then, on-chain fees will be high enough to provide security budget. But at what cost? And is it worth it?

[franky1]

Shower thought. What if, instead of a Tail Emission or expanding Bitcoin's coin supply, Ordinals and the demand for block-space it brings would be the answer to the question, "Will the fees be enough to support the miners when all the coins have been mined"?

the answer is... "Yes!"

two idiots that think ordinals are a real economy that can sustain..
although miningpools will earn fees from excessive premiums caused by junk. we should not use junk for force out actual real utility.

i do find it funny how two basement dwelling miners earning only a few dollars a day think they have enough economic experience to think ruining a multimillion per hour payment system purely so they can earn a couple extra cents per day..

if they want to junk up the blockspace then they should be the ones paying the premium.. not other people

the answer is not to junk up the blockspace to make it cost multiple dollars per transaction. as that just makes people abandon the network for daily use. the answer is to allow more real use on the blockchain by real transactors so the more transactions there are the more combined income a pool can make

EG dont open a gym to serve one rich client for $1000 an hour per week. instead have a gym with 1000 clients that pay an average of $1 an hour each week, which combines to the same $1000 income

..
as for this topics title and subject

a monetary supply that always produces 50coins per block forever starts hyper inflated.. it does reduce the amount of inflation.. but inflation still occurs..
think about it
block one 50.. block two 50 means 100% inflation in 10 minutes average.. however by block 1000 there is 50,000 in circulation with only 50 (0.1%) increase per 10 min average

in reality based on yearly economics of say a healthy 1% per year inflation.. it would, based on a 2.625m coin per year(50 coin per block with 52500 blocks a year)take 100 years to get down to 1% inflation.. so unlike P.Todds theory... it would be inflationary for 100 years before it becomes un noticeable economically

[tromp]

a monetary supply that always produces 50coins per block forever starts hyper inflated.. it does reduce the amount of inflation.. but inflation still occurs..
think about it
block one 50.. block two 50 means 100% inflation in 10 minutes average.. however by block 1000 there is 50,000 in circulation with only 50 (0.1%) increase per 10 min average

in reality based on yearly economics of say a healthy 1% per year inflation.. it would, based on a 2.625m coin per year(50 coin per block with 52500 blocks a year)take 100 years to get down to 1% inflation.. so unlike P.Todds theory... it would be inflationary for 100 years before it becomes un noticeable economically

You're describing Grin's pure linear emission, except that Grin has 1-minute blocks with 60 Grin reward so the emission is 1 Grin per second forever [1].

[1] https://john-tromp.medium.com/a-case-for-using-soft-total-supply-1169a188d153

[Wind_FURY]

Shower thought. What if, instead of a Tail Emission or expanding Bitcoin's coin supply, Ordinals and the demand for block-space it brings would be the answer to the question, "Will the fees be enough to support the miners when all the coins have been mined"?

the answer is... "Yes!"

two idiots that think ordinals are a real economy that can sustain..
although miningpools will earn fees from excessive premiums caused by junk. we should not use junk for force out actual real utility.

Well ser, it was a hypothetical question that never debated that Ordinals can or will be sustainable. ALTHOUGH perhaps there could be an open debate whether the usage of the Bitcoin blockchain that you may not like, could or could not sustain a high block-space-demand environment to sustain the incentivization of the miners.

But I wouldn't listen to most opinions given in the forum, especially not from people who has been known to spread disinformation. I believe the best person to ask is philipma1957.

[DooMAD]

the answer is not to junk up the blockspace to make it cost multiple dollars per transaction. as that just makes people abandon the network for daily use. the answer is to allow more real use on the blockchain by real transactors so the more transactions there are the more combined income a pool can make

EG dont open a gym to serve one rich client for $1000 an hour per week. instead have a gym with 1000 clients that pay an average of $1 an hour each week, which combines to the same $1000 income

One person doesn't get to unilaterally decide that, though.  Being part of a network means you need to accept that other people exist and you can't control those people or what they choose to do.  If some people want to screw about with ordinals, provide lucrative fees and then miners decide to include those transactions in a block, then you are not in a position to deny that from happening.  Bitcoin is observably not Socialist, so I don't understand your insistence in attempting to portray it as such. 

If you believe the above isn't acceptable and want to change things so that you have influence over which transactions are accepted, so you can make it more Socialist, start your own protocol and mine your own blocks on it.  Until then, freedom reigns.