Reward Payout vs World Population

[cypherdoc]

i really object to describing Bitcoin as a "deflationary currency".  not only does it scare the avg Joe and reminds them of the Great Depression, i don't think its technically correct.  the assumption here is that there will be a mild but negligible loss of coins.

i think its more appropriate to describe what it will be in 2040 and beyond when the vast majority of coins will have been mined and we're finished with its inflationary distribution phase.  if we focus on that timeframe i think it is appropriate to describe it as a "stable currency" which is much less objectionable by the uneducated and more technically correct.

inflation, as defined by those of similar mindset to our own, is the growth of the money supply + credit.
deflation, is the decrease of money supply + credit.
clearly, Bitcoin will neither increase or decrease the supply of money + credit.

thus it is a stable currency.

edit:  "fixed supply currency" would also be acceptable.

[markm]

This is crazy, miners can already merged-mine both DeVCoins and GRouPcoins alongside BiTCoins, so they can mint two of these always same number of coins per block coins right alongside their bitcoins almost free; there is thus absolutely no point whatsoever screwing around with actual bitcoins in such a way.

-MarkM-

yes it's pointless.... but it would be sure awesome to witness the drama it would bring with it  

The trolls trolling about it are full of crap anyway, they don't even bother to mine the coins that do feature the very feature they claim to favour, so they are just noise, trolls, crap, waste of bandwidth.

-MarkM-

[ElectricMucus]

This is crazy, miners can already merged-mine both DeVCoins and GRouPcoins alongside BiTCoins, so they can mint two of these always same number of coins per block coins right alongside their bitcoins almost free; there is thus absolutely no point whatsoever screwing around with actual bitcoins in such a way.

-MarkM-

yes it's pointless.... but it would be sure awesome to witness the drama it would bring with it  

The trolls trolling about it are full of crap anyway, they don't even bother to mine the coins that do feature the very feature they claim to favour, so they are just noise, trolls, crap, waste of bandwidth.

-MarkM-

Just imagine if there are enough idiots gullible enough to do this, it would result in a cozy low difficulty to continue mining the main fork after the block reward reduction before they give up on it.  

[jackmaninov]

Not really - you forget the impact of lost coins. Assuming a 0.5%/year loss rate, a permanent 10.5 million BTC per four years would amount to an ultimate fuzzy cap of 525 million coins, while Bitcoin's current strategy would peak the currency at 18.9 million in 2028 and then have it slowly come down and be all the way down to 13.6 million at the end of the century.

I neglect it because I don't think anyone has come up with a good way to model it yet. We're coming out of a regime where wallets have been lost because the software is immature and the coins in them are largely worthless, this clearly won't keep happening at the same rate. I also expect the loss rate to decay exponentially as people innovate in this space. But I worry about what happens when retirees are holding bitcoin and die without divulging their private keys.

Realistically the loss rate just moves around the finish line a bit, it doesn't change the nature of the race too much.

[markm]

Lost coins are not really a problem, there are already so many chains all of which can be merged-mined at once that losing a few coins on each chain really doesn't amount to much, especially if you also take into account the fact that the number of chains you can merged mine at once is not yet saturated; mining a few more is still easy, we have not hit a point yet where the sheer number to merge is too many to do it practically. (We have however found that ten second block time chains are not practical to merged mine alongside more-normal blocktime chains.)

-MarkM-

[ElectricMucus]

Lost coins are not really a problem, there are already so many chains all of which can be merged-mined at once that losing a few coins on each chain really doesn't amount to much, especially if you also take into account the fact that the number of chains you can merged mine at once is not yet saturated; mining a few more is still easy, we have not hit a point yet where the sheer number to merge is too many to do it practically. (We have however found that ten second block time chains are not practical to merged mine alongside more-normal blocktime chains.)

-MarkM-

Shouldn't it be possible to merge mine another bitcoin blockchain which doesn't have the blockreward reduction?
Call it TrollCoin or whatever... idk  

[SimonL]

From a system level perspective anything that can inflate in an infinite manner requires regulation of some sort. But as a decentralised system it is incredibly difficult to find a single source that can reliably regulate the currency, hence it is up to the holders of Bitcoin and the market to regulate itself, (surprise surprise) .There is simply no other simple way it can be done. I think Satoshi understood that if Bitcoin were to succeed it needed to be based on a community that strongly supported it as an integral, useful, valuable tool, no more, no less. This is no bunch of suits switching numbers on a computer, nor is it regulated by an algorithm, it is the visceral market of supply and demand that regulates Bitcoin. Stop trying to fuck with it.

[markm]

Shouldn't it be possible to merge mine another bitcoin blockchain which doesn't have the blockreward reduction?
Call it TrollCoin or whatever... idk  

At least read the frikkin posts if you are gonna pretend to be responding to them. Sheesh.

-MarkM-

[ElectricMucus]

Shouldn't it be possible to merge mine another bitcoin blockchain which doesn't have the blockreward reduction?
Call it TrollCoin or whatever... idk  

At least read the frikkin posts if you are gonna pretend to be responding to them. Sheesh.

-MarkM-

I did, I think my suggestion is possible and just wanted to check.
No reason to get mad.

[markm]

Shouldn't it be possible to merge mine another bitcoin blockchain which doesn't have the blockreward reduction?
Call it TrollCoin or whatever... idk  

At least read the frikkin posts if you are gonna pretend to be responding to them. Sheesh.

-MarkM-

I did, I think my suggestion is possible and just wanted to check.
No reason to get mad.

For the umpteenth time: there are already at least two blockchains that do not reduce mining reward over time and that are merged-mine-able: DeVCoin and GRouPcoin.

-MarkM-

[ElectricMucus]

Shouldn't it be possible to merge mine another bitcoin blockchain which doesn't have the blockreward reduction?
Call it TrollCoin or whatever... idk  

At least read the frikkin posts if you are gonna pretend to be responding to them. Sheesh.

-MarkM-

I did, I think my suggestion is possible and just wanted to check.
No reason to get mad.

For the umpteenth time: there are already at least two blockchains that do not reduce mining reward over time and that are merged-mine-able: DeVCoin and GRouPcoin.

-MarkM-

I didn't know that they don't reduce the block reward. Still it might be worth to do it for the laughs. And they are not bitcoin you know people tend to get somehow what they want.


The alternative is to ignore it, in which case the trolling will probably continue till it peaks just before the reduction. Worst case people actually use a patched version of BTC and try fork the blockchain. We wouldn't want that...

[markm]

If you want a coin that does not reduce rewards over time, use DeVCoin and/or GRouPcoin.

Bitcoin does reduce reward over time, and has no need to change since anyone who does want rewards not to drop can simply use DeVCoin and/or GRouPcoin, without even interfering with their ability to continue mining bitcoin, namecoin, i0coin, ixcoin etc at the same time.

-MarkM-

[ElectricMucus]

If you want a coin that does not reduce rewards over time, use DeVCoin and/or GRouPcoin.

Bitcoin does reduce reward over time, and has not need to change since anyone who does want rewards not to drop can simply use DeVCoin and/or GRouPcoin, without even interfering with their ability to continue mining bitcoin, namecoin, i0coin, ixcoin etc at the same time.

-MarkM-

Since chose to ignore the threat and even ignored my suggestion on how to deal with it I wish you the best in dealing with the trolls in December...

[Vod]

Was there any reason that the number 210,000 was chosen as the block reward reduction?

[FreeMoney]

Though the answer to this question seems obvious to a bitcoin holder, miners may have a different opinion - and it's their vote that counts.
There is a tension between people who hold bitcoins and want deflation, and miners who want to earn more bitcoins.
The allure of more bitcoins per block is a delusion, but if enough miners agreed, then there is the slight possibility of a fork that could develop momentum - especially if bitcoin was floundering somewhat.
I suspect miners faced with a fork like this would simply choose to drop out and wait for low difficulty rather than pursuing an inflationary model - or maybe they'd mine both and wait for the winner.

No it isn't. We're paying them by accepting coins, if they don't make them how we want them we won't accept them. It is up to us (people who serve for coins).

[jackmaninov]

Was there any reason that the number 210,000 was chosen as the block reward reduction?

Closest round number to 4 years? I really don't think the reasoning was any more complicated than that.

[bg002h]

No.  the very reason, IMO, that ppl invest in Bitcoin is b/c of the projected fixed supply.

Bitcoin is rapidly inflationary now, with decreasing inflation caused by the fact that the creation of Bitcoins is never proportional to the circulating supply and the halvings of the subsidy/reward. Keeping the block subsidy/reward steady at 50 btc just slows down the rate of inflation decline -- but both models end up in the same place -- only a trivial fraction of the circulating coins are created each year for many many years.

[cypherdoc]

No.  the very reason, IMO, that ppl invest in Bitcoin is b/c of the projected fixed supply.

Bitcoin is rapidly inflationary now, with decreasing inflation caused by the fact that the creation of Bitcoins is never proportional to the circulating supply and the halvings of the subsidy/reward. Keeping the block subsidy/reward steady at 50 btc just slows down the rate of inflation decline -- but both models end up in the same place -- only a trivial fraction of the circulating coins are created each year for many many years.

i understand.  but the story is much more compelling and simple with a stable, fixed supply.

[jothan]

http://timothyblee.com/2011/04/19/bitcoins-collusion-problem/

Tim Berners-Lee thinks that collusion will be a problem and that the protocol rules will be changed to manipulate the money supply.

Let's prove him wrong and keep the decreasing reward.

[evoorhees]

1) The fact that coins are occasionally lost is not a problem to anyone except the person who lost the coins. Increasing the rate at which coins are mined, or mining them forever at a constant rate, doesn't help the person who loses his coins. It's a non-solution to a non-issue.

2) If ever the Bitcoin community generally agreed to remove the 21m bitcoin cap and extend mining at a constant rate indefinitely, the whole experiment would collapse and fail.

3) There is absolutely no net benefit to removing the cap. Do no equate money with wealth... the fact that more money is printed doesn't mean the world is better off. Market's adjust to the supply of money - if you tinker with the supply of money, you screw up the market.

4) The growth rate of world population is entirely irrelevant when determining what the proper amount of money is. Few people understand this, but it's true.