[Bitcoin-development] Finite monetary supply for Bitcoin

Peter Todd pete at petertodd.org
Tue Apr 1 20:00:39 UTC 2014

On Tue, Apr 01, 2014 at 09:00:07PM +0200, Pieter Wuille wrote:
> Hi all,
> I understand this is a controversial proposal, but bear with me please.
> I believe we cannot accept the current subsidy schedule anymore, so I
> wrote a small draft BIP with a proposal to turn Bitcoin into a
> limited-supply currency. Dogecoin has already shown how easy such
> changes are, so I consider this a worthwhile idea to be explored.
> The text can be found here: https://gist.github.com/sipa/9920696

What's interesting about this bug is we could also fix the problem - the
economic shock - by first implementing the OP_CHECKLOCKTIMEVERIFY opcode
in a soft-fork, followed by a second soft-fork requiring miners to
"pay-forward" a percentage of their coinbase outputs to the future.
(remember that whomever mines a block controls what
recently-made-available anyone-can-spend txouts are included in their
block) We could then pick the distribution rate fairly arbitrarily; I
propose the following linear distribution:

Each gold mine produces 21,000,000 coins over 210,000*64 blocks, or
1.5625 BTC/block evenly distributed. Measured as an absolute against the
monetary the inflation rate will converge towards zero; measured against
the actual economic monetary supply the value will converge towards some
low value of inflation. In the short run we get an immediate reduction
in inflation, which can help our currently sluggish price. Either
outcome should be acceptable to any reasonable goldbug - fortunately our
community is almost entirely made up of such calm and reasonable people.
Meanwhile maintaining a miner reward has significant advantages in terms
of the long-term sustainability of the system - everyone needs PoW
security regardless of whether or not you do transactions, thus we
should all pay into it.

As for your example of Python, I'm sure they'll accept a pull-req
changing the behavior in the language.

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