What happens when the mine runs dry?

General discussion of CryptoNote based currencies and issues.

What happens when the mine runs dry?

Postby Lost my passwords » Wed Jun 11, 2014 4:30 am

There's already been intense debate on bitcointalk about this issue .. but it won't hurt to bring it here .. as there was one crucial point that wasn't addressed on btctalk that I'll bring up here.

Specifically the question is, when the emission is complete .. what should happen?

1 Should miners continue to mine for only transaction fees?

2 Should there be a constant low supply starting at about 1% of the total currency supply, to cement continued centralized mining (presumably this is what that would be at that point)?

3 Should "new blood" be merge-mined with older established currencies in order to keep a currency secure free of both charge and extra cost?

4 Should a constant inflation be set, in order to yield an exponentially growing coin supply?

With 1, it's not hard to say that such a low yield will more than likely discourage miners from spending processing time as it would be a detriment to themselves with the implied benefit of securing a network.

With 2 There is no way to counter the value of the currency from approaching infinity after the subsidy drops <<<.01%. This has been modeled to take well over 1000 years .. but with no significant depreciation how could the value not trend toward infinity?

With 3 well I'm hoping for some insight

With 4 the value of the currency over time will trend toward zero, and the economy will have to keep pace with an exponentially increasing storage of value. The ideas presented with this theory are that it will prevent wealth from centralizing and solidify the currencies role as a method of transaction rather than a total store of value. Additionally, the fixed percentage gives miners an ever-increasing incentive to continue supporting the network .. allowing vast capacities for value to be stored within the currency.

The most common solutions presented I've seen so far have been numbers 2 and 3 for a CN currency. Does anyone have thoughts on this? Any particular economic theories jump out?

There are multiple links for background to this consideration in the Freicoin forums and recent discussion in this btctalk thread https://bitcointalk.org/index.php?topic ... msg6701490
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