10 sats \ 13 replies \ @netstatic 6 Sep 2023 \ parent \ on: Tail Emissions Are A Terrible Idea bitcoin
I've never read that post but I think it's pretty dumb. He solved a differential equation to show that the supply will always be a proportion of growth divided by loss, but implicit to his calculation is the loss of Bitcoin continuing until the supply reaches 0.
It's obvious that if the loss of Bitcoin continues every year at a non-zero rate, it will eventually hit 0. The differential equation wasn't needed at all, and I feel like inserting math where it isn't needed makes someone look too desperate to seem smart lol.
So because Bitcoin's fiat value has historically fluctuated mostly up, and because Bitcoiners are okay with double digit down swings today, we should be okay with whatever double digit inflation rate tail emissions might incur?
It's obvious that if the loss of Bitcoin continues every year at a non-zero rate, it will eventually hit 0
What do you mean? 0.5^n approaches zero, but never reaches it.
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The amount of money someone holds is not continuous and in the context of losing Bitcoin, you either lose Bitcoin or you don’t. If there was only 1 utxo with 1 sat (which is impossible with today’s policy rules), and I said there was a non-zero rate of loss that year, then that means that person has lost that utxo.
When working with discrete everyday things, constant values like .5^n as n approaches infinity just doesn’t make sense as there will always be a point where subdivision is impossible.
It’s the same reason why the dichotomy paradox’s thought experiment can’t actually be done. There gets to a point where it’s impractical/impossible to move half of a set distance.
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Bitcoin is not gold, which you can't divide beyond the individual atom, making it discrete at the micro scale.
Bitcoin is code. By the time Bitcoin's supply is a miniscule fraction of what it is now due to lost coins, we'll have forked it to divide 1 sat into micro- or nano-sats. Also, when the supply is that small, tx fees will be denominated in nano or pico sats.
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Forking to make sats more divisible is almost like raising the 21 million cap and equally distributing the new coins. Either way you shouldn't assume either is the direction the project will go.
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More divisible is nothing like raising the 21m cap. Going from one to two pizzas is different from cutting your one pizza into 4 pieces instead of 2.
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Comparing pizzas to Bitcoin doesn't make much sense because pizza is not money and its economic mechanics don't work the same.
Let's take the simplest example of a world with only 2 sats, one held by you and one held by me. We both valued our respective sats at some defined value X. If both you and I decided to make a rule that allowed the doubling in value of all utxos, we would now have 2 sats respectively.
This would be an instance of inflation, but because both of us received sats according to our existing distribution it acts as a halving of value among all sats. Since each of us now have a monetary unit worth X/2 we can effectively treat that as a division of sats. In wallet interfaces, I can even halve the display value of sats such that when someone sends 1 sat, it shows .5 sats instead.
Going back to the pizza analogy, it doesn't make sense in this context because the value of pizza isn't in its usefulness as money. Pizza is typically seen as useful because it provides calories/nutrients/etc. If I were to double everyone's amount of pizza then they would double their value in calories/nutrients/etc. Applying this logic to money would mean everyone benefits from inflation, which we know is not the case.
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We both valued our respective sats at some defined value X
There is no single X, value is subjective, but that's an aside.
This would be an instance of inflation [...]
That's a convoluted way to look at it. It's just an increase in precision. More decimal places.
Like expressing the length of something as an integer number of metres. If you need more precision, you go to millimetres. So if your backyard was measured to be 35 m long, if you measure it in mm precision you may discover it's actually 34.983 m or 35.112 m long. Of course it doesn't inflate anything.
In implementation, if BTC amounts are expressed as 64 bit ints (in fact, I reckon only 51 bits are needed), this could be increased to 128 bits if mankind and Bitcoin survive for long enough.
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There is no single X, value is subjective, but that's an aside. This just seems petty at this point. The whole point of the construction is under the assumption we (subjectively) valued satoshis at some exchange rate with something else. Like 2 people both valuing a sat as a loaf of bread. Yes, obviously individuals can value their sat at $1m if they choose. It has nothing to do with my point.
That's a convoluted way to look at it. It's just an increase in precision. More decimal places.
It's not convoluted, it's simple actually. Multiplying the value of sats does allow you to increase the precision, but whether we rename the basic units to something like millisatoshis or keep calling the base unit sats doesn't matter.
And yes in the implementation Bitcoin amount are expressed as 64 bit integers. 51 bits were not used in the amount.
The main point is that it doesn't matter whether you keep the unit in satoshi and multiply everyone's supply equally or to multiply and change the base unit to millisatoshis. Everyone should still consider the value of their satoshis to be the same as before.
FYI, sats are already 1000x more divisible on LN. This did not change anything in terms of the value attributed to each sat.
But let's agree to disagree :)
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I think the concept went over your head. I'm saying equally inflating the value of everyone's sats by some multiplier of 10, subsequently changing the value of each sat, is effectively equivalent to making sats more divisible.
The lightning network's millisatoshi is an abstraction using a similar concept but it's obviously not enforceable on chain:
"Amounts are in millisatoshi, though on-chain enforcement is only possible for whole satoshi amounts greater than the dust limit (in commitment transactions these are rounded down as specified in BOLT #3)."
I thought it was widely accepted that's the direction the project would go. No controversy here at all.
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