Saturday, August 29, 2020

Ceterum censeo: In some yet undefined future - the halving must be removed. The question is not: if, but when (and how)

Bitcoin's mining ecosystem is saturated. Period.

The ASIC race has weakened as it has moved closer to the technological limits - achieving some kind of fragile balance. The best proof of this is Bitmain's search for new areas (vide: AI research)

After more than a decade, we are smarter than Satoshi at least in one area - we have the knowledge acquired over these more than ten years ...

"Bitcoin should have had a 0.1% or 1% monetary inflation tax to pay for security." (Peter Todd): https://www.google.com/search?q=peter+todd+inflation

If someone cannot accept the inevitability of this right now - let him think if he would change his mind while he sees the consecutive halvings - after which the network hashrate drops half by half - and does not return to the previous level, ever... (I suppose we can see that process in 4 years already...)

And the trigger could be like this (of course after general consensus):

  • If on X (e.g. 2016) blocks before the incoming halving the network difficulty is lower than 212016 blocks backward - the next halving should be removed - as a strictly destructive event now for the Bitcoin network (or greater X for smooth hardfork)

That would be an "organoleptic" determination of the optimal inflation rate for the Bitcoin network - and there is simply no better way to determine it. Just don't belive such simplification, when is hard to find an optimum for something - the ultimate solution is zero. It's not.

Remember, that Bitcoin is not an entity detached from the reality. There are various limitations, e.g. nanometer-based technological processes limitations, there is a finite amount of cheap energy that can be obtained on a global scale, etc.) Bitcoin functions in certain realities - whether we like it or not.

Sooner or later the situation described above will get us. It is worth to be prepared mentally for it - and not to start another war, but rather discuss it calmly. If, for example, 90% of the community considers that something is necessary for the development of bitcoin - such a change will take place.

For example, the theoretical exchange of ECDSA due to the threat of quantum computers - acceptance would take place at an express rate. It will be similar in this matter. Just it shouldn't be too late for corrective action.

The small inflation rate, decreasing continuosly and slowly but never to zero, and last but not least: determined by reality - seems to be the most proper measure in this case.

Ceterum censeo...


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