mimblewimble team mailing list archive
Mailing list archive
Re: On block rewards
I have been following MW, Grin and this mailing list for a while, and this is my very first post.
It seems that in discussions of Grin's future issuance schedule, the favoured option for now has been a linear-issue schedule (resulting in an infinite supply and an inflation rate tending towards zero without ever reaching it). This contrasts with the fixed supply model of many other currencies such as Bitcoin or Monero. This choice has been defended as a way to incentivise miners to go on mining and making the chain more secure in the very long run.
I think that it would be mistaken to start out with a monetary policy that doesn’t encourage early adopters and investors, but instead has been chosen as a way to deal with issues that may or may not arise decades from now.
A currency's use as a medium of exchange is directly related to it having network effect to begin with. The best way to bootstrap this network effect would be to incentivise early adopters to invest in the coin, by making it as investor-friendly as possible (i.e. with a finite supply). Grin has great qualities (strong privacy, ASIC-resistant proof of work) that lack in Bitcoin, and that many Bitcoin investors would want to invest in; but an infinite supply would be a deal breaker to many.
I do not believe that the “store of value” and “medium of exchange” aspects of a currency have to be mutually exclusive: a currency has to be good at both to become popular and widely used.
In all cases, this project is amazing, and I’m looking forward to the testnet and eventual release!