mimblewimble team mailing list archive

[John Tromp <john.tromp@xxxxxxxxx>]

On Mon, Oct 2, 2017 at 8:53 AM, Alessandro Viganò <alvistar@xxxxxxxxx> wrote:

> Right now is important to design a good monetary policy but not a perfect
> one. I believe it’s impossible to foresee what is coming in years. So some
> flexibility is needed, and, in any case, the ultimate flexibility is called
> forking.

A finite supply is considered part of bitcoins "social contract" and any fork
with a tail emission will likely be shortlived.

> If the world would need a change in 10 years, nothing is really immutable,
> and we could be dealt later.

In theory emission schedules could be changed. But in practice no
radical change will be accepted.

> Il giorno lun 2 ott 2017 alle 01:38 Gold Goblin <goldgoblin@xxxxxxxxxxxxxx>
> ha scritto:

>> 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 prefer a linear supply curve for having better prospects of yielding an
equitable wealth distribution. A Hacker News thread today
https://news.ycombinator.com/item?id=15382009 mentions:

  In economics, the Gini coefficient is the standard measure
  of how inequitable a society is. This is tricky to
  determine for Bitcoin, as it's not quiet a "society" in
  the Gini sense, one person may have multiple addresses and
  many addresses have been used only once or a few times.
  (The commonly-cited figure of 0.88 is based on one small
  exchange in 2011.) However, a Citigroup analysis from
  early 2014 notes: "47 individuals hold about 30 percent,
  another 900 a further 20 percent, the next 10,000 about
  25% and another million about 20%"; and distribution
  "looks much like the distribution of wealth in North Korea
  and makes China's and even the US' wealth distribution
  look like that of a workers' paradise

  Dorit Ron and Adi Shamir found in a 2012 study that only
  22% of then-existing Bitcoins were in circulation at all,
  there were a total of 75 active users or businesses with
  any kind of volume, one (unidentified) user owned a
  quarter of all Bitcoins in existence, and one large owner
  was trying to hide their pile by moving it around in
  thousands of smaller transactions. (Shamir is one of the
  most renowned cryptographers in the world and the "S" in
  "RSA encryption")"

>> 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.

It could also be mistaken to set a policy that puts later generations at
significant disadvantage, discouraging them from adopting a currency
that they deem less equitable.

>> 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.

Grin's qualities of privacy, fungibility and scalability are better
geared toward use as currency than as store-of-value for investors.

regards,
-John