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The idea is that it's not under any entity's control, and the amount of currency grows in a predictable (and decreasing) way. This should prevent the crazy infl
by jackowayed 16y ago
The idea is that it's not under any entity's control, and the amount of currency grows in a predictable (and decreasing) way. This should prevent the crazy inflation we've seen occur with normal currency where the government can always just print more.
- akkartik 16y agoWhy does the number of bitcoins in circulation converge to an asymptote?
- jackowayed 16y agoBecause every few years (4, I think), the number of bitcoins in each "block" (what you generate) is halved. So right now you get 50 BTC when you generate a block. In a few years it'll be 25. Then 12.5. Etc. In a very long time, they'll round from 10^-8 down to 0, but generating a block will still get you transaction fees from the transactions that occurred since the last block generated.
- akkartik 16y agoI asked why, not how :) I understood from the FAQ how it was done, but there's no mention of why it's desirable? Why not either fix the number of bitcoins now for all time, or let them grow unboundedly at a constant rate?
- jackowayed 16y agoAh, ok. I think they're trying to balance 2 interests: They don't want inflation. One of the impeti for this initiative is to have a currency that some politicians can't decide to print more of. But at the same time, they can't just issue 90% of the total money that will exist right at the beginning. No one's going to buy into a currency where the vast majority of the "wealth" goes to a few early adopters. So it makes sense to have the money supply grow fast at the beginning, when the currency is hopefully getting more popular as well, preventing inflation, and then to gradually slow down the money supply growth to achieve the goal of preventing inflation.
- akkartik 16y agoAh, very cool, thanks.