[137134] in cryptography@c2.net mail archive
Re: Bitcoin P2P e-cash paper
daemon@ATHENA.MIT.EDU (Satoshi Nakamoto)
Sat Nov 8 16:38:10 2008
Date: Sun, 09 Nov 2008 02:54:38 +0800
From: "Satoshi Nakamoto" <satoshi@vistomail.com>
Reply-To: satoshi@vistomail.com
To: cryptography@metzdowd.com
Ray Dillinger:
> the "currency" is inflationary at about 35%=20
> as that's how much faster computers get annually
> ... the inflation rate of 35% is almost guaranteed=20
> by the technology
Increasing hardware speed is handled: "To compensate for increasing hard=
ware speed and varying interest in running nodes over time, the proof-of=
-work difficulty is determined by a moving average targeting an average =
number of blocks per hour. If they're generated too fast, the difficulty=
increases."
As computers get faster and the total computing power applied to creatin=
g bitcoins increases, the difficulty increases proportionally to keep th=
e total new production constant. Thus, it is known in advance how many =
new bitcoins will be created every year in the future.
The fact that new coins are produced means the money supply increases by=
a planned amount, but this does not necessarily result in inflation. I=
f the supply of money increases at the same rate that the number of peop=
le using it increases, prices remain stable. If it does not increase as=
fast as demand, there will be deflation and early holders of money will=
see its value increase.
Coins have to get initially distributed somehow, and a constant rate see=
ms like the best formula.
Satoshi Nakamoto
---------------------------------------------------------------------
The Cryptography Mailing List
Unsubscribe by sending "unsubscribe cryptography" to majordomo@metzdowd.com
