BMAX: pricing “sats now vs sats later” via a mining sharechain (no L1 changes, no custodians, no oracles)

The concept of BMAX presents a novel approach toward addressing the economic disparity between "sats now" and "sats later" within the Bitcoin ecosystem, aiming to establish a decentralized base money for civilization that is long-lived, self-consistent, and free from central control. This initiative stems from the recognition that the current fungibility of satoshis in the Bitcoin protocol does not account for their time value—highlighting a significant economic distinction between a satoshi available for immediate use and one that is locked away for future use.

BMAX introduces a system where Bitcoin's existing mechanisms are leveraged to facilitate a market-driven discovery of a discount curve for sats themselves. This is achieved without necessitating any modifications to Bitcoin's core protocol, avoiding reliance on custodians, oracles, or fiat-based financial instruments. At its core, BMAX operates as a proof-of-work sharechain akin to a p2pool, which simultaneously functions as a standard mining pool from Bitcoin's perspective but with distinct internal rules that highlight the time-value of sats through the issuance of shares and bonds.

Shares in BMAX represent perpetual, equity-like claims on future Bitcoin rewards mined by BMAX, with each share having a probabilistic chance of earning a full coinbase reward. Bonds, on the other hand, are formed by burning shares to enter a FIFO queue, serviced by future coinbase rewards. This mechanism ensures that when a bound share is selected upon finding a valid block, the coinbase reward is allocated towards redeeming bonds in the queue, effectively making the supply of shares deflationary over time.

A key component of BMAX is its dynamic bonding price, adjusted through a control loop mechanism, aimed at maintaining the expected redemption time of bonds around a targeted horizon. This system facilitates a Bitcoin-native term structure, enabling market participants to price the time value of sats without external references.

Economically, BMAX seeks to create an environment where unbonded shares function similarly to solo mining opportunities, while bonded shares introduce a structured way to invest in the future value of Bitcoin. The creation of a market for these instruments could enable a native Bitcoin pricing for time, potentially paving the way for broader economic applications based on Bitcoin's monetary base.

In conclusion, BMAX represents an ambitious proposal to embed a time-value consideration directly into the Bitcoin ecosystem, providing a decentralized solution to a fundamental economic challenge. By doing so, it aims to enhance Bitcoin's utility as a base monetary layer capable of supporting complex economic activities, without compromising the principles that make Bitcoin unique.