bitcoin-dev

Purely off-chain coin colouring

Purely off-chain coin colouring

Original Postby Peter Todd

Posted on: February 4, 2023 13:06 UTC

In a discussion on bitcoin-dev mailing list, Anthony Towns expressed his opinion regarding the desired characteristics of blockspace in Bitcoin.

He stated that small blocks should be preferred in order to reduce the need to trust third parties and aid decentralization. However, he also mentioned that blockspace should not be too valuable as it would make using Bitcoin expensive and limit its usage. In response, another member argued that blockspace needs to be valuable for transaction fees to replace the inflation subsidy and ensure the security of Bitcoin in the future. Currently, the inflation subsidy pays miners about 50 times more than fees do. The member suggested using mechanisms such as ordinals or publications to drive consistent demand for block space. The question was raised whether changing the inflation subsidy phase-out by introducing tail emission or demurrage would be a solution. A link to an article on tail emission was provided for further reading.