From The Macroeconomic Perspective, Monero’s Tail Emission Is Identical to Bitcoin’s Hardcap, Says Dr. Kim
Monero’s tail emission will provide for continued and indefinite mining reward, according to Monero Outreach blog post. Notably, it claims this structure gives Monero a built-in, stable and predictable inflation, which are considered essential for real money.
In an interview with Monero Talk, Dr. Daniel Kim, a significant personality in the Monero community, recently discussed about whether this tail emission destroys the economics of Monero’s scarcity.
According to Kim, the very clever thing about Monero’s linear tail emission was that the percentage of monetary expansion goes asymptotically towards 0%. However, he claimed it never hits 0% because, any given year, fixed amount of Monero is going to get generated. Yet, the size of that fixed amount of Monero that gets generated in 1 year is relative to the base of Monero that’s already been generated.
He explained further that the proportion shrinks, so the inflation rate drops ever towards 0%. Kim claims that is the relevant quantity in macroeconomics.
Kim remarked that from a macroeconomic point of view, this structure was identical to Bitcoin. In the case of the number one cryptocurrency, Kim said the inflation rate was equal to 0%. Whereas in Monero, it was asymptomatically 0% per year.
He further argued that the monetary structure of Monero that is seen as ‘infinite supply’, is a misinterpretation. Kim remarked further that the narrative of tail emission destroying the scarcity of Monero, was the worst kind of FUD. He said such allegation sounds plausible, is superficially true, but almost intentionally misleading.
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