6

According to an interview with Yeastplume on What Bitcoin Did, Grin is going to have a flat reward schedule of 60 grin per block at one minute blocks. This translates to an annual inflation of 100% in the second year, 50% in the third year, 33% in the fourth year and so forth. For comparison, many countries target around 2% inflation, which Grin will only achieve in its 51st year of operation. Even given that actual inflation of fiat currencies may be higher, Grin's high inflation seems to make it unattractive to store value in Grin for many years to come.

Has the Grin team elaborated their reasoning for choosing a reward schedule with such a high inflation?

2

See this page of the wiki for a brief set of reasons: https://github.com/mimblewimble/docs/wiki/Monetary-Policy

0

There is a long discussion thread ongoing in the Grin forum at https://www.grin-forum.org/t/emmission-rate-of-grin/171

  • Can you point to somewhere in that discussion that specifically addresses the issue of a high inflation rate continuing 10-30 years out? Looking through it, I can't find much of use for this question. – B T Apr 29 at 1:04
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Calling it "high" is a misunderstanding. An inflation rate of 60 Grincoin/block forever is EXACTLY THE SAME as an inflation rate of 600,000 Grincoin/block forever. Why? Because the number of units of currency don't matter. What matters is the percentage rate of inflation.

Creating new coins at a constant number per block tends toward a 0% inflation rate over time. See this graph: https://plot.ly/~Bobby_Digital/1/#plot

And I'm sure we can agree that a near-0% inflation rate isn't "high".

  • I downvoted this answer because it misses the point of my question. I've amended my question to make it even clearer that I'm well aware of the constant emission and its eventual low inflation. – Murch Apr 28 at 16:58
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    Ah ok. I'd also be curious to know about whether the sustained high inflation rate even 20 years out has a solid logical foundation. It seems like many people commenting on the grin-forum subscribe to the old tired "deflationary currencies don't work" pseudo-argument. I imagine that pervasive misunderstanding of currency economics isn't an insignificant factor. Personally, I'd like to see a currency that aims to split the cost of securing the currency between payers and holders. Maybe targeting 10% of the cost paid by new emission, and 90% by transaction fees. – B T Apr 29 at 1:13

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