The only concern I have about BTCD is the 5% staking inflation. Short term, that doesn't matter much, but long term it seems high and will put a constant downward pressure on prices. Why was 5% chosen? 2% sounds a much better figure to me.
I wasnt around when this was decided, but
The actual figure is closer to 4%, so it is about 100 coins per day, even with compounding it will take decades to get to 10 million coins, I think
around 60 years to reach the maxso for practical purposes, since the base is so small, 1.2 mil, the number of coins over the critical next three years is 1.2 to 1.3 million
I think this rate of inflation is less than bitcoin is now after 5+ years, with a few more years before the inflation is about the same
One of the cool thinks about BTCD is that the staking actually provides meaningful income. While at current prices the staking income wont be that much, as the value of BTCD rises, the staking could provide a permanent funding for anybody who was smart enough to buy a big enough stake.
James
P.S. Longer term, we will need all the BTCD the staking will create if only to compensate for BTCD in cold storage telepods
Without coin inflation, more BTCD in cold storage telepods means more scarcity and higher prices. I don't see a problem with that
.
Is there a maximum number of coins hardcoded?
One of the things people love about bitcoin is the fixed supply. There will only ever be 21million. The more extra coins being added, the harder a coin has to hold its value (see Dogecoin, Mintcoin). From this point of view, 5% in perpetuity seems large. I'm thinking longterm here, as in 5, 10, 100 years down the line. Things can't be changed when a coin has matured, but perhaps it can now at this early stage. (If it can't then there's no much point in this discussion; if it can then maybe a poll?)
I'm imagining a world with BTCD as the main world currency. At 5% a year, the price of BTCD will continually go down. At 5% a year, it'll often be better for investors to hold their money rather than spend it, killing investment. 2%, though, is considered the best case inflation for modern economies. 2% will allow BTCD to be staked/saved for a reasonable return, but will also encourage spending/investment.
I realize that hardly anyone is thinking that far ahead, but the better thought out a coin is, the better its chance of success. Some economists dismiss bitcoin because of longterm deflation and could favor a 2% inflation coin. I know from an altcoin investment point of view, I'm more interested in coins with less inflation--I think some people could dismiss a 5% inflation coin out of hand just from that one fact.
Edit: used the 5% figure rather than 4% because that's what it says in the OP. Is the % fixed or does it vary based on how many people are staking?
The number of BTCD will eventually be the same as the number of BTC, at least within a few percentage points. I am not sure of the exact number but 21 to 22 million total.
I am no economist and I like the "higher than optimal" 5%, as it means 2.5% more revenue for me