With miners getting 50btc per block ad infinitum we end up creating an exponential earnings curve. Whoever is ahead on that curve will eventually see their lead greatly exaggerated such that the majority of bitcoins created each day will be created by their cluster.
Too many outside variables to know if this would actually happen.
What kind of outside variables are there? Mining scales exponentially. Furthermore, we've seen this sort of action happen in the free market before. First there was IBM, then there was Microsoft. They own well over half the market share. If we want to keep the network from falling under the control of a single person or a small cabal, we will have to take steps to ensure that a Microsoft or IBM never emerges in the bitcoin network. The problem would be even more insidious for us because there would be only one product and no for clusters to differentiate themselves. The various products of mining clusters are qualitatively the same. There would be no room for a cluster with a sustainable competitive advantage to emerge. It's
good that the incentive for an individual to own a large cluster will slowly diminish. The ideal network model would consist of a large number of small clusters working together to create a secure network. A system that encourages monolithic clusters would only hurt us.
I think that if we stick to a deflationary model, transaction fees will prove to be profitable enough. There still exists the potential for an exponential earnings curve there, but growth from transaction fees will likely be so gradual that it shouldn't matter much. If it turns out that transaction fees aren't enough to keep people mining, then we come back to the concept of security audits. If an audit shows that the network is vulnerable to a cluster that likely exists, then it will be up to those with the most to lose (i.e, those with the most bitcoins) to allocate boxes to "mining." (Though at that point the term "mining" will be a misnomer.)
I honestly think that the cause of keeping our currency network safe will be compelling enough to attract a sufficient number of miners, especially if the data on our network's security is easily accessible. There are massive networks dedicated to such tasks as searching for extraterrestrial life and folding proteins whose participants receive no incentive beyond the knowledge that their idle cycles are being used to make the world a somewhat better place.
An inflationary model just seems rather unattractive to me. If given the choice between holding a currency in an inflationary trend or holding a currency in a deflationary trend, I would rather hold the latter. If we succeed in our goals, the early adopters will end up spending their bitcoins. Yes, they will be fabulously wealthy, but I have a hard time seeing that as a good reason for decreasing the wealth of the community as a whole via inflation.
Just my 2btc. What do you think?
