I think this statement is clear @jelly5649
Thanks for your thoughts and the exchange.
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Zcash Media.
By the end of 2024, I hope the converse is true.
This is a problem we must address. Unlike Bitcoin, we are well positioned to do so as we are a lot more agile, and have not created the expectation that our blockchain will be static.
Additionally,
I know many disagree. But I am pro inflation, as is done in Polkadot (for example).
I understand those who are concerned that it may de-valuate their holdings; scarcity is a very simple and well understood concept, that generally leads to increase in value. But itās not necessarily the best for everything. Nor does it necessarily leads to maximized value increase!
Think of it this way. Say we remove the 21M token cap. And say we, like Polkadot, set a ~10% inflation. Scary, right?
Ok, now say we have now transitioned to PoS and you are a validator (or staking your ZECs to a validator).
Of these 10%, dev fun would get 2.5% (for example), so we are left with 7.5% to distribute.
Not everyone will want to validate/stake, people will use their tokens in different ways such as trading, lending, etc. Letās say 50% of the supply is staked/used for validation.
The less people stake/validate, the higher the reward to those people, right? The idea is the higher the reward, the more people will want to validate, which hopefully should eventually self-balance based on a curve neatly designed. Now, if 50% of the supply is used to stake/validate, thatās 7.5% * 2, 15% rewards annually. Not only stakers/validators are not affected by the inflation, they earn a bunch for securing the network as well!
Ok so, thatās pretty much how Polkadot works currently. That doesnāt mean any of the numbers I have used would apply optimally to Zcash, but you get the idea. 21M cap has the advantage of scarcity, sure. But inflation has the advantage of encouraging participation and constant improvement, and this my friends, is truly key to a bright future imho.
worth a read: Token Inflation Ā· Polkadot Wiki
arenāt we 10 years away from having to think about this? we should maintain the current block rewards, add fees, add stablecoins and ZSAs etc, transition to POS (iām relying on others this is the way to go) and see if we can even get to the point there is a platform people are usingā¦ and we really are far away from having to decide about inflation because we already have itā¦fees are going to be a part of the formula no matter what. so letās get the fees in first. what makes ethereum work so well is the fees are greater than issuance. it would be insanity to raise inflation rates higher or alter the current path without a viable fee/gas structure
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I consider the 21M cap to be another pillar that should never be compromised.
Long term speaking, the topic of inflation opens the floodgates of āchangeā and is a race to the bottom imo. Furthermore itās just one more unnecessary confusion that needs to be explained (like t-addresses).
Iām speaking from the perspective of onboarding the many people that are already seasoned and familiar with the tokenomics of the most well established cryptocurrency, Bitcoin. If/when Zcash does decide to make a move, this base is likely going to be the meat and potatoes of our success. Hence their stubbornness should not be underestimated.
A couple of years ago when deciding between Monero and Zcash, one of the top three reasons I decided to go with Zcash was because of its 21M hard cap (I know what it is, I believe in it, no further research required 
).
We have a technological qualitative advantage over Monero now, this gap is closing with them moving to full membership proofs. Although I believe theyāll never be on par with us because of our devs, this gap wonāt be as huge as it is now and consequently āour tech is betterā becomes less obvious/important to the average crypto enthusiast/investor. In this scenario, the 21M cap would be a worthy reason and argument for them to choose Zcash. One could argue that theyāve actually done us a huge favour by introducing inflation. It would be unwise of us to capitalise on this.
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Interesting. So, any thoughts on the actual study I have linked, exposing the Bitcoin model as flawed?
I mean, it sure is great that it works today. But itās not just about today, is it?
Iām sure Satoshi evaluated and considered both options extensively and for arguments sake maybe decided to go with the ā21M hard cap flawed modelā. He still considered it enough of a lesser evil than inflation. Maybe he trusted that heāll establish this pillar as a nonnegotiable, and one day someone creative like Sean will find a solution to the flaw in the flawed model. Regardless, i trust his judgment on this one simply because the whole topic of inflation (in and out of crypto) is just too important for him not to scrutinise it extensively.
Why did the mathematician refuse to discuss inflation? It was a complex problem that he couldnāt simplify.
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The 21m cap appears arbitrary. but once you pick it, itās important to not change it. so the fixed supply makes sense because BTC was designed as a collateral token upon which banks would issue fiat against. BTC was the reserve or anchor for fractional reserves. you donāt want inflation at the anchor or reserve level . itās a flaw of gold because gold can be mined. and itās also why many people believe itās not fair for the USD to be the reserve currency because of the inflation of the USD. The inflation happens at the second level or the fiat level. zcash made the mistake of believing it was the fiat. zcash needs to implement the fiat level issuance such as a USDz and the fixed supply of zec and its value is what is supposed to restrict unlimited issuance of USDz, EURz etc. Thatās at least why I think they used a hard cap. Itās more of the way central banking was designed to work. Not sure if the designers of BTC were central bankers or working for them. but i think that was possiblly their goal.
ZEC is gold 3.0. its BTC with privacy.
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Yes, yes and yes.
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Thatās why I keep up my periodical small buys.
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Right there with you.
Never been more bullish on $ZEC. Next decade going to be wild, I wish everyone finds the freedom they deserve. Shout out to the builders, educators, and community members who move fearless into tomorrow.
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