this post was submitted on 21 Aug 2023
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How do we know that 0.5% is decent? Why not 10% or 0.01%?
The more the better for security, the upper practical limit is golds inflation rate, the lower practical limit is the percentage of coins that become lost or inaccessible. That puts the viable range to 1.5-0.2%, roughly. To be clear, I'm not worried about bitcoins current rate, but rather that it will drop further and further.
Would I be correct to assume gold sets the upper limit because any higher and people would just store value in gold instead?
Why does the security budget need to be higher than the rate of lost coins?
The goal is to create attractive market conditions. Positioning yourself between the historic store of value and the minimum to avoid deflation seems like a good target.