We’re distributing our money in a way that looks like a curve. It starts at the beginning of our currency’s history when no coins were created yet, and goes into the future when eventually all the coins are out there in the hands of someone. But what happens when we reach the end of that curve and we don’t have any more new coins for the miners? Without money to be made, it’s reasonable to think many (if not most) of the miners will just stop mining. After all, it costs to mine. You have to buy the hardware for it and pay the electricity bill as well. And in our money design, we need miners for it to work.

A possible solution to this problem is to add fees to our system, which are useful for more than one reason. But if miners have to rely on fees alone to be profitable, we’d need those fees to be quite high. If fees are high, our money becomes expensive to use, therefore it’ll be used less. And the lesser our money is used, the higher the fewer fees need to be. It’s a spiral of death.

Another solution is to just never stop creating new coins. Make the emission curve endless. But wait, isn’t that contrary to the scarcity we needed for our money to be considered good money? Well, yes and no. As with many things in life, it depends. Eating food is good for you, eating too much (or too little) is bad. Same thing happens with our coin creation: success or failure lies in how much, how often. That balance is struck with a tail emission. A emission that comes after the initial curve is completed. Just like the tail of a cat comes after the rest of the cat.

In the case of Monero, the tail emission started approximately after the first 18 million coins were out. Then, for every new block the system started paying the lucky miner 0.6 new moneros. Since we’re aiming for those blocks to be created every 2 minutes, that means that we’re creating 157,788 new moneros per year. With that, we’re ensuring that regardless of how many new transactions we have in those 2 minutes, miners will want to keep creating those blocks. We didn’t need to rise the fees, our money keeps being cheap and convenient to use, and the list keeps being protected of vandalism by our extended network of profitable miners.

There’s a last little trick. If we make the tail emission a fixed number (0.6 in this case), the devaluation of our money decreases with time, instead of accelerating.

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