Bitflate is a cryptocurrency with constant inflation of 7% per year.
It’s 2019. I’m pitching my idea of Bitflate, a cryptocurrency with constant inflation. I’ve got a lot of NO feedback. Investors tell me the age of tokens has passed. We don’t need more tokens. Crypto enthusiasts tell me I’m just forking Bitcoin. It’s been done so many times. There’s no new innovation.
Bitcoin is the king of cryptocurrency. Ethereum is the king of token platform. Bitcoin has sidechain, Lightning Network. Ethereum has programmable blockchain. Everyone should start building on top of these platforms. We don’t need to reinvent the wheel.
We don’t have the platforms we need
We have many platforms. I’m most familiar with Bitcoin and Ethereum. Their economics operate under the same assumption: limited supply. Supporters of these platforms value this property. Price rise is a big incentive to motivate communities. At market level, we can see token growth as a kind of inflation. As more projects launch, people have more tokens to choose. In 2019, the prevailing view is we have too many tokens. We need to innovate the technology. High profile investors continue to put money behind projects that experiment with technology.
I’m a software engineer. I have seen smart and innovative technology in crypto market. In Bitcoin, we have Lightning Network for scaling, sidechain for launching derivatives. In Ethereum, we now have solutions building 3-4 layers on top of the main chain. There are other platforms improving components of Bitcoin and Ethereums.
I have come to the conclusion that technology is not the problem, at least right now. We have enough technology to solve any problem in the next 5-10 years. We don’t need more solutions to solve imaginary problems. The real problem is our base layer is missing some economics.
Bitcoin strength and weakness: limited supply
Bitcoin has successfully bootstrapped using limited supply. Its limited supply and halving increase market price. I think Bitcoin would not survive if it didn’t have this property. There is economic and social movement built around Bitcoin. People promise liberation from the existing monetary system. Despite of the hype, the main use case of Bitcoin remains Store of Value. It remains and likely continues to be a speculative asset. With Bitcoin, we HODL. The feature that defines Bitcoin hinders its adoption. Its strength is also its weakness.
Ethereum and other tokens face the same challenge. People in crypto don’t recognize this. If users don’t make transactions with tokens, there is no point building layers on top.
Experiment with monetary policy
I’m making the case for new experiment with monetary policy. With Bitcoin, we already solved the Store of Value use case. But we need to rethink limited supply. The world needs more than Store of Value. Life isn’t just work and stash. Crypto needs to grow up and accept reality. We need to stop preaching a limited supply money future. We need to create a cryptocurrency that people want to use.
The missing platform: cryptocurrency with constant inflation
Bitflate is a cryptocurrency with constant inflation. It is experimental. My experiment is simple. I take what is working in Bitcoin and change monetary policy. I think it has the technology we need. Bitflate does reward halving until the 4th halving. Then it starts inflation of 7%. The reward schedule is as follows:
- 0: 50 (supply: 10 million)
- 1: 25 (supply: 15 million)
- 2: 12.5
- 3: 6.25 (end of halving)
- 4: 6.56 (start of inflation 7%)
- 5: 7.02
- 6: 7.51
- 7: 8.04
- 8: 8.60
- 9: 9.20
- 10: 9.85 (supply: 31 million)
Other tokens have constant tail emission. Bitflate has a percentage, exponential increase. Even with 7% inflation, Bitflate supply is still limited. This is an incentive for early adopters to acquire Bitflate tokens. I think an inflating crypto has different economics. It discourages HODL. It’s not a long-term Store of Value. When people transact more often, we will see crypto moving. The market needs an inflating cryptocurrency. This is why I create a cryptocurrency in 2019.