A video published today by PIVX Class youtube channel help us to find out why the “unlimited” coin supply of PIVX isn’t quite what most people think.
In the video they talk about the max supply of PVIX and the misconception thet the coi supply of PIVX is unlimited, but before we start a quick bit of preliminary information. The coin suplly is the total number of coins that can ever be created, many cryptocurencies have a total supply that is limited like Bitcoin but this is fairly standard in cryptocurrency at this time. In Bitcoin miners process the blocks of transactions to get the rewar of newly generated bitcoin for doing so, they also get the fees spent by users during that time period. After a certain point though there will be no more new Bitcoin and they will only get the fees from transacctions.
This is because the code was behind Bitcoin was created to have a limit on how many could be created, but why do this? Well, because a coin that creates more of it self forever is not much different from FIAT currencies is hope to replace.
Esentially, limiting suplly is a good thing as long as there are enough transacction fees to keep Bitcoin miners doing their minign. But what about PIVX?
There we go. Limited supplys are good because that means your coins dont deflate in value, but then why PIVX dont have a limit on its coin supply? It will be a bad thing if it werent for the fact that PIVX is playing with a different set of rules. In Bitcoin transaction fees goes to the miners, this means that Bitcoin swirl arround forever but in PIVX the fees are destroyed. But why the coins are destroyed? there are 3 reasons:
- If transactions fees are free then malicious people who dont want PIVX to succes could spamm millions of transactions on the net work to slow it down for normal users.
- If no one profits from fees theres no intencive to make them any higher than they need to be.
- It is the counterbalance to having a persistant rate of coin creation.
So unlimited isnt wrong at all. In truth theres no limit but it does end in kind of misleading people, anyway if a certain ammount of coins are generated each minute, and a certain ammount of coins are destroyed with each transaction, eventually they will reach a point where the two will kind of break even, so there will be as many destroyed as created. This is why PIVX doesnt like the term unlimited.