The Monero(XMR) community is working to introduce some important measures and upgrades which it calls Tail Emission to help in protecting its miners’ interests in the coming days.
Tail Emission is a “minimum subsidy” designed to “keep fees reasonable, secure a lower bound of network security, and enable dynamic block sizes.” The Monero community has proposed that miners receive a minimum of 0.6 XMR for each block mined on Monero as part of tail emission.
This is in contrast to Bitcoin’s strategy, which permits block subsidy to reach zero. The official announcement notes:
“That 0.6 $XMR is linear, meaning Monero’s inflation rate approaches 0% in perpetuity. This makes Monero *disinflationary*, and unlike fiat or centralize cryptocurrencies, the supply is perfectly known, predictable, and able to be projected at any point in the future”.
Advantages of Monero Tail Emission
The block subsidy in digital currencies like Bitcoin will go to zero in the future. It means that the network’s security will be 100% dependent on user transaction fees. The fees must, however, be sufficient to support a “competitive, decentralized mining environment.” Otherwise, the number of miners and the BTC hashrate will plummet to achieve market equilibrium.
Presently, the transaction fee is set at 1% of the reward in each block. The remaining 99% is made up of block subsidies, which will eventually drop to zero. This puts into question Bitcoin’s long-term security promises.
Monero’s Tail Emission ensures that miners are not completely reliant on transaction fees. This ensures them a consistent revenue independent of the fee market. The announcement continues, “
“Not only does this ensure Monero has a certain level of security forever, it removes the burden of security from being 100% on transaction fees, thus allowing transaction fees to remain reasonable long-term”.
Tail Emission, according to the Monero community, will allow them to build an intriguing “dynamic block size.” As a result, miners can adjust the block size automatically to efficiently tackle congestion. The dynamic block size also allows to keep block size as small as possible under normal situations.
“The tail emission also ensures that there will always be new Monero entering the economy, replacing a portion of the Monero lost by clumsy users, incentivizing commerce, and enabling new entrants a way to get Monero without KYC (mining!) no matter the fee market,” the community writes.
The tail emission will ultimately improve network scalability and long-term XMR transaction security.