January 21, 2022

Monero (XMR) Closer To Its Tail Issues – Crypto Trends – Bitcoin, Crypto & Blockchain News

According to the data available in MoneroBlocks.info, an explorer of the Monero blockchain, this cryptocurrency focused on the privacy of its users, has already issued about 16.6 million XMR (16,659,263 at the time of writing this article), and at the current rate it is anticipated that for the May 31, 2022, there will be a total of 18.4 million Monero XMR coins in circulation. At that precise moment, the project will have already exploited about 90% (87.6% to be exact) of its total coin issuance.

As the issuance of coins thanks to mining reaches parity with the total supply, the Monero project will switch to a new supply program, dubbed “Tail emission” (Tail emission in English). Previous announcements of the project indicate that miners will earn a consistent mining reward of 0.6 XMR per block that would likely maintain the overall security and integrity of the Monero blockchain.

In Moneropedia explain this mechanism as follows:

Miners need an incentive. Due to the dynamic size of the blocks, competition between miners will cause fees to decrease.

And the situation is understandable, since if mining is not profitable due to high cost and low reward, miners lose their incentive and will stop mining, reducing network security.

Monero like Bitcoin and many other cryptocurrencies, reduce their supply of XMR as time passes, using mining. Currently, the project offers a reward of 3.41 XMR per block, and is programmed to go down with each block mined until it reaches 0.6 XMR.

XMR Circulation Chart

With this issuance system, Monero tries to somehow challenge the supply mechanism of Bitcoin, the world’s leading digital currency by adoption and market capitalization. The Bitcoin network will mine a total of 21 million coins in its lifetime. By 2040, there will be a total of 99.8% of all bitcoins in circulation, while the remaining 0.2% will be spread out over the next 100 years.

However, this situation is something that many crypto miners do not like, since the difficulty at that time would be very high and the economic incentives very low, which would lead many to cease their operations and with it the security of the network would decline. It is for this reason that Bitcoin is looking for other mechanisms to avoid this situation known as: The tragedy of the commons a dilemma described by Garrett Hardin in 1968, and that makes all the sense in the world in an increasingly interconnected world.

One solution for this is the sidechains Y Lightning Network, where users do not pay commissions to miners to settle each Bitcoin transaction, solving two serious problems of Bitcoin: scalability and speed in confirming transactions, without having to increase mining power.

Monero, on the other hand, will keep its supply constant to incentivize miners throughout their lives. This forecast suggests that Monero is preparing to be among the few cryptocurrencies that would replace Bitcoin if it fails to innovate, although that remains to be seen in the future.

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Monero (XMR) Closer To Its Tail Issues – Crypto Trends – Bitcoin, Crypto & Blockchain News