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## <b>What's the Problem?</b>
Many people have voiced concern about the long-term security of the Bitcoin protocol as the block subsidy trends to zero. Eventually, miner compensation will be entirely reliant on transaction fees and the resulting variance in block rewards may create incentives for aberrant mining behavior. The argument is that some incentive other than transaction fees will be needed in order to keep the miners hashing and the network secure.
@peterktodd has suggested a <a target="_blank" href="https://petertodd.org/2022/surprisingly-tail-emission-is-not-inflationary" color="blue">tail emission</a> or <a target="_blank" href="https://stacker.news/items/84108" color="blue">demurrage</a> should be added to Bitcoin as a continued funding mechanism for miners. Unfortunately, both of these suggestions present significant problems for Bitcoin and Bitcoiners. A new type of mining that has recently emerged stands to provide a solution to the Bitcoin security problem.
## Inflation and Taxation
Tail emission is the idea that there should be some set amount of newly minted bitcoin arriving with every block as a reward to the miner without regard to the 21 million coin cap. Todd suggests a 1% or less tail emission would likely be a neutral change to the total supply of bitcoins when accounting for lost coins.
<a target="_blank" href="https://x.com/i/status/1880065537608478892" color="blue">https://x.com/i/status/1880065537608478892</a>
However, for Bitcoiners the concept of an inflated supply is antithetical to the purpose and ethos of Bitcoin. The hard-coded 21 million coin cap is among Bitcoin's strongest promises. Somehow ∞/(21M+1% per annum) just doesn't have the same ring to it.
Further, to my knowledge there has been no formal proposal as to how the level of tail emission would be set or whether it would ever be adjusted. Presumably there would be some group of people who would meet quarterly, evaluate the state of lost coins, and make a determination as to the percentage of the next quarter's tail emission.
Maybe they could be called the Bitcoin Reserve Board, in keeping with tradition.
Todd's other suggestion, demurrage, is simply a redistributive tax from long-term holders to miners. His proposal involves paying a percentage of your coins in a transaction, with Todd suggesting 0.1%, scaled up based on how long the coins were sitting in storage. This concept takes the current standard of taxation and integrates it into Bitcoin's protocol. Rather than any voluntary activity which could solve this problem, demurrage forces a tax onto savers.
In theory, either or both of these interventions would encourage miners to continue to mine for blocks without trying any reorgs or delayed publications of blocks.
I will venture a guess that most Bitcoiners would agree with me: taxation and inflation are theft. If only there were some voluntary mechanism by which Bitcoiners could engage in the mining ecosystem resulting in consistent fees paid to miners.
## <b>DATUM Gateways</b>
This is a good time to talk about <a target="_blank" href="https://ocean.xyz/docs/datum-setup" color="blue">Decentralized Alternative Templates for Universal Mining</a>. DATUM is a protocol which allows miners to participate in pooled mining while retaining the right and responsibility of creating their own block templates. Any pool can offer DATUM support, although currently only OCEAN supports DATUM.
The revolutionary aspect of DATUM is in the way it furthers mining decentralization while still allowing the benefits of pooled mining. The critical aspect of mining, what separates miners from hashers, is the ability to determine what goes into blocks and what does not.
<a target="_blank" href="https://x.com/i/status/1840408161271890264" color="blue">https://x.com/i/status/1840408161271890264</a>
Miners using DATUM are not simply taking an order from their pool and working on it. They are actively mining Bitcoin by exercising their discretion in block templates. By extension, DATUM makes significant strides in decentralizing the most important aspects of Bitcoin mining.
## <b>Hired Hashrate</b>
The history of hired, or rented, hashrate in the Bitcoin ecosystem is checkered to put it nicely. The risks of cloud mining, such as paper mining, where a "miner" would sell contracts for hashrate they never actually owned, or pre-paid mining contracts getting rugged by outright charlatans have resulted in well-earned skepticism from the Bitcoin community.
With its introduction of Hashpower, Braiins is offering a spot market for immediate hashrate delivery. This provides crucial protections relative to the prior concept of cloud mining.