Monero Tail emission

Monero has disclosed plans for a significant Tail Emission update aimed at improving the network. The update focuses on several crucial aspects, such as initiatives to reduce inflated fees while also increasing security.

Tail Emission, as the name implies, is a “minimum subsidy” designed to “keep fees low, provide a lower bound of network security, and allow dynamic block sizes.” Therefore, in this article, you will discover more about the latest update from Monero.

What is Tail Emission?

The Monero community has recommended 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 system, which permits block subsidy to reach zero.

This is because miners require motivation to mine. Due to the dynamic blocksize, competition among miners will lead fees to fall. If mining is not profitable due to a high cost and low reward, miners lose motivation and stop mining, decreasing network security. Tail emission allows for the development of dynamic block size and fee market.

The Monero community considers this important because Tail Emission ensures that Monero has a certain amount of security standards. However, it removes the weight of security from being 100% on transaction costs, allowing transaction costs to stay fair in the long run.

What are the Advantages of Tail Emission?

The block subsidy in digital currencies such as Bitcoin will go to zero in the future. This means that the network’s security will be entirely dependent on the user’s transaction fees. However, the fees must be sufficient to sustain a “competitive, decentralized mining ecosystem.” Otherwise, the number of miners and BTC hashrate will fall to reach market equilibrium.

At the moment, the transaction cost is only 1% of the reward in each block. The remaining 99% is made up of block subsidies, which will ultimately go to zero. This brings Bitcoin’s long-term security assurance into question.

Moreover, Monero’s Tail Emission will guarantee that miners are not entirely reliant on transaction fees. This ensures consistent revenue for them independent of the fee market.

Other Advantages of Monero’s Tail Emission

These are other advantages of Tail Emission’s upgrade:

  • This makes Monero deflationary. Unlike fiat or centralized cryptos, the supply is known and predictable at any moment in the future.
  • Monero miners are not entirely dependent on transaction fees and can therefore guarantee a fixed revenue regardless of the fee market.
  • The Monero community can create and implement an innovative “dynamic block size”. Miners can automatically raise the block size to better control congestion by paying a penalty to block subsidy in exchange for TX fees
  • No matter the fee market, new Monero will always enter the system. It will replace a part of the Monero lost by clumsy users, stimulating commerce, and provide new entrants a method to receive Monero without KYC
  • To better allow Monero as digital currency while keeping its store of value properties, the Monero network will scale better. It also guarantees the long-term security of its transactions and keeps costs reasonable.

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