Background: Difference between revisions
No edit summary |
No edit summary |
||
| Line 5: | Line 5: | ||
[[File:ST logo 3D02.png|300px |left]] | [[File:ST logo 3D02.png|300px |left]] | ||
Seasonal Tokens design is based on key observations about the way Bitcoin evolved. Therefore we need some understanding of Bitcoin to fully appreciate the design principles behind Seasonal Tokens. Check out this [[Bitcoin Design | Bitcoin]] summary of ideas that influenced Seasonal Tokens design. | Seasonal Tokens design is based on key observations about the way Bitcoin evolved over time. Therefore we need some understanding of Bitcoin to fully appreciate the design principles behind Seasonal Tokens. Check out this [[Bitcoin Design | Bitcoin]] summary of ideas that influenced Seasonal Tokens design. | ||
Basically, the mean feature borrowed from Bitcoin's design is the use of proof of work. In Bitcoin PoW is used in the consensus mechanism for keeping the distributed database. But it goes beyond that, in fact PoW solves many problems at once as described in the [[Bitcoin Design | Bitcoin]] page. | Basically, the mean feature borrowed from Bitcoin's design is the use of proof of work. In Bitcoin PoW is used in the consensus mechanism for keeping the distributed database. But it goes beyond that, in fact PoW solves many problems at once as described in the [[Bitcoin Design | Bitcoin]] page. | ||
Proof of Work mining is necessary for Seasonal Tokens design, because it gives a real cost of production for the tokens (together with ETH minting fees). This is what anchors the token's prices to the real economy, and it is the handle that allows the relative token's prices to oscillate around each other. | Proof of Work mining is necessary for Seasonal Tokens design, because it gives a real cost of production for the tokens (together with ETH minting fees). This is what anchors the token's prices to the real economy, and it is the handle that allows the relative token's prices to oscillate around each other. | ||
The halving of mining supply every 3 years in Seasonal Tokens (every 4 years in Bitcoin) also is a way to have an absolute maximum number of tokens produced. | |||
The fact that there is a finite number of bitcoins is what makes them so valuable. This digital asset is not subject to inflation. Nobody can produce Bitcoin out of thin air de-valuating the asset. | |||
The halving of the mining supply makes sure there will be only a bit over 33 million tokens of each type. | |||
Revision as of 03:17, 17 June 2023
In construction...
Seasonal Tokens design is based on key observations about the way Bitcoin evolved over time. Therefore we need some understanding of Bitcoin to fully appreciate the design principles behind Seasonal Tokens. Check out this Bitcoin summary of ideas that influenced Seasonal Tokens design.
Basically, the mean feature borrowed from Bitcoin's design is the use of proof of work. In Bitcoin PoW is used in the consensus mechanism for keeping the distributed database. But it goes beyond that, in fact PoW solves many problems at once as described in the Bitcoin page.
Proof of Work mining is necessary for Seasonal Tokens design, because it gives a real cost of production for the tokens (together with ETH minting fees). This is what anchors the token's prices to the real economy, and it is the handle that allows the relative token's prices to oscillate around each other.
The halving of mining supply every 3 years in Seasonal Tokens (every 4 years in Bitcoin) also is a way to have an absolute maximum number of tokens produced.
The fact that there is a finite number of bitcoins is what makes them so valuable. This digital asset is not subject to inflation. Nobody can produce Bitcoin out of thin air de-valuating the asset.
The halving of the mining supply makes sure there will be only a bit over 33 million tokens of each type.
