PIVX Coin Supply

Hello. Nice to see everyone and
welcome to another PIVX Class. Today we have a class
on PIVX itself. We are going to talk about
coin supply and a common misconception that the
coin supply of PIVX is unlimited. So get your notepads out
and lets get started. Okay. So a quick bit of
preliminary information. First, coin supply is the
total number of coins
that can ever be created. Many cryptocurrencies have a
supply of coins that is limited. We'll use Bitcoin as an example,
but this is fairly standard in
cryptocurrency at this time. In Bitcoin, the miners process
the blocks of transactions to get the reward of newly
generated Bitcoin for doing so.

They also get the fees spent by
users during that time period. After a certain point, though,
there'll be no more new Bitcoin and they will only get the fees
from those transactions. This is because the code
behind Bitcoin was created to have a limit on how many
could be created. But why do this? Well, because a coin that creates
more of itself forever is not much different from the fiat
currencies it hopes to replace. Essentially, limiting supply
is a good thing as long as there are enough transaction
fees to keep the Bitcoin miners
doing their mining. Right. Well, there we go. Limited supplies are good
because it means that your
coins don't deflate in value. But then why does PIVX not have
a limit on its coin supply? It does seem to be a bad thing. And it would be if it weren't
for the fact that PIVX is playing
with a different set of rules. In Bitcoin, transaction
fees go to the miners. This means that Bitcoins
swirl around forever. They go from one wallet to the
next and then to another again.

In PIVX, the fees are destroyed. Wait. Destroying coins? Why would you do that? Well, there are three reasons. One, if transactions are free,
then malicious people who don't want PIVX to succeed
could spam millions of transactions on the network
to slow it down for normal users. That'd be pretty bad. Two, if no one profits
from fees there's no incentive to make them
any higher than they need to be. And three, it is the
counterbalance to having
a persistent rate of coin creation. There it is. Did you notice how I said
persistent, not unlimited? It isn't wrong to say unlimited. In truth, there is no limit,
but it does end up
kind of misleading people. Hence, this video. As I see it, there are
two reasons to not limit
the currency in the system. One, the budget for PIVX
development is created
within that block reward. And then the second thing is
that it guarantees that the stakers will keep supporting
the network no matter what. Now the funny thing is
that PIVX is likely to actually
increase in rarity over time. Their system has a kind
of break-even point.

If a certain amount of coins
are generated each minute, and a certain amount are
destroyed with each transaction, eventually they will reach
a point where the two
will kind of break even. So there will be as many
destroyed as created. This is why PIVX doesn't really
like the term unlimited,
it can be kind of misleading. In fact, the PIVX supply
will likely shrink the more adoption it sees when many,
many people are using PIVX
for just everyday transactions. The fees will outweigh the
new coins being created. At this point, the PIVX
community will have to vote on how they want to
proceed from there. They can allow the supply to
drop and thereby increase
the value of each coin, or they can raise the coin emissions
to kind of match the fees.

They have the power to change
the emissions by a vote
of the community. And for those that don't know,
emissions is another term
for block reward. So when a staker is staking
they can earn PIVX emissions. To summarize this lesson
you could say that PIVX does not have an unlimited
coin supply because it destroys the transaction fees while
most cryptocurrencies pay those fees to the people
processing the transactions. Whether you do things the
Bitcoin way or the PIVX way, they both improve upon the
traditional fiat money system
in different ways. Okay. That's it.

You now know why PIVX
doesn't have a supply limit. This can be a tricky
topic to explain, so I hope I explained it in
the easiest way possible. If you are having trouble
with my explanation, feel free to ask your questions
in the comments below. I will answer you to the
best of my ability. Thank you for tuning
into today's class. I look forward to our next one. So have a good day and I
will see you next time.

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