I love watching the constant hand-wringing about Casper's inflation model.

Question

I love watching the constant hand-wringing about Casper's inflation model.

Shows a complete lack of understanding of the economics.

First, I've witnessed coins with MASSIVE inflation rates basically hyperinflate into nothing. That's where this fear comes from, and rightly so. But Casper's model isn't massive. It is 8%. This is a reasonable amount throughout the period of network development.

Second, Bitcoin has halvings, but in its early years it had MASSIVE inflation. Initially in the 1000s, then 100s of %. We're only seeing what it has been reduced to in recent years. Casper doesn't come close to Bitcoin's early inflation rates. Not even a small fraction. And those huge rates didn't push BTC into the ground, did they? Going forward, CSPR might not have halvings, but there is nothing besides consensus preventing it from reducing its rate as it develops. Not really needed, though, for at least a number of years.

Third, what 8% means is that 9 years from now, in 2032, supply will be about 22 billion. That is still less than 2/3 the supply of Cardano. You know, the same Cardano that did 300x a few years ago with 35 billion supply. I'm not too worried about 11 billion supply as of today, or where it might be going anytime in the near future.

Fourth, you immunize yourself — and more — against this supply inflation by staking, as all the newly minted coins go to the validators and delegators helping to secure the network. Unlike mined coin inflation (eg, BTC), rewards are not limited to a few.

Fifth, ~75% of Casper supply is bound up in staking. This means the actual AVAILABLE supply is less than 3 billion. All use cases and anyone else transacting with CSPR is limited to using these available coins. And that number isn't increasing a fearful amount anytime soon. Given the same stake %, 2032 available supply would be 5-6 billion.

Yes, long term (decades), 8% inflation could do some damage and would need to be addressed before then. Anytime in the near future, though, it is a minor concern at best. The focus should be on network development and growth, which is FAR more important and easily outstrips any reasonable growth in supply.