The privacy focussed cryptocurrency, Monero, has entered the highly-anticipated “tail emission” that aims to provide a perpetual incentive to miners. The focus will be to “keep fees reasonable, ensure a lower bound of network security, and enable dynamic block sizes.”
Securing Monero Network Forever
As per the halving model of Bitcoin and other Proof-of-Work (PoW) blockchain networks, the mining reward will eventually reduce to zero. Following this, the network hash rate may decrease significantly as transaction fees alone will not be enough for miner profits. If they lose the incentive to mine, the network’s security will be at stake.
Monero’s tail emission aims to address this critical issue to maintain healthy network usage. As such, tail emission is designed to ensure that a dynamic block size and fee market can develop by implementing a linear fee of 0.6 XMR instead of allowing the block subsidy to go to zero to bring down the dependency on the transaction fees.
Subsequently, this mechanism is expected to help the privacy-focussed digital asset to provide a healthy incentive for miners while ensuring a decentralized future.
This is expected to make XMR “disinflationary” with its supply “perfectly known, predictable, and able to be projected” at any point in the future.
While explaining the potential risks and attack vectors in the future fee market of Bitcoin, Monero stated,
“This tail emission means that Monero miners are not 100% reliant on transaction fees, and so can guarantee a specific income for themselves regardless of the fee market. This security and assurance for miners is a big departure from Bitcoin’s security model.”
The recent upgrade comes as “privacy” remains a controversial subject matter in the industry. A Reuters investigation earlier claimed Binance acted as a “conduit” to launder funds worth a whopping $2.35 billion and that Monero was leveraged by bad actors using the exchange.
Monero is slated to undergo a hard fork in July this year to enhance the base protocol and not result in the splitting and creation of a new coin. The upcoming hard fork is its fifteenth software version (v15) which will upgrade the privacy and general performance of the network.