On Inflation, Transaction Fees and Cryptocurrency Monetary Policy

Blockchain networks face fundamental costs for maintaining security through paying miners or validators in consensus protocols. There are two primary methods for covering these essential security expenses that all blockchains must address.

• →Blockchain security requires economic incentives for miners or validators regardless of consensus mechanism
• →Security costs are unavoidable expenses that must be funded through specific payment mechanisms
• →Both proof of work and proof of stake systems face the same fundamental economic challenge
• →The article explores two distinct approaches for funding blockchain security infrastructure