About Siacoins calculation and supply



  • Recently many people asked questions about the calculation and supply of Siacoins. Many people actually have misconception of Siacoin’s supply and calculation. I am reposting a post about Siacoin’s supply I wrote couples of months ago and hope it is helpful to some poeple.

    In Sia FAQ - "The number of siacoins created each block is (300,000 - height). The genesis block has a height of 0. After height 270,000, all blocks will have a reward of 30,000 siacoins. The current number of siacoins can be found at explore.siacoin.com"

    By about July of 2020 when sia hits the 270,000 block height, there will be about 44.55 billion (((300,000+30,000)/2)x270,000=44.55 billion) siacoins available in the market. From there, there will be about 1.57 billion (30,000x144x365=1.5678 billion) of siacoins coming out from the mining every year constantly. So by the Match of 2021, there will be about 45.6 billion of siacoins available. by March of 2026, there will be about 53.5 billion of siacoins available in the market.

    I think Siacoin's inflation is not high. By Match of 2021, the inflation is about 3.4%. by March of 2026, the inflation will be about 2.9%. by March of 2036 it will be about 2.2%. In the long run, the inflation will be about 2% for long time. So in the long run, the inflation rate will probably be lower than the Sia network growth rate besides the lost coins.

    In return, Sia gets a robust and secured network and Sia can focus on the long term growth of its business and ecosystem. Siacoin’s value eventually will depend on people's expectation on the growth of the business and ecosystem on Sia network. So once the market figures out the proper marketcap of Sia, we will see the real price of the Siacoins.

    In v1.2.x, Sia will implement a host Proof of Burn mechanism in which hosts have to burn certain siacoins to show that they are real and sincere for business to counter the sybil attack. When Sia network is getting mature, the estimate annual burned siacoins can be 0.1% to 0.5% of total available siacoins. The burned siacoins will offset the inflation in the long run. At some point, it could result in a deflation of siacoins.

    Here is also a Siacoin’s supply(inflation) chart (by the courtesy of siapulse.com) - http://siapulse.com/page/market

    In addition, research has indicated Bitcoin will be unstable when its block reward ends in the future - http://freedom-to-tinker.com/2016/10/21/bitcoin-is-unstable-without-the-block-reward/ and http://randomwalker.info/publications/mining_CCS.pdf . Sia won't have this problem in the future.

    "So perhaps designers of new cryptocurrencies should make the block reward permanent and accept monetary inflation as inevitable. Transaction fees would still exist, but merely as an incentive for miners to include transactions in their blocks."


  • Global Moderator

    Awesome, thanks for writing this up! Now we will have something to reference every time someone complains about the supply. :)



  • Just a side note:
    Storj currently has only released 10% of their total coins (http://coinmarketcap.com/assets/storjcoin-x/). It means they will release 9 times more of their current coins supply and dilute their coins 9 times more in the future, while Sia has released about 25% of their total coins so far (and continue to release more coins every day through the mining system) and only can release about 4 times more coins in a long future. Therefore, if we assume Sia and Storj have same tech and market value, the Sia's current marketcap should be 2.5 times of Storj's current marketcap considering the future coins supply. If you think Sia is a better product, the Sia marketcap should be more than 2.5 times of Storj's.



  • Another side note:

    My analysis in my last side note has been proved to be correct by the market. Right now the Sia’s market cap is about 2.9 times of Storj. It had taken the market long time to discover and adjust that. We can see that the market eventually is efficient and will find the right value and price for the assets in the market. But it also takes time for the market to discover and absorb the information.

    As we know that a free market is always an efficient market, that means, in comparison of each product in the market, the better products always should have higher market value. Even if for some reasons, this equilibrium(efficiency) is broken for some products (the better products don’t get the higher market value comparing to other products), the market will discover it and adjust it eventually and the equilibrium will be reached sooner or later. Actually the trading opportunity will emerge whenever there is an inequilibrium or inefficiency in the market.

    I would like to do one more analysis on Sia’s market cap because I think the market cap ranking on coinmarketcap.com is a good tool to analyze the crypto-coins. On coimarketcap.com, Sia currently is at the 14th place. Let’s take a look at all the 13 crypto-coins above Sia. Based on all criterions you can come up with, for example dev team, business model, technology, development stage, the chance to be commercialized, growth opportunity, the market perspective, the maturity and security and stability of the products and so on, for all the 13 coins above Sia, which ones do you think they are supposed and definitely deserved to have higher marketcaps than Sia? Whence you pick up those coins which you think are definitely better than Sia at this moment and put them in front of Sia, you will discover your true place for Sia. Everyone might have a different place for Sia. But that is the place the market eventually will move Sia to if you are correct.



  • Added a new note:

    In v1.2.0, Sia will implement a host Proof of Burn mechanism in which hosts have to burn certain siacoins to show that they are real and sincere for business to counter the sybil attack. When Sia network is getting mature, the estimate annual burned siacoins can be 0.1% to 0.5% of total available siacoins. The burned siacoins will offset the inflation in the long run. At some point, it could result in a deflation of siacoins.



  • @tobo said in About Siacoins calculation and supply:

    Added a new note:

    In v1.2.0, Sia will implement a host Proof of Burn mechanism in which hosts have to burn certain siacoins to show that they are real and sincere for business to counter the sybil attack. When Sia network is getting mature, the estimate annual burned siacoins can be 0.1% to 0.5% of total available siacoins. The burned siacoins will offset the inflation in the long run. At some point, it could result in a deflation of siacoins.

    As we're a hosting provider, we'd be offering Storage and keep the Siacoins we earn for some time. Does the "Proof of Burn" mechanism warn us or will it just empty our entire wallet or just 0.1%-0.5% of the total balance per year?


  • admins

    @Guardoo said in About Siacoins calculation and supply:

    As we're a hosting provider, we'd be offering Storage and keep the Siacoins we earn for some time. Does the "Proof of Burn" mechanism warn us or will it just empty our entire wallet or just 0.1%-0.5% of the total balance per year?

    Proof-of-Burn will actually be entirely opt-in. You won't burn any coins without configuring it explicitly, and certainly it wouldn't do anything like burn a percentage of your total balance. (well, if you opt-out entirely nobody will use your host. But at the very least you will have full control over the exact amount of burn, and full visibility into how many coins total have been burned)

    PoB is something that we're going to be evolving slowly, but definitely also something that we're going to be careful about. Burning 1% of your revenue is obviously a drain on your profits, and we care about optimizing host profitability (as it will make the overall network more competitive).


  • admins

    This post is deleted!

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