Monero has one of the best tokenomics structures of all cryptocurrencies. The biggest benefits are: there is no coin-based governance structure and RandomX allows mining on almost any computer.
Although there is no set limit on the total supply of XMR, the tail emission makes sense because it slowly replaces any coins that are lost.
Emission Schedule
Monero uses a unique emission curve that differs from many other cryptocurrencies. Initially, there was a rapid emission of XMR, with the majority of XMR to be mined by 2022. After this initial phase, Monero transitions to a "tail emission" where a fixed amount of 0.6 XMR per block is created indefinitely. This is intended to ensure miners are incentivized to continue mining and maintaining network security after the main emission is complete.
Inflation
Due to its tail emission, Monero has a disinflationary supply model. The inflation rate decreases over time as the fixed tail emission becomes a smaller percentage of the total supply. This setup aims to balance long-term security and moderate inflation, ensuring that mining remains profitable.
Mining Algorithm
Monero uses a proof-of-work (PoW) mining algorithm called RandomX, which is optimized for general-purpose CPUs. This choice is strategic to keep mining decentralized and accessible, preventing the dominance of mining by specialized hardware such as ASICs, which is common in other cryptocurrency networks.
Decentralized and Community-Driven Governance
Monero does not have a formal governance structure built into its blockchain. Instead, decisions are made through community consensus, involving developers, miners, and other stakeholders. Funding for development and community initiatives typically comes from donations and community-driven crowdfunding. Show Less
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