This series continues to translate the original white paper by Satoshi Nakamoto to plain language. The goal is to have easily shared content, and send new people directly to nostr to read it. The original content will be posted, with the plain language below.
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6. Incentive Paragraph 2
The incentive can also be funded with transaction fees. If the output value of a transaction is less than its input value, the difference is a transaction fee that is added to the incentive value of the block containing the transaction. Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.
Plain Language
In the Bitcoin game, players can also earn rewards (coins) through transaction fees. If the value of moves (transactions) going into the puzzle (block) is more than the value coming out, the extra is like a fee added to the reward for solving the puzzle. As more coins join the game, the rewards might shift more towards these fees, making the game self-sustaining without creating more new coins.
In the beginning of Bitcoin, everyone got new coins as rewards for playing well. As more and more people join the game, there's a plan to keep things fair and balanced.
Instead of making lots of new coins all the time (inflation), the creator decided that players can start earning more coins through fees. Like saying, "Okay, now that there are many players, you can still earn coins, but a big part of it will come from the fees paid by others in the game."
This way, the game becomes self-sustaining. It doesn't have to keep making endless new coins, and players can still earn rewards by playing and helping others in the game. It's a way to control how much money is there in circulation, preventing too much from being made and keeping the game's money system in balance – like making sure there's not too much or too little money in a game.
Bitcoin has a fixed supply of 21 million coins. This scarcity is part of what makes it valuable. Only the programming can create new coins, not the decision of a central authority or any outside persons.
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