Bitgesell is a young blockchain project started in April of this year by Emma Wu. Its codebase is derived from Bitcoin but has some differences when it comes to certain aspects. Bitgesell has learned from the mistakes and struggles Bitcoin and other PoW chains have had in the first years of their existence. Its main goals at launch were to create an asset that would constantly increase in value by implementing some changes in the intrinsic asset model.
Increasing value through increased scarcity
Bitgesell has kept some similarities that make Bitcoin into a great store of value. The maximum supply of mineable coins is and will never be more than 21 million. Just as with Bitcoin this feature cannot be changed unless the chain undergoes a hard fork, which will only result into loss of reputation and more problems along the way. We don’t need to point out which examples from Bitcoins past we’re talking about. There will only be as many BGL as was hard coded.
The difference in scarcity is where Bitgesell takes it up a notch. By burning 90% of the transaction fees, the supply will not only plateau, but decrease over time, potentially enhancing the scarcity far beyond that of Bitcoin.
Not only does the supply of BGL coins have a diminishing feature, the rate at which halvings occur has been cut in four. Whereas Bitcoins halvings occur every 210.000 blocks, Bitgesells halvings will occur every 210.000/4 or 52.500 blocks. Roughly one year between each halving instead of four.
Therefore Bitgesells first halving is set to take place in or around April of 2021, decreasing the block reward to 100 BGL per solved block. Yes, 100 BGL because the initial block reward has changed also: 50*4. So instead of the now expected year 2140 when Bitcoins block reward will hit zero, Bitgesells block reward will have gone to zero around 2054. This schedule gives many of us something to look for, because most of us are expecting to still be alive. Which is impossible to say for Bitcoins schedule. None of us today will witness that final halving when the rewards drop to zero. In any case Bitgesell will be a guide to what this economic model of programmed scarcity has in store for Bitcoin.