Cryptocurrency introduced the idea that a means of exchange could be governed by a set of hard and fast rules, rather than being subject to the whims of the government that issued it. How these rules are set up gives each cryptocurrency its unique attributes.

Perhaps the most critical rule is how new coins are issued, and to whom they are issued. New coin issuances are typically used to “reward” the miners and stakeholders that allow the currency to function. These rewards can be critical to a functioning coin economy, but they come at a cost — new coin issuances to miners and others very slightly dilute the value of existing coins.

This inflation exists in all currencies and is not an inherently negative thing. Yet when evaluating a currency, it gives us a few crucial points to consider: How does this inflation occur? Who benefits from it? And is it in the best interests of the everyday user?

Many cryptocurrencies follow a model of fast issuance of coins in the beginning and eventually slowing down over time. Originally, Bitcoin (BTC) miners were rewarded 50 new coins for every block that was added to the network. Once 210,000 blocks were added, the reward amount was reduced to half (also known as halving) and this will continue to occur approximately every four years. An advantage to this structure is that inflation is very high early on, but slows over time to zero or near zero. Theoretically, this means that as adoption accelerates over time, rewards scale back to avoid “overcompensating” miners with too high an inflation rate. The downside is that these cryptocurrencies tend to disproportionately reward founders and early adopters.

Energi (NRG) is unique in that the rate of Energi coin issuance follows a linear model. In this structure, Energi has a fixed amount of 1,000,000 coins created every month and has no max coin supply. Every month, 40% of the newly minted coins go to active NRG Masternodes, 40% to Energi’s Treasury System, 10% to Energi miners and 10% to the Energi Backbone.

In this article, we will explain Energi’s coin issuance and how it is better than any other cryptocurrency today.

Adoption Curve, and the Needs of Everyday Users

As we have seen, cryptocurrency is still early in its adoption curve, and yet over 80% of all bitcoins are already mined. This is critical to understanding the assumptions behind Bitcoin’s growth strategy, or that of any currency weighted towards early issuances.

This model creates a lot of people with the means to invest in a not-yet fully realized currency, who own large amounts of the coins. To fuel the long trek to global adoption, they rely on the actions and evangelism of those early investors as they seek to grow the value of their stake. The most extreme example of this is the Initial Coin Offering (ICO) — where all (or most) of the tokens/coins ever to exist are issued at once to early investors, whose self-interest then drives them to promote adoption.

We at Energi believe the most important people in any currency are those who use it, not investors, and trapping the bulk of capital in the hands of a few relies on a “trickle down” approach that has yet to bear fruit.

Furthermore, cryptocurrency adoption has not been the exponential, “fire and forget” process some had hoped. The reality seems to be that building a fully realized crypto-economy requires continuous work, which is why Energi has a Treasury system designed to drive the adoption (and value) of our coins.

Having a linear model helps with business logic as we always know what our development budget is. For other coins, every so often their budget drops due to changes in emission rates, and they have to absorb that budget cut. We have 184,000 NRG available in the Energi Treasury every two weeks, and that will never change. This helps keep budgeting simple and easy for miners, masternode holders, and other potential community members to understand our economics.

Simplicity and Transparency

It is critically important to us that NRG be easy to understand for all users, not just sophisticated investors, and a constant issuance rate is a way of achieving that. This is very important as many coins try to ‘game’ the system by complicating their issuance models. The holy trinity of a scam coin is one that has masternodes, premines and delivers high inflation in its infancy. They confuse the public with numbers that hide the reality of the supply being centralized by the founders.

Some coins may have really high masternode rewards with a premine — for example, 95% could go to the masternodes with a premine of 50 masternodes held by the founders. By doing this, one could conceivably end up with 80% of the total supply. With a large portion of the supply already in the hands of the few, it will be extremely difficult for potential investors to pre-calculate this without understanding the implications of the logarithmic issuance curves. So not having any premine, delaying masternode payments, these are all intentionally designed to have high masternode rewards, but not to create a centralized supply.

Because our issuance is constant and linear, the rate of inflation will diminish over time to a small fraction of the overall supply. DASH and NRG have similar percentage masternode rewards, however, our issuance is currently higher because DASH is further along on their ‘stair step’ of declining issuance.