Initial Supply Creation and Distribution
The initial MWC supply was created in the genesis block with 10,000,000 units, and another 10,000,000 units will be mined using proof of work. The 10,000,000 units were distributed for free in a widely publicized airdrop during 2019 to any Bitcoin holders who registered over a period of months. Over 148,000 bitcoins were registered, making it one of the largest airdrops ever. Additionally, any MWC holders who registered for several airdrops during 2020 received a portion of the supply.
Methods of Supply Creation
The supply of cryptocurrency can be created in various ways. For example, it can be purely proof-of-work mined, a result of a fork, created in a genesis block, or other methods. Some people may attach their personal, yet irrelevant to others, moral judgment to the means of supply creation. Regardless of how the initial and subsequent supply is created, the price discovery process must proceed with buyers, sellers, and holders participating 24/7/365 in the order books.
Bitcoin's Early Distribution
In Bitcoinâs case, early miners had extremely low costs, practically free. The bitcoins were valued so low by the market that many were given away for free in faucets to increase network effects. Additionally, other new stock was created by a miner who then likely sold to a speculator who sold to another speculator and so on until eventually, it landed with a holder of last resort.
MWC's Early Distribution
In MWCâs case, the initial stock was valued extremely low and to increase network effects was distributed via an airdrop, similar to a faucet, for free to either Bitcoin holders during the bottom of a bear market or to early MWC buyers and holders. It could be argued that this constituency would likely make good candidates to become holders of last resort.
Comparing Bitcoin and MWC Distribution
Therefore, in this monetary experiment, the MWC initial stock may have started off much nearer the eventual holder of last resort than Bitcoin's initial stock did. Nevertheless, in both cases, the monetary goods have had to grow their market cap during the price discovery process from zero.
Praxeology and Market Sentiment
Praxeology, the study of human action, does not attach moral judgments to human action or prices. Prices describe past behavior, but future prices are totally dependent on the subjective valuation from individual market participants based on how well they think the good will help satisfy their desires.
Historical Perspective on Supply Creation
With gold, the market does not attach personal sentiment to how the stock was created or distributed despite extremely immoral history, like the Spanish conquistadors. Likewise, with Bitcoin, the market does not attach personal sentiment to how the stock was created or distributed despite some people thinking it will boil the oceans by using too much electricity and not being âgreenâ enough. If they do not want to buy Bitcoin for that reason, as the meme says, they can have fun staying poor.
Stock-to-Flow Ratio Comparison
The stock-to-flow ratio measures how much dilution holders and new buyers endure. In Bitcoinâs example, in 2011 there were about 5 million bitcoins, and in 2021 there were about 18.5 million or 73% inflation cost paid to miners. In MWCâs example, at the start of 2021 there were about 10.7 million and in 2030 there will be about 11.1 million or about 4% inflation cost. Consequently, the MWC stock will be created much faster than Bitcoinâs, and the buyers of MWC will be paying a much lower price in terms of MWC than early Bitcoin buyers did.
