<p>If every block subsidizes the forger with extra coins (in addition to the fees) then bigger accounts become even bigger by following the compound interest curve. In a currency with selfish forgers most of the coins would be absorbed by very few accounts that would lead to centralization of the currency.</p>

<p>This was predicted (<a href="https://nxtforum.org/alternate-cryptocurrencies/dgex-assists-in-launch-of-a-new-crypto-fimk/msg58485/#msg58485" rel="nofollow">https://nxtforum.org/alternate-cryptocurrencies/dgex-assists-in-launch-of-a-new-crypto-fimk/msg58485/#msg58485</a>) by me and proved in practice (<a href="http://forum.fimk.fi/index.php?topic=539.0" rel="nofollow">http://forum.fimk.fi/index.php?topic=539.0</a>) by FIMKRYPTO, which is a clone of Nxt with over-time distribution.</p>

<p>Regarding a PoW distribution, back in 2013, when Nxt was launched, PoW couldn't be used as a good distribution method because a CPU-friendly algorithm would give enormous advantage to botnet masters and a GPU-friendly one - to owners of GPU-based mining farms left after Bitcoin rise in 2012.</p>

CC BY-SA 3.0
2015-04-02T20:21:17.093Z
2015-04-02T20:21:17.093Z
Come-from-Beyond
<p>From studying the <a href="http://wiki.nxtcrypto.org/wiki/Whitepaper:Nxt" rel="nofollow">Whitepaper</a> it appears that there is no technical reason not to have block rewards, rather it appears to be a design decision that the sum of all assets is always zero: When Nxt's Genesis block was created, the Genesis account issued 1,000,000,000 NXT which were distributed to other accounts, hence rendering the account with a negative balance and unable to send any other transactions. As the sum of all assets must remain the same in each block, no more can be created.</p>

<p>I couldn't find any further explanation for the decision of initial distribution, but all initial NXT were distributed among the 72 users that contributed to the Nxt funding.</p>

CC BY-SA 3.0
2015-03-31T09:18:19.763Z
2015-03-31T09:24:14.863Z
2015-03-31T09:24:14.863Z
Murch
<p>Proof of work in Bitcoin has two distinct purposes: To issue coins, and to synchronize transactions.</p>

<p>In NXT, PoW for synchronization was eschewed, the stated purpose being reducing long-term energy usage and ecologic harm. They're using PoS instead.</p>

<p>For some reason, probably misunderstanding the roles of PoW, they thought this means they also shouldn't use PoW for issuing either. Some method of issuing is still needed, and forgoing PoW doesn't leave much options, since PoS is not a valid issuing method. So they went with a centralized issuing, where the coin's creator gets all the proceeds from the issuing. Of course, this means the currency is not decentralized.</p>

<p>Probably, the creator wanted to get rich quick, and this contributed to the decision.</p>

CC BY-SA 3.0
2015-04-02T20:25:50.520Z
"Probably, the creator wanted to get rich quick, and this contributed to the decision." -- 

The creator asked to send small amounts (https://bitcointalk.org/index.php?topic=303898.0) and collected 21 BTC that were worth ~5000 USD at that time.
Come-from-Beyond
CC BY-SA 3.0
2015-04-04T18:47:51.353Z
@Come-from-Beyond: That request made no sense. If people want in on the issuing, and the issuing is proportional to the amount sent, they will send large amounts. The cap is also meaningless since people can send several times. "Please send small amounts" is a nice way to maintain an illusion of not being about profit. He may have hoped lots of people would send him a medium amount each. If he really wasn't in it to profit from the issuing, he should have used a burn address like XCP. Anyway, he alone knows his own intentions, hence "probably".
Meni Rosenfeld
CC BY-SA 3.0
2015-04-07T14:53:30.890Z
"Nice way to maintain an illusion"... This is an accusation that can't be counteracted, we can say something similar about any (even altruistic) deed. Anyway, here is what he said about the issue (https://bitcointalk.org/index.php?topic=303898.msg3279997#msg3279997): "Why send coins to my own address, not some unspendable address?  I need a way to send the coins back, just in case.  Or fund development of services to promote Nxt, if the total amount happens to be decent."
Come-from-Beyond
CC BY-SA 3.0
2015-04-08T11:08:08.887Z
@Come-from-Beyond: I don't know if his intentions are good or not. What I'm saying is that "send small amounts" is not evidence of his pure intentions. Credibly signaling altruism requires a greater sacrifice than this. Furthermore, the last quoted statement doesn't hold water - if his intentions are indeed pure, he's been going about it completely wrong. Instead of vague statements he should have made an actual plan.
Meni Rosenfeld
CC BY-SA 3.0
2015-03-31T11:05:35.143Z
2015-03-31T11:05:35.143Z
Meni Rosenfeld
<p>The idea behind creating (and distributing, unlike ripple) 100% of the coins, was to reduce price inflation caused by monetary inflation. NXT loses values sometimes, but it happen because normal economic things and not because of inflation.</p>
<p>Not printing money at the start increase alot the chance of price inflation NOT happened, specially if you arent going to do like the state and print enough money to be 100% sure price inflation happen.</p>
<p>This is related to the fact that not having state style monetary inflation followed by price inflation is one of the main points behind cryptocurrencies and 100% premine (and distribution) is the logical conclusion of that.</p>

CC BY-SA 4.0
2021-10-18T12:51:59.530Z
2021-10-18T12:51:59.530Z
corango
<p>As Nxt's generating accounts receive now the transaction fees of the transactions included in the block they forged, it would be possible to add some new NXT to the balance of the generating account, incentivizing forging even more and distributing the currency in a better way.</p>

<p>Is there a technical reason why all NXT were distributed in the beginning instead of distributed over time?</p>

CC BY-SA 3.0
2015-03-30T19:46:41.973Z
I don't think there would be a *technical* reason; are you looking for a explanation of their reasoning?
Nick ODell
CC BY-SA 3.0
2015-03-30T19:52:48.200Z
I think there has to be a technical reason because it seems to me that Bitcoin's distribution is superior in every way, so there must be something that I'm missing
randomname453
<nxt><wealth-distribution>
What prevented NXT from being distributed the same way bitcoins are?
randomname453
# What prevented NXT from being distributed the same way bitcoins are?

(Asked by: username_0 on 2015-03-30)

As Nxt's generating accounts receive now the transaction fees of the transactions included in the block they forged, it would be possible to add some new NXT to the balance of the generating account, incentivizing forging even more and distributing the currency in a better way.

Is there a technical reason why all NXT were distributed in the beginning instead of distributed over time?

**Tags:** nxt, wealth-distribution

> **Comments:**
> **username_1**: I don't think there would be a *technical* reason; are you looking for a explanation of their reasoning?  
> **username_0**: I think there has to be a technical reason because it seems to me that Bitcoin's distribution is superior in every way, so there must be something that I'm missing  

---

## 4 answers

### Answer by username_2 on 2015-04-02. Score: 2 | Accepted answer

If every block subsidizes the forger with extra coins (in addition to the fees) then bigger accounts become even bigger by following the compound interest curve. In a currency with selfish forgers most of the coins would be absorbed by very few accounts that would lead to centralization of the currency.

This was predicted (<https://nxtforum.org/alternate-cryptocurrencies/dgex-assists-in-launch-of-a-new-crypto-fimk/msg58485/#msg58485>) by me and proved in practice (<http://forum.fimk.fi/index.php?topic=539.0>) by FIMKRYPTO, which is a clone of Nxt with over-time distribution.

Regarding a PoW distribution, back in 2013, when Nxt was launched, PoW couldn't be used as a good distribution method because a CPU-friendly algorithm would give enormous advantage to botnet masters and a GPU-friendly one - to owners of GPU-based mining farms left after Bitcoin rise in 2012.


---

### Answer by username_3 on 2015-03-31. Score: 1

From studying the [Whitepaper](http://wiki.nxtcrypto.org/wiki/Whitepaper:Nxt) it appears that there is no technical reason not to have block rewards, rather it appears to be a design decision that the sum of all assets is always zero: When Nxt's Genesis block was created, the Genesis account issued 1,000,000,000 NXT which were distributed to other accounts, hence rendering the account with a negative balance and unable to send any other transactions. As the sum of all assets must remain the same in each block, no more can be created.

I couldn't find any further explanation for the decision of initial distribution, but all initial NXT were distributed among the 72 users that contributed to the Nxt funding.


---

### Answer by username_4 on 2015-03-31. Score: 1

Proof of work in Bitcoin has two distinct purposes: To issue coins, and to synchronize transactions.

In NXT, PoW for synchronization was eschewed, the stated purpose being reducing long-term energy usage and ecologic harm. They're using PoS instead.

For some reason, probably misunderstanding the roles of PoW, they thought this means they also shouldn't use PoW for issuing either. Some method of issuing is still needed, and forgoing PoW doesn't leave much options, since PoS is not a valid issuing method. So they went with a centralized issuing, where the coin's creator gets all the proceeds from the issuing. Of course, this means the currency is not decentralized.

Probably, the creator wanted to get rich quick, and this contributed to the decision.

> **Comments:**
> **username_2**: "Probably, the creator wanted to get rich quick, and this contributed to the decision." --   The creator asked to send small amounts (https://bitcointalk.org/index.php?topic=303898.0) and collected 21 BTC that were worth ~5000 USD at that time.  
> **username_4**: @username_2: That request made no sense. If people want in on the issuing, and the issuing is proportional to the amount sent, they will send large amounts. The cap is also meaningless since people can send several times. "Please send small amounts" is a nice way to maintain an illusion of not being about profit. He may have hoped lots of people would send him a medium amount each. If he really wasn't in it to profit from the issuing, he should have used a burn address like XCP. Anyway, he alone knows his own intentions, hence "probably".  
> **username_2**: "Nice way to maintain an illusion"... This is an accusation that can't be counteracted, we can say something similar about any (even altruistic) deed. Anyway, here is what he said about the issue (https://bitcointalk.org/index.php?topic=303898.msg3279997#msg3279997): "Why send coins to my own address, not some unspendable address?  I need a way to send the coins back, just in case.  Or fund development of services to promote Nxt, if the total amount happens to be decent."  
> **username_4**: @username_2: I don't know if his intentions are good or not. What I'm saying is that "send small amounts" is not evidence of his pure intentions. Credibly signaling altruism requires a greater sacrifice than this. Furthermore, the last quoted statement doesn't hold water - if his intentions are indeed pure, he's been going about it completely wrong. Instead of vague statements he should have made an actual plan.  

---

### Answer by username_5 on 2021-10-18. Score: 0

The idea behind creating (and distributing, unlike ripple) 100% of the coins, was to reduce price inflation caused by monetary inflation. NXT loses values sometimes, but it happen because normal economic things and not because of inflation.

Not printing money at the start increase alot the chance of price inflation NOT happened, specially if you arent going to do like the state and print enough money to be 100% sure price inflation happen.

This is related to the fact that not having state style monetary inflation followed by price inflation is one of the main points behind cryptocurrencies and 100% premine (and distribution) is the logical conclusion of that.


---

