Seigniorage
economics · intermediate
The profit a money issuer captures from the gap between the face value of money and the cost of producing it.
Historically literal: a sovereign minted coins from gold he stamped with his face. Cost was the labor and the metal; revenue was whatever the coin commanded. The difference — the seigniorage — went to the sovereign.
In a fiat system, seigniorage is essentially total. The Federal Reserve produces a $100 bill for a few cents and lends it into circulation at face value. The privilege scales: as long as the world wants to hold dollars, the issuer can run a permanent revenue stream by producing more. Cantillon effects (those closest to new money benefit most) are seigniorage's distributional cousin.
Bitcoin has no seigniorage in the issuance sense — new bitcoin is paid out as the block subsidy to whoever did the proof-of-work, and the cost approximates the value through competition. That's a design choice. The protocol explicitly forfeits the issuer's privilege in exchange for credible scarcity.