151 sats \ 8 replies \ @softsimon OP 22 Jul 2022 \ parent \ on: I'm Simon, creator of Mempool.Space. AMA. bitcoin
Most Bitcoiners including me disagree. Bitcoin security is fine, and if security would be lowered, we do what all altcoins and Bitcoin forks has to do when security is lowered, you need to wait more confirmations and you get the exact same security. Go to https://howmanyconfs.com/ and see how Bitcoin Cash (BCH) requires 1,121 conf for the same security of 6 Bitcoin Confs. So in 50 years when block reward is close to zero, fees will probably be very high because increased adoption with small block space causes a fierce fee market that will pay for security. But if security is low enough to make Bitcoin attack prone from miners... We might have to get used to waiting 2 hours instead of 20 minutes for our transactions to be considered secure, and that is OK, because most of us will transact on Layer 2 or Layer 3 anyway and won't notice.
This feature is described in the white paper actually.
How do you know most bitcoiners disagree? Is it subjective or do you have some data?
I've been following the fee market development closely and I am not that optimistic. Once I thought that introducing an inflationary component to bitcoin was heresy but the past few years made me question that.
What Peter Todd suggests does seem to make sense considering the coins that are lost in organic ways.
Bitcoin is becoming increasingly important to the energy sector and having a tiny block rewards without any meaningful fees will impacts that progress.
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It's just my general understanding that the majority of the Bitcoin maximalists that I see on twitter and meet IRL all agree that the 21M hard cap is holy and should not be touched. That of course fees with cover the security in the future if Bitcoin is successful.. And just like I stated in my first reply.. if security is lowered, we just increase the number of confirmations before calling it final settlement... So what is the issue exactly?
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I understand the "21 million forever" concept but that's not my question or the original question (I think)
What do you specifically think about the idea of a fixed reward that Peter Todd recently opted for discussion on the bitcoin-dev mailing list?
In short: organically coins/sats are lost and therefore a small inflationary reward for miners might not absolutely impact the 21 million cap.
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It's an interesting argument for sure. But there is no way of measuring or proving how much that organically gets lost. I still prefer the 21M hard cap meme. All money that existed before Bitcoin was "leaking", even Gold with its yearly 2%(?) inflation. So Bitcoin is the perfected money with a actual hard cap first time in the history of humanity. So introducing a small leak would mean that there could in theory be something "better" than Bitcoin still. I want Bitcoin to continue being the perfected money in this aspect, and if 0.001% of coins gets lost every year it just slowly increases the value of everyone's coins in a deflationary way.... just my 2 sats. Especially without any inflation required to secure the network due to the arguments I stated above.
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It's not hard to know. One of the first principals of Bitcoin is scarcity. If you increase the supply, it will no longer be Bitcoin.
That is just the simple truth of the matter. 21 million forever.
It is difficult to solve a problem that does not exist today. If we are at the very beginning of the adoption curve (which I personally believe we are) then the network is only be used at <2% of future network traffic.
This problem is a problem for tomorrow, because we cannot foresee the future and have it hang around our necks like an albatross.
IF this issue needs addressing, then it will be addressed at the appropriate time. That time is not now.
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Point well made and taken. Too early to think about it.
I was hoping for a more nuanced response from @softsimon since he is more aware of the fee market development and likely has thought more about it therefore.
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Just based of what I've seen. Bitcoin block size and block space are scarce and the limitations are also very arbitrary. Currently you can do 1 sat/vb, but what happened in 2020 for example is that as soon as the fee market starts for real, it will shoot up to 100 sats/vB .. and we get true price discovery for block space.
What happens when fees go up is that the market adapts, stop doing some transactions, migrate to other technologies like Lightning. This part is very unpredictable. It's like the people 100 years ago that predicted that food and oil would run out in the world... They base their assumptions on current data. We don't know how the market adapt and what scaling tech will exist in 20 years.
Personally I think one thing is for sure,, if Bitcoin is successful and adoption continues,, there will be a fee market enough to cover security. And it will not be like now with empty blocks during a bear market, it will have a steady market price as world trade continues 24/7.
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There's a web app that illustrates how this could be wrong: https://www.btcsecuritybudget.com/
You can change failure/success thresholds in the settings, but you can get the idea pretty quickly just playing with the sliders.
That's not to say inflation or tail emission is a good idea either, but I think more people ought to be taking this seriously as its potentially an issue coming sooner than later.
Also:
- long conf times are bad for UX.
- high security is one of the biggest selling points of btc (helps with censorship resistance). If eth surpasses BTC in security, then why wouldn't people just move to eth?
- high fees are a negative because that turns the base layer into something closer to banking than what we have today.