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The energy that goes into a Bitcoin transaction doesn't just pay for the one transaction. It also pays for the security of all the value stored in the rest of t
by Taek 6y ago
The energy that goes into a Bitcoin transaction doesn't just pay for the one transaction. It also pays for the security of all the value stored in the rest of the system, and that's actually where most of the revenue for mining comes from - inflation, not fees.
But also, Bitcoin transactions aren't typically buying coffee from your local store. It's very often international, and Bitcoin transactions offer a finality and immediateness that can't be found in other financial systems.
But also, in many cases Bitcoin is your only choice to transact at all. Our business keeps getting rejected by payment processors such as Stripe and PayPal, and at this point Bitcoin is our only option to get revenue from Europe. As a result, Bitcoin is making things possible for us and our users that simply aren't possible at all without Bitcoin.
If you think the fees are absurd, make a system that gives all the same benefits to us without costing so much. So far, we don't have an alternative, and we are very grateful that Bitcoin exists as an option.
- totheloop 6y agoYou mean deflation, incidentally.
- rspeele 6y agoNo, I do think he means inflation. He's talking about the block reward, the Bitcoin "minted" through mining, being larger than the fees. Currently it's 6.25 BTC minted per block and the fees only add up to between 1 and 2 BTC. We don't really see this as inflation because of the value of Bitcoin going up, but it is a tiny tiny tax on all the people HODLING their coins, as it dilutes the value (again, by a miniscule amount). In theory if BTC is still being used in 2150 or whenever the block reward goes to zero, all the cost of mining will be borne by those actually exchanging BTC, and the people just holding it will be free-riding, with the security of the network paid for entirely by people transacting on it. Not sure how well this will work.
- krupan 6y agoBitcoin supply is scheduled to increase for the next 100 years or so. So yes, inflation.
- xur17 6y ago> The energy that goes into a Bitcoin transaction doesn't just pay for the one transaction. No energy "goes into a Bitcoin transaction". A block with 0 transactions and a block with 100 transactions will both take the same amount of energy to generate.
- 3np 6y agoYou just repeated why they said