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> That makes no sense. If all money was USD would literally everyone be in the banking industry with no market for corn? It indeed makes no sense if you compl
by chmod775 6y ago
> That makes no sense. If all money was USD would literally everyone be in the banking industry with no market for corn?
It indeed makes no sense if you completely ignore half of the argument (and probably misunderstand it on top of that).
The argument was that it makes sense to spend currency for security equal to the amount of currency you are securing, meaning if you do that for all currency, (pretty much) the sole economic activity will be securing it.
Suppose for the moment that what is mining power to bitcoin is the US military to the USD. It makes no sense to spend all USD on just the military, so that it can secure the currency, does it?
- thebean11 6y ago> The argument was that it makes sense to spend currency for security equal to the amount of currency you are securing You are right, I don't understand this argument at all. It only makes sense to spend the minimal amount that would keep it secure. The incentive to mine is only the block reward, which is only transaction fees plus inflation. The incentive is not the entire pool of currency.