4 ms·

Correct, the fees would decrease, but when when you can only process 200k transactions every ten minutes, there’s an upper limit of how much people are willing

Correct, the fees would decrease, but when when you can only process 200k transactions every ten minutes, there’s an upper limit of how much people are willing to pay before it becomes absurdly expensive. This reached almost $100 in the 2017 rush. It’s unsustainable and renders the network unusable for most of the planet. When you on the other hand can process millions of transactions every block (and scalable as needed), you’ll charge far less per transaction while still allowing miners to generate a huge (and ever growing) revenue, while also enabling most of the planet to transact next to free. From an environmental perspective, if you divide the hash rate environmental impact on a mere 200k transactions every ten minute, the carbon foot print per transaction would seem absurdly high. Do the same calculating for millions of transactions every ten minutes, and you’ll arrive at a far better environmentally friendly figure.

_alex_ 4y ago
Then why isnt bcash or bsv more valuable than bitcoin?
- cowtools 4y ago
  In my experience, BTC has more "brand recognition" amongst uninformed investors who are more concerned with "number go up" technology than digital cash technology
- intabli 4y ago
  If you measure value by the thing Bitcoin came to replace (fiat), your vision will be distorted. If you measure value as a consequence of utility, they’re certainly far more valuable than BTC (BSV however is a corp coin and has weird copyrights so I wouldn’t touch it with a stick).
wmf 4y ago
Why wouldn't fees go all the way to zero? Zero times a zillion transactions is still zero.
- shawabawa3 4y ago
  ...because miners choose whether to include a transaction or not. Obviously they have no incentive to include a zero fee transaction There would be an equilibrium where the fee is worth the marginal cost of mining it
  - colinmhayes 4y ago
    Unless miners start colluding their strategy will become "include every possible transaction with fee greater than $0." which means fees will settle at the smallest possible value greater than 0.
    - imtringued 4y ago
      Yeah sure, everything I buy costs the smallest possible value greater than zero. shawabawa3 already explained it "There would be an equilibrium where the fee is worth the marginal cost of mining it" The miner has cost X and wants profit Y. He adds those together and now the price is X+Y. Someone wants his transaction on the blockchain, he is going to pay X+Y unless there is a miner that offers an even lower rate. You're making the assumption that the block reward is high enough to make transaction fees irrelevant, which is a trivial observation and not what we are interested in talking about here.
      - colinmhayes 4y ago
        There is no cost to adding a transaction to your block if its size is uncapped. Once a miner completes a block why wouldn't they maximize the profit they can make on it?
- mustyoshi 4y ago
  Miners still have to choose to include your tx. The risk of losing during two blocks being mined goes up as blocksize does (longer to transmit across the network), so you still have to incentivize the miner to include your tx. Ofc there will be miners who make much larger blocks no matter what, but it comes down to how urgent is your tx?
FabHK 4y ago
So currently every transaction costs around $101, of which $1 visible in transaction fees, and $100 invisible in mining reward (aka seignorage, leading to money supply growth of 1.7% p.a.). To maintain current mining hash power, as the mining reward halves away to zero, every transaction would have to incur around $100 in fees. > still allowing miners to generate a huge (and ever growing) revenue, while also enabling most of the planet to transact next to free If blocks would grow 10x, the blockchain would grow about 50GB per month, every human being could do around 10 transactions in their lifetime, and those would cost around $10 each. I don't see how huge and growing revenue for miners is compatible with "next to free" transactions.
- intabli 4y ago
  I think you will enjoy this great presentation by Peter Rizun and Andrew Stone: https://youtu.be/5SJm2ep3X_M https://youtu.be/5SJm2ep3X_M
  - FabHK 4y ago
    That was an interesting talk, thanks. Looks like with some optimisations they could support blocks of around 100 MB, yielding around 500 transactions per second. Would mean though that the blockchain grows by a few hundred GB every month.
hajhatten 4y ago
> This reached almost $100 in the 2017 rush. Ethereum, with a bigger blocksize had transaction fees going up to $3,500 a couple of weeks ago. A larger blocksize is not the answer. https://web3isgoinggreat.com/?id=popular-nft-mint-spikes-ethereum-gas-prices-opensea-transaction-fees-exceed-3500 https://web3isgoinggreat.com/?id=popular-nft-mint-spikes-eth...
- intabli 4y ago
  Ethereum is account based, not UTXO based, has a completely different overhead and you can’t possibly compare it to Bitcoin.
joshcryer 4y ago
Just to clarify your number, an average Bitcoin block (currently) has about 2000 transactions, each of which, be it a transaction for half a cent, or a billion dollars, cost around $3 each. What you described is what happened when Bitcoin was actually being adopted by people, the mempool, that is, transactions not added to the latest block, started to fill up, and the market took hold and people who offered more to transact were included in the block. You don't have to offer more for the transaction and your transaction will sit in the mempool forever. Offering more is simply a way to expedite your transaction.

_alex_ 4y ago

Then why isnt bcash or bsv more valuable than bitcoin?

cowtools 4y ago
In my experience, BTC has more "brand recognition" amongst uninformed investors who are more concerned with "number go up" technology than digital cash technology
intabli 4y ago
If you measure value by the thing Bitcoin came to replace (fiat), your vision will be distorted. If you measure value as a consequence of utility, they’re certainly far more valuable than BTC (BSV however is a corp coin and has weird copyrights so I wouldn’t touch it with a stick).

wmf 4y ago

Why wouldn't fees go all the way to zero? Zero times a zillion transactions is still zero.

shawabawa3 4y ago
...because miners choose whether to include a transaction or not. Obviously they have no incentive to include a zero fee transaction There would be an equilibrium where the fee is worth the marginal cost of mining it
- colinmhayes 4y ago
  Unless miners start colluding their strategy will become "include every possible transaction with fee greater than $0." which means fees will settle at the smallest possible value greater than 0.
  - imtringued 4y ago
    Yeah sure, everything I buy costs the smallest possible value greater than zero. shawabawa3 already explained it "There would be an equilibrium where the fee is worth the marginal cost of mining it" The miner has cost X and wants profit Y. He adds those together and now the price is X+Y. Someone wants his transaction on the blockchain, he is going to pay X+Y unless there is a miner that offers an even lower rate. You're making the assumption that the block reward is high enough to make transaction fees irrelevant, which is a trivial observation and not what we are interested in talking about here.
    - colinmhayes 4y ago
      There is no cost to adding a transaction to your block if its size is uncapped. Once a miner completes a block why wouldn't they maximize the profit they can make on it?
mustyoshi 4y ago
Miners still have to choose to include your tx. The risk of losing during two blocks being mined goes up as blocksize does (longer to transmit across the network), so you still have to incentivize the miner to include your tx. Ofc there will be miners who make much larger blocks no matter what, but it comes down to how urgent is your tx?

FabHK 4y ago

So currently every transaction costs around $101, of which $1 visible in transaction fees, and $100 invisible in mining reward (aka seignorage, leading to money supply growth of 1.7% p.a.). To maintain current mining hash power, as the mining reward halves away to zero, every transaction would have to incur around $100 in fees. > still allowing miners to generate a huge (and ever growing) revenue, while also enabling most of the planet to transact next to free If blocks would grow 10x, the blockchain would grow about 50GB per month, every human being could do around 10 transactions in their lifetime, and those would cost around $10 each. I don't see how huge and growing revenue for miners is compatible with "next to free" transactions.

intabli 4y ago
I think you will enjoy this great presentation by Peter Rizun and Andrew Stone: https://youtu.be/5SJm2ep3X_M https://youtu.be/5SJm2ep3X_M
- FabHK 4y ago
  That was an interesting talk, thanks. Looks like with some optimisations they could support blocks of around 100 MB, yielding around 500 transactions per second. Would mean though that the blockchain grows by a few hundred GB every month.

hajhatten 4y ago

> This reached almost $100 in the 2017 rush. Ethereum, with a bigger blocksize had transaction fees going up to $3,500 a couple of weeks ago. A larger blocksize is not the answer. https://web3isgoinggreat.com/?id=popular-nft-mint-spikes-ethereum-gas-prices-opensea-transaction-fees-exceed-3500 https://web3isgoinggreat.com/?id=popular-nft-mint-spikes-eth...

intabli 4y ago
Ethereum is account based, not UTXO based, has a completely different overhead and you can’t possibly compare it to Bitcoin.

joshcryer 4y ago

Just to clarify your number, an average Bitcoin block (currently) has about 2000 transactions, each of which, be it a transaction for half a cent, or a billion dollars, cost around $3 each. What you described is what happened when Bitcoin was actually being adopted by people, the mempool, that is, transactions not added to the latest block, started to fill up, and the market took hold and people who offered more to transact were included in the block. You don't have to offer more for the transaction and your transaction will sit in the mempool forever. Offering more is simply a way to expedite your transaction.