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How do the costs of our current dominant model of currency change at scale? Seems to me the cost-per-unit drops as the currency foothold expands, based primaril

How do the costs of our current dominant model of currency change at scale? Seems to me the cost-per-unit drops as the currency foothold expands, based primarily on existing infrastructure. Conversely, costs to "mine" bitcoin and similar proof-of-work currencies increase over time, unless I'm mistaken. The infrastructure is already in place, so it seems absolutely bonkers for costs to go up at scale. Is the argument for bitcoin that in the long run (hundreds of years), with bitcoin the global currency and no longer being mined since it hit the cap, costs will on average be less than bills/coins/credit/cheques?

snailmailman 3y ago
The mining must continue. Mined blocks allow transactions to occur. Without mining there is no transactions either. In theory, instead of getting paid through newly minted bitcoin, the miners get paid through transaction fees instead. The cost of mining doesn't always rise though, it adjusts based on the number of miners competing for the prize. If you work harder than everyone else, you get paid more. So usually this cost rises. But if it stops being profitable and lots of people stop mining, the cost of mining will decrease.
- wkat4242 3y ago
  > The mining must continue. Mined blocks allow transactions to occur. Without mining there is no transactions either. Yes. BUT, the energy used for the actual transaction processing is negligible compared to the energy wasted on the random number hashing that is mining. I could probably process all the world's bitcoin transactions on a raspberry pi in realtime if this hadn't been artificially coupled to doing a ton of mathematical busywork. Of course there is a reason for this busywork, meaning not everyone can do it. But this busywork really should be replaced with something less harmful to the environment like the proof of stake ETH has implemented now.

snailmailman 3y ago

The mining must continue. Mined blocks allow transactions to occur. Without mining there is no transactions either. In theory, instead of getting paid through newly minted bitcoin, the miners get paid through transaction fees instead. The cost of mining doesn't always rise though, it adjusts based on the number of miners competing for the prize. If you work harder than everyone else, you get paid more. So usually this cost rises. But if it stops being profitable and lots of people stop mining, the cost of mining will decrease.

wkat4242 3y ago
> The mining must continue. Mined blocks allow transactions to occur. Without mining there is no transactions either. Yes. BUT, the energy used for the actual transaction processing is negligible compared to the energy wasted on the random number hashing that is mining. I could probably process all the world's bitcoin transactions on a raspberry pi in realtime if this hadn't been artificially coupled to doing a ton of mathematical busywork. Of course there is a reason for this busywork, meaning not everyone can do it. But this busywork really should be replaced with something less harmful to the environment like the proof of stake ETH has implemented now.