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> I do think a digital currency will be the eventual dominant payment system. Government issued money already falls under the category of "digital currency" as

> I do think a digital currency will be the eventual dominant payment system. Government issued money already falls under the category of "digital currency" as far as most people are concerned. I doubt that blockchain based currencies will ever see mainstream adoption because the only thing they bring to the table is decentralization; a feature that the overwhelming majority of people will never need. I'll concede that decentralization is probably a desirable trait, and if decentralization came free with the switch to bitcoin, I think there would be a compelling reason to expect that bitcoin would eventually see wide adoption, but decentralization is not free, it's extremely expensive, and once miner subsidies disappear and the true price of securing the network becomes an upfront cost to general users, nobody will even consider using bitcoin except in situations where decentralization provides tangible benefits (i.e. for incognito transactions). There will always be individuals who want to perform digital transactions outside of the traditional system, so cryptomoney will probably always be with us, but barring the unforeseeable, there just isn't any reason for its usage to grow much beyond the current niche.

aminok 11y ago
>but decentralization is not free, it's extremely expensive, and once miner subsidies disappear and the true price of securing the network becomes an upfront cost to general users, nobody will even consider using bitcoin except in situations where decentralization provides tangible benefits (i.e. for incognito transactions). The cost of securing the network fluctuates to match mining revenue, which in turn is determined by the market price of bitcoin and the number of bitcoins being rewarded to miners for each block they generate. In other words, when the block subsidy decreases, the security of the network will decrease, the average transaction fee will not increase. Now, increases in total transaction fees could potentially compensate the loss of mining revenues from the subsidy declining, if transaction volumes increase, but the average fee per transaction will always trend toward the very minimal cost for a miner to process it.

aminok 11y ago

>but decentralization is not free, it's extremely expensive, and once miner subsidies disappear and the true price of securing the network becomes an upfront cost to general users, nobody will even consider using bitcoin except in situations where decentralization provides tangible benefits (i.e. for incognito transactions). The cost of securing the network fluctuates to match mining revenue, which in turn is determined by the market price of bitcoin and the number of bitcoins being rewarded to miners for each block they generate. In other words, when the block subsidy decreases, the security of the network will decrease, the average transaction fee will not increase. Now, increases in total transaction fees could potentially compensate the loss of mining revenues from the subsidy declining, if transaction volumes increase, but the average fee per transaction will always trend toward the very minimal cost for a miner to process it.