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Not quite, but sort of. First, I don't think the transaction costs are hidden at all. But that aside, the transaction costs are exactly where they belong: with

Not quite, but sort of. First, I don't think the transaction costs are hidden at all. But that aside, the transaction costs are exactly where they belong: with the miners. Effectively, all the transaction costs up front and applied once. The problem with existing financial transactions is that they take a cut every time a transaction is made. In fact, they take little cuts every time a transaction passes through their system/network/etc. Start with one dollar and send it through enough "transactions" and you end up with nothing. Bitcoin effectively solves this problem. No middle-man scum sitting between a financial transaction ever "adds value" (how a I hate that term). They just leech off the capital of the people. This is why I want bitcoin to succeed. (Ended up a bit ranty there at the end. Sorry.)

danbruc 11y ago
Not sure if I misunderstand you or disagree. Why should the miners bear the transaction costs? They provide a service, running the network and processing the transactions, to the users wanting to transfer money so they have to pay for this service.
- commentzorro 11y ago
  >...bear the transaction costs. > ...users wanting to transfer money so they have to pay for this service. Wrong! ;-) You are misunderstanding and implying, once again, that transaction costs are somehow "adding value." Bitcoins, like all financial instruments, exists _because_ of the transactions. The transactions _are_ the thing that makes financial systems live. Only parasites live at and leech off the system at the transactional level. Miners don't mine because of any arbitrary value in a product. They mine because the results of mining is going to be transacted. Putting all the costs, at the point of the miners means the "most fair" deal for everyone. (You can read that as Socialism if the word sticks in your craw. ;-) The costs go up-front at the point where the bitcoin goes into the system. It doesn't mean the miners get less overall so much as it mean everyone gets less but effectively only one time. As time goes on and resources become scarce and mining costs go up, transaction "costs" are subsumed into mining to a vanishing small amount. Transactions are effectively free which means that the market is open to everyone, regardless of wealth, without siphoning off capital into the hands of the 0.1% and out of the pockets of the rest of the people.
  - danbruc 11y ago
    That does not work out. The total numbers of Bitcoins that will ever be mined is finite but miners will have to pay their electricity bills forever (or at least until Bitcoin ceases to exist). The only way that miners could cover their costs would be that the price of Bitcoins goes to infinity which is of course a bad thing. And a Bitcoin is mined only once but can be transacted an unbounded number of times. The costs occur at every transaction because transactions require the Bitcoin network and therefore you have to pay for transactions. I completely understand and support your desire to have a system that does not allow a minority to get rich without doing much work but Bitcoin won't be this system.

danbruc 11y ago

Not sure if I misunderstand you or disagree. Why should the miners bear the transaction costs? They provide a service, running the network and processing the transactions, to the users wanting to transfer money so they have to pay for this service.

commentzorro 11y ago
>...bear the transaction costs. > ...users wanting to transfer money so they have to pay for this service. Wrong! ;-) You are misunderstanding and implying, once again, that transaction costs are somehow "adding value." Bitcoins, like all financial instruments, exists _because_ of the transactions. The transactions _are_ the thing that makes financial systems live. Only parasites live at and leech off the system at the transactional level. Miners don't mine because of any arbitrary value in a product. They mine because the results of mining is going to be transacted. Putting all the costs, at the point of the miners means the "most fair" deal for everyone. (You can read that as Socialism if the word sticks in your craw. ;-) The costs go up-front at the point where the bitcoin goes into the system. It doesn't mean the miners get less overall so much as it mean everyone gets less but effectively only one time. As time goes on and resources become scarce and mining costs go up, transaction "costs" are subsumed into mining to a vanishing small amount. Transactions are effectively free which means that the market is open to everyone, regardless of wealth, without siphoning off capital into the hands of the 0.1% and out of the pockets of the rest of the people.
- danbruc 11y ago
  That does not work out. The total numbers of Bitcoins that will ever be mined is finite but miners will have to pay their electricity bills forever (or at least until Bitcoin ceases to exist). The only way that miners could cover their costs would be that the price of Bitcoins goes to infinity which is of course a bad thing. And a Bitcoin is mined only once but can be transacted an unbounded number of times. The costs occur at every transaction because transactions require the Bitcoin network and therefore you have to pay for transactions. I completely understand and support your desire to have a system that does not allow a minority to get rich without doing much work but Bitcoin won't be this system.