Bitcoin miners say fee drought poses existential threat to network | Hacker News Reader

Bitcoin miners say fee drought poses existential threat to network

dlnews.com

23 pointstoss119 comments

Well those particular miners should have read the extremely open and specific code before they bought all the hardware.

It is exactly designed this way, power off some hardware for a while if it is no longer profitable

For sure! Tho it seems the original BTC design expected huge transaction volumes and transaction fees to take over providing income for miners as mining fees repeatedly halved.

But they didn't anticipate that people are not using BTC to buy pizza and a million other things, the great bulk of BTC is being stashed in financial vehicles like ETFs, generating fewer and fewer transactions.

Seems like a doom cycle. Fewer transactions, less profit, fewer miners, slower transactions, less value.....

Wealth always ends up in the hands of a few.

Satoshi did not anticipate that the block size would be restricted to 1MB by the development team forever, making the base layer impractical for payments.

Base layer is impractical for normal payments no matter what size you make it, and increasing it reduces decentralisation, weakening the strength of the network.

200MB blocks every 10 mins would compete with paypal's throughput, and wouldn't significantly reduce decentralization. A couple cryptocurrencies of this size, perhaps merge-mined, with atomic swaps between them could cover most of the world's need for transactions without the security and complexity of payment-channel based solutions. This seems to line up with satoshi's original intentions.

Mobile users could just shard, prune, or use SPV on a typical residential internet connection. Meanwhile merchants and exchanges can afford ~$200/yr in hard drives to store the whole chain (It is only about 10TB). When you consider that an efficient entry-level bitcoin miner is in the many thousands of dollars, the cost of a couple hard drives a year is not very significant in the grand scheme of the centralization of the network.

You sacrifice a lot with payment channels. You have to be online to accept payments, you need to pre-fund a channel (that you pay expensive fees on in the case of a small blockchain), you need to route through other nodes with enough liquidity, you need to occasionally go online to prevent the channel from being insecurely closed.

Even if it was the case that the economy should primarily rely on the lightning network, it would still be complemented by a large adjustable blocksize for reasons mentioned in this article and the lightning network whitepaper. The current status quo is unmistakably bad for the security of the network.

200MB blocks would lead to a >100x increase in size of the blockchain compared to the 1.6MB blocks we currently have, putting it at around 100TB.

Of course that would significantly reduce decentralisation - instead of a standard 1TB disk to run a node, you'd need 100TB! of storage space, without even considering the download.

Then you've got the increased bandwidth necessary to run the network which at the moment can even run over ham radio if necessary.

And even with those massive compromises, it would still be slow to confirm and could in no way compete with Visa/Mastercard.

Miners have to cover rapid depreciation costs in their equipment due to moore's law. They can't just "turn it off". Every second the ASIC miner is off, it's burning a hole in their pocket.

In hindsight, I suggest GPUs and hardware that can handle both bitcoin _and_ ML, and oscillate between the two as demand oscillates.

This one may or may not be a big deal, but bitcoin has a number of unknown and poorly understood long-term risks. There are tail events like a SHA-256 attack, 51% attacks while shorting futures, and long-term behavior of an asset where the supply continuously decreases.

Bitcoin and crypto in general has risks like any other investment, just a lot more of them. SHA-256 attack means everything's doomed though right? And 51% attack with the size of the network is some absolutely insane amount of GPU power right? My biggest concern is if there is a growing lack of interest. I have thought that ever since USD 10k, though, which is kind of what this "drought" is suggesting.

it's 51% of the network size (just the miners, actually) at the time of the attack. If the number of bitcoin miners decreases, so does the whole's network security.

So fees being too high is bad for bitcoin, and fees too low is bad for bitcoin?

Its fine, once institutions gobble up all the coins and the block reward disappears the blockchain can just stop. Bitcoin got eaten up by institutions.

But I bought some early and I deserve to become a gajillionaire overnight without working.

Investing is work. You have to spend time researching different opportunities, and even then there is still a risk involved.

If you made money by buying bitcoin a long time ago, you didn't get something for nothing. And if you sell it now, you can profit before the game of musical chairs collapses. So there is a limited window of arbitrage.

A little bit of work multiplied by a lot of risk and time.

It’s closer to speculation than investing.

Also it didn’t require any real work, just blind faith or forgetting that you even had bitcoin to begin with for a while.

I see this as one possible one good ending to bitcoin. The nerds of the world sold the financial institutions magic beans and dipped out.

Shame

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