Bitcoin usage and misaligned expectations - page 7.

jseverson

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Quote from: squatter on May 30, 2019, 03:29:45 AM

Quote from: jseverson on May 30, 2019, 03:00:59 AM

-snip-

Maybe we could afford for it to be a selling point years ago when transaction demand was very low and the block subsidy was very high. Cheap transactions didn't hurt miner incentives when block rewards were 50+ BTC. That's changing. In 5 years, the block subsidy will only be ~ 3 BTC. Shouldn't fee revenue be rising to compensate miners? How long can miners be expected to subsidize users with cheap fees?

I think Satoshi was naive with some of his economic assumptions.

I probably don't know enough about the subject, so please be patient with me.

I'm not defending Satoshi, but maybe he thought that BTC's rising value (it is deflationary by design after all) would offset the loss in mining revenue of the decreasing block rewards? I mean, I'd bet that 3 BTC 5 years from now would still be a lot more valuable than 50 BTC from a few years ago. I understand that mining costs are also increasing, but isn't that what the difficulty adjustment is for? It ensures that there will always be financial incentive for miners, regardless of transaction fee revenue.

I concede that transaction fees will have to rise, and that micro transactions won't be plausible at some point anymore (nor would it indicate failure). My concern is that it still has to be cheap enough as to not be detrimental to adoption. My views may be a little too naive though (like how Satoshi's may be lol), so I would appreciate any insight.

squatter

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STOP SNITCHIN'

Quote from: jseverson on May 30, 2019, 03:00:59 AM

I don't know about almost zero, but I feel like cheap fees should still be a priority going forward. Cheaper fees than ones charged by third party payment processors was one of the primary selling points of Bitcoin, and Satoshi even addressed it in the introduction part of the white paper:

Quote from: https://bitcoin.org/bitcoin.pdf

The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services.

Maybe we could afford for it to be a selling point years ago when transaction demand was very low and the block subsidy was very high. Cheap transactions didn't hurt miner incentives when block rewards were 50+ BTC. That's changing. In 5 years, the block subsidy will only be ~ 3 BTC. Shouldn't fee revenue be rising to compensate miners? How long can miners be expected to subsidize users with cheap fees?

I think Satoshi was naive with some of his economic assumptions.

Kakmakr

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Leading Crypto Sports Betting & Casino Platform

Quote from: Wind_FURY on May 30, 2019, 01:42:24 AM

I believe there are some people in the community who are in the standpoint that "Bitcoin isn't successful" unless they can use it for "almost-zero fee" coffee transactions. But is it truly a failure?

They should give us an example of any technology where they pay "almost-zero fee" transactions with other payment services out there, before they can say that about Bitcoin. Everything from Diners club to credit cards to PayPal has some kind of fee structure to pay for their expenses to run that system.

The Lightning Network is the closest we will ever come to a "almost-zero fee" transaction scenario, but it is still in it's development stage to sort out some teething problems. Crypto currencies will always need some remuneration or reward system that would need to be funded by someone else to fund the transaction volume on the network. Tongue

jhonjhon

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Quote from: YuginKadoya on May 30, 2019, 02:32:14 AM

Quote from: Wind_FURY on May 30, 2019, 01:42:24 AM

I believe there are some people in the community who are in the standpoint that "Bitcoin isn't successful" unless they can use it for "almost-zero fee" coffee transactions. But is it truly a failure?

Failure is on people who don't ride the wave where the price is still cheap, I guess they can not have easy access anymore whenever it is in the forum Earning, Trading, and Investing I guess it is too hard for them to really ride this kind of opportunity, Well I don't think that the technology of Blockchain is a failure because we can see that there are other uses for it instead of just using it on Online Ledger And these companies are highly positive with the technology of Blockchain.

So true, that's because when bitcoin was still cheap they didn't trust it and now when bitcoin's price is soaring high again they wanted to ride the wave but I guess they are having a hard time now, and also considering the fact that mining is so hard these days that's why they say its a failure, when in fact, its not. Bitcoin market trend right now is going upward and with a lot of people having interest in bitcoin means it will increase the demands, and once the demand will increase then so its price.

Mike Mayor

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If bitcoin was a failure then how did I pay for most of what I have? How come I made something of myself? I found something I am passionate about because everything else just bores me to death.
I found a career path and a way forward to a better life. It suites me too. I don't like to go to work so working from wherever I am is such a great gift. It has made using the internet easier for me and made transactions so simple. Being paid and paying others is wonderous now. We live in a world we can earn money doing all kinds of odd weird and wonderful things. Imagine trying to explain to people of the last two generations how we make money out of "thin air" HAHAHHA those of you here long enough know exactly what I am referring to. xP

jseverson

hero member

Activity: 1834

Merit: 759

I don't know about almost zero, but I feel like cheap fees should still be a priority going forward. Cheaper fees than ones charged by third party payment processors was one of the primary selling points of Bitcoin, and Satoshi even addressed it in the introduction part of the white paper:

Quote from: https://bitcoin.org/bitcoin.pdf

The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services.

I don't think it necessarily has to scale to be able to accommodate microtransactions (there are workarounds after all, like LN), but at the same time should have enough use cases to remain plausible for the middle class. It could be argued that there's a price to pay for decentralization, immutability, etc., but realistically speaking, the average joe wouldn't care about that. It's difficult enough to convince people to use Bitcoin, and pricing them out with fees they would be uncomfortable with wouldn't be the best idea.

asayoyaasa

copper member

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There lot more thing you can do with bitcoin, maybe just not for a daily basis and buy something at the coffee shop. So I don't think its a failure at all, there's a lot of services I usually pay with my card and now I pay it using bitcoin, the fee is always cheaper if I pay using bitcoin.
Anyway go using lightning if you want to use send a small amount of BTC with "zero fees"

figmentofmyass

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Quote from: Wind_FURY on May 30, 2019, 01:42:24 AM

I believe there are some people in the community who are in the standpoint that "Bitcoin isn't successful" unless they can use it for "almost-zero fee" coffee transactions. But is it truly a failure?

of course not. it was realized very early on that bitcoin couldn't scale to every possible tiny transaction. hal finney once predicted the emergence of bitcoin banks. later, the idea of "upper layer" protocols was conceived as a decentralized alternative.

anyone who thinks we can just raise block size to keep transactions cheap doesn't understand the tragedy of the commons. their greed and unwillingness to pay the real cost of transactions would be the undoing of bitcoin---if we let them.

YuginKadoya

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Quote from: Wind_FURY on May 30, 2019, 01:42:24 AM

I believe there are some people in the community who are in the standpoint that "Bitcoin isn't successful" unless they can use it for "almost-zero fee" coffee transactions. But is it truly a failure?

Failure is on people who don't ride the wave where the price is still cheap, I guess they can not have easy access anymore whenever it is in the forum Earning, Trading, and Investing I guess it is too hard for them to really ride this kind of opportunity, Well I don't think that the technology of Blockchain is a failure because we can see that there are other uses for it instead of just using it on Online Ledger And these companies are highly positive with the technology of Blockchain.

Wind_FURY

legendary

Activity: 2898

Merit: 1823

I believe there are some people in the community who are in the standpoint that "Bitcoin isn't successful" unless they can use it for "almost-zero fee" coffee transactions. But is it truly a failure?

Topic: Bitcoin usage and misaligned expectations - page 7. (Read 1159 times)