I started a similar threat related to that in Economcs.
s/threat/thread/ ?
I'm assuming this is that thread:
- http://forum.bitcoin.org/index.php?topic=9295.0
Yes.
Topic: Could the fees really support the Bitcoin network? (Read 4263 times)
s/threat/thread/ ?
I'm assuming this is that thread:
- http://forum.bitcoin.org/index.php?topic=9295.0
Yes.
I started a similar threat related to that in Economcs.
s/threat/thread/ ?
I'm assuming this is that thread:
- http://forum.bitcoin.org/index.php?topic=9295.0
Well, I have to admit that some of the concerns brought up here an in other similar threads have started to make me wonder if the situation can be improved, even though I don't really agree that it's truely broken. I started a similar threat related to that in Economcs.
You guys worry too much.
We worry sideways so it looks like the sky is falling to the left. And when that gets too weird we come here.
You guys worry too much.
If the transaction fees would not be enough to support the desired security by bitcoin hoarders, then the block reward just has to go up. I suspect that competition between different versions of bitcoin that adopt a different block reward, would discover the right block rewards at a certain time. Saving gold in a protective vault also costs a lot.
But you would not clean your sewage, pay for the police, you would overfish the ocean and do other things that have externalities. And avoid all the things that cost you a lot and bring only small benefit.
Hehe, well that depends on your opinion of "commons". Mine are quite different, but that is for a different discussion.
Please prove me wrong. I'm pretty sure the transaction volume would be not enough for protecting large Bitcoin market value (say billions of dollars). And fees cannot be arbitrary large because users would not use Bitcoins when alternatives are cheaper.
You are correct, I can't prove you wrong, so I will just bow out of this discussion and watch from the sidelines.
Yes, but you would then pay the regular fee and end up the same (or worse) than leaving the coins untouched.
Indeed.
I wear ear plugs when I mow the lawn, use a chainsaw, etc. I would certainly install a muffler without mandate. I want to protect my hearing. And I prefer to be able
to travel without drawing attention to myself.
to travel without drawing attention to myself.
Your noise is quite localized so much of the damage is indeed pointed at you.
But you would not clean your sewage, pay for the police, you would overfish the ocean and do other things that have externalities. And avoid all the things that cost you a lot and bring only small benefit.
Quote
Interesting suggestion on the old coins. I just wonder if not using your bitcoins is going to be as detrimental to the network as you suggest. I really think enough people will use them that it won't be an issue.
Please prove me wrong. I'm pretty sure the transaction volume would be not enough for protecting large Bitcoin market value (say billions of dollars). And fees cannot be arbitrary large because users would not use Bitcoins when alternatives are cheaper.
Quote
And couldn't you just transfer your balance back and forth occasionally to defeat such a fee?
Yes, but you would then pay the regular fee and end up the same (or worse) than leaving the coins untouched.
No, it's a problem of externalities and market forces are very poor in dealing with externalities. Nobody would install mufflers if it was not mandated.
Actually, I found a solution to this tragedy of commons. But I'm afraid it requires some (although enforced by consensus) force but I'm afraid solving all externalities requires some force.
The fees has to be proportional to the coin age. This way a hoarder who does not spend coins will have to pay for their protection when he wants to spend them.
Actually, I found a solution to this tragedy of commons. But I'm afraid it requires some (although enforced by consensus) force but I'm afraid solving all externalities requires some force.
The fees has to be proportional to the coin age. This way a hoarder who does not spend coins will have to pay for their protection when he wants to spend them.
Interesting suggestion on the old coins. I just wonder if not using your bitcoins is going to be as detrimental to the network as you suggest. I really think enough people will use them that it won't be an issue. And couldn't you just transfer your balance back and forth occasionally to defeat such a fee?
Standard fees EARLY have the same benefit as CREEPY fees later, averaged over time. Creepy fees now is redundant.
Over time fees will be part of market history and behavior.
Creepy fees now is not necessary if we start fees now. Hell I'll donate bitcoins to prevent creepy fees.
No, it's a problem of externalities and market forces are very poor in dealing with externalities. Nobody would install mufflers if it was not mandated.
Actually, I found a solution to this tragedy of commons. But I'm afraid it requires some (although enforced by consensus) force but I'm afraid solving all externalities requires some force.
The fees has to be proportional to the coin age. This way a hoarder who does not spend coins will have to pay for their protection when he wants to spend them. Therefore, a hoarder would pay for their protection in the same way as a frequent spender who spends a lot and pays a lot of fees (hoarder can be forced to pay a bit less because transactions carries some extra overhead). However, such a solution is rather opposite to the current Bitcoin philosophy where fees are left to the miners only. If we wanted to introduce such a solution, the Bitcoin network would have to enforce the fees and would not accept the transactions where the fees for old coins are lower than a threshold. Since there will be very strong opposition to introduce such a rule when the fees are substantial, such rule would have to introduced early. Maybe even now. But I'm pretty sure there still will be a strong opposition to it. Because it acts like coin devaluation. But without it, the Bitcoin will probably fail.
Actually, I found a solution to this tragedy of commons. But I'm afraid it requires some (although enforced by consensus) force but I'm afraid solving all externalities requires some force.
The fees has to be proportional to the coin age. This way a hoarder who does not spend coins will have to pay for their protection when he wants to spend them. Therefore, a hoarder would pay for their protection in the same way as a frequent spender who spends a lot and pays a lot of fees (hoarder can be forced to pay a bit less because transactions carries some extra overhead). However, such a solution is rather opposite to the current Bitcoin philosophy where fees are left to the miners only. If we wanted to introduce such a solution, the Bitcoin network would have to enforce the fees and would not accept the transactions where the fees for old coins are lower than a threshold. Since there will be very strong opposition to introduce such a rule when the fees are substantial, such rule would have to introduced early. Maybe even now. But I'm pretty sure there still will be a strong opposition to it. Because it acts like coin devaluation. But without it, the Bitcoin will probably fail.
I wear ear plugs when I mow the lawn, use a chainsaw, etc. I would certainly install a muffler without mandate. I want to protect my hearing. And I prefer to be able to travel without drawing attention to myself.
Interesting suggestion on the old coins. I just wonder if not using your bitcoins is going to be as detrimental to the network as you suggest. I really think enough people will use them that it won't be an issue. And couldn't you just transfer your balance back and forth occasionally to defeat such a fee?
I'm not trying to argue, I'm trying to find examples that fit! I, like you, don't know if this will be a problem or not. I, like you, hope that it isn't.
I think the idea is that the more Bitcoins you hold (the more value you have) the more you would be willing to pay for securing your holdings. A side effect is that it helps secure the entire network. Being greedy is altruistic!
A new muffler on a Ferrari is more expensive than a new muffler on a Volkswagen. But everyone benefits from the reduction in noise.
I think the idea is that the more Bitcoins you hold (the more value you have) the more you would be willing to pay for securing your holdings. A side effect is that it helps secure the entire network. Being greedy is altruistic!
A new muffler on a Ferrari is more expensive than a new muffler on a Volkswagen. But everyone benefits from the reduction in noise.
No, it's a problem of externalities and market forces are very poor in dealing with externalities. Nobody would install mufflers if it was not mandated.
Actually, I found a solution to this tragedy of commons. But I'm afraid it requires some (although enforced by consensus) force but I'm afraid solving all externalities requires some force.
The fees has to be proportional to the coin age. This way a hoarder who does not spend coins will have to pay for their protection when he wants to spend them. Therefore, a hoarder would pay for their protection in the same way as a frequent spender who spends a lot and pays a lot of fees (hoarder can be forced to pay a bit less because transactions carries some extra overhead). However, such a solution is rather opposite to the current Bitcoin philosophy where fees are left to the miners only. If we wanted to introduce such a solution, the Bitcoin network would have to enforce the fees and would not accept the transactions where the fees for old coins are lower than a threshold. Since there will be very strong opposition to introduce such a rule when the fees are substantial, such rule would have to introduced early. Maybe even now. But I'm pretty sure there still will be a strong opposition to it. Because it acts like coin devaluation. But without it, the Bitcoin will probably fail.
The market is like play dough. You mix colors in and after the twirling the colors become part of the whole.
Whether fees are enough, depends on whether fees come as a shock to the system when they are needed and no one has made decisions with them calculated in.
If we apply fees early people will calculate fees into the market and they will grow and shrink with the rise. Otherwise one day a sudden increase in fees everywhere will cause chat rage and randomness.
Better now than later.
Whether fees are enough, depends on whether fees come as a shock to the system when they are needed and no one has made decisions with them calculated in.
If we apply fees early people will calculate fees into the market and they will grow and shrink with the rise. Otherwise one day a sudden increase in fees everywhere will cause chat rage and randomness.
Better now than later.
Oh, come on. I would gladly pay for protecting my coins. But mining at a loss or paying fees pays for protection of mostly somebody's else coins. Only number_of_your_coins/number_of_ALL_coins fraction goes for protecting your coins. Everything else goes for protecting other coins. I don't care about protecting your coins, sorry.
Would you voluntarily pay for fixing holes in the roofs of all houses in your town? If you know that only a small fraction would go for fixing your roof? Or would you rather let somebody else pay for it?
You are not suggesting introducing taxation for protecting the network, do you?
Would you voluntarily pay for fixing holes in the roofs of all houses in your town? If you know that only a small fraction would go for fixing your roof? Or would you rather let somebody else pay for it?
You are not suggesting introducing taxation for protecting the network, do you?
I'm not trying to argue, I'm trying to find examples that fit! I, like you, don't know if this will be a problem or not. I, like you, hope that it isn't.
I think the idea is that the more Bitcoins you hold (the more value you have) the more you would be willing to pay for securing your holdings. A side effect is that it helps secure the entire network. Being greedy is altruistic!
A new muffler on a Ferrari is more expensive than a new muffler on a Volkswagen. But everyone benefits from the reduction in noise.
I am not suggesting a tax for protecting the network, it is already built in as transaction fees.
(Obviously we are back to square one, will the transfer fee be enough! I don't know.) Even at a loss? Really? I personally would not lift my finger. And all rational members would not. This is the Nash equilibrium I'm talking about.
Well, do you secure / protect your other valuables at a loss to yourself? I do.
Do you fix a hole in your roof when it leaks? Do you change the oil in your car when it become ineffective at lubrication? Do you change a fan on your computer when it stops spinning?
Oh, come on. I would gladly pay for protecting my coins. But mining at a loss or paying fees pays for protection of mostly somebody's else coins. Only number_of_your_coins/number_of_ALL_coins fraction goes for protecting your coins. Everything else goes for protecting other coins. I don't care about protecting your coins, sorry.
Would you voluntarily pay for fixing holes in the roofs of all houses in your town? If you know that only a small fraction would go for fixing your roof? Or would you rather let somebody else pay for it?
You are not suggesting introducing taxation for protecting the network, do you?
+1
The market as "someone else, over there" approach is hands-off and void of any responsibility/control. It's the position of the observer and exactly the reason we have our current economic woes (to varying degrees based upon location). Of course, we got into that situation before the internet was around.
The market as "someone else, over there" approach is hands-off and void of any responsibility/control. It's the position of the observer and exactly the reason we have our current economic woes (to varying degrees based upon location). Of course, we got into that situation before the internet was around.
Amen, brother.
Do-ocracy.
Even at a loss? Really? I personally would not lift my finger. And all rational members would not. This is the Nash equilibrium I'm talking about.
Well, do you secure / protect your other valuables at a loss to yourself? I do.
Do you fix a hole in your roof when it leaks? Do you change the oil in your car when it become ineffective at lubrication? Do you change a fan on your computer when it stops spinning?
Perhaps mining insurance companies will open up and people can pay them to secure the network?
Rational people will protect their valuables.
Letting the market it handle is a contradiction. We are the market so let's handle it.
We didn't wait until Deepbit actually had problems from double spending. Soon as it hit near 50% people moved their work load elsewhere.
Why is it people still think the market is some White Knight who slaps you around a few times? It's just the collective entropy that we fail to adjust for. The more ignorant we are or the more irresponsible we are the harder we all get hit.
The market is the collective paranoia of all of us. It can either see the dead canary and run before the gas hits, or it can wait for the first dead body at which point you have a stampede of miners market forcing each other to death. Hurray for balance! Who cares about the funerals?
WE.ARE.THE.FUCKING.MARKET.
We didn't wait until Deepbit actually had problems from double spending. Soon as it hit near 50% people moved their work load elsewhere.
Why is it people still think the market is some White Knight who slaps you around a few times? It's just the collective entropy that we fail to adjust for. The more ignorant we are or the more irresponsible we are the harder we all get hit.
The market is the collective paranoia of all of us. It can either see the dead canary and run before the gas hits, or it can wait for the first dead body at which point you have a stampede of miners market forcing each other to death. Hurray for balance! Who cares about the funerals?
WE.ARE.THE.FUCKING.MARKET.
+1
The market as "someone else, over there" approach is hands-off and void of any responsibility/control. It's the position of the observer and exactly the reason we have our current economic woes (to varying degrees based upon location). Of course, we got into that situation before the internet was around.
If I were holding Bitcoins, I would invest in processing and securing the transactions to protect my holdings. It has the added benefit that I can earn more by processing transactions for others.
Even at a loss? Really? I personally would not lift my finger. And all rational members would not. This is the Nash equilibrium I'm talking about.
Quote
Time will tell if the Bitcoin economy is large enough to make processing and securing the transactions valuable enough to sustain itself. I think that it will answer the question on its own. The more valuable the Bitcoin, the more people who want Bitcoin, the more transactions we see, the more profitable mining becomes, the stronger the network grows, the more secure the network becomes.
But this is all tautology.
The problem I'm suggesting at my original post is that transaction fees would have to be very large to adequately protect the network. And large fees are opposite to popularity of Bitcoin as a payment system.
I think Satoshi was brilliant in all technical Bitcoin details. But I'm not sure he thought about of all economic ramification of Bitcoin.
Please, prove me wrong because I would like Bitcoin to succeed but I'm afraid the Nash equilibrium is very bad for the network as a whole.
Letting the market it handle is a contradiction. We are the market so let's handle it.
Well, we have to agree on a problem first. I think it's too early to know if there is a problem or not?
With deepbit, we know that someone with >50% of the network can harm the network. (And I don't think this problem has been solved yet.)
Here, some think there won't be enough profit from transfer fees to provide motivation to mine. This is just speculation and I don't see how we can fix it.
Letting the market it handle is a contradiction. We are the market so let's handle it.
We didn't wait until Deepbit actually had problems from double spending. Soon as it hit near 50% people moved their work load elsewhere.
Why is it people still think the market is some White Knight who slaps you around a few times? It's just the collective entropy that we fail to adjust for. The more ignorant we are or the more irresponsible we are the harder we all get hit.
The market is the collective paranoia of all of us. It can either see the dead canary and run before the gas hits, or it can wait for the first dead body at which point you have a stampede of miners market forcing each other to death. Hurray for balance! Who cares about the funerals?
WE.ARE.THE.FUCKING.MARKET.
We didn't wait until Deepbit actually had problems from double spending. Soon as it hit near 50% people moved their work load elsewhere.
Why is it people still think the market is some White Knight who slaps you around a few times? It's just the collective entropy that we fail to adjust for. The more ignorant we are or the more irresponsible we are the harder we all get hit.
The market is the collective paranoia of all of us. It can either see the dead canary and run before the gas hits, or it can wait for the first dead body at which point you have a stampede of miners market forcing each other to death. Hurray for balance! Who cares about the funerals?
WE.ARE.THE.FUCKING.MARKET.
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