Topic: Demurrage, transaction fees, storage fees & comparison to commodity money. - page 7. (Read 16781 times)

Isn't the minimum fee just a default setting too? Won't people mod around that just as easily as the oldest first rule? Or do you mean to make the default client consider blocks with tx that have less than the minimum fee invalid?

I heard your mother charges a minimum fee.

Long term storage of capital is not free for the network, even though it might seem that way.  The network does suffer an uncompensated cost.  Namely, the ongoing replication of those deep transactions as new clients bootstrap and the ongoing disk storage costs, however small those might be individually, multiplied by the number of nodes.  What I'm suggesting is an incentive for capital accumulators to consolidate their holdings into fewer/newer transactions, allowing the network to 'compact' the blockchain.  Currently there is no incentive for early adopters, or anyone else with any substantial holdings, to spend their oldest transactions first.  This is the default action of the client, and this might be enough, but sooner or later someone is going to mod the client to allow users to spend newer coins first, because the deeper the transactions are the more secure they are.  There does need to be a cost for that kind of long term security, particularly if those holdings are spread across numerous transactions that cannot be pruned.  I do like the proposal of a miners' choice and rear-loading the fees.  It permits the well heeled bitcoiner to contribute to the security of the blockchain in a less direct manner, for the only miner that is likely to accept his old transaction without the demurrage fee is one that he owns or is otherwise closely associated with anyway.  If he is owner of a bitcoin bank, his old transactions can be spend or freshened without fee only if his own bank is doing the processing; implying that his financial actions directly benefit the security of the blockchain because that would have to be true for his transaction to be accepted for free in any reasonable period of time.

I have a proposal.  Using the rear-loaded, miners' choice model.  A minimum fee rule for any new transaction with inputs that are older than a year (in blocks) will have an alternative minimum fee based upon demurrage of one Satoshi ( .00000001 BTC) per retarget cycle (2016 blocks) for every input that exceeds one year since it's transaction was recorded.  This means that each input is charged for demurrage from it's inception, not the end of the first year, and the minimum fee for a new transaction with a single transaction exactly a year old would be at least .00000026 BTC.  This isn't much at all, but would still incentivise some savers to either freshen their savings once each year, consolidating their many transactions down to one while doing so, and potentially paying a transaction fee for the effort; or resolve to pay for the network storage costs upon release of funds.  This even gets demurrage upon off-network transactions wherein the private keys are traded instead, because no one saves money to never spend it, so sooner or later that has to happen.

This rule need not go into effect until the block reward is cut to 25 coins, giving the early adopters plenty of time to plan out their best course of action, most of whom will be consolidating numerous 50 BTC transactions into a single (bytewise small but BTC-wise large) transaction; permitting the network to prune even the block reward transactions from the old blocks, perhaps all the way down to the headers alone.

Also, this rule would be an alternative minimum fee, so if some other rule required a higher mimimum fee, those fees would not be additive.  It's just whichever minimum fee is highest that is required; or a miner willing to process your transaction for free.

Alright, I'm ready.  Tell me what you think, but please leave my mother out of it.

That's what I meant.

If bitcoins that have been held for a long time actually cost more to spend, then there's no need to create an artificial storage cost. Miners can simply charge higher transaction fees for older coins.

Okay, sorry for the hostility.

There is a sense in which is already baked in. Miners can 'charge' whatever they want based on whatever they want. It isn't unreasonable that they could require higher payment for tx with dependencies that were way back in the archives, right? Is it actually a tiny bit costlier to look farther back?

Even if there isn't extra costs, miners can still charge for it if they think that is a good idea.

This is just a tax on savings. The average early adopter is going to be strongly against this as well they should be). You are suggesting that we impose an artificial storage cost in order to make bitcoins more like a physical commodity as if that were a worthwhile goal. We don't want "digital gold"--we want a good medium of exchange. Why on earth would holders of BTC want to pay to store them when they cost (virtually) nothing to store?

whatever, all my coins are unique and i'm not running anything that takes them for being old.

I don't think that it's "shitty", just that the genesis block is unique. 

Fuck that. Somehow you realize it's shitty to do to him, but not the rest of us?

This might be better off in a different section, but I'm sure that it's going to go all over the place.

Recently, there has been much discussion in many different threads about how the transaction fees as they exist are a "tragedy of the commons".  Even though they are not such a type of resource commons, those threads seem to have awakened a real future concern about whether or not transaction fees will be enough of a reward for miners once the block reward drops to trivial levels.  The part that really got me wondering is about the lack of "demurrage" in Bitcoin's algorithum.  Many will immediately attack me here as advocating for inflation, but let me say first off that I am not advocating for any change that would actually make Bitcoin inflationary.  However, for those who do not know what demurrage is, it is the intentional introduction of fees into an artificial monetary exchange system intended to replicate the 'storage costs' that a commodity money would have.  For example, when physical gold was the primary medium of exchange between nation-states and silver the primary medium of exchange between private entities; both commodities imposed relatively high transaction fees in the form of transportation costs.  This kind of fee structure Bitcoin replicates well with it's transaction fee schedule.  However commodity money also imposed storage fees upon the long term holder of these mediums of exchange, usually in the form of the costs of building a vault or renting a safety deposit box inside the much larger vault of a bank or other highly secure institution.  It's these storage fees that demurrage is intended to replicate, and for which Bitcoin does not have a corrolary.  I don't know if it could even be done, and still keep everything else straight, but I want to ask for ideas about how demurrage could be introduced into Bitcoin under the following ideal conditions...

1)  Miners should receive the demurrage fees relative to their hashing contributions, as transaction fees and the block reward are now.

2)  Only transactions older than, say 6 months, should be affected by demurrage fees

3)  Demurrage fees should be very small, but should be assessed with each block, or perhaps with each retarget block.

4)  Demurrage fees should favor transactions with large collective amounts, probably the best way to do this is to asses the demurrage fee by each elderly transaction and not by how much it contains.  (a safety deposit box costs the renter the same if there is 100 ounces of gold in it or just one)


The astute observer will immediately notice that this will not likely result in actual demurage fees, but instead in savers periodicly moving their funds to keep them fresh.  This is part of the point, as if it's economicly better for the savers to freshen their funds and potentially pay a transaction fee instead, they still contribute to the security of the blockchain with the side benefit that their old transctions can be pruned from the blockchain once that becomes possible as well as encourage the condensation of many small transaction balances into fewer and smaller transactions.

I'm sure that an exception can be added to the demurrage fee system for the genesis block, so that Satoshi can keep his legacy intact for this heirs.

Any thoughts on how this could be accomplished, or why it shouldn't?  I'm open to being proven wrong about this concern.