Topic: Future Bitcoin security. TX_FEEs compared to the United States military budget? (Read 571 times)

You wouldn't pay 6.7%. You would pay the same fee that you do now, or less.

I guess I don't understand what you are trying to communicate.

To me, it sounds like you're trying to put miner fees on par with US military spending. If that is the case, then I do not think that could be justified, nor do I think it would be good for BTC. If I had to pay a transaction fee at 6.7% to get the transaction confirmed, I would drop BTC completely. Because that would truly be wasteful spending.

I didn't ask it was fair to compare the two.  Obviously the strength of the US economy is the main driver for the value of the USD, but ultimately it is the US military that backs up the 'reserve status' of the USD.  This is because the strongest economy in the world also needs a strong military to protect it, thereby ensuring stability and hence investor confidence.

But yes, it can be argued that much of the US military budget is wasteful spending.  It could be cut 3-4x and still be the largest military budget in the world.

Here are the numbers:

US GDP is $17 Trillion http://research.stlouisfed.org/publications/net/page24.pdf
US M2 is $10 Trillion http://www.federalreserve.gov/releases/h6/current/h6.htm
US M3 isn't published anymore.

US Military budget is about $670 Billion.  http://en.wikipedia.org/wiki/2013_United_States_federal_budget

Military/GDP = 3.9%
Military/M2 = 6.7%

If we extrapolate this to bitcoin, we have 21M*.039 = 819,000 and 21M*.067 = 1.4M.  

If the right number is around 1 million, then divide that by 365 days, 24 hours, and 6 blocks per hour we have 19BTC per block reward.

At .0001 BTC fee per average transaction thats 19,000 transactions a minute or 320 transactions a second.  But, in the future transaction fees will likely be 100 times smaller, so that would require 3,200 transactions a second to keep up with US military spending.  This is basically impossible from a technical perspective without major changes to bitcoin.

Perhaps a comparison to M3 would make more sense, the numbers aren't publicly anymore.

I don't know the numbers that you asked about, but I don't think that comparing the two is fair and I'm pretty sure I would drop out if miners' fees are as high as the US military budget because BTC is not a "world reserve currency" and the military actually secure US interests that amount to a whole lot more than just the US Dollar.  As an example, most humanitarian aid activities are not that important to the US Dollars' value. The DoD also conducts a lot of research that has very little direct impact on the global standing of US Dollar (except for the fact that it spends a lot of them). The military is also responsible for the healthcare and retirement programs for those that have retired due to age or injury.

Bitcoin miners are automated processes that do one thing and do it very well and deserve to be compensated for it. But, I wouldn't put them on the same level as the entire US military budget.

Also, this doesn't take into account the roles that the Federal Reserve and SEC play in maintaining the stability and actual value of the USD in the global markets.

One could argue that the US military budget is the TX_FEE for 'securing' the USD as the worlds reserve currency.  

What is the percentage of this cost compared to the total USD money supply M1 and M2?


Once all 21,000,000 Bitcoins are mined, if we apply this same percentage, how many bitcoins will be spent a day as a reward for miners securing the network?  How does that compare to today?