Topic: The need for transaction scarcity (and why coindesk censors). (Read 310 times)

The point is that if transactions are not scarce, fees will be low, and without tail emission (of which bitcoin is proud), these fees are the only thing that will pay for ledger security.  The ledger is ONLY be secure because it is too expensive to do it over, that is, in order to do it over, one has to spend more than what is potentially at stake (double spends).
As such, the block benefit (reward + fees) must not be significantly smaller (orders of magnitude) than the largest individual transactions it contains ; otherwise, it is beneficial for the emitter of that transaction to redo the chain, orphan the block in which the transaction took place, and double spend it to another of his addresses.

For instance, suppose that you do a 1000 btc transaction in block X.  Suppose that the total reward per bloc is about 5 btc.  That means that mining will not cost more than about 5 btc per block in proof of work, or miners would lose money mining.  If you wait for 10 blocks, your counter party thinks that the transaction is safe.  You obtain what you wanted from your counter party. 
Next, you pay miners 200 btc to redo the last 10 blocks, and insert another transaction of your 1000 btc (to one of your addresses).  For miners, this is profitable: they discard 50 btc of bloc reward and the hash rate they spend on it by redoing the chain, but you pay them 200 btc.


There are ways, but not with PoW. 

Note that the price of bitcoin doesn't really matter in this story.

Half a billion dollars isn`t that much.Btc market capitalization is 16 billion USD (i don`t remember the exact value).Anyway,without block rewards the transaction fees might increase in order to keep the mining profitable.
I wish there was a way to make all the transactions free,but it`s impossible.
Bitcoin will survive only if the price goes to the moon. 

Ha, coindesk has censored again one of my contributions.  You'll see why:

There are structural problems built into bitcoin from the beginning, and its biggest problem is what has often been hailed as its great virtues: the limited number of coins that will be in circulation when the Sun becomes a Red Giant, and the proof of work scheme that needs the biggest computing effort in history to make a cryptographically secure ledger.
This gigantic computing effort, needed to secure the ledger of all transactions ever, must be financed by something, and that is not a small amount. We are talking about about half a billion dollars a year to keep bitcoin's cryptography up and running. The early years of bitcoin, this has been financed essentially by inflation: the bloc rewards. It is still largely financed by inflation, but since the last bloc halving, fees have become a significant contribution to the financing of security by proof of work of the ledger.
The block halvings are needed to obtain a finite amount of bitcoin when the Sun will swallow the earth ; and to finance the huge computational effort to secure the ledger with proof of work, something else has to pay for it: the scarcity of transactions. If one finds "a solution" to the scarcity of transactions (be it large blocks, or off-chain transactions), bitcoin's economical model crumbles, because there is no scarcity any more that will pay for the huge proof of work.

Because the (poor) cryptographic security of proof of work is simply that it is too expensive to break it. So bitcoin's security is tied to wasting a lot of value. That value has to come from something. As the inflation tax is shrinking, only transaction scarcity can take over. Hence, transactions must remain scarce and expensive, or bitcoin becomes insecure.
And hence, there shouldn't come a "solution" to the problem of transaction scarcity.