Author: Anthony Towns 2015-08-07 18:22:50
Published on: 2015-08-07T18:22:50+00:00
The discussion is about the minimum transaction fee in Bitcoin. The first person argues that if one is willing to wait for an infinite amount of time, then the minimum fee will always be zero or very close to it. However, this argument depends on blocks being found at random intervals, and sometimes a lucky event happens where six blocks are discovered within ten minutes. In such a case, if one is willing to wait until that event occurs, they can submit their transaction with a low fee. All higher-fee transactions waiting to be confirmed will get confirmed in the first five blocks, and even a very-low-fee transaction will get confirmed if miners do not have any floor on the fee they'll accept. However, this depends on how rational miners are because once the block subsidy is retired, hash power is only paid for by fees. If there are no fee-paying transactions in the queue, then there's no reward for applying hash power, so mining a block won't even pay for miners' costs. In that case, it is better to switch to hashing something else, such as an altcoin with less fees than bitcoin has on average but more than nothing, or put hashing hardware into a low-power mode to cut costs. On the other hand, when the queue is over-full because there have been no blocks found for a while, miners can fill a block with higher-than-average fee transactions. This could cause some miners to switch hash power from altcoins and sidechains to catch the temporary chance of higher revenue blocks. Both tendencies would help reduce the variance in block time, which would probably be a good thing for the network as a whole. The second person argues that the same incentives apply with mining being paid for by assurance contracts rather than directly by transaction fees. If a bunch of blocks are done quickly, the existing assurance contracts are dealt with just as well as if it had taken longer, so miners want to wait until new contracts come in rather than spend their hash power for no return. However, all of this only applies once fees make up a significant portion of the payment for mining a block.
Updated on: 2023-05-19T21:23:02.199174+00:00