Author: Elliot Olds 2015-08-15 20:36:06
Published on: 2015-08-15T20:36:06+00:00
The conversation is about the negative consequences of high fees in Bitcoin. Elliot Olds suggests changing 'utility' to 'money' as it will reduce the utility of people using the network. He explains that if the fee amount increases, the benefit users get for each transaction they make is reduced by the extra amount. In addition, some use cases will become nonviable, depriving people of Bitcoin's decentralized benefits. However, concrete cases that would be lost are difficult to list due to Bitcoin's low usage.Moreover, experimentation with new Bitcoin use cases will be discouraged, making it less likely that such cases are discovered, improved, or popular before Bitcoin's security relies on having many users. Experimentation can't be done on a test chain as most experiments being done by early-stage companies are about product-market fit and which services are valuable to users. If the per-transaction benefit to the person is less than $1, then $1 transaction fees will prevent it.Lastly, the exchange rate and the value of block rewards are tied to Bitcoin's security. The more people use Bitcoin for transactions, the higher the price will be. Therefore, the exchange rate will be higher, all else being equal. As long as Bitcoin's security is tied to the exchange rate via block rewards, it's an important consideration for security.
Updated on: 2023-06-10T19:14:35.735925+00:00