Author: Stephen Pair 2013-02-14 05:36:09
Published on: 2013-02-14T05:36:09+00:00
The email conversation discusses the issue of fees and costs associated with bandwidth and validation required for a transaction. The relay node will not propagate transactions whose fee is too small, but this only considers their own marginal costs, not the externalized cost of other nodes that also validate the block produced. However, full nodes can earn money by relaying and validating transactions as miners will pay them for prompt delivery of profitable transactions. This will ensure decentralization as anyone with profitable transactions would only deliver them to miners or peers willing to pay for them. Wallet software may cut out middlemen and submit directly to miners, while other nodes with access to large amounts of transactions may reduce the infrastructure a miner has to maintain. The cost involved in relaying and validating transactions ensures that all transactions with fees will not get included by miners, destroying the mining business as the block reward decreases. It is predicted that it will take a few years before volumes force the infrastructure to evolve, and there may be a point where full nodes start dropping offline. Bitcoin will be more valuable if it can handle large transaction volumes. Mike Hearn's analysis suggests that even at Visa scales, the hardware requirements for full validation and relay are not substantial, enabling lots of small, profitable node operators and low transaction fees.
Updated on: 2023-06-06T10:05:28.046059+00:00