Published on: 2018-07-13T10:11:27+00:00
PJ Fitzpatrick has proposed a method to establish digital scarcity from bitcoin transactions. The concept involves creating coins from transactions if their hash is among the closest n to the non-zero portion of the block hash. Regardless of the size of the transaction, only one coin is generated per transaction, resulting in n coins being produced per block. The initial coin supply and addresses can be determined entirely by the existing blockchain, making the coins scarce as they can only be created through transactions.The goal of this approach is to incentivize more transactions by building overlay scarcity and value on top of the bitcoin blockchain. By finding an equilibrium between paying transaction fees and mining new coins, it is believed that congestion on the bitcoin network can be created, motivating individuals to borrow scarcity from bitcoin in a sidechain. This borrowing of scarcity would effectively result in overlaying scarcity and value on top of the bitcoin blockchain, encouraging more frequent transactions.Jakub Trnka supports the idea of overlaying scarcity and value on top of the bitcoin blockchain to encourage increased transaction activity. He suggests that by establishing a balance between transaction fees and mining new coins, congestion on the bitcoin network can be stimulated. This congestion, in turn, would motivate individuals to utilize a sidechain and borrow scarcity from bitcoin. Trnka also mentions that there are other variations of this approach, such as generating computation puzzles from the previous block.In seeking feedback on this proposal, Fitzpatrick plans to initiate a discussion on bitcointalk. He is interested in hearing whether others have encountered a similar method or have any insights to offer.
Updated on: 2023-08-01T23:39:50.159108+00:00