Author: Anthony Towns 2022-07-07 22:06:14
Published on: 2022-07-07T22:06:14+00:00
In a recent bitcoin-dev post, Peter Todd stated that "we should not imbue real technology with magical qualities" and instead focus on advancing technology. The current amount of security for Bitcoin is 1.7% of the total coin supply per year, which seems to be working fine. However, an amount of 0% would be too small, so there is no need to stress about finding an "optimal" amount. An amount low enough to be affordable, but non-zero, would suffice. Todd suggests that 1%, 0.5%, or 0.1% would all be acceptable. To put this into perspective, 0.1% of 21 million BTC per annum is equivalent to 0.4BTC per block, which is approximately 50sat/vb if blocks are 800kvB on average. This fee seems feasible to fund with fees alone. A 200vb tx (roughly the size of a 2-in, 2-out p2wpkh/p2tr tx) at 50sat/vb would cost $2 at a price of $20k/BTC, $10 at $100k/BTC, $100 at $1M/BTC, etc.If the current block reward of ~1.7% pa of 19M at a price of $20k funds the current level of mining activity, then you'd expect a similar level of mining activity as today with a reward at 0.1% pa of 21M at a price of ~$310k. Going by the halving schedule, the block subsidy alone will remain above 0.1% of supply until we hit the 0.39 BTC/block regime in 2036, at which point it drops to ~0.0986% annualized.
Updated on: 2023-05-22T20:36:53.495009+00:00