Author: Peter 2022-07-09 22:21:05
Published on: 2022-07-09T22:21:05+00:00
Proof-of-work currencies currently reward miners with both block rewards and transaction fees. However, most currencies are phasing out block rewards over time. The exception to this is Ethereum, from June 2020 to August 2021, where transaction fees consistently accounted for more than 5% to 10% of the total mining reward. No proof-of-work currency has ever operated solely on transaction fees, and academic analysis has found that in this condition block generation is unstable. This is a scary phase change that no other coin has gone through. A fixed block reward does not necessarily guarantee that the value of energy securing transactions is greater than the value being transacted in a practical amount of blocks where practical is a certain amount of time (currently 1 hour). If the energy expenditure is less than the value transacted in a given amount of blocks, those transactions are at risk of being double spent. Ethereum Classic has experienced this failure where any meaningful amount of value would need two weeks of blocks to be deeply confirmed for economic purposes.The Bitcoin emission curve should not be assumed to imply that there will be zero block rewards for mining Bitcoin. There is an ugly solution that doesn't require a hard fork where a new coin is launched to merge mine with Bitcoin. The new coin, called BTail, would enfranchise everyone who is a Bitcoin UTXO holder at the moment of the real-time launch of BTail at a well-known block height. BTail would have a floating exchange rate to Bitcoin, and its success or failure in terms of adoption would be determined by the market. It would require the same network effect barriers as a hard fork but would not put Bitcoin at risk while people can take time to install new software as they would with a soft fork.
Updated on: 2023-06-15T22:33:49.468791+00:00