Author: Bram Cohen 2022-07-11 18:12:52
Published on: 2022-07-11T18:12:52+00:00
Bitcoin's security could be seriously compromised if it becomes entirely dependent on transaction fees, which are subject to a well-established day/night cycle with fees going to zero overnight and longer gaps on weekends and holidays. This means that there will be very few blocks mined overnight and miners may even preemptively stop attempting mining the last hour of the day. Eventually, miners with lower costs of operation will collectively reorg the last hour (or some time period) of the day overnight, causing miners with more expensive operations to shut down. This slippery slope could lead to a mining cabal and eventually 51% attacks. Existing experience shows that having transaction fees be about 10% of rewards on average works well, incentivizing collecting fees without making incentives get too weird. Relying completely on transaction fees for security is likely to be a disaster, as 90% transaction fees are probably very bad and 50% runs the risk of spikes getting too high. Possible fixes include dragging most of East Asia eastward to a later time zone to smooth out the day/night cycle or hard forking in fixed rewards in perpetuity, both of which are unrealistic.More actionable measures involve smoothing out fees over time by having wallets opportunistically collect their dust during times of low transaction fees and making UX which clarifies when transactions are likely to take a day or week but that it's reliable. However, users are usually averse to transactions taking a while.
Updated on: 2023-05-22T20:44:33.244335+00:00