Author: James MacWhyte 2022-07-11 22:19:06
Published on: 2022-07-11T22:19:06+00:00
In a discussion about the loss of the mining reward, James argues that people are shortsighted in their approach. He says that it is always daytime somewhere, and when volume drops at night, it simply means there is not enough activity outside of the US. If Bitcoin continues to rise in price, mining rewards will still be substantial for decades to come. In the next ten years, he believes that there will be enough adoption worldwide to make mining profitable around the clock, even with minimal rewards. However, Bram Cohen argues that relying completely on transaction fees for security is likely to be a disaster. He notes that there is a well-established day/night cycle with fees going to zero overnight and longer gaps on weekends and holidays. This pattern could result in no or very few blocks being mined overnight. The miners with lower costs of operation may find a way to reorg the last hour of the day overnight and profit from it, causing miners with more expensive operations to preemptively stop attempting mining the last hour of the day. This slippery slope could lead to a mining cabal that eventually 51% attacks the whole thing.To fix the potential problem, Cohen suggests measures that smooth out fees over time. For example, having wallets opportunistically collect their dust during times of low transaction fees would help and save users on fees. Making UX which clarifies when things are likely to take a day or week but that it's reliable would be a reasonable thing to do. However, users are unfortunately very averse to transactions taking a while. Cohen also suggests that existing experience shows that having transaction fees be about 10% of rewards on average works well, incentivizing collecting fees but not so much that it makes incentives get all weird.
Updated on: 2023-06-15T22:46:10.192476+00:00