Author: Erik Aronesty 2022-07-11 18:43:27
Published on: 2022-07-11T18:43:27+00:00
The security of Bitcoin is becoming increasingly dependent on "fee pressure" as the rewards drop. This approach seems to make more sense than relying on fixed and predictable tail-emissions. Modifying on-chain utility can alter fees, and increasing on-chain utility by promoting the use of Bitcoin & Lightning in transactions can help promote fee growth and maintain the security budget. Proposals like "payment codes" and protocols like "omni" and "omnibolt" all use on-chain resources without needing a soft fork, while other proposals like covenants may increase fee pressure further. If Bitcoin becomes entirely dependent on fees for security, this could become a serious problem due to the established day/night cycle with fees going to zero overnight and even longer gaps on weekends and holidays. This could cause miners to shut down and rapidly lose the ability to quickly spin up again, leading to a slippery slope to a mining cabal which reorgs everyone else out of existence and eventually 51% attacks the whole thing. Possible solutions to address the issue 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. However, these are unrealistic and extremely problematic solutions. More actionable measures include having wallets opportunistically collect their dust during times of low transaction fees and making UX which clarifies when things are likely to take a day or week but that it's reliable.
Updated on: 2023-06-15T22:52:00.186738+00:00