Author: Anthony Towns 2015-10-28 02:13:59
Published on: 2015-10-28T02:13:59+00:00
The discussion on Bitcoin's lightning payment system leads to the question of whether miners can operate as a cartel and force fees to rise. The possibility of miners using a soft-fork protocol to enforce decisions would enable them to act as a cartel. However, the supply constraints for transactions per block are not tied to miner costs, so there would be no significant increase in supply capacity with cost. If miners accept various transactions with different fees, it introduces timing issues, and a cartel would consider such complications in their analysis. In this example, a cartel would optimise revenue by accepting any transactions at 90c or more immediately and all transactions that are at least 50 minutes old at 25c or more. A non-cartel miner could have a different policy; however, it is unlikely that they could affect prices. Since alternative payment methods can undercut prices and steal market share, bitcoin fees will likely remain at "free market" rates rather than anything extortionate.
Updated on: 2023-05-18T15:43:23.183119+00:00