0 sats \ 5 replies \ @orthwyrm 11 Jan \ parent \ on: On Spamcoin Revenue for Miners bitcoin
Would it be better for miners if fees remained at 1-5 sats / vbyte in perpetuity, then?
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No not at all
I don't understand how one can think the following can both be true
- random fee spikes from "legit" transactions (status-quo) is preferable to no spikes at all
- increasing the frequency and magnitude of those spikes (ordinals effect) is worse
My straw-man is trying to understand if you think 1) is false
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I don't understand how one can think the following can both be true
I see. I'll try to explain:
I'm trying to say that random fee spikes from "legit" transactions are preferable since they have more social consensus and are using block space more efficiently, so there is less chance that they will generate significantly less fees just by some software update (wallets, CEX batching, soft forks, ...) that makes them even more efficient. "Legit" transactions had an incentive to be as efficient as possible since bitcoin was created.
So basically, I want to argue the following: efficient transactions => reliable block fees
It's much more probable that bitcoin will continue to have the same magnitude of fee spikes from "legit" transactions than from inscriptions. Filling a block with a lot of small, efficient transactions is ... a lot more efficient than filling it with big transactions since you can fill something easier if you have a lot of small stuff to fill in the gaps. Hence, inscriptions aren't as reliable to generate a consistent stream of fees on a long enough time scale.
I think I also read somewhere that inscriptions are pretty inefficient since they use JSON to encode stuff which is wasting block space. So assuming this is true (I didn't verify), this means that inscriptions could generate significantly less fees in the long run simply by optimizing them - assuming that's in their interest. But people don't have infinite money to spend on expensive, wasteful inscriptions. That's part of why I am not too worried about inscriptions. So either they run out of money or they optimize them. Both cases will generate less fees though.
Additionally, it makes more sense to build a business model around something which existed for 15 years than around something which existed for what, 1-2 years?
I really don't know if inscriptions will still be a thing in another 1-2 years. I don't know how much it is driven by hype vs. sustainable demand. But I think there is a sustainable demand for "legit transactions" by L2 layers etc.
Else bitcoin will have failed anyway and I don't think people will continue to run their miners solely for inscriptions. The hash rate is there for a global, permission-less, censorship-resistant monetary network. Not for inscriptions.
Does that help?
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Well look, you basically have two scenarios:
- Fee-market driven by regular transactions
- Fee-market driven by regular transactions + ordinals / inscriptions
Jimmy is arguing that (1) is healthier for miners than (2).
Scenario (2) should always generate equal or more fees than (1) at any point in time. Both scenarios capture the demand for regular transactions, but in scenario (2) there is occasionally an additional demand driven by the latest NFT / token craze.
Scenario (2) is possibly also more unpredictable (reasonable assumption, but the market is still too nascent to tell IMO).
My problem: Jimmy has made this weird assumption that the increased volatility in (2) will be a net-negative compared to the additional revenue it rakes in. I don't know on what basis he makes this claim. I have yet to see a single miner complain about this theoretical problem.
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Yes it helped, but not convinced.
I can't know what is efficient, because it depends on individual human perspectives assessed in the moment. I don't think that these things are valuable but the market says that other people do.
Maybe it's corruption and gambling or maybe the lessons to be learned by people getting burned will be valuable for these people long term.
Also I can't know what will be a sustainable business model because the future is uncertain. What seems random on a short time frame can be very consistent over long time frames.
I want to be convinced, but "reliable block fee's" I think is not clearly good, it biases miners who are not agile and dynamic. Why would we want that?
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