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> Anyways if it turns out that fees alone don't look like they're supportin=
g enough security, we have a good amount of time to come to that conclusion=
and do something about it.=C2=A0
The worst-case scenario is that the first global hashrate regression may ta=
ke place in 2028.
Instead of the average price increase at least x2 every halving - the globa=
l hashrate may gradually decrease from that point. Again, it would be the w=
orst-case scenario.
In my proposal you don't need to think about any calculations - just simple=
logic which we have right now. No hardcoded values and the free market in =
its finest - self-regulating the level of taxation of parties involved, but=
with opposite interests. And the mechanism would try to fix a global hashr=
ate regression if appear.
In other words: let's be optimistic regarding fees, but with emergency mech=
anism built-in just in case.
The only drawback here is that the system is already running.
In my personal opinion avoiding long-term global hashrate regression is mor=
e important for store of value feature than the 21M schelling point (or tra=
p...)
W dniu 2023-01-04 17:03:33 u=C5=BCytkownik Billy Tetrud <billy.tetrud@gmail=
.com> napisa=C5=82:
> In Bitcoin "the show must go on" and someone must pay for it. Active [and=
/or] passive users=C2=A0
I certainly=C2=A0agree.=C2=A0
> or more precisely: tiny inflation
=F0=9F=91=8D
> Right now security comes from almost fully from ~1.8% inflation.
Best I could find, fees make up about 13% of miner revenue. So yes, the vas=
t majority of security comes from coinbase rewards. I assume you're implyin=
g that ~13% of today's security is not enough? I would love to see any quan=
titative=C2=A0thoughts you have on how one might determine that.=C2=A0
Have there been any thoughts put out in the community as to what size of th=
reat is unlikely enough to arise=C2=A0that we don't need to worry about it?=
Maybe 1% of the yearly=C2=A0government budgets=C2=A0of the world=C2=A0woul=
d be an upper bound on how much anyone would expect could realistically be =
brought to bear? Today that would be maybe around $350 billion.=C2=A0
Or perhaps a better way to estimate would be calculating the size of the mo=
tivation of an attacker. For example, this paper=C2=A0seems to conclude tha=
t the US government was extracting a maximum of ~$20 billion/year in 1982 d=
ollars (so maybe $60 billion/year in 2022 dollars if you go by CPI). If we =
scale this up to the entire world of governments, this seems like it would =
place an upper bound of $180 billion/year of seigniorage extraction that wo=
uld be at risk if bitcoin might put the currencies they gain seigniorage fr=
om out of business. Over 10 years (about as far as we can expect any govern=
ment to think), that's almost $2 trillion.=C2=A0
Whereas it would currently cost probably less than $7 billion=C2=A0to purch=
ase a 50% share of bitcoin miners. To eventually reach a level of $350 bill=
ion, bitcoin's price would need to reach about $800,000 / bitcoin. That see=
ms within the realm of possibility. To reach a level of $2 trillion, you'd =
need a price of $4.3 million/bitcoin. That's still probably within the real=
m of possibility, but certainly not as likely.=C2=A0 If you then assume we =
won't have significant coinbase rewards by that point, and only 13% of the =
equivalent revenue (from fees) would be earned, then a price of ~$6 million=
would be needed to support a $350 billion and $34 million to support a $2 =
trillion security. I think that second one is getting up towards the realm =
of impossibility, so if we think that much security is necessary, we might =
have to rethink things. Its also quite possible, as the network of people w=
ho accept and use bitcoin as payment grows, that the fee market will grow s=
uperlinearly in comparison to market cap, which would make these kind of hi=
gh levels of security more realistic.=C2=A0
Anyways if it turns out that fees alone don't look like they're supporting =
enough security, we have a good amount of time to come to that conclusion a=
nd do something about it.=C2=A0
> Deflation in Bitcoin is not 1:1 matter like in gold, for example...=C2=A0=
Deflation in Bitcoin is more complex issue
It's helpful to keep our language precise here. Price inflation and deflati=
on act identically in bitcoin and gold and anything else. What you seem to =
be talking about at this point is monetary inflation (specifically, a reduc=
tion in it) which of course operates differently on the machinery of bitcoi=
n than it does in the machinery of gold or other things. Whereas my comment=
about you mentioning Gresham's law was specifically talking about price in=
flation, not the effects of the coin emission machinery in bitcoin.=C2=A0
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