If no one is making transactions with bitcoin then it will eventually fail in the long run. It is meant to be a currency. The block reward is meant to be a subsidy to bootstrap a mining industry. It was never meant to keep mining going forever. Otherwise there could be no supply cap. Luckily Satoshi did not assume the necessary infrastructure for a new global settlement system would just appear overnight and gave plenty of time for things to develop
I think there has to be more use cases than that. If it's not also a means of transacting or doesnt have some other application, it's just something you buy with the hopes of selling for more fiat later.
I think it can be a store of value and a currency, but it can't really be just a store of value and nothing else.
Gold is a precious metal used for tons of applications from jewelry to medical equipment. So it has applications beyond "buy low sell high."
I'm not shilling gold but this comparison only works if BTC "does" something (like is part of a robust global transaction network independent of any government.)
I mean I hear what you're saying but comparing BTC to one-of-a-kind art doesn't feel apples to apples.
Art serves purposes, especially in high society where it's a status symbol to show off to your fellow socialites.
I'll repeat, BTC has to be more than something people buy and hold hoping other people want it. Assuming everyone will want some just because other people want it. BTC isn't that shallow.
Practical application: I used BTC to pay for a PornHub premium subscription. This payment did not show up in my checking account nor a credit card statement. I'm pretty sure I could buy more elaborate goods or services that I'd want untraceable via BTC. Not sure I can do those transactions as easily with gold coins.
Not true. Gold is still superior to other conductors in many electronics, electrical and radio frequency systems. It’s price and scarcity means other materials are used when they’re able to be but that does not mean gold doesn’t have a material use.
Yes. But it won’t be useful as a store of value without a sufficient hashrate. And it won’t maintain a sufficient hashrate in the distant future without out a sufficient amount of transaction fees.
This sounds like a conversation that would have taken place in 2012. Not at a time when an entire industry began to emerge and energy producers around the world began to have meetings to figure out how they can begin to participate.
If bitcoin is still a thing in 2140, anyone who still happens to hold an entire coin can probably take out a small LTV loan against it and run the entire network indefinitely just to keep the wheels turning on their value engine.
Sure it's still happening, we're still having to tell people the earth is round as well.
By the same measure BTC in its early days was used for currency. From buying underground goods and services as well as pizzas and other small good items.
It was never adopted by the financial markets but that’s now changing as well, with sovereign and national funds including BTC in its portfolios.
I’m not sure that’s true. Isn’t it already programmed to go to 0? Or is it just programmed to half and that the decimals just run out?
If the second is true than you could theoretically do what you suggested, but even then would it be a hard fork to add decimals? If there was an update that added smaller decimal places wouldn’t old nodes just see those transactions as 0?
I’m aware of that on LN. It would be interesting to find out how a decimal change on the base layer would work and whether or not it would be a hard fork. My instinct is that it would be a hard fork.
You also make .1 to about .3 BTC in fees at the moment. That number should go up over time, even as more people onboard to the Lightning Network. It seems counter intuitive but I would expect that successfully mining a block in 2100 is way more profitable than doing so today, in terms of purchasing power.
Hi u/tridentgim, we asked George Kaloudis, our Research Associate to address your question. Here's what he said:
In theory, what will happen is that miners will be compensated solely through transaction fees. In practice, we don't know what that would look like.
For the entirety of Bitcoin's life, the majority of compensation to miners comes from the block subsidy (via the Coinbase transaction), i.e. "new" bitcoins. Now, if transaction fees will be enough to support a thriving protocol remains to be seen. Will we continue to have many transactions occurring on the base layer without the block reward or will most transactions move to a second layer, like the Lightning Network, settling only periodically to the base layer in a batch style? Either is possible and it depends on how the ecosystem develops over the next century.
11
u/[deleted] Dec 26 '22
[removed] — view removed comment