Oddbean new post about login | logout I see problems for Bitcoin before too long. It's getting more expensive to move than gold already. After the halving that can only get worse, right? Am I missing something?
1btc=1btc 1sat=1sat you are definitely missing smthn bro.
It's 45 mins work at my job to pay for mining fees this morning and 45 mins = 45 mins.
? 🤣🤣🤣🤣🤣 Still you got pay in fiat that is not 1fiat = 1fiat Ofc time = time
When the day comes when you can do your shopping in sats, how's it going to feel paying double because the sats per transaction are the same as now?
Now I’m shopping like that I’m waiting that price will go up and then Im buying something bigger, but if times that u mean came one day to the world(like paying in shop center for daily needs), btc will have that much market value that will be two scenarios- Governments accepting it as a commodity to their fiat or price will be stable bcs of high market value.
actually can you bring some proof? don't trust, verify
Yes to courier a 10oz lump of gold interstate here in Australia costs $25 Australian plus insurance. One email and it's there tomorrow. I've got a transaction stuck in mempool for at least the next day with a $20 fee. This is only going to get worse.
how much does it costs to send it abroad? internationally? how much does it cost to send it to places where the have no banks? Probably I am missing your point ..
Not saying gold is the answer. I'm saying that as long as fees are set in ever appreciating satoshis while block rewards keep halving the cost of moving Bitcoin is going to become prohibitive except for increasingly large amounts. Tell me I've got that wrong please.
I think in your equation you are probably missing technological adjustments (so that same hashpower => less energy required). the tx fee is not exactly connected to the exchange price, is more something which depends on the congestion of the network. Layer 2 solutions, like lightning, can mitigate the weight of tx on the layer 1, so that, eventually, more and more tx will happen on a layer 2. I suppose it is going to be "safe" to move up to 10k$ on lightning. (maybe I am wrong on this, it is just a quick mind evaluation) For tx of higher values it will probably still make sense to do it on layer 1. In the case it will not be, as you suppose, worth to send smaller amounts, probably different types of services will pop-up (escrows, insurances, or whatever our creativities will come up with)! Your point is not wrong, but it's probably missing some "organic" factors. And maybe I am being too naive! Who knows!
Lightning I trust for day to day transactions, but not for storage. Hence there is still the issue of, say, moving the funds onto lightning and back off there to do the weekly shop. Personally I wouldn't keep more than a few hundred $ worth on lightning for any length of time. You are right, the issue is block chain congestion. So the more popular Bitcoin becomes the more likely than ever it's usefulness will be limited to large amounts and big players, or else very small change activity on lightning. By extension, this will limit growth in value and price. This also means the system is vulnerable to DDOS and/or big players congesting the mempool at critical times and thereby manipulating the system. Increasing competition among miners is the only mathematical solution I can foresee. The bottom line is that in order for Bitcoin to remain useful and keep increasing in value, affordable domestic scale mining is the next area of development urgently needed so we can have millions more miners.
that makes sense! that is what we shall work for in fact! about lightning, I would also not use it for storage, but at the same time, running your own node, and opening several channels, will mitigate the risks connected to the lightning network. For bigger amount of money, but I think in the orders of a 10k, I would also store it on layer1. So yes, running nodes or, even better, mine bitcoin at home is a way forward!
Almost costs more than moving gold in a boat or plane across the world with security guards and all the logistics? Source?
That's the point. I can courier gold coins and bars around the country for a fixed price of $25. Increasing Bitcoin mining fees mean very soon only large movements will make economic sense. Lightning wallets aren't secure for storing large amounts and moving it back on or off chain will be prohibitive just to do the weekly shop. When they say Bitcoin is the new gold this is what it means. Ten years from now it's going to sit mostly idle in large wallets out of reach of most citizens while the hoypoloy transact in Montero. The only solution I can see is through more affordable and efficient mining technology to bring about greater numbers of domestic level miners.
People are currently moving huge sums (6 figures+) for a few dollars. At some point in the future it's possible that a single transaction could cost a lot to move, but I think there are a lot of factors. Nothing really to be concerned about as it will be sorted out and L2/L3 are all part of the natural progression in a monetary system. People wondered how the internet would scale, they figured it out. People love to solve problems and make things more productive, so I'm sure we'll figure it out. 🙂 Small transactions are one thing, but when it's large sums of money, Bitcoin is faster, cheaper and safer and that's not going to change. Currently, any transaction can be sent for far less than $25, so I'm not sure the comparison makes sense, but I get what you're going for. Also, the latest super high fees were only because of people making high free transactions on purpose. Partly based on how the transactions were constructed, from what I understand. They could have paid a lot less, but they wanted the extra noise.
I totally agree with all of that, and implicit within it is that Bitcoin is heading towards usefulness for large sums mainly. The pricing structure for block fees is based on what satoshis were worth years ago and I see no sign of any incentive for any solution that would lead to lower fees. What would create such an incentive is some upstart focused on making mining more affordable to create more competition. Currently supply and demand favours the largest miners. So, yes, exactly as you say, technical advances. But if they are market driven as they surely have to be then more accessible mining technology has to be the way.
I've thought about the possibility that once the block rewards get lower the mining could transitions back to smaller communities and groups, but we've already had blocks where the fees were more than the reward... so prob not. Maybe each community that runs a mint also runs some miners. I could see it making sense IF the fees are lower and that way the mining stays active and you have people with incentives to keep things working well. I guess we'll just have to see how the financials work out over time.