Oddbean new post about login | logout I have question regarding the statement that - smaller UTXOs will become economically unspendable in the future assuming they aren’t consolidated into larger ones relatively soon. If bitcoin becomes more valuable in future like 1 USD per sat the miners will be incentivized to accept transaction charging 1 sat per v/B. Will a 10000 sat UTXO be economically unspendable in such scenarios? Also is it possible to submit transaction to the network with 1 sat per 10 v/B or 1 sat per 100 v/B in case where value of 1 sat is 100 USD in future? If yes, then the small UTXOs will also be spendable and there is no need to worry about smaller UTXOs. #bitcoin #nostr @preston @ODELL @Derek Ross @LynAlden @jack
The school of thought here is that it's possible that your 10K sats transaction could become negated by 10K sats as the on-chain cost. I believe technically speaking, the mining fees can be less than 1 sat/vbyte. Mining nodes just need to change their configuration to accept them. They could accept 0.001 sats/vbyte.
Ultimately it comes down to how many UTXOs want to move in a given time period relative to how much blockspace there is. There are a lot of tiny UTXOs relative to block space available for a year, so moving them can be cost prohibitive. And in a future world where sats are way more valuable than today, it likely means that a lot more people own sats and are trying to use blockspace, which drives the transaction fees up. So those tiny UTXOs might be worth more but still remain cost prohibitive to move in many cases since fees are also higher. It’s good to consolidate UTXOs when it is cheap to do so, albeit taking into account some privacy considerations and so forth.
also please do the math to understand what bitcoin is and what will be: a scenario with high tx fees means a scenario with high demand for blockspace. It means probably also high net-value for bitcoin, and so high fiat-denominated price and high pirchasing power for bitcoin. This means that 50k sats will value at some point 1k $ bucks BUT your 50k sats UTXO will become unspendable; moving bitcoin onchain will cost the fiat equivalent of thousands of dollars. Add some Pareto effects and the consequent "squeeze", and the situation will be also more extreme. This is bad? I dont think so. This is dangerous? Absolutely yes, and we need more tools to scale bitcoin off-chain if we want to prepare ourself for the "worst-best-case scenario".
So what's an alternative? We can't store on lightning so have to consolidate what we have an hope for the best.
An alternative is to stake on lightning in large channels, so that the close UTXOs will be big. Not the most simple alternative, but an alternative. There are liquidity providers that gives you inboud liquidity for a fee. The scenario we talk about will maybe come in a far future, and lightnig specs will changes a lot, we will see the options we will have. I think that economic activity of 50k sats would fiind their routes out of bitcoin, like on ecash (on virtual bitcoins). For me its ok scale the security and trust assumption for wallets based on how much is on stake.
I would divide the mempool into 3 parts. High value tx that can afford high fees. Low value tx for poor, for devs and for L1/L2 interaction. Then the middle layer which could be attacks, gambling, spam. If we expand the mempool in line with the hardears of the day, the fee attacks will become more expensive, and also help secure the chain on top of the top tier fees.
YOU ARE CONFUSING YOURSELF BY THINKING IN DOLLAR TERMS. BOTH FEES AND UTXOS ARE DENOMINATED IN SATS. BLOCK SPACE IS FINITE AND SCARCE. AS ADOPTION INCREASES SO WILL FEES.
in sats, i think the fee rates change very little, and with LN and now ecash taking more and more of the payment load off, likely the fee rates in sats are gonna stay fairly flat they are going up in dollar value but so are the average transaction sizes due to the bottom end being shifted off chain
Yes, even 1 sat per transaction and 0 (zero) sats per transaction (or byte) are valid in #Bitcoin. Transaction fees will be lower and lower in the long-term because of technological advencement. It may take years, though.
Good question nostr:nevent1qqsf3x8uwm22pvpsaucx0xqej0f0xg64jkkjhske2tkd4km8aypcxzspr4mhxue69uhkummnw3ezucnfw33k76twv4ezuum0vd5kzmp0qgsyf8qsun6yp7jq2x6rj2l4cq3ezzrrl86ukxqj5u2hdsuupfm4suqrqsqqqqqplhukr2
1 #Bitcoin = 1 #Bitcoin 1 Sat = 1 Sat Fiat terms are irrelevant. ₦1 ≈ 1 Sat, but Nigerians don't get cheaper fees. I think in the future Bitcoin on the Basechain will be used much like gold bars of old, for the bulk of wealth preservation. Expensive to move, so only used for large sums of sats, for large purchases, or withdrawals to L2. L2 will be like the banking level, where your accessable savings will be. Only you can be your own bank, or trust a custodian. L3 will be for daily use and the payment layer. Just think about the sats we are passing around just now, and how they will resemble on-chain pizza purchases of olden times.