i wonder if storage rent will work with some projects
Well written article.
Only if Bitcoin will have more economically viable activities such as transactions on layer 2 or other uses such as smart contracts, can security hold on the long term. The biggest problem I see is the ever increasing value of Bitcoin itself, this means that these other economic activities should on the long term at least keep the same growth pace as the total value of Bitcoin, which is very hard to achieve.
This combination of ever weakening security fees combined with Bitcoins deflationary nature should make anyone at least ponder about the long term viability of BItcoin with a fixed supply. I would not be surprised to see a hard fork happening in the coming 30 years since this is such a major issue. And on the long term, my money would be on the chain that changes to a fixed percentage supply or a linear supply.
What do you mean with storage rent, do you mean paying a monthly fee for having an output on chain, so sort of inflating outputs?
If so, the problem would be that the ‘rent’ is only paid when making a transaction, meaning you still have all the fluctuations in ‘rent’ that is release because of the seasonality in transaction density. Only if it would be ‘reserved’ and gradually paid out to miners over multiple blocks, then it would better spread out security payments. However, in case it would be the same as spreading transaction fees over multiple blocks which some projects are looking to implement, like Ethereum and Verus.
I only know of ergo having such a feature, if your utxo hasn’t moved for 4 years the miners can take a small amount from it. I know you can just move it, the question is if the people who wouldn’t bother doing that + the people who lost their private keys are enough to pay the miners (+ tx fees ofc)
Well, it is an interesting idea to pay rent. I will check out ergo.
Especially interesting for coins like Grin that do not need to keep a historic record of transactions, meaning that having transaction outputs on the chain is really a burden on all who hold the chain, until you spend the transaction.
An excellent article.
In the future, this topic will divide people into 2. One group will argue that reducing block rewards is dangerous, while another group will not support it because they want the supply to be limited.
This distinction will bring with it a speculation. Even this speculation could hurt Bitcoin.
In my personal opinion, the ever-decreasing block rewards will be always problematic and the consequences will unpredictable. Because there is no other example of this.
However, if the block rewards continue at as 1 btc or 0.5 btc in each block after the halvings, all these situations may disappear.
But it is very difficult for people to accept this. Because it goes beyond Satoshi’s vision. This will cause great speculation and problems.
That’s why we’re here. Because we argue that fixed and infinite supply would be a better model of monetary policy. As it will keep the network more secure and free from speculation.
If one day Bitcoin is hit hard by these speculations, all cryptocurrencies like it may suffer a similar fate. That day we will be in a different position.
@minexpert True, Grin has a supply model that does give any reason to fork unless you want it to be a get rich quick coin like bitcoin by having halvings.
Grin will simply go towards a roughly fixed amount of grin where the rate of loss will equal the rate of the supply. It does not matter much if this 0.5% per year or 2%, since 0.5-2% of the total Grin supply in security fees/mining fees per year should still be sufficient to secure transactions. Bitcoin will already be down 0.4% inflation/security payment per year by 2028. For grin to reach such a low security fee, it would be more than 200 years from now assuming there would be no loss of Grin whatsoever in the mean time.
This is why i like Grin so much. Solutions must work long term and i don’t see that happening with Bitcoin because of its monetary policy and its impact on security.
Since Bitcoin can not process many transactions it is not very suitable as a “currency”. But as a “store of value” you are incentivised not to trade with your bitcoin but to hold it-> This would lead to low transaction fees and thus impact security when block rewards dimishes.
In the whitepaper the aspect of halving rewards for mining blocks always seemed to me as an afterthought. It seems satoshi just didnt put a lot of thought into Bitcoins monetary policy in the long term. Grin definately did better here.
Grins s2f increases over time just like Bitcoin though. So it is at some point that that miner subsidy is obsolete and replaced by fees. Grin suffers the same fate it seems, and the rigidity of the monetary policy for grin is also the same (1 grin per second).
It would seem like the subsidy is a shared fee (aka a tax) on all stakeholders that could be programmable and should be a value that is a relationship between the total volume of the transactions in a block such that the cost to mine a block or multiple blocks at some point would be greater than the volume of the transactions. This means that even if all transactions where apart of a double spend, that we still guarantee double spend safety at some number of confirmations. Currently there is not way to measure this with grin because transaction volumes are hidden. Sorry to say.