growth of bitcoin is proportional to it's population size = exponential growth.

The more people that know about bitcoin (size), the more people will find out about bitcoin (growth).

This is the nature of a viral entity. Of course, it will reach a saturation point because the population is finite, but for now, at least it's approximately exponential.

Bitcoin growth is so obviously exponential.

Implying that the US Government is beneficial to the US...

All they have to do is generate a different address for every donation, so the government CAN'T track/tax their income. Like everyone else.

Isn't that the point of bitcoin.

Well it doesn't really peg fees to anything. Fees will naturally approach the cost of including a transaction, which means miners will have no margin. I'm merely proposing a simple change which will result in fees naturally approaching double the cost of inclusion.

I don't think doubling the natural fee equilibrium will eliminate micropayments.

all the bitcoin client really needs to be safe for the tech illiterate, is super simple encryption and backup of wallet.dat. I've seen so many hopeless computer users with machines that are riddled with viruses and other who get caught totally off guard by disk failures, etc.

There is nothing the government or banks can do, short of shutting down the entire internet in all countries, that will stop bitcoin.

Yes, the entire power structure of the status quo rests on control of the currency and bitcoin takes it away. They'll want to stop it, they'll try to stop it, but they will fail.

Well, that's a pretty important difference, isn't it?


min fees and constant inflation have problems. My solution is market based and scales with increased usage and change in electricity costs and the value of bitcoin. Which is exactly what we want. It ensures a sustainable market for mining, absent block rewards, and it's very simple to implement.

Thank you for so eloquently stating the problem. A solution I brought up in another thread goes like this (http://forum.bitcoin.org/index.php?topic=6284.msg134662):

Change the fee structure to pay 50% of fee proceeds to the block solver and 50% to the solver of the next block. This way, fees will approach 2 times the cost of including a transaction. So half the fees cover the cost of transaction inclusion and the other half goes to securing the network.

I didn't get a very positive response in the other thread, but as I can see how well you understand the issue, I would love your feedback on this proposal. Thank you.

I've been doing php work for bitcoins for months now.

Yeah, it's their money, which was stolen from them by the government.

You are in favor of government run healthcare and schools, therefore you are a socialist. Seems pretty straight forward.

You seem to be seriously deluded about the role that government plays in society. If you don't understand that government involvement in health and schooling decreases quality while raising costs and if you don't understand how government regulations and distortions of the market enable and encourage the corrupted and parasitic institutions we all despise, then I see this as you main failing. I could accuse you of hating the poor, as you advocate the system that condemns them, but I know you are just another righteous liberal who hasn't thought things through.

Many here appreciate bitcoin precisely because it takes away the power of the government to persist with it's wealth redistribution insanity.

Stop bashing Libertarianism until you can actually make an argument against it. you clearly don't understand it at all.

scroll up ;-)

ITT: liberals who think government socialist policies benefit society.

What rights are they protesting? the right to receive other peoples money?

Wealth redistributing policies break the very market forces that produce wealth. You cry about the poor, etc, then advocate a socialist system which creates poverty and enables the likes of JP Morgan to suck our wealth.

grow a brain and join the dots. you make me sick!

So arrest Bernanke.

it does change the dynamics.

If we agree that transaction fees will approach the cost of including a transaction (you're in the Vandroiy's "The side seeing a problem" category), then fees will only cover the cost of including transactions. Miners have other costs, this is the problem.

Under my proposed scenario, fees will approach double the cost of including a transaction. This leaves some meat for the miners.

As other have pointed out, it also creates an incentive to re-process a block with low fees that proceeds a block with high fees rather than building on that block. I didn't consider this; it is an unintended consequence, which I consider undesirable. To mitigate this bad incentive you could make the algorithm more complicated. For example: 10% of the last five block fees + 50% of the fees from the current block.

The core idea is that there is some reward that doesn't depend on just the transactions that the miner accepts.

Mining will be profitable, absent block rewards.

The 50% from the previous block acts as a kind of replacement for the block reward.

50% of the fee goes to the miner that solves the block. 50% goes to the miner that solves the next block. This way, txfees approach the cost including a transaction x2.

The miner covers his tx inclusion costs by including transactions with fees that are at least double the cost of inclusion and the profits from the half the fees collected in the previous block.

problem solved?

I would think that if a pool operator started playing up, the members would migrate to another pool. It's sort of democratic like that. A pools members are a asset which it has incentive to protect.

Probably not. Unless everyone loses their wallet at the same time, there will be coins. The amount of coins will reduce over time, but will asymptotically approach 0.

For example, if the number of coins remaining is halved every year, will we ever run out?

These are artificial limitations on the miners. As you say, the fee schedule will change in the near future: Miners will accept a transaction if the fee covers the cost of electricity to process it and reject it if it doesn't. Do you disagree with this?

Give the above supposition, there is no time limited resource! fees will converge to zero. (actually the cost in electricity to process, which itself converges to zero with hardware improvements)

Your argument rests on the assumption that miners will maintain a set of artificial limitations on fee acceptance policy for which they have no obligation or incentive to abide.

You highlight the flaws in fiat currency then apply them to gold as reasoning why gold can't work as a global currency. Straw man.

Not that I'm for a global currency. The free market should decide what currencies dominate, but we live in a world of state mandated fiat paper which won't let this happen, for now.