Living solely on transaction fees

[BCNext]

Bitcoin is an inflationary currency and remain such until the last bitcoin is mined.  "Early adopter" phenomenon works only for deflationary currency, this is why noone gives 1,000,000 USD for 1 BTC.  Has anyone thought how much 1 BTC would worth if miners earned only transaction fees without a block subsidy?  Would it be much more valuable or would it be completely abandoned?  Someone can ask how all initial coins would be distributed in such a scenario, there is no way to do it without a premine and we all don't like it.  But what about a premine when already mined coins are "transferred" to other blockchain and a new currency is launched?  This looks good from my point of view.  Will such a currency survive?

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[BCNext]

I forgot to say that I'm talking about a 100% proof-of-stake cryptocurrency.  Miners don't need to spend a lot of money for hardware and electricity to secure the network.

[Ekaros]

Living of transaction cost is probably very hard.

The cost of mining is likely to match the profit made from mining or transactions. Probably even be higher.

So there would be change to make living only if you had some edge over competition...

[BCNext]

The cost of mining of proof-of-stake currency is almost 0.  Also the early adopter effect is supposed to be higher for a 100% deflationary currency.

[MerchantMiner]

Bitcoin is an inflationary currency and remain such until the last bitcoin is mined.  "Early adopter" phenomenon works only for deflationary currency, this is why noone gives 1,000,000 USD for 1 BTC.  Has anyone thought how much 1 BTC would worth if miners earned only transaction fees without a block subsidy?  Would it be much more valuable or would it be completely abandoned?  Someone can ask how all initial coins would be distributed in such a scenario, there is no way to do it without a premine and we all don't like it.  But what about a premine when already mined coins are "transferred" to other blockchain and a new currency is launched?  This looks good from my point of view.  Will such a currency survive?

you have absolutely no idea what your talking about my friend i suggest you brush up on Bitcoin Mechanics, and basic economics. to call somethings an inflationary currency that was designed not to be is a bit silly. it can only be inflationary is if someone COULD release 1000's of bit coin at there will , and they cant so no and well im bored now

[BCNext]

you have absolutely no idea what your talking about my friend i suggest you brush up on Bitcoin Mechanics, and basic economics. to call somethings an inflationary currency that was designed not to be is a bit silly.

I'm not a friend of a person who is unable to take part in a discussion without personal insults.

Regarding your reply, number of bitcoins is increasing. Right now Bitcoin is an inflationary currency.

[MerchantMiner]

you have absolutely no idea what your talking about my friend i suggest you brush up on Bitcoin Mechanics, and basic economics. to call somethings an inflationary currency that was designed not to be is a bit silly.

I'm not a friend of a person who is unable to take part in a discussion without personal insults.

Regarding your reply, number of bitcoins is increasing. Right now Bitcoin is an inflationary currency.

ha ha ha ha ha ha ha ha h ah ah ah aha ha ha ha ha the number of bitcoins is increasing , please can other people point out his short comings in his failed logic , ok so its now 24million Bitcoins?

im not being horrible and im not being rude and i dont want to offend you but please dont respond to this,just go away and teach ya self about this subject, next ya gonna tell me bitcoin comes with interest free credit lol

where was the personal insult? calling you a shit easting monkey fucker is a personal insult and i would never do that its beneath me.

also please understand that Bitcoin is a supply and demand currency not inflationary.

[broolstoryco]

Bitcoin is an inflationary currency and remain such until the last bitcoin is mined.  "Early adopter" phenomenon works only for deflationary currency, this is why noone gives 1,000,000 USD for 1 BTC.  Has anyone thought how much 1 BTC would worth if miners earned only transaction fees without a block subsidy?  Would it be much more valuable or would it be completely abandoned?  Someone can ask how all initial coins would be distributed in such a scenario, there is no way to do it without a premine and we all don't like it.  But what about a premine when already mined coins are "transferred" to other blockchain and a new currency is launched?  This looks good from my point of view.  Will such a currency survive?

Bitcoin's value is not as much a function of miners' revenues as it is of its utility as a global payment system. As for the issue of profitability of verifying blocks without block rewards, the free market will solve this very quickly: miners (verifiers) will simply demand higher fees. This will lead to a new equilibrium between transaction frequency, size and fee size.

[jdbtracker]

There are many changes to be made. Currently the experiment is proceeding quickly and we learn new information every day. Once the correct parameters for Bitcoin are discovered, there will probably be changes made to increase transaction limits, but while it is there. It causes a secondary scarcity market that of the blockchain; The maximum block size is 1mb, so all transactions have to fit within this limit in 10 minutes; If there is too many transactions people may choose to increase the fee themselves to make sure they are included instead of waiting possibly hours or days before their transaction goes through.

so we have the limit to increase the users incentive to pay the fee that is required to reflect the urgency of the message themselves. The purpose I believe is that this is the signalling method to tell the miners that their services are needed if the network has been throttled back. this makes sure that independent of price of BTC the customers on the network can receive good secure service.

the other is the miners costs, no one will mine if it costs too much to do so. If the need for them is there the fee will be increased to reflect that need. If there is no need for them then miners may choose to opt out and turn off their machines for a while till they are needed. This makes it possible to throttle the network efficiently according to supply and demand.

Imagine a scenario where the network has been throttled back, the ASIC farms are idling but a few units are processing transactions, i.e. they are monitoring the fees on the network. If the blockchain is getting saturated, and people are increasing their fees to be included, the ASIC farm roars to life and pounds the block out in 3-5 minutes by sheer force. This allows an automatic script to run, controlling the time and speed of the network while allowing efficient operation.

[xypos]

If miners want 25 or 50 btc for all blocks, without any reward (meaning coming only from transactions fees), the fees will be very high. So, it will be difficult to keep the currency alive with that difficulty for sending money ....

[BCNext]

@jdbtracker:
I'm talking about a currency that doesn't need ASICs for mining. Particularly I'm talking about this.

@xypos:
Sorry, I didn't get your idea. Do you mean that having no block reward is a bad feature?

[jdbtracker]

The network would be much smaller, the block subsidy is all that is increasing the size of the network.

the network would get bigger of course but the financial incentive would not be there to get started so quickly.

starting out a coin without the miners and having only transaction fees is possible, but the adoption rate. if we ignore that and build it...
we can build a encryption based ledger with a list of preset coins, each coin would be logged with it's key on the ledger and each created coin would be added as needed, it would not be fungible though, but secure, the fee would not be necessary. it could function as straight cash... but that introduces problems; how do you verify the veracity of your ledger to others? A verification server would have to be setup to maintain the integrity of all copies... fees.

the servers would essentially work as cloudbanks, monitoring and maintaining all the ledgers in circulation. the fees would be based on the amount of transactions being processed... too many and the operator is losing money, fees increase, but how would you even know what their operating costs are or if they are even telling you the truth?

that is uncertainty,  1BTC would be worth very little without that consensus. I can't tell you how much but the price would be much lower at this point and completely up to the central cloudbank to determine by them increasing the amount of coins in circulation. ie they update the ledger with absolute control, distributed control could be provided, but it would be up to the cloudbank to determine what is right and wrong, who has valid coins and who doesn't and then we get into the distribution problem... which is too hard for me to think of... I haven't even had coffee yet.

[zackclark70]

you have absolutely no idea what your talking about my friend i suggest you brush up on Bitcoin Mechanics, and basic economics. to call somethings an inflationary currency that was designed not to be is a bit silly.

I'm not a friend of a person who is unable to take part in a discussion without personal insults.

Regarding your reply, number of bitcoins is increasing. Right now Bitcoin is an inflationary currency.

ha ha ha ha ha ha ha ha h ah ah ah aha ha ha ha ha the number of bitcoins is increasing , please can other people point out his short comings in his failed logic , ok so its now 24million Bitcoins?

im not being horrible and im not being rude and i dont want to offend you but please dont respond to this,just go away and teach ya self about this subject, next ya gonna tell me bitcoin comes with interest free credit lol

where was the personal insult? calling you a shit easting monkey fucker is a personal insult and i would never do that its beneath me.

also please understand that Bitcoin is a supply and demand currency not inflationary.

interest free credit lmao > https://bitcointalk.org/index.php?topic=276416.0;topicseen

[BCNext]

The network would be much smaller, the block subsidy is all that is increasing the size of the network.

The network will be bigger.  Because each time someone opens a wallet they can mine a block by accident.

[BombaUcigasa]

I forgot to say that I'm talking about a 100% proof-of-stake cryptocurrency.  Miners don't need to spend a lot of money for hardware and electricity to secure the network.

PoS cryptocurrencies are worth crap. This is because they cost nothing to secure.

The cost of mining of proof-of-stake currency is almost 0.  Also the early adopter effect is supposed to be higher for a 100% deflationary currency.

See, you get it. No cost means no price if you maintain profit margin on par with bitcoin.

@jdbtracker:
I'm talking about a currency that doesn't need ASICs for mining. Particularly I'm talking about this.

So you just wanted to promote your own scamcoin...

Time between blocks is one minute.  This increases the rate of orphaned blocks but makes it more convenient for the users.


So how do you protect your network against attacks?

How do we know you won't take the bitcoins you get and do nothing but scam us?

[BCNext]

I don't want to derail this thread.  Repost your reply in the thread dedicated to Nxt, please, and I will answer the questions.

[Argwai96]

well, the value of bitcoin could be significantly higher than now, so that it is worth it, right?

[bg002h]

Bitcoin is an inflationary currency and remain such until the last bitcoin is mined.  "Early adopter" phenomenon works only for deflationary currency, this is why noone gives 1,000,000 USD for 1 BTC.  Has anyone thought how much 1 BTC would worth if miners earned only transaction fees without a block subsidy?  Would it be much more valuable or would it be completely abandoned?  Someone can ask how all initial coins would be distributed in such a scenario, there is no way to do it without a premine and we all don't like it.  But what about a premine when already mined coins are "transferred" to other blockchain and a new currency is launched?  This looks good from my point of view.  Will such a currency survive?

you have absolutely no idea what your talking about my friend i suggest you brush up on Bitcoin Mechanics, and basic economics. to call somethings an inflationary currency that was designed not to be is a bit silly. it can only be inflationary is if someone COULD release 1000's of bit coin at there will , and they cant so no and well im bored now

Bitcoin's numerical INFLATION rate is decreasing. It was outrageously highly at block #2 and has been decreasing with _each_ block since. To think Bitcoin is not under severe inflation now is to miss the most powerful point--despite a rapid rate of increase in the Bitcoin money supply (even the US doesn't print such a large fraction of its money per year), the purchasing power of 1 unit of currency is not going down in proportion. That's the real Kicker.