Mempool will clear by the end of the weekend
This is very sad news for Bitcoin.
This is not what adoption looks like.
Discussion
why is it bad for Bitcoin?
It means people aren't really using it and it reduces incentives for miners to secure the network
I see. Could it also mean that more people are using the Lightning network (that Tether just joined)
I thought running nodes are the network security, not necessarily the miners
Nodes can reject blocks, but if you don’t have miners with an economic incentive to build blocks with all transactions (to earn fees) you don’t have censorship resistance.
What options does the network have from here then? Doesn't this incentivise smaller mining operations?
Exactly. This will allow all the decentralized bitaxes to shine. Personal mini mining pools will also help. I don’t see a problem here at all. Game theory calms down and rises again.
Isn't that a risky bet on altruism?
I think it de incentivizes all mining equally. It means you’re mining just for the block reward, which is halved every 4 years… so that revenue has to be replaced by fees over time.
The solution is not so much on the mining side, it is on having more usage of Bitcoin P2P - more on chain payments, more lightning channels being opened, etc..
Unfortunately we also have the incentive to hodl and spend fiat instead, so this will probably only really change when there is a significant amount of people with no fiat to spend (I.e living in a bitcoin standard).
I don't understand. Isn't lightning a threat to miners?
In the short term, it reduces their earnings I guess, since it reduces the amount of transactions (assuming those transactions would be made in the base layer otherwise, which isn’t true in many cases).
In the long run, it raises the economic value of each base layer transaction, which should allow for higher fees.
But in the short run, I believe most gains come from the block reward, not fees (haven’t checked recently though)
Lightning is the payment layer. Onchain is your gold.
It can't be a sign of 2nd adoption taking off? I get it though... guess some miners will be going under.
Actually... yeah i guess 2nd layer adoption would involve a butt ton of channel opens... 😟
Not if most people coming in are using custodial wallets
true... but is that good either? Guess it helps build the infrastructure out by supporting these companies. you know they are going to slowly ratchet down any exit ramps from these services probably. hopefully people learn enough to get hell off of them before that. 🤷♂️
it is possible that this could lead to miners going under, but I think that's not necessarily a bad thing long term. the difficulty adjustment is there for a reason and it will keep the system running smoothly. also, I think the biggest risk to btc at this point is the increase in the power of mining pools to centralize and control the network. if hashrate where to drop momentarily, this would incentives other players to come into the mining space and increase mining decentralization
Oh yeah, been watching foundry and i totally agree with that!! I hope jacks little project takes off soon and helps decentralize it more!
i haven't heard about this and will check it out asap! I'm really hopeful for projects like bitaxe and maybe in the distant future, mining is done by home appliances like water heaters, central heating, ect. ik they techically exist already but just more common, efficient, ect
He is trying to decentralize the chip production industry which will definitely trickle down to projects like bitaxe and the sort I am sure.. And yep totally agree... pretty sure some of these bitcoin funds are getting investing in all sort of companies doing things of the sort. I myself am running my old ass butterfly labs 25GH/s miner as a heater 🤣 doing my part... solo mining!!
actually.... now that i think about it... i should probably be mining to ocean to help... but i like the idea of that 1 in a never gonna happen chance of hitting a block 😄
Most of the coin moving on chain is from and to exchanges.
So you could also see it as people hodling and the $100K target sellers finally being out.
SoV use case is proving itself, medium of exchange, not to much.
that's a good way to look at it! The medium of exchange is layer 2 anyway... i know I have been exchanging the hell out of it.
During last bull runs there was massive activity on chain, mostly withdrawals from exchanges
I don’t think so. It means, that 2nd layer technology’s are working great.
i would like this to be true as well, but from my bitcoin tracker app atleast, it looks like lighting transactions, channels, and nodes has decreased as well. maybe its just means people think number is about to go up and so they are sitting on their hands?
Preach.
I'll agree if you can fill in the velocity of lightning network 😏
(tbh my intuition is with you that this isn't great)
I don't understand...
mempool is pending and unconfirmed transactions so the fact it will clear means lower transaction activity onchain. this is counter-intuitive given where the price is - you might expect more activity based on history. his point is that it's not yet a widely used medium of exchange in terms of adoption but others are suggesting that folks and institutions are just hodling while transacting more on layer 2 like lightning. i think it's all just a matter of time - this is the best money on the planet
Are Drivechains viable tech?
Fiatjaf seems to think so and I trust his judgement. But I don't know enough to have an opinion on it
*looks to the left, looks to the right...no noobs here?....raises his hand* Newbie here! what is Drivechain?
HODL ✊
This is what network efficiency looks like. 👍
Because everyone's hodling, and the ones spending are using Lightning.
That’s the answer.
Nothing is happening rn
Keeping an eye on hashrate
I wonder what is the reason for such a small transaction volume. It might be the current price and market being undecided where to go and lack of new retardinals. Anyway I think that latest 2-3 months fee levels were mainly caused by 1sat/vbyte bloating mempool since retardinals’ start and on top of them were normal transaction volumes that had to adjust to that. I do not see anything new in terms of Bitcoin use cases that would significantly change the transaction volumes.
I would expect to see again fee levels like in 2021 when another price discovery starts.
And lastly, regarding network security, most of the miners are profitable now. Would they still be in 10 years’ time after 2 more halvings with fees around 1-2sat/vbyte? Hell, I don’t know but I would not extrapolate linearly their dominant current business models into the future. I agree with what I heard from Bob Burnett that block reward will play lesser role than their additional sources of revenue like grid support, heat reuse, mining transactions outside the mempool. Either they adapt or go bankrupt.
Pleb will still mine. Pleb is like cockroaches.
🪳 💪🫡
But I know I know shit.
Just furthers the evidence that bigger blocks aren’t needed.
Or, maybe it's the calm before the storm.
this is entirely OK. a medium cannot become wide adopted for payments before its much wider adopted for savings
i hear you but isn't it just a matter of time? this is the best money on the planet. i guess the silver lining is you can do some inexpensive UTXO management if needed
or more people are using L2s and hodling
adoption is about the number of holders and users. not tx numbers, and certainly not miner revenue.
Maybe transactions have just moved over more to LN?
lol