What am I missing here?
His entire post is just a long winded way of restating the same tired security budget FUD I have heard for years
Is it not a question of what happens to security of the network when the miners are not subsidized by the block reward?
The AI doesn't address AT ALL what he said.
and neither have you.
Bitcoin incentivizes free-riders (hodlers) that control UTXOs but do NOT contribute to the security budget through paying transaction fees.
The security budget is only payed by people actually making transactions on the network. Although hodlers also benefit from it. As MM points out, the security of the network is one of Bitcoins primary features.
So a subset of people pay for that network security and a subset are free-riders.
The definition of the free-rider problem.
First off you call hodlers free-riders and I vehemently reject that notion. Holding is a use case for bitcoin.
If a holder earned bitcoin (either by providing value to someone that paid them in bitcoin or exchanging fiat they earned) and now holds the utxo they did contribute to the network when they paid the transaction fee to move the coin and gain control of that UTXO.
If they want to spend that UTXO they will pay a fee to miners to move that coin to someone else so again they contribute to the network
Good job!
that sounds a lot like your own opinion đź‘Ť
Hodling by definition is free riding. Holders pay absolutely nothing to guarantee security of the bitcoin network that they benefit from. It's not an insult. Theres no emotional implication. You can vehemently reject it all you want, taking a shit in the river is a use case for the river, that doesnt mean it's long term viable.
You ever heard of business models where you can get a single lifetime subscription for one large payment? They always fail. You know why? Because there are ongoing costs. No matter how big the payment, "pay once use forever" is never, ever viable for a service. Paying the fee to buy the coin and then sitting on it while others pay to keep miners protecting your money is the exact same thing.
Ok commie! Let’s just redistribute all the wealth in world!
Holding is not free riding so we can agree to disagree.
everything else you state is nonsense in my opinion because I disagree with the underlying basis for your argument
Apparently based on your other post you can predict the future and have it all figured out! Best of luck to ya 🫡
Good god. Redistribute? Did I say anything about redistribution?
"We can agree to disagree" lol. You don't comprehend what ive said. that's OK. But you look like a fool arguing like this.
What's the underlying basis of my argument and exactly what do you disagree with about it?
The underlying basis of your argument is that people holding bitcoin are being free-riders which is complete bullshit
No that's not the basis. And it is provably true, you dont know what "free rider" means.
obviously everyone benefits from Bitcoin security 24/7
but only transactors pay the miners.
come on dude
Holding is using bitcoin. By not selling holders are restricting supply and making it more of a scarce asset which increases the value of all holders/users
You also continue to ignore the fact that the holder paid the miners to obtain their UTXOs
All resources are scarce to a greater or lesser degree.
Its only Bitcoin maxis who want to call simple possession "using"
and only for Bitcoin.
As in my example, owning an automobile is not "using the car".
and the tx fee is the toll.
(do you know who you're responding to??)
Lol he just said they benefit the network by making number go up.
But hang about
To steelman the argument
Because this is the first perfectly scarce
money
Does holding and making the money more deflationary, more scarce constitute a benefit for network?
ie, by increasing the purchasing power of the tx fees?
No. This is the same premise that drives shitcoins on ethereum and the like where people "stake" to increase scarcity. It never works because people doing that are not net contributors to anything, actually it's the opposite; they benefit from others creating value by trading in the currency.
To put your point another way:
Increased scarcity may provide increased value to other holders
but it doesn't provide value to the network.
Therefore holders do not contribute and are free-riders.
Is that about right?
You’re still discussing this nonsense?
Holders aren’t free riders. They paid their fee when they took custody of the UTXO and they will need to pay a fee when they need to move that UTXO as some point in the future…
nonsense
we reap the benefits of network security 24/7/365
but only pay for it when we make transactions
the rest of the time we are free-riders by definition.
unless you have a transaction in the mempool right now, you are benefiting from Bitcoins network security without paying for it.
"I sent a fee to a miner once bro, I'm helping" is cope.
Keep thinking that holding bitcoin as a savings asset is not “using” the network and you will continue to end up with this retarded concept
It’s almost like you are a Keynesian and buy into the broken window fallacy.
Basically
but isnt driving up scarcity and therefore the purchasing power of the tx fees providing value to the network?
because it helps miners pay for electricity?
or is it just semantics?
You're not driving up scarcity unless you're actually buying, the scarcity you've created is already priced in.
Why hodl? So that *your* purchasing power goes up. But where does that wealth come from that you get? It comes from others purchasing the bitcoin. So, by holding, you're front running others, youre saying "I think this thing is going to be valuable to others in the future and so if I'm right I will be rewarded for my foresight". This is not unethical.
Ultimately, it's those people on boarding that drive the purchasing power up, because your options are 1) buy shit with it, or 2) sell to them. If they offer a premium, youre going to do that if you aren't starving. So those people drive up the profitability for miners, given that the block reward is static. Profitability leads to more competition, increase in hash power to capitalize on that larger margin and the security of the network benefits.
What you actually do by hodling is *reducing liquidity.* this goes both ways. Your lack of liquidity during demand appreciation has a price impact that does benefit miners, but ultimately, since youre siphoning wealth from newcomers, as you should for taking the risk, any quantifiable benefit to the network is negated, and the benefit you see is largely borne by the newcomers, not hodlers. You get more than you give in terms of capital, and you wouldnt do it if that weren't true.
Theres no perpetual motion machine here, there is a law of conservation of capital if you will.
The free-rider problem has never been a problem. I don't understand this whenever anyone brings it up. It's just nagging at imaginary abstractions absent of context.
Just because you don't understand it doesnt mean it doesnt make sense.
It is an architectural problem. Are you saying it's just not there, or that it's never going to actually result in failure? There's nothing imaginary about it, incentives are always outcomes.
