I'd like to hear your thoughts on this.
Discussion
Lots words to just ask about the security budget question?
Biggest piece of FUD out there and propagated by shitcoiners that had incentives to pump their shitcoin
Nobody has any idea what the future holds for miners but they are taking the risk to invest capital in equipment and procure energy to secure the network today and hashrate or “security” of the network is at all time high despite the diminishing block reward.
I personally think a fee market will develop and not everyone will be transacting on chain. Most will be using bitcoin through intermediaries and on 2nd or 3rd layers.
yeah ok
you didn't understand his point, which is that Bitcoin has a well-understood game theory problem
but whatever, I certainly have not gotten the feeling youre interested in discussion of the subtle design points 😂
Well-understood game theory “problem” is a comical thing to state and believe in ha
Game theory seems to be working just fine. Hashrate at all time highs and bitcoin adoption continuing to grow
ok 👍
if you're interested in taking it a little deeper I suggest reading about the free-rider problem
From Gemini:
Bitcoin's mechanism, primarily using proof-of-work, solves the free-rider problem by aligning individual self-interest with the maintenance of the public good (the secure, decentralized transaction ledger) through a built-in incentive system.
Explicit Cost for Benefit: Unlike a traditional public good where one can benefit without contributing, participation in the Bitcoin network requires an explicit contribution of resources (computational power for mining) to gain any benefit.
Monetary Incentives: Miners expend significant computing power to verify transactions and secure the network. In return, they are rewarded with a block reward (newly created bitcoins) and transaction fees. This ensures that only those who contribute to the network's security are compensated.
Excludability of Rewards: The block reward and transaction fees are not non-excludable public goods; they are captured by the specific miner who successfully solves the computational puzzle first. Non-contributors (non-miners) cannot access these rewards.
System Integrity: The entire system is designed such that acting honestly (contributing computational power to verify legitimate transactions) is the most profitable strategy for a miner. Attempting to free ride or act maliciously would require an enormous amount of computational power with a high risk of losing their investment (e.g., in a "forking" attack).
In essence, Bitcoin internalizes the cost of providing the public good (a secure, transparent ledger) and structures its incentives so that participants are directly rewarded for their contributions, bypassing the classic market failure associated with free riding.
AI slop
Gemini isn't understanding the point of MM point either
🤣
You don’t like the answer so it is AI slop and it does not understand the point of of the original post
You call the security budget “problem” a well-understood game theory problem and then point to the free-rider problem.
I thought Gemini did a pretty decent job explaining why the free-rider problem is not an actual issue with bitcoin and I told you why I am not overly concerned with the security budget “problem”
its not a question of *miners freeriding.
maybe try actually reading what he wrote.
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 👍
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.
Bro this guy does not understand the conversation we are having. I remember being like this. I'd get defensive instead of shut up and learn. I'm lucky I realized that, so many people never do and they just stop learning for the rest of their lives. I hope this guy realizes it too.
I didn't ask a question.
I have an idea what the future holds.
No attempt whatsoever to give an intelligent retort. This is just the talking points of a midwit who doesnt understand what ive said.
You got it all figured out bud! You know the future
Best of luck to ya!
I will bet you 10 xmr that bitcoin doesnt see a new all time high in 4 years.
I don’t want your xmr shitcoin 😂
I will bet you 100k sats that bitcoin does see an all time high in 4 years though
Find someway we can actually escrow it and I will make my deposit today
Well I can't make the bet in bitcoin because if I'm right it will be worthless crap and I don't want a situation where if you win I owe you gold and if i win you owe me lead. Seriously, read game theory man. You need to do some learning.
How about gold? 1 troy ounce of 999 gold that bitcoin doesnt make a new ATH before Nov 19 2029. To be paid out in xmr or bitcoin, winners choice but denominated in gold. Honor system, if I win and you don't pay you feel like a sleazy subhuman pretender who cares more about your ego than your mind, and if I lose and I don't pay, same.
Your a conceited asshole
I have no interest in owning a shiny rock that already failed as global money either
Enjoy monero and best of luck getting people in the real world to accept it!
Jesus, now with the name calling. I'm glad I'm not your wife's dad.
You have acted like we are dumb rubes this entire time and before that, you've been smug, all ive done is make my points, you'd rather get mad and insult than talk. Youre going to remember this conversation for the rest of your life, I promise. Hopefully something good comes of that.
You are a piece of shit that thinks you know everything. You posted a 1,000 word diatribe of bullshit, asked for my thoughts and then preceded to call me a midwit when you did not like my response downplaying your bullshit FUd
You are a 🤡 that will have fun staying poor whining about bitcoin while trying to shill your privacy shitcoin
Enjoy your life shithead
so yesterday I made a point about people who want increased purchasing power without PoW
and your response was "fuck monero people"
today we make a point about Bitcoins game theory tradeoffs
and your response is again "fuck monero people"
(after not understanding the point, running it through AI and finally having it explained to you)
this is boring.
You already forget that I admitted to misunderstanding your post and apologized.
You and your buddy didn’t like my response to your game theory security budget FUD and I got called a midwit for expressing a reasonable opinion
I try to engage with you guys in good faith but you guys are insufferable trolls so yes fuck all you monero retards on here. Waste of everyone’s time
Nobody wants your monero shitcoin and you clowns whining about how bitcoin is a failure is not going to miraculously change that
I'm just pointing out that was your reaction both times.
Nobody mentioned monero except you again today.
It was very gracious of you to apologize and I avoided saying mean things today.
But you did basically have exactly the same reaction again.
Not understanding and then hostility.
You called me a shitcoin fudster, arguably more I silting than being called a midwit because I'm calling you ~100 IQ but you're calling me a straight up liar.
You didn't express a reasonable opinion. You didn't express any opinion. You didn't respond to anything I said actually. You just got big mad and threw a hissyfit.
Don't forget, this started because I called him a NGU hypeman subservient to Blockstream's further compromising of their pet project at a developmental and governmental level, using his own words to prove it.
THAT must have hit a nerve. :smile:
And you can go fuck yourself for calling me a midwit
I understand what you say…it’s complete hypothetical bullshit and you don’t like my response
You literally dismissed my shit as shitcoiner fud. Define midwit. You can get mad if you want, if you can't take it dont give it out and if you can't have a conversation dont invite people to one.