Re: [bitcoin-dev] Security problems with relying on transaction fees for security

From: Gino Pinuto <gino.pinuto@gmail•com>
To: Bitcoin Protocol Discussion <bitcoin-dev@lists•linuxfoundation.org>
Subject: Re: [bitcoin-dev] Security problems with relying on transaction fees for security
Date: Wed, 13 Jul 2022 14:11:59 +0200	[thread overview]
Message-ID: <CAA3CggEVmx+97TE05Oe3ViFHLC0ejmuRX7L_tMWrRVhYsxaF9w@mail.gmail.com> (raw)
In-Reply-To: <CAOU__fz=AiWyOMvbLxpQZTho5QJJCUvwmcVB06gyoEwzy02vdg@mail.gmail.com>

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What about burning all fees and keep a block reward that will smooth out
while keeping the ~21M coins limit ?

Benefits :
- Miners would still be incentivized to collect higher fees transaction
with the indirect perspective to generate more reward in future.
- Revenues are equally distributed over time to all participants and we
solve the overnight discrepancy.
- Increased velocity of money will reduce the immediate supply of bitcoin
cooling down the economy.
- Reduction of velocity will have an impact on miners only if it persevere
in the long term but short term they will still perceive the buffered
reward.

I don't have ideas yet on how to elegantly implement this.

On Wed, 13 Jul 2022, 12:08 John Tromp via bitcoin-dev, <
bitcoin-dev@lists•linuxfoundation.org> wrote:

> > The emission curve lasts over 100 years because Bitcoin success state
> requires it to be entrenched globally.
>
> It effectively doesn't. The last 100 years from 2040-2140 only emits a
> pittance of about 0.4 of all bitcoin.
>
> What matters for proper distribution is the shape of the emission
> curve. If you emit 99% in the first year and 1% in the next 100 years,
> your emission "lasts" over 100 years, and you achieve a super low
> supply inflation rate immediately after 1 year, but it's obviously a
> terrible form of distribution.
>
> This is easy to quantify as the expected time of emission which would
> be 0.99 * 0.5yr + 0.01* 51yr = 2 years.
> Bitcoin is not much better in that the expected time of emission of an
> bitcoin satisfies x = 0.5*2yr + 0.5*(4+x) and thus equals 6 years.
>
> Monero appears much better since its tail emission yields an infinite
> expected time of emission, but if we avoid infinities by looking at
> just the soft total emission [1], which is all that is emitted before
> a 1% yearly inflation, then Monero is seen to actually be a lot worse
> than Bitcoin, due to emitting over 40% in its first year and halving
> the reward much faster. Ethereum is much worse still with its huge
> premine and PoS coins like Algorand are scraping the bottom with their
> expected emission time of 0.
>
> There's only one coin whose expected (soft) emission time is larger
> than bitcoin's, and it's about an order of magnitude larger, at 50
> years.
>
> [1]
> https://john-tromp.medium.com/a-case-for-using-soft-total-supply-1169a188d153
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