Re:The political case for a blanket cryptocurrency ban
by hudon on Wednesday March 31, 2021 @04:58PM
(#26653116)
Or the network finds consensus on an algorithm change where the block subsidy keeps going, thereby continuing to pay the miners. The 21 million bitcoin cap isn’t as immutable as people claim. It’s just that most Bitcoin stakeholders agree to keep it there, for now.
That Bitcoin is some immutable “backed by math” financial system has been a charade all along. It’s very much backed by people, and proof-of-work is a Rube Goldberg machine used to distract the tech-literate.
Re:The political case for a blanket cryptocurrency ban
by fphhotchips on Wednesday March 31, 2021 @06:11PM
(#26653797)
Of course the problem with this approach is that (at least part of) the Bitcoin community see it as non-inflationary - see above. So if you remove that cap then the value surely comes down significantly.
Yes, and the elephant in the room with Bitcoin is that it's only going to get easier. Despite the categorization of Bitcoin as non-inflationary, the computational power of the network is currently ~85% subsidized by block rewards that grant miners new coins (i.e., inflation). Once those are diminished through halvings, either transaction costs will have to go up about 7x to match the current incentive, or the network difficulty will come down as miners go offline. If the latter happens, not only will the hash rate go down, there will be a flood of mining hardware on the market as miners exit the game.
Oh, and if “layer two” solutions ever do take off, there will be downward pressure on transaction fees, too.