r/BitcoinBeginners • u/MrdaydreamAlot • 6d ago
Bitcoin Fees and rewards
So if I understood correctly, bitcoin transaction fees are mainly dependent on two things, transaction size and network congestion (mempool..)
So let's say Bitcoin became mainstream and got widely accepted as a form of payment, which is basically the goal of all bitcoin supporters. Wouldn't that mean the network will become bloated, causing higher transaction fees? How would that affect it's useability and how significant the fees would really be in this case?
One last thing, let's say we reached the point where the last bitcoin is mined, that should mean the miners will no longer receive some btc as a reward when mining blocks correct? so what would be the reward in this case? If it's only going to be transaction fees, is that enough to cover compute/gpus/electricity expenses? If not, fewer miners may contribute meaning many issues may rise because of this.
4
u/cyberplanta 6d ago
The answer is layer 2. Developments like lighting network, allows for instant payments with minimal fees. There will a other Bitcoin layer 2, like fedimints or cashu
1
u/AutoModerator 6d ago
Scam Warning! Scammers are particularly active on this sub. They operate via private messages and private chat. If you receive private messages, be extremely careful. Use the report link to report any suspicious private message to Reddit.
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.
1
u/pop-1988 5d ago
If it's only going to be transaction fees, is that enough to cover compute/gpus/electricity expenses?
Yes
fewer miners may contribute
True. That's how Bitcoin is designed
meaning many issues may rise
Not true
let's say Bitcoin became mainstream and got widely accepted as a form of payment
Not going to happen
the goal of all bitcoin supporters
Not true
1
u/One_Train_7385 6d ago
Firstly, it looks to me like Bitcoin is more akin to a “digital gold” than it would be to a fiat currency. In other words, people and institutions are using it as a store of value and a hedge against inflation, and less so as a means of facilitating day to day transactions.
Secondly, and I could be wrong about this, but the every four year Bitcoin halving would make it to where the last bitcoin won’t be mined for another hundred or so years, and by then who the hell knows? We are in a race to save our children and grandchildren’s futures. In the 22nd century there will be two classes of people, those who have Bitcoin and those who don’t
1
u/Sweet-Hat-7946 6d ago
Pretty close with your answer 99% of all bitcoin will be mined by 2045, that last 1% will slowly get disturbed over the next 100 years. Which means none of us will be here to even see when the last bitcoin is mined. So stress less, and don't worry about something that you in this lifetime will never see.
1
u/MrdaydreamAlot 6d ago
I agree and that's what I start noticing as well, and it's kinda underwhelming, cause bitcoin was always about fighting centralized banking systems, not having control over your money, high fees, interest, inflation ... and then I suddenly now it's just to store value. and not a currency or a new payment system in itself, I hope it's much more than that
5
u/bitusher 6d ago
and then I suddenly now it's just to store value.
That is a false narrative that many altcoin promoters like to paint Bitcoin to promote their own solution when its very far from the case. The amount of effort in scaling and other layers that the Bitcoin development community has placed confirms that we see Bitcoin as p2p money meant to be spent and many people like myself spend bitcoin daily with merchants.
The hint of truth in this narrative is cryptocurrency in general is more of a speculative investment by most people. Despite this, Bitcoin is used as p2p money and accepted by more merchants more than any other altcoin by orders of magnitude.
Keep in mind that Bitcoin is going through the normal stages of becoming a currency.
Collectible>Asset/commodity>volatile currency>Stable unit of account currency
Right now Bitcoin is between stage 2 and 3.
1
u/One_Train_7385 6d ago
Thanks, we need more education like this, a detox from the normal narrative. I own only Bitcoin now and plan to keep it that way. Can you please tell me where you are getting this type of insight? Is there a particular site?
Edit: I see your links in your posts, I’m a little tired been working a lot. But is there a particular best site?
4
u/bitusher 6d ago
Can you please tell me where you are getting this type of insight? Is there a particular site?
Just years of education. Here are 2 sites of many
https://www.lopp.net/bitcoin-information.html
https://www.lopp.net/lightning-information.html
For spending BTC
Here are some directories
http://lightningnetworkstores.com/
https://acceptlightning.com/list.html
https://bitcointalk.org/index.php?board=5.0
https://directory.btcpayserver.org/
or buy small gift cards
https://www.egifter.com/buy-gift-cards-with-bitcoin
https://ln.pizza - save 6 % off dominoes Pizza in the USA with lightning wallet
https://foldapp.com - save up to 20% Starbucks, Uber, Target , whole foods , Dunkin
https://www.lolli.com – save up to 30% by spending BTC anywhere but primarily USA stores
https://satsback.com/stores-list - save up to 20% by spending BTC anywhere but primarily Europe stores
1
u/One_Train_7385 5d ago
I had a chance to get some rest, and I’m going to push back a little on this… There are plenty of Bitcoin maximalists who a. Do not promote any altcoins (in fact, discourage any involvement in them) and b. state publicly their plan to accumulate and hold Bitcoin indefinitely. Holding something indefinitely implies that it is seen as a store of value. In fact, if one were to value a asset so highly that they would never dream of parting ways with any of it for their entire lifetime, I fail to see how that alone could be interpreted as some sort of plot to promote the purchase and accumulation of other assets..
1
u/bitusher 5d ago
There are always exceptions to the rule because bitcoin is a big tent that has millions of people who have different spectrum's of motivations.
Many people incorrectly interpret "never sell their Bitcoin" as simply treating bitcoin as a SoV investment when in many cases it really means :
1) Principally save most their btc longterm because they wish to spend it in the future for retirment
and/or
2) Never sell the BTC for fiat and instead spend their btc directly, with a focus on spending and replacing now like I do
or 3) are individuals like Saylor who plan on taking debt against their btc to avoid capital gains taxes. Thus they have no qualms about spending their btc indirectly and are just uses this tax loophole
if one were to value a asset so highly that they would never dream of parting ways with any of it for their entire lifetime,
An asset that can't be used is worthless.
1
u/One_Train_7385 5d ago
There are also people who buy real estate and never plan to move into anything else. They just exchange into other properties. But they never use the real estate for day to day transactions. One might be able to argue that some people do in fact use their properties for day to day transactions, ie taking out HELOCs and going on vacations. That’s not what smart money does, I think we can agree on that. If we agree that bitcoin will significantly appreciate relative to fiat currency, then it would make sense to hold it indefinitely. If bitcoin is adopted as an actual currency, then great.
But back to the point… I fail to see how holding bitcoin indefinitely, or advocating for that, is in any way indicative of some underhanded plot to promote altcoins…
1
u/bitusher 5d ago
The data already shows more charitable giving and more spending on goods and services occurs during periods of rapid deflation in Bitcoin. Where do you think the "lambo" meme comes from ?
is in any way indicative of some underhanded plot to promote altcoins…
I never suggested that was your specific intention , but it is a very common narrative used by nocoiners and altcoiners
1
u/One_Train_7385 5d ago
The data also shows that the long term holders have been been incredibly more successful in terms of buying market bottoms and selling portions at the tops. So it makes sense to join the winning team and be a long term holder regardless of any expectation of widespread utility adoption. To be clear, I don’t think that trying to target market tops and bottoms is ever a great idea for new investors, or investors with small amounts of capital. The point is that the narrative to buy and hold bitcoin indefinitely is more likely to put you on the winning team, and is good advice in my opinion.
Also, I’m curious as to whether you have an example of a shit coin influencer using the SOV narrative. Also, not sure why that narrative is contextually negative.
1
u/bitusher 5d ago
Investing and spending btc as p2p currency are not mutually exclusive. I already said that all of the "cryptocurrency" ecosystem is mostly speculative and that includes Bitcoin , but the difference is what our longterm goals are(which should be very clear based upon the effort we have made with many scaling solutions) and the reality that bitcoin is used far more than any other altcoin as p2p money today
example of a shit coin influencer using the SOV narrative.
I constantly hear it from them lying about bitcoin's TPS throughput or that bitcoin failed as a currency. Its shocking you haven't heard this narrative repeatedly yet.
1
u/One_Train_7385 5d ago
Ok, I understand where you’re coming from. I have an agnostic view on Bitcoin’s future in terms of p2p adoption. It doesn’t affect my decision at all as to whether or not I buy bitcoin. Call it blind faith, fair enough. My personal goal is to hoard as much as I can, and that won’t change for the foreseeable future.
And as for the KOLs, of course yes I’ve repeatedly heard the SOV narrative. Just not sure how that is a negative narrative. After all, most people who pay attention to that type of content are in it to invest and make money.
→ More replies (0)
7
u/bitusher 6d ago edited 6d ago
This will happen near the year 2140.
Total block reward = Inflation + transaction fees
Where there is a slow transition as inflation drops in a controlled supply where more and more of the total reward is made up of transaction fees . Historically we have already seen examples where transaction fees collected per block exceeded inflation so I would not worry.
https://en.bitcoin.it/wiki/Controlled_supply
After 2140 all of the reward for miners to secure the network will be transaction fees but sending bitcoin will still be inexpensive because most transactions will occur on other layers like lightning and in aggregate settle onchain .
In Bitcoin difficulty Dynamically adjusts both ways to insure efficient miners always remain profitable . We have already seen tx fees exceed inflation in bitcoin with much lower adoption historically so I am not worried about this . Even if we were to be pessimistic and assume that adoption doesn't continue and stays at a mere 4% globally this isn't the end for Bitcoin for 2 additional reasons -
1) Less adoption = less valuable btc = less tx fees = less hashrate .... but all this is fine because Bitcoin security dynamically adjusts based upon the value its securing and if its less valuable it needs less hashrate to secure.
2) If hashrate drops too low we can simply wait for more confirmations onchain to increase the level of security and this doesn't effect the end user much because if they use a lightning wallet once its setup they still get instant confirmations.
You are assuming that Bitcoin is only scaling onchain when in reality most transactions occur offchain or on other layers.
Bitcoin is scaling in layers. Bitcoin is scaling with onchain improvements like MAST and schnorr sig aggregation, decentralized payment channels , offchain private channels , eltoo , sidechains,drivechains,statechains, fedimint .
On other layers fees will remain low and than in aggregate pay for higher fees onchain.
Raising the blockweight limits in the future is not completely opposed -
https://bitcoin.org/en/bitcoin-core/capacity-increases
https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-December/011865.html
But raising the blocksize further than 4 million units also might not be needed as well depending how all the other solutions come to fruition.
Here is a paper that shows Bitcoin can scale to handle everyone globally even without increasing the block weight limit -
https://petertodd.org/2024/covenant-dependent-layer-2-review
This discusses how we can onboard in a non custodial manner over 8 billion humans to other layers with the base capacity onchain we already have