What is a healthy fee market?

By January 20, 2016Bitcoin Business
Click here to view original web page at www.reddit.com

Hello all,

This is my first post so I will introduce myself as an outsider in the sense that I am not an engineer nor do I work for any Bitcoin company. I have a financial/investment background, do not own bitcoins but could imagine doing so if certain (probably obvious) development hurdles are achieved. My self-assessment of Bitcoin expertise on a scale of 1 ("isn't Bitcoin a ponzi?") to 10 ("I am Satoshi") is around a 3.

My question pertains to the issue of tx fees for on-chain transactions; if tx growth outstrips max block size (or effective max block size with SegWit) and a transaction layer solution is lacking then a fee market will develop. I've seen some commentary in the Core roadmap and other materials relating to fees but certainly not anything that I personally would consider sufficient for what would be a significant change to the characteristics of Bitcoin.

Relying in part on Jeff Garzik's characterization that "notable" Core devs' aim to have a "healthy fee market" develop for on-chain transactions, can someone from the 1M max block size camp explain what the tenets of such a fee market are?

  • Do Core devs supporting 1M blocks want to cull low-value transactions from the blockchain? If so, why?
  • Is the aim to have a fee market develop more about funding mining as the block reward diminishes?
  • Do Core devs supporting 1M blocks want most transactions to move off-chain, resulting in capacity headroom on-chain and thus low fees with 1M/small blocks?
  • If the issue mainly relates to funding miners, are 1M devs of the view that it is not possible to fit enough tx on-chain to fund miners with low fees per tx without centralization (ie 8GB blocks), and thus the system needs to adapt to have miners funded by a smaller number of higher value, higher fee on-chain transactions?
  • What has Satoshi said about funding miners once new bitcoin issuance reaches zero?
  • Are fees really a side issue for 1M devs in the sense that they are more concerned with centralization (or some other issue relating to the scaling debate), and see growing fees as a negative but comparatively better characteristic than their perceived threat of centralization?
  • Is there any consensus among Core devs on fees?

I'm interested in the issue of a Bitcoin fee market in a general sense so any commentary outside the direct scope of these questions would also be appreciated!

Also, I am going to preempt those who will be tempted to post about Core wanting to push tx onto Blockstream solutions and all comments of that nature. I don't care for these opinions.

Many thanks

This is my first post so I will introduce myself as an outsider in the sense that I am not an engineer nor do I work for any Bitcoin company. I have a financial/investment background, do not own bitcoins but could imagine doing so if certain (probably obvious) development hurdles are achieved. My self-assessment of Bitcoin expertise on a scale of 1 ("isn’t Bitcoin a ponzi?") to 10 ("I am Satoshi") is around a 3.

My question pertains to the issue of tx fees for on-chain transactions; if tx growth outstrips max block size (or effective max block size with SegWit) and a transaction layer solution is lacking then a fee market will develop. I’ve seen some commentary in the Core roadmap and other materials relating to fees but certainly not anything that I personally would consider sufficient for what would be a significant change to the characteristics of Bitcoin.

Relying in part on Jeff Garzik’s characterization that "notable" Core devs’ aim to have a "healthy fee market" develop for on-chain transactions, can someone from the 1M max block size camp explain what the tenets of such a fee market are? Do Core devs supporting 1M blocks want to cull low-value transactions from the blockchain? If so, why?

Is the aim to have a fee market develop more about funding mining as the block reward diminishes?

Do Core devs supporting 1M blocks want most transactions to move off-chain, resulting in capacity headroom on-chain and thus low fees with 1M/small blocks?

If the issue mainly relates to funding miners, are 1M devs of the view that it is not possible to fit enough tx on-chain to fund miners with low fees per tx without centralization (ie 8GB blocks), and thus the system needs to adapt to have miners funded by a […]

Leave a Reply

All Today's Crypto News In One Place