Bitcoin’s Security Budget is Adequate

Bitcoin’s Security Budget is Adequate

In a few decades when the reward gets too small, the transaction fee will become the main compensation for nodes. I’m sure that in 20 years there will either be very large transaction volume or no volume.Satoshi Nakamoto in 2010

Read the article thrice top to bottom to process all the details.

It was strange to see the sudden spike in transaction fee as % of block reward between Q4 2016 and Q1 2018. What do you think caused it? I mean, I know people were excited about bitcoin at that time, but why the rise in the transaction fee being paid as the block reward?

Dan’s assumption that mining rewards would be based on the market cap of bitcoin never really made sense to me. Looking at the history of mining rewards against the market cap, that can be clearly justified.

Your explanation makes sense, but I’m sure it is going to be much more complicated than this. There would be many other factors that would count in in the future.

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Good question. From what I remember (mostly my personal experience at that time), there weren’t that many wallets focusing on good fee estimation and custom fee input. So most people just paid what the wallet (mostly wrongly) suggested. Also no segwit for most of that time (or little adoption), so the block capacity was smaller than today.