OK so you don't understand. Its not about supporting miners. I mean kind of, but not really. It's about what miners are, and who receives the benefit of their service and who pays for it.
Youre right, a capped supply supports holders. But who pays for securing the network? The people moving it, spending it, using it. Holders get their wealth secured, which is the only reason the bitcoin itself has value, that it is secure, a currency that can disappear in the night is worthless no matter how few there are in the world, without having to cover the cost of the security they receive, their cost is subsidized by daily users. In game theory we call this the free rider problem, something everyone benefits from but only a subset pays for. The game theory in systems like this is that everyone tries to become one of the people that doesn't pay and then eventually there's not enough people paying for the thing to keep existing to benefit people. There is no other outcome.
So there's an incentive in bitcoin to not spend, to only hodl. But if people don't spend, security goes down. And I've already establishes that security is the primary sales pitch that bitcoin offers. So ultimately, bitcoin's value is only its security level, and it's security is covered by a decreasing percentage of the userbase. This means security *must* decrease beyond some point, whicheans the value must decrease, which means the price must decrease.
So, how do you resolve this free rider problem, and get everyone to cover the cost of securing their assets without one person having an outsized unfair cost of doing so, without tinkering with peoples funds and having the the cost apply proportional to the benefit they receive? Well, the answer is of course, an emission. I can go into the different emission schemes with different benefits and problems, but those are kind of out of scope, if you're interested I'll go into it. Suffice to say, a capped supply coin, any capped supply coin, no matter what, will suffer from the free rider problem and eventually go to 0.
mister_monster
npub1m5…jgjl3
2024-11-13 00:50:19
in reply to nevent1q…98af
Author Public Key
npub1m5s9w4t03znyetxswhgq0ud7fq8ef8y3l4kscn2e8wkvmv42hh3qujgjl3Published at
2024-11-13 00:50:19Event JSON
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"content": "OK so you don't understand. Its not about supporting miners. I mean kind of, but not really. It's about what miners are, and who receives the benefit of their service and who pays for it.\n\nYoure right, a capped supply supports holders. But who pays for securing the network? The people moving it, spending it, using it. Holders get their wealth secured, which is the only reason the bitcoin itself has value, that it is secure, a currency that can disappear in the night is worthless no matter how few there are in the world, without having to cover the cost of the security they receive, their cost is subsidized by daily users. In game theory we call this the free rider problem, something everyone benefits from but only a subset pays for. The game theory in systems like this is that everyone tries to become one of the people that doesn't pay and then eventually there's not enough people paying for the thing to keep existing to benefit people. There is no other outcome.\n\nSo there's an incentive in bitcoin to not spend, to only hodl. But if people don't spend, security goes down. And I've already establishes that security is the primary sales pitch that bitcoin offers. So ultimately, bitcoin's value is only its security level, and it's security is covered by a decreasing percentage of the userbase. This means security *must* decrease beyond some point, whicheans the value must decrease, which means the price must decrease.\n\nSo, how do you resolve this free rider problem, and get everyone to cover the cost of securing their assets without one person having an outsized unfair cost of doing so, without tinkering with peoples funds and having the the cost apply proportional to the benefit they receive? Well, the answer is of course, an emission. I can go into the different emission schemes with different benefits and problems, but those are kind of out of scope, if you're interested I'll go into it. Suffice to say, a capped supply coin, any capped supply coin, no matter what, will suffer from the free rider problem and eventually go to 0. ",
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