Now, if transaction fees are low and its simple and easy to transact, the more people will start using it.
The incentives of the network have been designed so nodes are encouraged to get the transactions that they need and nodes that do not have the transactions they need can ask other nodes for the information.
Full nodes are incentivized to have all the transactions because they need them in order to win the next block.
Wright goes on to explain that the nodes’ incentives are not to get as much coin as possible because it’s not to the benefit of a node to take over the network.
Also, if a node is a huge percent of the network, they may be mining all the coins, but paying a huge amount to do this.
Second of all, even if there weren’t any records, why would nodes invest all this money and collapse a system they’re a part of? It doesn’t make any sense.
Despite the current BTC narrative, Bitcoin was not created to be “digital gold.” The comparison is often made because there is a limited volume of gold, similar to how there is a limited volume of Bitcoin.
Bitcoin miners receive a subsidy for finding blocks and they are also rewarded with the transaction fees associated with that particular block, together referred to as a the “coinbase reward.” Dr.
“They have really, really small margins and the only way to make money on really, really small margins is to sell a hell of a lot,” he says.
The subsidy is slowly disappearing, but too much grew too fast and too many people jumped on board too quickly and pumped up the subsidy and the subsidy is what skews the market.
With BTC’s block cap, there’s no push to increase transaction numbers and therefore no investment in improving mining hardware.
If people can actually use Bitcoin in any denomination and send it somewhere else for a small fee, we can develop network effects that actually grow.