Thread by @joekelly100

Bitcoin's transaction fees are not fine. Outside of short-lived speculative frenzies, blocks aren't full and total miner revenue from fees is in the $100s-of-thousands per day. 1/

https://twitter.com/Bitcoin/status/1432221396558516229

In other words, at current usage levels, the BTC system is on a predictable path to eventual security failure (incentive incompatibility / economic instability) given the exponentially decaying block subsidy. Number go sideways from here = no bueno. 2/

In the short term, number must go up (NmgU). Or better, number geometrically must increase (ngmi).

Eventually, transaction volume must go up too, a lot, which likely requires very significant usage as an everyday medium of exchange. 3/

Bitcoin's unsuitability as a medium of exchange was one of @nntaleb's main observations in his so-called Bitcoin Blackpaper.

You can assemble a complex argument out of these parts for why it therefore isn't going to succeed (and is worth exactly 0 🤌). 4/

But even in the optimistic case, where BTC does come to enjoy some significant usage as an everyday medium of exchange, there may still be a problem w/ fees.

If off-chain mechanisms (incl. regulated custodians) are "too good", that's also no bueno. 5/

https://twitter.com/brian_trollz/status/1425555479565115399

Why? Because it becomes a classic tragedy of the commons. People aren't going to pay high fees if they don't need to (especially if it's their precious deflationary bitcoin they're saving). 6/

https://twitter.com/joekelly100/status/1425561151685943299

The idea that a fee market will cover Bitcoin's security in future has been highly questionable from day 1, and it still is. The economic engineering going on around the problem is deeply speculative stuff. 7/7