PoW/PoS – we don’t need high transaction fees

Computing power at this scale comes at almost no cost, *creating blocks could be done by my smartphone*. Storage is cheap, too. So why do we need so much more fees for more transactions? Isn’t this what averts mass adaption? We could just pay stakers no matter how many transactions there are.

Upscaling should be simple and most projects claim to be able to do this. As far as I could see the problem will persist after the merge.

Some numbers: With a block size around 100 kB in right now every 12-14 seconds, the amount of data is really small. Even if we take worldwide credit card transactions – around 1 Billion per day -, a modern CPU with (for example) capable of 200 Billion floating point operations per second seems to be wasted hardware.

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8 thoughts on “PoW/PoS – we don’t need high transaction fees”

  1. The major issue with increased block size is the fact that it centralizes a network even more. Some may have access to hardware and internet that can sustain the network but not everyone can.

    A lower block size requires less hardware and internet to maintain the network, and encourage anyone to run a node. If it costs 10,000$ to run a node nobody will be willing to get into crypto in the first place thus causing mas adaption to fall through.

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  2. Tps isn’t merely a function of cpu. You have to propagate the blocks across the network until consensus is achieved without forking.

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  3. Monero uses RandomX so virtually anyone can mine with a cpu. It uses dynamic block size. Transactions cost a fraction of a penny.

    Monero is what money should be. Monero is what Satoshi wanted Bitcoin to be.

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  4. it comes down to transaction capacity of the network. if there’s an ability to pay a fee to be prioritized above someone else, it turns into a fee market frenzy when the demand is too high

    removing ability to pay a fee can help, but you still need a good capacity to deal with demand, especially during saturated network activity

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  5. Blockchains are, by design, “single threaded bottlenecks”. You might have thousands of computers whirring away ready to make a block (or in pow, burning ever higher amounts of energy competing to be allowed to make the next block), but only one of those will be creating the next block.

    At the same time millions of users might want to make transactions but there is not the capacity in this bottleneck to process them all, so txn fees are like airline ticket dynamic pricing to keep out the riffraff and enable VIPs to fly.

    So txn fees will be proportion to demand / efficiency.

    The only way to scale is through parallelism, which I suspect means more of a DAG type approach or perhaps other breakthroughs that do not yet exist, rather than adding more computing power to the classic blockchain design.

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  6. Fees are a protective measure to prevent spamming the network. They are by design, not some accidental side effect.

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