Comment on [deleted]
dhork@lemmy.world 3 days ago
Bitcoin was extremely successful at making what it set out to do in the first place: make a fully distributed, peer-to-peer, trustless currency. Anyone who has ever been forced to pay bogus transaction fees ought to be able to appreciate paying for things without needing a bank, or any intermediary at all. It’s like cash you can e-mail.
But, most people into crypto now don’t care about this utility, they just want Number Go Up. So they don’t transact with it anymore, they just hold it (or actively trade with it). Which makes the whole ecosystem not useful for anything except feeding itself.
I still think that, in theory, there are areas where cryptocutrency can be used for real innovative purposes. But these will never actually be done, because the people on a position to do those things would rather make quick money selling shit tokens to unsuspecting people.
Do you want to learn how it all works? Feel free to do so, it’s all Open Source. But if your goal is to invest… Well… Read up on it and understand it first. This will help you differentiate the good ideas from the scams. (And there are a lot of scams!)
theunknownmuncher@lemmy.world 3 days ago
Cryptocurrency has transaction fees. They start out as the newly mined coins, paid from the pool of unmined coins. Once the finite number of coins have been mined and that pool is empty, the miners will begin charge fees for each transaction directly to the users making the transactions.
dhork@lemmy.world 3 days ago
No, that’s not quite how it works.
Calling the newly minted coins a transaction fee “paid from the pool of unmined coins” isn’t really accurate, as those coins didn’t exist until they were mined. The algorithm carefully controls how many new coins are made.
But miners do not set fees at all. Users set their fee when they make their transactions, and miners pick which transactions they want to attempt to validate. We expect miners will pick the transactions with the highest fee per byte, because they want to increase their reward if they manage to find a block. But they don’t have to, and they may have reasons to pick other transactions.
The whole point of it being trustless is that no party needs to coordinate. Users create transactions, miners validate them.