[bitcoin-dev] Reducing block reward via soft fork

[Karl]

On 5/23/21, ZmnSCPxj via bitcoin-dev
<bitcoin-dev at lists.linuxfoundation.org> wrote:
> Good morning James,
>
>> Background
>> ===
>> Reducing the block reward reduces the incentive to mine. It reduces the
>> maximum energy price at which mining is profitable, reducing the energy
>> use.
>>
>
> If people want to retain previous levels of security, they can offer to pay
> higher fees, which increases the miner reward and thereby increasing the
> energy use again.

The turn-around time for that takes a population of both users and
miners to cause.  Increasing popularity of bitcoin has a far bigger
impact here, and it is already raising fees and energy use at an
established rate.

If it becomes an issue, as bandwidth increases block size could be
raised to lower fees.

> Properly account for the entropy increase (energy usage) of all kinds of
> pollution, and the free market will naturally seek sustainable and renewable
> processes --- because that maximizes profitability in the long run.

There is little economic incentive to fine carbon emissions because
there is no well-established quick path to gain profit from reducing
them.  The feedback paths you describe take decades if not hundreds of
years.

But it sounds like you are saying you would rather the energy issue
stay a political one that does not involve bitcoin.  Your point is
quite relevant because bitcoin is not the largest consumer of energy;
those who care about reducing energy use would be better put to look
at other concerns.

The reason to reduce _bitcoin's_ energy use, would simply be to aid
its popularity and quell public concern.  Without doing this, people
move to an altcoin, because increasing the value of bitcoin via
spreading its use, increases the demand for mining.  That human
decision is part of the honesty you describe.

> What is needed is to enforce that pollution be paid for by those who cause
> it --- this can require significant political influence to do (a major world
> government is a major polluter, willing to pay for high fuel costs just to
> ship their soldiers globally, polluting the environments of foreign
> countries), and should be what true environmentalists would work towards,
> not rejecting Bitcoin as an environmental disaster (which is frankly
> laughable).
>
> Remember, the free market only works correctly if all its costs are
> accounted correctly --- otherwise it will treat costs subsidized by the
> community of human beings as a resource to pump.

It sounds like you would prefer a proof-of-work function that directly
proved carbon offsetting?  And an on-chain tax for environmental harm?

On 5/23/21, Anton Ragin via bitcoin-dev
<bitcoin-dev at lists.linuxfoundation.org> wrote:
> Well, it is done automatically every 4 years :) It is a self-balancing
> system - more people shout about Bitcoin being dirty -> less adoption ->
> lower the price -> less energy consumption. Add on top the fact that in
> 2024 block rewards will fall 50% anyway and someday it will be zero.

Is hashrate rising slower than the block reward is dropping, that you
mention the 4 years halving?  Do you see a problem with dropping the
block reward to make faster change to the hashrate curve, that you
mention the existing system's weaker approach?

I personally wasn't aware that Elon had complained; I've been hearing
the complaint from scads of people for many years.