Nick Szabo  🔑

I would think by then Exchanges might become miners as well.

It's prudent for businesses & users to take part in mining defensively to participate in security. Even post subsidy, I am not so worried because even less secure money has worked because people need it to, and there is market incentive to find ways to fund #Bitcoin security.

This smacks of asking for volunteers to mine despite having unprofitable rigs. How to make it incentive compatible?

If your businesses doing millions of dollars a day you have plenty of incentive to fire up rigs.

Free rider problem. More profitable to let somebody else pay for security, so nobody wants to.

If no one does they all go out of business. Of course no one knows for sure what will happen, we'll be going back to the experimental stage at that point.

Recipients of large value txs can: 1. try to mine the tx themselves by quickly leasing extra hashpower just for this block. may be lots of subtle problems with this. 2. wait more blocks

The second point is enough imo, security is the product of hashpower and the passage of time.

There is one implemented counter-measure using nlocktime of current height on new tx (core and some wallets so this), it means miners have to progress to claim fees. Other longer term low subsidy era ideas include fee averaging across block intervals to smooth fee revenue.

Fee averaging sounds like a good idea since fee estimations of 'current' block are just terrible. I constantly need to check websites to see what realistically I should set my fees at.

Volatility fees as the price goes up leads to non linear hash rate, so you argue that there can be corresponding drops that would lead to large short term drops right?

Personally I think that's actually a pretty important point.

A point lost in the noise of all the idiots who are equating a lower long-term hashrate with lower security.

I agree with you for double-spend attacks. But what do you think about "sabotage attacks" (Budish)/ "spawn camping" (Buterin), where a cartel perpetually attacks Bitcoin/mines empty blocks because it wants to kill Bitcoin itself?

Such attacks would at least temporarily drop confidence in Bitcoin and thus drop coin value and miners w/ only block reward wouldn't be able to compensate themselves for hardware/electricity cost and eventually run out of money & be replaced. Alternative is maybe PoW change.

Not just that but bitcoin is always relied on people acting in self interest. If it's more profitable to attack the network than mine and make money we have a problem.

Sure, but some attacks are internal to the network and others target outside entities. For example a 51% attack and significant chain re-org is really just a temporary disruption to the network but could still be used to profit at the expense of merchants/exchanges.

Economic participants can simply increase conformations required for effective finality, or engage in defensive mining. Chain selection rule tweak, PoW change are more serious changes requiring consensus protocol changes. Seeing all these discussions regarding ETC atm. #forkonomy

It's easy to come to consensus on ETC. There are 10 people using it.

Haha you would think! Indeed coordination is exponentially more difficult in BTC. But there are people talking up all the potential solutions. Funny that I was at their conference last autumn talking about the woes of minority PoW networks and listing potential mitigations.