The AI doesn't address AT ALL what he said.
and neither have you.
Bitcoin incentivizes free-riders (hodlers) that control UTXOs but do NOT contribute to the security budget through paying transaction fees.
The security budget is only payed by people actually making transactions on the network. Although hodlers also benefit from it. As MM points out, the security of the network is one of Bitcoins primary features.
So a subset of people pay for that network security and a subset are free-riders.
The definition of the free-rider problem.
Replies (5)
First off you call hodlers free-riders and I vehemently reject that notion. Holding is a use case for bitcoin.
If a holder earned bitcoin (either by providing value to someone that paid them in bitcoin or exchanging fiat they earned) and now holds the utxo they did contribute to the network when they paid the transaction fee to move the coin and gain control of that UTXO.
If they want to spend that UTXO they will pay a fee to miners to move that coin to someone else so again they contribute to the network
Good job!
that sounds a lot like your own opinion 👍
Hodling by definition is free riding. Holders pay absolutely nothing to guarantee security of the bitcoin network that they benefit from. It's not an insult. Theres no emotional implication. You can vehemently reject it all you want, taking a shit in the river is a use case for the river, that doesnt mean it's long term viable.
You ever heard of business models where you can get a single lifetime subscription for one large payment? They always fail. You know why? Because there are ongoing costs. No matter how big the payment, "pay once use forever" is never, ever viable for a service. Paying the fee to buy the coin and then sitting on it while others pay to keep miners protecting your money is the exact same thing.
The free-rider problem has never been a problem. I don't understand this whenever anyone brings it up. It's just nagging at imaginary abstractions absent of context.
Just because you don't understand it doesnt mean it doesnt make sense.
It is an architectural problem. Are you saying it's just not there, or that it's never going to actually result in failure? There's nothing imaginary about it, incentives are always outcomes.
