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Comment by thatguy0900 | Hacker News Reader

I was under the impression that long term, the fees will increase and the fees will be the miners reward

Unlike the block reward (mining subsidy) which is set according to a fixed schedule, fees are set by the market. They will go up if demand for L1 transactions go up, but there’s nothing in the protocol to push them up over time.

Satoshi’s vision was for Bitcoin to be used as digital cash[1], so that transaction demand would be enough to sustain the security of the system. Since the “cash” use case has fallen away to the “store of value” use case, it seems a bit dubious.

Transaction costs have recently gone up because of ordinals and NFTs so we’ll see if that sticks.

[1] the Bitcoin paper was called “Bitcoin: a Peer-to-Peer Electronic Cash System”

Did the original "digital cash" thesis ever make sense? It's my understanding that Bitcoin can never hope to scale to meet a fraction of daily real-world transaction volume outside of adopting a so-called L2 solution like Lightning Network, which would seem to defeat the point somewhat.

It certainly couldn’t have covered all of human commerce, but it could cover the sort of transactions where having an uncensorable, irreversible transaction is worth paying a premium for (silk road, etc.)

Well, in practice the mining subsidy is highly variable, as most miners' costs are in local currency, so fees are already set by the market.

But I agree that the NFT thing is really a side-effect of fees being low (thus, cheap distributed storage) which probably at best provides a price floor, rather than a sustainable source of revenue.

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