I wrote this in another thread, but felt it might be good to have a decent reference/resource for any arguments against tiny fees not being enough to secure the network in the future. I think at a high level I’ve covered a lot, but would love to get thoughts to see what I may have missed/didn’t consider.
Just for clarity’s sake, granted this is all hypotheticals, $100,000,000 per coin isn’t really in the cards (without some major inflation, which maybe is in the cards in the next 10-20 years!), but is still a bit irrelevant.
There is approximately $49T in the M1 money supply and $83T for M2. Rounding to $50T and $100T nets a price of BCH at $2.38M and $4.76M, respectively. So the fee would be $7,000 or $15,000, roughly (respectively), rather than $255,000.
Though, inflation doesn’t matter, because the actual value of the currency wouldn’t change.
So for today’s value, an adjusted calc would be…roughly $12,000 per block in today’s dollars. And that value should scale up proportionally with inflation, whereas value would remain constant.
1sat/byte, assuming the $4.76M price per BCH, would be a fee of $17. Which in today’s dollars would still be far too expensive. So 1millisat/byte does make sense to keep the fee at just around 1 penny.
So at the end, the daily fee to miners would only be $1.7M (in today’s dollars) of value. But the beauty is that that’s only at 1%, and assuming no improvements are made to transaction sizes! So there should never really be a fee problem at scale.
EDIT:
For fun calc with today’s dollars/value in a full replacement scenario…
60,000tps * 60seconds * 10min * 360bytes/tx / 100,000,000,000millisats/bch * 4,760,000price/bch * 144blocks/day = $88.8M in daily miner fees!That should be plenty of fee budget.
EDIT: Amount of daily storage needed at the above scale:
60,000tps * 60sec * 60min * 24hr * 360 bytes/tx = 1,866,240,000,000 bytes = 1.866TBytes Per day (or 1.738Tibibytes per day).
Maybe little by little I’ll break it down as I get bored, but some more assumptions!
Today, Seagate has a 30TB HDD (plans to retail for $450 iirc). So $450 will cover 16 days of transactions. Let’s say there are 100 mining pools. That’s $450 / 16 days * 100 pools = $2,800 per day for all mining pools! Doesn’t even make a dent in the daily mining fees. Except, that dent will become smaller over time as storage gets cheaper and cheaper in relative value.
The natural counter to this would be (fast storage is needed!). Ok, well 100TB SSDs exist today (in 3.5in form factor), but they cost $40,000. Let’s do that math:
$40,000 / 53 days * 100 pools = $75,000 – 0.08% of the daily mining revenue. This is basically non-existent.
But at the same time, if you can’t be bothered to spend THAT much, Run HDDs in RAID 10. Sure, now paying for extra drives, but the relative cost (to daily revenue) is still basically non-existent. Now you have fast, redundant storage, at a fraction of the cost.Heck, let’s do those 100TB drives in a RAID 10 configuration. Double that cost for the SSDs! 0.16% of daily mining fees. Now this is where it becomes noticeable, but it is still so tiny. And this is before accounting for the decrease in relative cost for this storage, which would likely send this cost down 10x by the time 60,000tps would ever occur.
Now let’s think about internet bandwidth. 1.866TB / day. 1.866TB / 24hrs / 60min / 60sec = ~24MBps = ~ 200Mbps. That’s pretty close to a normal home internet connection today. Associated costs are completely insignificant.
Then what about for businesses/otherwise running nodes? I don’t really think it’s necessary to account for their cost since UTXO commitments will likely exist well before this sort of scale.
What about other high performance full archival nodes? Such services would be offered and likely charge for those services. They will charge what the market determines it is worth so this is not really a consideration.
What’s the TLDR?
60,000tps with a 0.001sat fee at $4.76M relative value per coin equates to $88.8 million of relative miner compensation a day.
This requires a daily incremental cost (over 0) of 0.16% of those fees assuming a high performance configuration.
Necessary uninterrupted internet connection would be 200Mbps, which is common today for homes and so this is completely insignificant.