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Bitcoin Letters: Understanding Miner Economics

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Bitcoin Letters: Understanding Miner Economics

Bryan Daugherty, the Public Policy Director at Bitcoin Association has published his new book The Bitcoin Letters.

Bryan Daugherty, the Public Policy Director at Bitcoin Association has published his new book The Bitcoin Letters. The book aims to help readers unlock the mysteries surrounding Bitcoin and essential concepts such as sustainability, regulation, and the transformation to Web2 and Web3.

Bitcoin has taken the world by storm, but there are still many misconceptions about the technology. Through thoughtful analysis and engaging writing, readers will gain a deeper understanding of the intricacies of Bitcoin and how it is shaping the future of finance.

Additionally, the book includes three letters written to industry leaders – Elon Musk, NYS Governor Hochul, and SEC Chair Gary Gensler – that provide unique insight into the world of Bitcoin.

Understanding Bitcoin miner economics

In this section of the book, Daugherty considers the important topic of miner economics and the broader concept of game theory and Bitcoin.

He notes that the block size debate has resulted in different Bitcoin miner economics game theory outcomes for Bitcoin Core (BTC) and BSV blockhain. BTC has a limited block size of 1 MB, which restricts the number of transactions that can be included in a block. As the block subsidy rewards are halved after every 210,000 blocks are mined, transaction fees must rise on a limited size block to replace the decreasing subsidy. As a result, BTC blocks can become volatile and unusable with fees rising over time to replace lost revenue.

By comparison, BSV has an unbounded block size that allows for more transactions to be included in a block without increasing energy consumption. Daugherty notes that BSV’s unbounded block size allows for transaction fees to remain stable and low, with the reward subsidy eventually being eclipsed by transaction fees. BSV’s scalability is fundamental to improving the energy efficiency of digital assets secured by proof-of-work.

Increasing the number of transactions per second drops the network’s energy consumption per transaction, and unbounded block sizes like those used in BSV have the potential to accommodate massive levels of transactions while being energy efficient.

Daugherty also explains how the unlimited block size provides sustainability without trading security because the larger the block can be, the lower the energy consumption per megabyte. BSV’s highly scalable proof-of-work protocol addresses scalability through unbounded block sizes that enable far higher volumes of transactions per block. The energy consumed per transaction in BSV is over six thousand times better than BTC.

Daugherty concludes by noting that it is vital for policymakers to consider the scalability of blockchain technologies and their potential for sustainable innovation and regional benefits beyond their cryptocurrency use cases. By promoting and utilising the unbounded block size and scaled proof-of-work, policymakers can ensure the sustainability and energy efficiency of the blockchain industry, he said.

Buy your copy of The Bitcoin Letters now

The Bitcoin Letters is now available in Kindle ($9.99) and paperback ($19.95) formats on Amazon. But for readers who want to experience the full potential of Web3 technology, there’s an even better option. By downloading the ImmutableBooks.com app, you can purchase the eBook by page, chapter, or in its entirety, using a pay-per-consumption model that only charges you for the content you read.

ImmutableBooks.com is user-friendly and secure, powered by the latest blockchain technology to ensure complete privacy and safety for its users. It’s a revolutionary platform that offers unparalleled transparency, security, and immutability in content distribution.

About Bryan Daugherty

Bryan Daugherty is an accomplished digital transformation specialist with over two decades of experience in enterprise-grade technologies. Daugherty serves as the Global Public Policy Director for an educative, non-profit trade association, where he advises policymakers in over 30 countries, playing a key role in shaping the future of blockchain policy globally.

His area of expertise includes Blockchain Information Security, Cybersecurity, Enterprise Blockchain Integration & Implementation, and Commercial Blockchain Application Development.

Ryan Brothwell

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