Potential fundamental issues for BTC?

Hello all :grin:. I am just starting the courses here and I’m enjoying trying to understand it all… A few things have jumped out at me and I’m looking for peoples thoughts on some potential problems that BTC could encounter and looking for reassurance/ better understanding :rofl:

1: UTXOs… If fees increase when using multiple UTXOs for a transaction / sending back ‘change’ to the wallet, then if say in 10yr when the BTC has been split and split into trillions of UTXOs won’t it make using it for transactions expensive and impractical?

2: Mempool Hacks, is the network vulnerable to attack via the Mempool by simply overloading the network with transactions with bots etc.?

3: Fees: An example of the block reward showed 14.5BTC paid (not 12.5BTC) as this includes the fees, so for every 12.5 BTC, 2BTC in fees… This seems a very high percentage of fees when free to use Visa?

4: High electricity useage makes a valid case for worldwide banning of mining and conversion of crypto into fiat, along with clear evidence of fraudulent trading / price manipulation (:heavy_dollar_sign:1-2k crashes in minutes?!)

Not trying to be negative just a few things that seemed a bit of a concern long term…

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Hi @SiBTC,
I’m not an expert so maybe I could make some mistake but you brings out some interesting questions so let give me a try.

  1. I think about UTXO like flakes of your asset. When you try to spend them the blockchain check if effectively you have those flakes you are claiming to. Think to transfer all those flakes together into a wallet. This mean that the private/public key, associated to your new wallet, will be used to claim to your fund the next time you want to use it, in a single shot. This because your previously claimed flakes are now link to a single transaction that bring them in a unique single place. So next time private/public key of your wallet will be used to claim only a single UTXO.
  2. Usually the total block reward for miner is composed by block reward and the sum of all the fees. 2BTC for fee should be high but think that into a block you have thousand of transactions. Let me say that without incentives to the “work” miner do blockchain should be a less trusty place even not exist.
  3. I think that in future electricity will cost quite less than now and it will comes in high percentage from renewable energy. So I didn’t see a big problem, also think that to cool down server for hot video platform it is used a more amount of energy :joy:
    I think that if you decide to leave your crypto in an exchange or you do trading, you should know the risk. I saw price manipulation also in normal stock market :laughing:

I don’t have an answer for the second question ahaha .
Hope I said something useful for you.

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Interesting, thanks for your answers. That makes more sense now with the UTXOs.
With regards to the fees I just thought that 2BTC in fees was high compared to a 12.5 or now 6.25 reward, but I don’t know how many transactions are included in a block is there a limit or minimum BTC value?
And yes, the Mempool issue seems like a potential big issue as presumably it wouldn’t be hard to attack with bots making billions of transactions… Hmm :thinking:
However I am new to this and I’m sure alot smarter people have already looked at this…

happy to be useful enough :wink:
In BTC blockchain the size of a block is 1 MB and it can include approximately 2 thousand transaction. Making a simple math 2BTC:2000= 0,001BTC that at actual exchange rate are more or less 9$. I don’t know exactly if they strictly depend on how much BTC you are moving.

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@Stefano Thanks for doing the math :+1: I think that’s my point, at an average of $9 that is crazy expensive fees when in theory it should cost very small fees to move BTC

@SiBTC I think fewer and fewer transactions will actually happen on the main BTC network as Lightning Network with payment channels becomes commonplace. Side-chains allow BTC to broadly scale and combines millions of small transactions. Base fees in these nodes could charge 300 satoshis (1 cent) as an example. The base fee is set by each node operator in the network. There is also a liquidity fee which is percentage based, but these are far less than what you would pay on the main chain. When the mempool was flooded at the peak in 2018 - fees could be $50 - but this is largely independent of how much you are sending.

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Regarding the last question on electricity usage, Jim Rickards, an author on financial matters and precious metals, thinks this is a limiting issue for Bitcoin. Bitcoin energy consumption is estimated to be greater than many countries currently. Renewable energy has significant limitations that fossil fuel or nuclear generation approaches do not and so are not a viable alternative. (I find it amusing that solar farms are backed up by fossil fuel at nighttime and that wind generation is ecologically harmful as turbine blades are filling up land fills.) If governments persist in limiting the use of human efforts that produce CO2, then there could be a problem. Or the mining will just switch to countries that stick with fossil fuels.

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