Host Tom Shaughnessy talks to Dan Held, Director of Business Development for Kraken Digital, and Paul Sztorc, an independent Bitcoiner. They debate the Bitcoin security model, with Paul feeling skeptical that fee rates will climb and Dan believing that fees are already growing and could subsidize Bitcoin security solutions.

Dan’s post (Bitcoin’s Security is fine) and Paul’s original post (Security Budget in the Long Run) for context on the episode.

Episode Highlights:

• Paul wrote a blog post last year proposing that we should use merged mining to keep security costs low.

Key Points:

1. There’s a significant debate about looking at transaction fees alone versus the full cryptocurrency exchange fee structure.

Tweetable Quotes

• “It’s not the case that new supply automatically lowers the price because it’s negligible when it’s less than $1-2, is my claim… People prefer having $1 or $2 to not having it, I don’t think they significantly care… I agree with you that there are many frictions.” –Paul Sztorc

• “If the security budget collapsed that means the value of Bitcoin either collapsed or no one’s transacting. It’s circular logic to say no one cares about Bitcoin, which means the security budget is meaningless bc Bitcoin doesn’t need to be secure bc no one values it.” –Dan Held

Resources Mentioned: 

• Chain Reaction Twitter: https://twitter.com/chainpodcast