Kwon: Bitcoin Miners Burn Energy Because Block Rewards Dwarf Transaction Fees
Jay Kwon · 821: Crypto: $17m Raised to Speed Up Mining Blocks Using New "Validators" · Oct 23, 2017 · at 6:35
Jay Kwon, creator of Tendermint and Cosmos, discusses the economics of Bitcoin mining and proof-of-work mechanisms with host Nathan Latka.
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“You see that the block reward is a hefty, like, hundreds of millions of dollars a year, if not a billion at this point, of rewards. And the transaction fees, In comparison, are much smaller. That's why Bitcoin miners don't care about the transaction fee right now. They don't care too much because the inflationary reward of Bitcoin is much greater, and they're able to, you know, burn energy to win blocks because it's worth it for them.”
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More from Jay Kwon
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“Tendermint, Tendermint is a replacement. It's an alternative to proof of work. It's a way to have a secure distributed ledger without having to Burn energy to try to win a lottery ticket.”
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“You know, we avoid the term ICO precisely because we don't want to associate it with a security offering.”
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“We raised we had a cap of seventeen million. At USD? USD. So we filled that cap in 29 minutes, so we had to stop accepting funds.”
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“Everyone gets security from the fact that they know that they can download the blockchain around themselves. They can audit it themselves. It's accessible. So, it's good that a blockchain is a small machine, but replicated all around the world so that it's not…”
Kwon: Cosmos is building an interoperable network of blockchains
“We use this to create a network of blockchains that can talk to each other and interoperate, and that's called Cosmos. That's the project we're building.”
Kwon: Cosmos contributors will receive Atom staking and governance tokens at Genesis
“And on Genesis Day, all the contributors are going to get, on that Genesis block Atom tokens. They are staking tokens. They're tokens that allow you to vote on the blockchain, participate in consensus, you know, make governance governance decisions about where…”