The Bitcoin Fee market Myth

 Jimmy  Song argues in his article that Bitcoin is a public good and a public  good has socialized costs that are hard to understand. He says-

Much  like a factory which gets taxed for polluting has an incentive to not  pollute as much, fees prevent the abuse of utilizing the blockchain as  pure storage.

If  I want to transfer a small amount of 0.005 BTC to my friend, I am not  abusing the blockchain, I am not utilizing the blockchain as pure  storage, nor am I polluting. I merely want to transfer money to my friend.

Data as Cost

Everyone  running a full node has to receive, send, store and maintain the full  blockchain. However, only miners need to run full nodes as Olivier Janssens points out in ‘Why “non-mining full nodes” are a terrible idea’,

Non-mining full nodes delay sending your transaction to the one node that really matters: a *mining* full node. Only mining full nodes  have the ability to put your transaction in the blockchain, and you  want to have that happen as soon as possible. To put it bluntly:  “non-mining full nodes” are actually a sybil attack against mining full nodes. “Non-mining full nodes” make the network LESS efficient.

If  only the miners and businesses maintaining a full node are paying for  the costs of storage, then these costs are not socialized over all  Bitcoin users. In fact, if an artificial limit is set, that is when we  socialize the costs because the average fee of a transaction goes up. 

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