Proposal To Give 45% of Block Reward To Bitcoin Node Operators Is Silly

Throughout the years, there has been a lot of discussion on whether or not people should receive an incentive for supporting the Bitcoin network by running a full node. Even though there is no need to reward people for these steps, new ideas to change that situation keep popping up now and then. One particular Reddit user would take a page out of DASH’s book and pay up to 45% of the block reward to node operators. Such an idea would never be viable, though, as it would ultimately lead to centralization.

Also read: First Global Credit Brings Commodity Futures Trading to Digital Currency Holders

Bitcoin Node Incentives Are Unnecessary

At this point, there are over 6,000 Bitcoin nodes in existence, and none of these operators are getting paid for doing so. No one is complaining about that either, even though some people might prefer to have some monetary incentive attached to being a Bitcoin node operator.

For some unknown reason, people in the Bitcoin community assume these people should get paid for supporting the network. While there may be a certain logic behind that idea, it is not feasible in the Bitcoin world by any means. Bitcoin nodes help broadcast transactions to miners, but they are not producing any proof-of-work to make this happen.

That does not mean running a Bitcoin node is free of charge, though, as the computer used will need electricity, and there will be a slight strain on computer resources such as the CPU and hard disk speed. Should users be compensated for voluntarily dedicating a part of their resources to securing the Bitcoin network? Probably not.

One user on Reddit posted how it would be an interesting idea to change the Bitcoin protocol and reward node owners with 45% of the current block reward. That would mean that miners, who spend a lot of money to generate blocks on the network, would close to half of their earnings in favor of people who voluntarily run a bitcoin wallet on a device. While such a solution can easily be opened up to the general public, there will be a significant backlash from Bitcoin miners to this idea.

It’d be good if there were a way to incentivize people running a Bitcoin Node, but such a situation would only bring more centralization to the ecosystem. Nothing would stop a collective of individuals to deploy thousands of Bitcoin nodes and take the lion share of the reward for themselves, rendering the entire point of incentivizing node owners completely moot.

Source: Reddit

Images credit 1,2

If you liked this article follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin and altcoin price analysis and the latest cryptocurrency news.