[abm53]

On the other hand, transaction networks clearly add massive value, so it’s very likely that net of fees (without which the network may not exist at all) these networks still add value.

So it’s more a question of finding the optimal equilibrium rather than viewing fees as “deadweight”.

[bjornsing]

“Dead weight” might be too harsh a term, but I think “rent seeking” is spot on. And it’s generally not a good idea to let rent seekers extract value in proportion to the damage they could potentially cause.

[dahfizz]

"Dead weight loss" is an economic term. It sounds like a generic English phrase but it has a very specific meaning and formula.

[1] if you are interested. Particularly the section on the dead weight loss of taxes - in this case, transaction fees operate the same as taxes.

https://en.m.wikipedia.org/wiki/Deadweight_loss

[runnerup]

> transaction fees operate the same as taxes.

Absolutely. And for the colloquial English phrase "dead weight" that would correspond to the portion of these fees which go above and beyond the cost of running the (high-utility) transaction network. Reducing the rent-seeking on this network also reduces both the colloquial and technical meanings of "deadweight".

But for the economic term "deadweight", additional deadweight loss can be reduced by anyone who can provide similar functionality to the current interchange network but at lower cost than the current network. This wouldn't reduce the colloquial "deadweight" because in theory 100% of the fees could already be going towards necessarily funding the existing network. But it would still reduce the economic deadweight of 1-4% tax on every transaction.