Topic: a dumbed down version of the 1MB point of view - page 2. (Read 2384 times)

There is nothing 'artificial' about the transaction rate.  It's just an operational parameter which defines how the system works and is no more 'artificial' than the 21m currency base, the 10min block frequency, or the POW algorithm.  Changing this parameter will have pros and cons, just as would changing any number of other operational parameters.

Folks like me who wish to see the transaction rate rather severely limited simply value the aspects which are enhanced by having a low data rate.  In my case I highly value the potential flexibility to adapt to certain types of attack (which we've not seen yet.)

Conversely, having a wide userbase for native Bitcoin itself is not very interesting, and in fact I consider it a negative.  Most users add nothing toward infrastructure support even at our low data rate.  Most people are not prepared technically to safegaurd their BTC and Bitcoin get's egg on it's face every time one of them gets ripped off, and it is an appallingly inferior solution for run-of-the-mill coffee purchases anyway compared to systems which were designed from the get-go to be real-time.


Ultimately I would like to get rid of the mining cartels themselves as mentioned in my last post above.  There is some chance that that would happen to their detriment should they abuse their power which is probably the main reason it has not happened already.  Block size has relatively little to do with it one way or another I don't guess.

Since I've not mentioned it for a while, note that mining never has the potential to be profitable in the long term whether the reward comes from coinbase or from fees or from some combination.  The simple reason for this is that capacity will rapidly grow to take all of the excess.  The higher the profitability, the stronger this differential which creates growth and makes the profitability point be hit that much sooner.  The only solution is to consolidate and start monetizing business intelligence which will further squeeze out miners who are not of size to do so efficiently, but then we have a shitty PayPal-II and that ugly reality cannot be hidden forever.  That really would open the door for distributed crypto-currency which adhered more to some of the original principles of Bitcoin and could make Bitcoin go extinct (and at that point I would hope for this outcome.)

Sometimes I wonder if Theymos and the rest of the developers should hold a summit
Post the date on Bitcointalk and have them Debate it out
As I wonder which one is the Donald Trump among them 

The limit is not "the basis for fee pressure". The limit acts as a boundary beyond which the network is at risk of centralization. The ensuing demand for this space in blocks will result in fee pressure.

As for "overcharging" this is obviously subjective and your argument starts from the premise that capital flowing into Bitcoin does so because of economic friction inside the fiat system. I argue it isn't, large holders do not move value into Bitcoin because they are after "cheap transactions". What they are after is monetary sovereignty, something which only Bitcoin offers at this point.

Another mistake in your argument is that somehow "other cryptos" is the obvious alternative for transactional demand that can not be fulfilled on Bitcoin's blockchain. I cannot agree with this. In fact it seemingly is the less likely of scenarios as trust in a new form of money, especially crypto, is almost impossibly hard to build. As long as it exists the fiat system will be the obvious option for consumer spending and general retail transactions, Gresham's law would seem to support this idea. Then within a few year at most users will be given a plethora of alternative open-source payment systems that all leverage Bitcoin's network effect.

As for the suggestion that fee pressure would exist as a result of orphan risk (the Peter R argument), it holds only in a vacuum and seems patently unaware of the actual real-world dynamics of the network. Even if that were true, the security of the network can not be left to the very naive assumption of altruistic behaviors between miners and their costs to orphan.

An artificial constraint can't be the basis for organic fee pressure.  Bitcoin does have it's network effect / first mover advantage, but the currency has a head start, not a monopoly.  People will and do pay a slight premium for access to Bitcoin's stability, liquidity and security, but any attempt to overcharge and people will take their business elsewhere, to other cryptos waiting in the wings.

Organic fee pressure would exist on the basis of the increased block orphan risk with each added tx.  In the long run, if those fees are not sufficient to pay for adequate security, I would expect miners to form a cartel to enforce some minimum fees.  I could understand a cartel seeming like an artificial constraint as well, and in some senses it would be one; though having a different basis than a software hard-limit would give the nature of the constraint different properties.  For instance, a mining cartel would be able to adjust their fee policy in real time if they so desired.

I feel that the POW aspect of Bitcoin is a total mess which might be impossible to recover from.  So yes, I realize this and agree, but my thesis about it is the opposite of yours.

I am hardly going to shed any tears if the total reward for mining blocks is insufficient to support a large datacenter deployment even if it found every block.  That reality is obviously on the horizon for anyone who shelled out the money needed to mine competitively.  As I've said many times, I anticipate that they will have to monetize other aspects of the network which they, unlike smaller players, will ultimately be well positioned to do.  At that point Bitcoin as a system has no real interest to me since it will be more like VISA and PayPal than like original Bitcoin.

A more ideal design would be that a reward is more available and more generous to infrastructure providers who are demonstrably decentralized, and the more decentralized, the more generous the reward.  A block reward which would barely interest a large consolidated miner would be a giant win for a decentralized independent participant.  So, it is not the end of the world to me if rewards in monetary terms shrunk considerably with what is realized today.  The 'grow or die' philosophy that Silicon Valley takes as a bedrock truth is unimpressive to me and always has been.

Not only is a demonstrably decentralized infrastructure network difficult to do technically, but it would be fairly challenging to get from where we are now with POW to where I think we need to be for a healthy and enduring system.  The only realistic way I see it happening is for a hostile blockchain fork (a-la XT) to occur and a trusted group (namely the blockstream guys) to take the opportunity to fix the POW issues once and for all.  I doubt that there will ever be another point in time where there is the same aggregation of capable and trusted technical participants than we have at this moment under the Blockstream banner.

---

Lastly, I'll point out again that if the average transaction was, say, $10,000 equiv, a 0.5% transaction fee would net a block winner something like $200,000.  If half of it were distributed among those providing transfer infrastructure (non-mining validating nodes) and half were available to the block winner, that is enough to keep small-timers interested and playing at various levels.

Most of my real work with Bitcoin has been transfers of value in this range, and if the native blockchain were used for nightly balancing operations between off-chain (and/or sidechain) providers the $10,000 figure might be low-ball.  The actually coffee purchasers doing transactions on the sidechain (for instance) would still be paying a tiny fee (and probably none for branded sidechains) and the reward to the native Bitcoin infrastructure supports would still be generous at a low transaction rate.

One more advantage in using Bitcoin as a high value system is that those making such transactions are usually in no big hurry.  There is then no need to try to convert Bitcoin from a batch system to a real-time system.  A batch system is vastly easier to secure against attack, and particularly if those using it in this use-case are doing so with the appropriate expectations about system function.

You realize that it is impossible to make up for the block halvings by increasing the fees? It would be instant death to bitcoin trying that.

And why should we need higher fees now? The mining market is obviously so lucrative that we have more than 100 fold hashpower than we would need to secure the network.

And there was this study, i read about some weeks ago, that calculated that every bitcoin transaction needs the amount of power that 1.75 average us- households need each day. Every single bitcoin transaction.

Surely that makes no sense at all.

Miners had to switch off their nonprofitable miners all the time. It's not something to fear about that. The network is more than protected and the incentive to mine seems to be way too high.

So i don't see a problem with low fees at the moment.

The inflation rate which supports the Bitcoin infrastructure has already dropped from 50BTC/block to 25BTC/block.  Soon it will be cut in half again.

I would say that it's about time to start at least pushing into the phase where there is organic competition and fees start to become a factor.  Who knows what Satoshi would say.  Not that I ever really ever considered the guy to be an infalable oracle of infinte wisdom, but it is certainly not a crazy idea that there would be competition for space in blocks either.

From my reading of history. Satoshi foresaw that as the reward from mining diminished; miners would need other incentives to mine transactions. The fees would be that incentive. I don't think block size or competition for space in a block had anything to do with it. I think that was just predatory capitalism exploiting an opportunity.

The whole idea of transaction fees make no sense unless there is competition for space in a block.

This statement can be negated by asserting that people could still freely choose to provide a transaction fee out of generosity and good-will.  Users _could_ be of the mindset 'From each according to his ability, to each according to his need' state of mind.  I'm living proof of that as I supply generous transaction fees which far exceed what is currently needed...but I know of no other person who does so.

We know for sure that Bitcoin will totally fail if we approach a point where there is competition for space in a block.  We know this with certainy because it has been repeated thousands of times on here trolltalk and by millions or redditards.

We also know for sure that nobody in computer science has dealt with the problems of memory exhaustion or queuing or anything like that because so many top developers in the Bitcoin community say that it is vital that there never be competition for block space as it would cause these kinds of problems and the system would collapse.

Satoshi was certainly smart enough to know these technical aspects of block size, yet he added transaction fees prior to the initial release of Bitcoin.  Ergo, Satoshi is a Communist and anticipated there being a lot of people like me who will willingly pay more than necessary for a transaction.  Else he was a totalitarian who anticipated a 'benevolent dictator' with enough control to mandate the 'appropriate' fee by coding it in.  Right?

I posit that Satoshi actually did anticipate there being competition for space on the block-chain and some of the assumptions about how devastating it would be to have it are simply idiotic propaganda.

actually this is the dumbed down version of XT
https://bitcointalksearch.org/topic/a-dumbed-down-version-of-the-xt-point-of-view-1161067

And here is a dumbed down version of the supports of XT.

bump for the dummies that still think 1MB block limit is an option.

You are everything I never thought I wanted in a block size.

   Very sharp.

Excellent summary of an otherwise quite complicated debate.

Ayy lmao

Just came here to say I was on this epic thread!

Its not a problem that there are problems because the problems only happen some of the time, of course the problem will become bigger problems in a few months but that's not a problem!