i see that alot of the 1MB proponents are attempting to use the excuse of "digital gold as a reserve currency" or as a "settlement currency" to argue for their cap.
as one of the first, if not the first, to have made the conceptual switch from physical gold to what i consider digital gold (Bitcoin),
AND act on it, i think i am qualified to comment on this excuse:
https://bitcointalksearch.org/topic/m.443129my argument against leaving the limit at 1MB to guide Bitcoin's future towards being a reserve or settlement currency is that it is too early to claim Bitcoin as a gold substitute. Bitcoin is unknown by probably greater than 60-70% of the world's population. those African kids digging gold out of mine shafts 3ft wide and down 100 yds have no idea that something like Bitcoin even exists. otoh, they obviously know about the value of gold. i'd argue they even understand why; that it can't be debased by their gvts by legalized counterfeiting. they also understand that they can hold the metal in their hands. it's hard, it's physical, they can break it up, it doesn't seem to lose it's value, and they can instantly transact with it with their
local peers. this is possible b/c gold has been around for thousands of years and has had the benefit of time and usage to spread itself along with it's sound money properties to all corners of the Earth. the hivemind around gold is set, it's mature, it's universal, it's accepted by gvts and central banks; it's a given.
contrast that with Bitcoin that has maybe a couple of hundred thousand dedicated users. that is not enough. there are very few of us, mostly those of this in this thread, that understand that Bitcoin is actually a superior form of gold, ie, digital gold. it can be transmitted across the internet in fractions of a second. it's supply is harder and more fixed than gold ever can be by the laws of mathematics. it isn't under threat of further debasement by asteroid mining or ocean gold. it's more easily transportable and crosses guarded borders seamlessly and effortlessly. it certainly can replace gold. but it is too early to make the claim.
b/c Bitcoin is digital, there exists a burden of proof that is higher than just proving mathematically that the supply is fixed.
that involves proving it's worth as a payment network. this is not only b/c Bitcoin has the unique ability to be the best payment network the world has ever seen but also b/c it is necessary to prove it's worth as a gold substitute. it will do so by proving to be a reliable payment network which will
allow BTC units to be disseminated widely to places like Africa. b/c those kids in Africa can't touch Bitcoin, admire it's color, wear it, transact with it (no smartphones), they will never accept Bitcoin until these things happen:
1. they first have to be able to access it: this first challenge is easily foreseeable as long as we let the Bitcoin expand; smartphone penetration is coming. all data analyses point to this. as we speak, thousands of miles of fiber optic cable is being laid across Africa. Benedict Evans of a16z regularly talks about this. this eventually will solve the problem of these ppl accessing the internet which will make transacting in Bitcoin possible. actually, as an aside, i was the first i know to have talked publicly about M-Pesa being a great foreseeable example of how Bitcoin could take over Africa. here is where i first talked about it. someone correct me if they know of someone else who talked about it earlier than this:
https://bitcoin-forums.net/index.php?topic=6322.202. since those kids can't touch or feel Bitcoin, these kids have to be able to use it reliably; no payment delays, no double spending, no loss of tx's in a queue, no loss in value. this is necessary to develop
confidence in Bitcoin as a gold substitute. this is a few years off even with a block size increase. but Bitcoin won't even get to them with the 1MB cap as this will prevent the worldwide dissemination necessary for this level of confidence to occur.
capping at 1MB will cause unacceptable confirmation delays, lost tx's, loss of revenues, loss of user base, loss of confidence, loss of exchange value, and generalized degradation of Bitcoin. it will then never reach the status of digital gold we all aspire to.
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