Topic: My thoughts about the blocksize thing - page 2. (Read 3579 times)

Why hard fork in your opinion is a inflation, hard fork essentailly make two versions of bitcoin, and in the end, only one could win or both lose.

That's not the first hardfork. Not even in recent times. Remember the reward halving. There was a fork made by some where the reward didn't halve.

So this was a 100% inflation immediately, too? OMG!

No, block size increase will cause a hard fork, and that is a 100% inflation immediately, and once it started, it could happen again, so the promise of limited supply is forever broken, bitcoin will be no more different than any fiat currency

As long as price stay strong, I don't worry any of this. Businesses will have much higher incentive to receive a high valued but difficult to transfer coin vs low valued but easy to transfer coin. If the price is enough strong, there will be commercial solution to overcome the transaction problem, if the price do not stay strong, they will abandon it, no matter how fast the transaction is

Bitcoin gained mainstream acceptance is because it's value get stable increase, despite the fact that now people have to download 7G blockchain

You really do not understand what you are talking about.  Block size increases do not cause bitcoin inflation.  This allows more transactions to be processed per block.  If we reach block size limit we could slow the adoption of bitcoin which would limit economic activity.

You seem to be confusing increasing block size with increasing block reward.

The actual trading occurs at the exchange...not on the block chain. People might have trouble getting Bitcoin into their accounts, but, that's about it. I'm not in favor of an unspendable Bitcoin. Why not set the limit to 1 transaction per second? Or 1/10 that? Will that make Bitcoin better or stabilize the price?

I think Bitcoin's distant future is more of taking the role of gold (i.e. the value underlying a currency) than actually replacing a large currency such as US$.

Small transactions would be handled by processors such as Ripple or Coinbase and actual changes in the blockchain would be only worthwhile for large transactions.

+1

Exactly this is what I'm (and I think most are) worrying about.

It's not about having free transactions (as some seem to think).

...and doomed to stagnation. No more innovation would occur, no more moderately sized and up businesses would start accepting bitcoins, and the businesses that do accept it would phase it out over time. Interest in bitcoin would drop, and it would be declared a failure. Because of that stigma, businesses would become even more hesitant about accepting crypocurrency in general than they already are, and it would stay that way until either something radically different from bitcoin was created or several generations passed. Later on, people would look back in awe about how Bitcoin was far ahead of its time and wonder what happened. That is our worst-case scenario, and it's more likely than you might think.

If a lot of people is rushing to sell, due to transaction limit, they won't be able to sell, only one person per hour can sell his coin, so the price will stay stable

And, if price dropped, the people's interest (and thus transaction volume) will decrease, then the system will become good again

So the block size limit will function like a valve to stop the mass volume sell off and constantly lock the bitcoin price higher and higher. It is the most genius design in human history to stable the exchange price 

I think the price of Bitcoin will drop like a hot potato as soon as people can't spend them Due to the low transaction limit. There's absolutely no question that the transaction limit will go up , because Bitcoin will become practically worthless If people can never spend them At a reasonable cost and miners will Miss out on getting Small fees from many many many many more transactions.

I wouldn't take it as a given that more transactions per block would mean fewer fees. If the network could've been processing 2000 transactions per second instead of seven, I bet the miners would make more In fees.

I don't see any problem to begin with.  Just like any other business, the amount of competition in the mining business automatically increases to the point where it is just barely profitable enough to keep the most efficient operators in business.  It reaches an equilibrium, yes, but at that equilibrium point, the work still gets done and the surviving miners still make a living.

I could have said it more clearly.

I favor a situation where the network is perfectly stable running on people's hardware who can barely afford a low-end car and can barely have the technical skills needed to keep a forum operational on the Internet.  That is what we have today and I don't want to lose it.


I think you are wrong for the following reasons.  The actual cost on a per-transaction basis is so low currently that the fees required to  operate profitably are not all that high.  Severe gouging by miners would destroy the system and/or draw out competition who wish to see the system survive.  In fact it might be the case that some people will fund mining simply to preserve the system for their own use rather than trying to make a huge profit on it.

But as the developers say, it is kind of hard to know exactly what will happen.  I'm all for finding out empirically.


Going forward you will be able to live your dream and I will be able to live mine.  Which of us, if either, finds ourselves on the Bitcoin block-chain will be an interesting thing to find out.

As far as I am concerned Satoshi's main work is done;  peer-2-peer crypto-currencies are proven to be a workable concept and nobody can deny this.  I'm personally attached to Bitcoin because I have a lot of respect for certain parts of the community and separately because I have a significant 'speculative bet' on it.  But I'm not glued to Bitcoin specifically, and I will dump it if it turns sour.  Probably I am not alone.

You like it fine that people using the currency have a hard time with it? I don't even understand what you are saying. You don't want it to be run by "ordinary citizens" or "mega corps", you want it run by a select few with specialized skills. That's the definition of centralized.






Its not wrong, its very simple math. A hard limit of 7 transactions per second means that once we hit our transaction bandwidth (already 25% there!), the price of individual transactions will go up. Free transactions will disappear and paid transactions will enter into an increasingly expensive auction.  If you think this is wrong, explain why.

I said nothing about the BTC size of the transaction. Also total value from transactions may end up going down because even with higher individual transaction prices, so many previously possible cheaper transactions will become impossible to perform, and total value (all fees paid on all transactions) may decrease by removing the ability for those other transactions to exist at all.

And with the individual transaction price going up, many use cases (micro transactions, retail transactions) will disappear. Huge numbers of individuals will not be able to participate as users at all (except perhaps to validate transactions that they themselves cannot take part in, but at least it works a 56.6k modem.... give me a fucking break). Centralization of ACTUAL USE will increase and total usage stops growing by the network limiting to 7 transactions per second. The remaining advantage over expensive wire transfers will be diminished as the price difference decreases. And ultimately the value of Bitcoin as a payment network and currency of the people will disappear.

The dream that my penny-ante dice bet, your skittles purchase, and someone's cheese sale in mongolia coexists in a common block chain IS THE REALITY TODAY. It needs to be the reality tomorrow as well. Anything less than that is total failure.

More use of Bitcoin means significantly less trust to me.  The crypto-currency world is rife with participants who have difficulty running a reliable forum (and I like it just fine this way.)  The suggestion that the class of ordinary citizenry who currently move Bitcoin are going to be able to run a reliable economic solution at scale (with load-balanced processing clusters, high quality provisioned bandwidth, etc, etc) is absurd to me.  Throw in the potential to need to deal with coordinated state level attacks and the trust I would have in the solution is next to nill.

The alternative is that if the infrastructure required to operate the Bitcoin network shifts to well capitalized corporate entities.  My 'trust' in this solution is nearly nill as well.  And it is much less palatable from a philosophical level besides.


Almost certainly wrong.  The transaction cost at current scale is so close to zero that it is not worth thinking about.  The cost of performing a transaction is not related to the BTC size of the transaction.  Even at the current block size the Bitcoin solution could handle a fair part of the worlds need for high value transactions (I suspect.)  It's probably about perfect for balancing between other crypto-currency systems...accident???

The dream that my skittles purchase, your penny-ante Satoshi Dice bet, and someone's goat cheese sale in outer Mongolia coexist in a common block chain is nice and cool and all that, and I like it, but it is something I would trade for a robust solution which looks vaguely like what we see today.

Ahh we get to the crux of it. You want to be paid more to mine blocks, period. You are hoping that with a hard block size that each block you mine will be worth more and require less work to mine and store. You don't care if fewer people use Bitcoin, or if Bitcoin is less useful to the world. And you ignore that as a niche with higher transaction fees more closely resembling those of its competitors, Bitcoin will remain less valuable as either a technology or a payment system.

I'm sorry if mining isn't currently as profitable as you want it to be. The network is already the worlds largest distributed computing platform and very secure. I care more about the average person using the technology easily and cheaply, and the industry that will ultimately enable (impossible at this point to even imagine), then making mining more profitable.

The opposite. Really.

We face a deficit of paying transactions as compared to our ever-since-we-started huge oversupply of block size.

There have never been anywhere near enough paying transactions to fill our blocks, thus some of us are maybe doubting we can afford to increase the size of our blocks, because the capital cost of equipment to accommodate larger blocks is not being paid for because blocks have always been far far from full.

Our blocks are too large compared to the number of paying transactions in them, and people are claiming that no one is going to provide us enough paying transactions per block to come anywhere close to filling our blocks unless we increase the size of our blocks, that is, start leaving them far more empty, far less well supplied with paying transactions, than they have always so far been.

It seems to amount to "no one is going to pay you for a cup of water while you only have a lake full available, you need to have ten lakes full first then maybe people might consider buying a cup".

-MarkM-

that's not the type of inflation i was talking about..

parallels, metaphor, subtlety

that sort of thing.

It has nothing to do with the money supply (inflation). Its about not being able to perform enough transactions to keep up with usage. The current hard limit of 1MB block size coupled with the fixed number of blocks means about 7 transactions per second. To put that into perspective about 220 million people could do 1 transaction per year. That's less than 2/3 of the United States  (ignoring the rest of the world). ONE PER YEAR!

There are people here who seriously think this is acceptable. 220 million transactions per year for the whole world, total. Those people have a very very different vision of Bitcoin then the one that I do.