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It's tragedy of the commons. Bitcoin is designed for having rational actors as miners. The miners profit less from the larger block sizes, and since they cont

by bduerst 11y ago

It's tragedy of the commons. Bitcoin is designed for having rational actors as miners. The miners profit less from the larger block sizes, and since they control the block size it's not going to happen. Bitcoin users who think the miners will do it "for the good of bitcoin" don't realize that the entire bitcoin ecosystem is built on the miners acting in their own best interest, not bitcoin's.

wmf 11y ago
http://hackingdistributed.com/2016/01/03/time-for-bitcoin-user-voice/ http://hackingdistributed.com/2016/01/03/time-for-bitcoin-us...
- bduerst 11y ago
  If the bitcoin consumers were king, then the majority of them would collude and stop hoarding their bitcoins. But they can't, because they're rational like the miners. Bitcoins are deflationary and always going to be traded as an asset, for which the small block size suffices and the Miners will continue to profit from. The bitcoin consumers can as much influence the miners as they can influence each other to voluntarily lose wealth.
danharaj 11y ago
I wouldn't call that a tragedy of the commons. I would call that "capitalism" because it is exactly the relationship between the owners of the means of production and everyone else. "But anyone can become a miner" so it's free as in market and fair as in game. /s
- bduerst 11y ago
  It's tragedy of the commons because the miners are trying to reap from a shared resource, with no alignment to the changes that are beneficial for Bitcoin.
- deleted 11y ago
  [deleted]
CyberDildonics 11y ago
Miners profit more from bigger blocks due to more transaction fees.
- bduerst 11y ago
  Miners profit from increased competition (for transactions to be included in smaller blocks) increasing the transaction fees. Only transactions with the highest fees are put into blocks. It was proven several times with the "stress tests" of Bitcoin network.
  - CyberDildonics 11y ago
    > It was proven several times with the "stress tests" of Bitcoin network. An attack on the network doesn't prove anything about the economic incentives that make up the mechanics of the system. Bigger blocks hold more data and transactions pay by the kilobyte. That's all there is to it. Increased fees per transaction may give more money in the short term, but ultimately it isn't how a crypto currency will be sustained, because at any point a fork could have lower fees.
    - bduerst 11y ago
      It's simple supply and demand. The less supply increases the demand for transactions and transaction fees. Larger blocks have way more supply and thus the fees are a minimum. Miners know this which is why they're not increasing block size. There is nothing short term about it. The more competition the greater the fees and profits in the long run.
      - CyberDildonics 11y ago
        Miners haven't yet increased the block size because the Chinese miners are both risk adverse and afraid that any increase will give them more latency, which could reduce their mining competitiveness. As soon as transactions are legitimately getting hung up with reasonable fees, any of the thousands of forks have the potential to fill the void and decrease fees since there is no real technical limit to blocksizes in the same orders of magnitude. So what you are forgetting is competition in your model of supply and demand. Miners will do what is most profitable for themselves. If they can double the amount in fees that they mine without halving the number of blocks they mine, they will do it, because they will make more money that way. This is much more likely than not since the latency introduced to block propagation from something like 1MB to 2MB is insignificant compared to the probability that someone else will mine another block and propagate it first.

by bduerst 11y ago

wmf 11y ago

http://hackingdistributed.com/2016/01/03/time-for-bitcoin-user-voice/ http://hackingdistributed.com/2016/01/03/time-for-bitcoin-us...

bduerst 11y ago
If the bitcoin consumers were king, then the majority of them would collude and stop hoarding their bitcoins. But they can't, because they're rational like the miners. Bitcoins are deflationary and always going to be traded as an asset, for which the small block size suffices and the Miners will continue to profit from. The bitcoin consumers can as much influence the miners as they can influence each other to voluntarily lose wealth.

danharaj 11y ago

I wouldn't call that a tragedy of the commons. I would call that "capitalism" because it is exactly the relationship between the owners of the means of production and everyone else. "But anyone can become a miner" so it's free as in market and fair as in game. /s

bduerst 11y ago
It's tragedy of the commons because the miners are trying to reap from a shared resource, with no alignment to the changes that are beneficial for Bitcoin.
deleted 11y ago
[deleted]

CyberDildonics 11y ago

Miners profit more from bigger blocks due to more transaction fees.

bduerst 11y ago
Miners profit from increased competition (for transactions to be included in smaller blocks) increasing the transaction fees. Only transactions with the highest fees are put into blocks. It was proven several times with the "stress tests" of Bitcoin network.
- CyberDildonics 11y ago
  > It was proven several times with the "stress tests" of Bitcoin network. An attack on the network doesn't prove anything about the economic incentives that make up the mechanics of the system. Bigger blocks hold more data and transactions pay by the kilobyte. That's all there is to it. Increased fees per transaction may give more money in the short term, but ultimately it isn't how a crypto currency will be sustained, because at any point a fork could have lower fees.
  - bduerst 11y ago
    It's simple supply and demand. The less supply increases the demand for transactions and transaction fees. Larger blocks have way more supply and thus the fees are a minimum. Miners know this which is why they're not increasing block size. There is nothing short term about it. The more competition the greater the fees and profits in the long run.
    - CyberDildonics 11y ago
      Miners haven't yet increased the block size because the Chinese miners are both risk adverse and afraid that any increase will give them more latency, which could reduce their mining competitiveness. As soon as transactions are legitimately getting hung up with reasonable fees, any of the thousands of forks have the potential to fill the void and decrease fees since there is no real technical limit to blocksizes in the same orders of magnitude. So what you are forgetting is competition in your model of supply and demand. Miners will do what is most profitable for themselves. If they can double the amount in fees that they mine without halving the number of blocks they mine, they will do it, because they will make more money that way. This is much more likely than not since the latency introduced to block propagation from something like 1MB to 2MB is insignificant compared to the probability that someone else will mine another block and propagate it first.