9 ms·

Wait a minute! Are you telling me that after all this, the supply of bitcoins is, ultimately, like all fiat currency, controlled by the will of human beings? I

Wait a minute! Are you telling me that after all this, the supply of bitcoins is, ultimately, like all fiat currency, controlled by the will of human beings? I'm not being sarcastic, I really don't know the answer to that question, but if, as it sounds, someone or group could just change the blocksize, that, based on my simple understanding of math, seems to indicate an ability to alter the supply-demand curve for the commodity.

pmorici 11y ago
Block size has nothing to do with the supply of Bitcoin. It has to do with the transaction throughput of the network. No one has ever proposed a change the Bitcoin supply. The original Bitcoin release from Satoshi set the block size at 32MB (it's currently at 1MB) so increasing the block size to 2MB as is being proposed by classic would bring Bitcoin closer to it's original implementation. Perhaps your comment is genuine but when people say stuff like "if we increase the block size next they will want to increase the money supply!" I feel like they are trying to hood wink less technically adept Bitcoin users into supporting their small block view.
- my5thaccount 11y ago
  After reading the article, I get that now, but is there a difference? If there are 1,000,000 bitcoins and you can only use 100,000 of them per day in transactions, then there are only 100,000 bitcoins in supply. I understand there may be more than one bitcoin per transaction, however, the fact remains. The supply of bitcoins, via the ability to use bitcoins to transfer value, is controlled by human beings. The consequence is identical. Is it not? Perhaps, the consequence is the opposite? If there is no ability to transact with the currency, the currency has no value? I'm seriously ignorant, you can tell, but I would like to understand. Perhaps my questions can help reveal the answer? If not only to me, then to the community? Is that too scary? The truth? Too scary?
  - hughw 11y ago
    No. The proof of work requirement constrains the money supply. It's a hard constraint. The block size constraint was never designed to constrain the money supply by constraining the number of transactions per day. It is adequately constrained by the proof of work.
  - pmorici 11y ago
    No, the consequence of increasing the block size is not related in any way to the money supply of Bitcoin. That argument has no merit. Bitcoin's value is limited by small block size though. A large part of the value of BTC is the value of the total transactions done through it. Limiting the number of transactions will severely limit the price in in the long term. BTC will probably lose out to an alt coin if the transaction back log due to the small block size continues and is not resolved sooner rather than later.
    - my5thaccount 11y ago
      Thanks for clarifying that blocksize controls only transaction volume. I get that now. I didn't when I made my original post. I think, still though I'm not articulating my point well enough. Fiat currency fails 100% of the time because it is controlled by humans. My understanding thus far was that bitcoin was controlled by physical limits in the real world, that of electricity, compute power, ultimately: Math. Now, here, we are not talking about the supply of bitcoins themselves, but rather, the number of transactions with them that can occur. That too is a factor in the value of a currency. It's not just the supply of currency that affects the value, but whether or not the person receiving that currency believes in its value, in this case, they must believe they can themselves use that currency to conduct future transactions. It is this belief, in the case of bitcoin -- transactability for the lack of a better word, that is controlled by human beings -- and this is the same failing that has caused the collapse of every fiat currency in history prior to the US Dollar. Now I'm learning that bitcoin has not solved this problem and I can't understand how bitcoin will survive this failure. For a money to survive, it must be bound by physical laws beyond the reach of humans to change. It is human fallibility that is the culprit behind all fiat failures in history. We must invent a currency immune to the decisions of humans to solve the problem that has plagued fiat throughout history.
      - hughw 11y ago
        Gold is very dense. There are physical constraints making it difficult to transact large amounts of it. Even though humans can constrain the transaction throughput of bitcoin, bitcoins or other crypto currency, will probably, eventually, converge on a solution where the possible tx rate is far larger than we can use. Tx rate limiting won't be a feature of any crypto coin that survives. You're just observing the effects of imperfect initial engineering. I wouldn't draw broad conclusions about the impossibility of successful cryptocurrencies based on this current limitation.
hellbanner 11y ago
AFAIK, blocksize is about the size of each transaction (think "packet") while computing bitcoins. The bigger the size, the more data can be stored here. For example, you could have a bot monitor blockchain data and see that when someone sent payment to your NewShoeStore address, parse the metadata in the block to get their size, color, brand etc.
vertex-four 11y ago
Some group could not just change the blocksize. Instead, what can happen is that someone publishes a piece of software implementing a protocol - call this Bitcoin 2.0 - that can process all previous blocks correctly, but relaxes the rules for future blocks. People can then choose whether or not to run this piece of software. However, Bitcoin is only useful because of the consensus on what the protocol is - so in practice, people must generally run whatever everyone else is running. At the moment, there's a general consensus that everyone should be running software implementing the same protocol as the latest version of the Bitcoin software implemented by a certain group of people. That could, theoretically, change if the majority of the community doesn't like some change to the protocol, forcing the dissenting minority to follow along with them.
- Animats 11y ago
  Only miners get a vote, because they validate all blocks. The design of Bitcoin is such that what a majority of the miners want, happens. The two top miners have just over 50% of the mining power, and the top four pretty much do most of the mining. The top four or five miners are all companies in China. They've issued joint statements in the past, and what they say, goes. The "core developers" and the Bitcoin Foundation don't matter, although they sometimes act like they do.
  - vertex-four 11y ago
    > Only miners get a vote, because they validate all blocks. No, everyone validates all blocks. (Or at least they theoretically should.) Otherwise you could get miners lying about whether they've validated a block. Changing the Bitcoin protocol is essentially creating an altcoin - the only difference is that the money distribution is "pre-seeded" with everything that's happened on the Bitcoin network so far. If all users move along, the altcoin succeeds and the "original" Bitcoin fails. If everyone except the current miners decided to follow new rules, the miners would be forced to follow - there's not much point mining a currency which nobody will accept in exchange for goods, services or other currency.
    - 11y ago

pmorici 11y ago

Block size has nothing to do with the supply of Bitcoin. It has to do with the transaction throughput of the network. No one has ever proposed a change the Bitcoin supply. The original Bitcoin release from Satoshi set the block size at 32MB (it's currently at 1MB) so increasing the block size to 2MB as is being proposed by classic would bring Bitcoin closer to it's original implementation. Perhaps your comment is genuine but when people say stuff like "if we increase the block size next they will want to increase the money supply!" I feel like they are trying to hood wink less technically adept Bitcoin users into supporting their small block view.

my5thaccount 11y ago
After reading the article, I get that now, but is there a difference? If there are 1,000,000 bitcoins and you can only use 100,000 of them per day in transactions, then there are only 100,000 bitcoins in supply. I understand there may be more than one bitcoin per transaction, however, the fact remains. The supply of bitcoins, via the ability to use bitcoins to transfer value, is controlled by human beings. The consequence is identical. Is it not? Perhaps, the consequence is the opposite? If there is no ability to transact with the currency, the currency has no value? I'm seriously ignorant, you can tell, but I would like to understand. Perhaps my questions can help reveal the answer? If not only to me, then to the community? Is that too scary? The truth? Too scary?
- hughw 11y ago
  No. The proof of work requirement constrains the money supply. It's a hard constraint. The block size constraint was never designed to constrain the money supply by constraining the number of transactions per day. It is adequately constrained by the proof of work.
- pmorici 11y ago
  No, the consequence of increasing the block size is not related in any way to the money supply of Bitcoin. That argument has no merit. Bitcoin's value is limited by small block size though. A large part of the value of BTC is the value of the total transactions done through it. Limiting the number of transactions will severely limit the price in in the long term. BTC will probably lose out to an alt coin if the transaction back log due to the small block size continues and is not resolved sooner rather than later.
  - my5thaccount 11y ago
    Thanks for clarifying that blocksize controls only transaction volume. I get that now. I didn't when I made my original post. I think, still though I'm not articulating my point well enough. Fiat currency fails 100% of the time because it is controlled by humans. My understanding thus far was that bitcoin was controlled by physical limits in the real world, that of electricity, compute power, ultimately: Math. Now, here, we are not talking about the supply of bitcoins themselves, but rather, the number of transactions with them that can occur. That too is a factor in the value of a currency. It's not just the supply of currency that affects the value, but whether or not the person receiving that currency believes in its value, in this case, they must believe they can themselves use that currency to conduct future transactions. It is this belief, in the case of bitcoin -- transactability for the lack of a better word, that is controlled by human beings -- and this is the same failing that has caused the collapse of every fiat currency in history prior to the US Dollar. Now I'm learning that bitcoin has not solved this problem and I can't understand how bitcoin will survive this failure. For a money to survive, it must be bound by physical laws beyond the reach of humans to change. It is human fallibility that is the culprit behind all fiat failures in history. We must invent a currency immune to the decisions of humans to solve the problem that has plagued fiat throughout history.
    - hughw 11y ago
      Gold is very dense. There are physical constraints making it difficult to transact large amounts of it. Even though humans can constrain the transaction throughput of bitcoin, bitcoins or other crypto currency, will probably, eventually, converge on a solution where the possible tx rate is far larger than we can use. Tx rate limiting won't be a feature of any crypto coin that survives. You're just observing the effects of imperfect initial engineering. I wouldn't draw broad conclusions about the impossibility of successful cryptocurrencies based on this current limitation.

hellbanner 11y ago

AFAIK, blocksize is about the size of each transaction (think "packet") while computing bitcoins. The bigger the size, the more data can be stored here. For example, you could have a bot monitor blockchain data and see that when someone sent payment to your NewShoeStore address, parse the metadata in the block to get their size, color, brand etc.

vertex-four 11y ago

Some group could not just change the blocksize. Instead, what can happen is that someone publishes a piece of software implementing a protocol - call this Bitcoin 2.0 - that can process all previous blocks correctly, but relaxes the rules for future blocks. People can then choose whether or not to run this piece of software. However, Bitcoin is only useful because of the consensus on what the protocol is - so in practice, people must generally run whatever everyone else is running. At the moment, there's a general consensus that everyone should be running software implementing the same protocol as the latest version of the Bitcoin software implemented by a certain group of people. That could, theoretically, change if the majority of the community doesn't like some change to the protocol, forcing the dissenting minority to follow along with them.

Animats 11y ago
Only miners get a vote, because they validate all blocks. The design of Bitcoin is such that what a majority of the miners want, happens. The two top miners have just over 50% of the mining power, and the top four pretty much do most of the mining. The top four or five miners are all companies in China. They've issued joint statements in the past, and what they say, goes. The "core developers" and the Bitcoin Foundation don't matter, although they sometimes act like they do.
- vertex-four 11y ago
  > Only miners get a vote, because they validate all blocks. No, everyone validates all blocks. (Or at least they theoretically should.) Otherwise you could get miners lying about whether they've validated a block. Changing the Bitcoin protocol is essentially creating an altcoin - the only difference is that the money distribution is "pre-seeded" with everything that's happened on the Bitcoin network so far. If all users move along, the altcoin succeeds and the "original" Bitcoin fails. If everyone except the current miners decided to follow new rules, the miners would be forced to follow - there's not much point mining a currency which nobody will accept in exchange for goods, services or other currency.
  - 11y ago