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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 Bi

by 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.
      - my5thaccount 11y ago
        I'm not a gold bug, but technology can enable us to use micro or even nano-ounces of gold. We used to use half-pennies too. Canada doesn't even use pennies anymore. Just store both olympic sized swimming pools of gold in the same place and put numbers in accounts that represent the weight owned by the person. We typically think about ounces of gold, but we could go down to the atom if necessary, theoretically anyway.

by pmorici 11y ago

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.
    - my5thaccount 11y ago
      I'm not a gold bug, but technology can enable us to use micro or even nano-ounces of gold. We used to use half-pennies too. Canada doesn't even use pennies anymore. Just store both olympic sized swimming pools of gold in the same place and put numbers in accounts that represent the weight owned by the person. We typically think about ounces of gold, but we could go down to the atom if necessary, theoretically anyway.