I don't think he underestimated it. Here's a quote: http://blog.oleganza.com/post/61694565252/satoshi-on-bitcoin-design http://blog.oleganza.com/post/6169456525

I don't think he underestimated it. Here's a quote: http://blog.oleganza.com/post/61694565252/satoshi-on-bitcoin-design http://blog.oleganza.com/post/61694565252/satoshi-on-bitcoin... Later in 2010, Satoshi also mentioned that block size limit can be raised if needed in the future. https://bitcointalk.org/index.php?topic=1347.0 https://bitcointalk.org/index.php?topic=1347.0 My point is not philosophical. It's purely economical. When miners start getting much more transactions than they could fit in, usefulness of Bitcoin will become limited by the costs of transactions (bigger fees would be needed to outcompete other transactions and get in the block). If costs go up, value of Bitcoin does not grow or even goes down (because value of money is always speculative: if the future does not look bright, one money quickly loses in value and becomes replaced by some other money). Miners earn bitcoins, not dollars. Investing a lot in expensive hardware, they are very interested in getting a decent return. They would never do something "out of principle" if it hurts their entire business. Block size will be raised by the vast majority of miners from 1 Mb to, say, 8 Mb. It's still small enough to protect against flood, but still gives enough room of growth. Also: "race to the bottom" is just someone's personal fear. In reality, very soon only huge chip factories will be miners. They will produce chips as fast as possible and plug them into their computing clusters right away. Forget about shipping nice boxes overseas, that's too inefficient. Mining will be done by big factories in China or Iceland (cheap electricity). I believe, mining in the hands of small number of big players is not a problem for censorship of transactions or raising their cost. If a miner tries to hurt fungibility of the coins on large scale, he'll simply be boycotted by other miners. (Because they are driven by desire to keep Bitcoin value up.)