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> So the free market will solve any overload problem. What do you mean by this? If 2mb of transaction data is generated every 10 minutes, but only 1mb of it is
by beaner 11y ago
> So the free market will solve any overload problem.
What do you mean by this? If 2mb of transaction data is generated every 10 minutes, but only 1mb of it is mined, what is the free market solution?
If the goal is to have bitcoin be an actual working currency for the people (and it may not be that to you), then it would seem the goal should be to be able to process the vast majority of transactions, instead of just those for the richest half.
A "solution" that is economic and solved by free markets tends to be about how to distrubute limited resources. I.e. here's a nice piece of property for sale - who gets it? The highest bidder. problem solved.
But I don't think the challenge for bitcoin is how to auction off space in the blockchain, it's how to make that space wide enough to be reliable as a potential currency for common people. If, every time you bought a candy bar at walgreens, you had to pay for the candy bar and take a guess at an extra fee for your payment and hope it goes through 10 minutes later... it just would not work.
So the market would be solving something, but it wouldn't be towards the goal of bitcoin being a currency. And honestly I think that's what the opponents of the block size increase want. As cryptocurrency tech evolves, we're seeing that various parties have new self interests to promote. Competing technologies, etc. And they benefit by bitcoin becoming artificially limited. I know there are other reasons, but it's a big part of why this is even a debate.
- Animats 11y ago"What do you mean by this? If 2mb of transaction data is generated every 10 minutes, but only 1mb of it is mined, what is the free market solution?" When you submit a transaction, you're entering an auction. The winners of the auction get their transactions processed quickly. The losers don't. The market thus sets a price on getting a transaction processed. This discourages free-riders who expect their transactions to be processed free or for a nominal fee. Miners are facing the dreaded "halving" next year, when the block reward drops by half. They need higher fees to compensate.[1] [1] http://www.coindesk.com/new-study-low-bitcoin-transaction-fees-unsustainable/ http://www.coindesk.com/new-study-low-bitcoin-transaction-fe...
- beaner 11y agoThis isn't an actual solution though, because space is still limited. Bitcoin cannot be a currency if it can only fit 2,000 transactions per block. Even if everyone is willing to pay $100 in fees for their $1 transactions, they won't all fit, and that's broken. The challenge is to find a way for miners to be incentivized and for them also to process all reasonable transactions. There's no reason miner's couldn't increase their fees independently of the block size increase.
- eyci 11y ago> They need higher fees to compensate. That's not an argument for any block size in particular, though. Saying that fee revenue is maximized at smaller blocks is positing that demand for block space (i.e. transaction demand) is relatively inelastic, whereas there isn't really any consensus or even much discussion on what the elasticity is.
- sneak 11y agoAuctions for limited capacity at this ridiculously early stage in bitcoin's growth will shake confidence in the network to the point of abandonment. A currency you can't easily transact in is one nobody wants to use. An auction process like this means you can't easily use bitcoin.
- AndrewDMcG 11y agothe goal should be to be able to process the vast majority of transactions That implies the social value of the transactions outweighs the cost of carrying them on the blockchain. If the bulk of transactions are penny-valued "scratch card" gambles (are they still a thing?), that is obviously not true.