{"type":"rich","version":"1.0","author_name":"npub16wtdr5grjycaw37553u5vvlfq09rwxhzz4kler6pz952a7ny6mtqslgem7","author_url":"https://nostr.ae/npub16wtdr5grjycaw37553u5vvlfq09rwxhzz4kler6pz952a7ny6mtqslgem7","provider_name":"njump","provider_url":"https://nostr.ae","html":"📅 Original date posted:2015-08-15\n📝 Original message:On Fri, Aug 14, 2015 at 3:55 PM, Jorge Timón \u003cjtimon at jtimon.cc\u003e wrote:\n\n\u003e On Wed, Aug 12, 2015 at 9:52 PM, Elliot Olds \u003celliot.olds at gmail.com\u003e\n\u003e wrote:\n\u003e\n\u003e -Reduce the utility of people using the network, even if the higher fees\n\u003e \u003e don't reduce their amount of transactions.\n\u003e\n\u003e \"Utility\" like \"value\" is always subjective and very vague. I prefer\n\u003e to identify more concrete ways in which \"utility is reduced\".\n\n\nChange 'utility' to 'money.' I'm just saying that paying more money for the\nsame thing is worse for users. If I'm a user who is used to making txns for\n1 cent each and suddenly all my txns cost 1 dollar each. then the benefit I\nget for each of my transactions that I still make is reduced by 99 cents\nper tx. This is as concrete a negative effect as I can imagine. It might\nseem obvious that this is a cost, but it seems to be ignored by a lot of\nparticipants.\n\n\n\n\u003e \u003e -Make some use cases nonviable, depriving people of Bitcoin's\n\u003e decentralized\n\u003e \u003e benefits.\n\u003e\n\u003e It is clear that not all use cases fit the blockchain, but it's still\n\u003e unclear which ones don't fit yet.\n\u003e But the amount of use cases supported is not a valid metric for\n\u003e decentralization.\n\u003e\n\nNot sure what you mean by \"valid metric for decentralization.\" I thought\nthe goal here was to list all negative consequences of high fees. Not just\nconsequences to decentralization. We're trying to figure out how to trade\noff risks to decentralization against these other things we're listing\nwhich aren't necessarily about decentralization (such as reduced use cases).\n\n\n\u003e In any case, it would be interesting if we could list some concrete\n\u003e cases that would be lost.\n\u003e\n\nIf tx fees rise to $1, then I'll stop making on-blockchain purchases of\nless than about $100, meaning pretty much all retail purchases are\neliminated. It's hard to list a lot of use cases that will be lost because\nBitcoin usage is very low right now. I assume most of us believe that there\nare lots of interesting use cases that have not developed yet. Just because\nthey don't exist now doesn't mean we should ignore the fact that high fees\nmight make them nonviable.\n\nSome examples of stuff that doesn't exist now but might be prevented or\nsignificantly harmed by high fees: small international remittances, machine\nto machine payments, decentralized prediction markets (maybe people like\nmaking lots of small bets). Just take any potential use case you can think\nof: if the per-tx benefit to the person is less than $1, then $1 tx fees\nwill prevent it. See below for another example.\n\n\n\u003e \u003e -Discourage experimentation with new Bitcoin use cases, making it more\n\u003e \u003e unlikely that such cases are discovered/improved/popular before Bitcoin's\n\u003e \u003e security relies on having many users.\n\u003e\n\u003e Experimentation can be done with worthless testchains. I'm not sure\n\u003e I'm following on this one.\n\u003e\n\nI think this is one of the most important costs to worry about. So much of\nexperimentation can't be done on a testchain, because most experiments that\nare being done by early stage companies are about product market fit, and\nwhich services are valuable to users.\n\nLet's say that you and I start a company that allows people to charge money\nto people who want to email/message them. There are so many things that we\nneed to figure out that can't be figured out without participating in the\nactual market, with real people, who are really trying to use our service.\nIt might take us years of making little tweaks to the product before we hit\non some solution that people finally like enough to use in large numbers.\n\nLet's say that right now tx fees are $1, and imagine that the highest\namount that most people are willing to pay to email people is 25 cents. If\nwe are experimenting in a market with $1 tx fees, perhaps our company will\njust die and we'll never figure out how to bring people this service that\nthey want. Perhaps there are a lot of other innovations relating to 'pay to\nmessage' that would have otherwise been developed (maybe celebrities like\ndoing AMAs via pay-to-message and devote the funds to charities. Maybe this\nbecomes a huge source of charitable giving in the future), but because\nBitcoin's high fee environment didn't allow us to explore these ideas, this\nwhole service category goes undeveloped for many years.\n\n\u003e -Reduce the amount of time we have between now and when tx fees need to\n\u003e pay\n\u003e \u003e for a significant portion of Bitcoin's security, by keeping the exchange\n\u003e \u003e rate and thus the value of block rewards low\n\u003e \u003e (https://en.wikipedia.org/wiki/Equation_of_exchange)\n\u003e\n\u003e Related to exchange rate.\n\u003e\n\nElsewhere you write \"I believe 'fear of exchange rate declining' can\nprobably be added to any concern/risk 'leaf', so we should probably leave\nthat for the end or just omit it.\"\n\nIt's true that you could tell some indirect story about how pretty much\nanything could affect the exchange rate, but separate from all the\nhypothetical stories there is a strong theoretical reason to believe that\nthe exchange rate will be higher the more value is transacted in the\nBitcoin ecosystem. See the wiki link on the equation of exchange. More\npeople using Bitcoin for transactions will drive up the price, all else\nbeing equal. Perhaps many people care about the price for irrelevant\nreasons (they just want to be rich), but as long as Bitcoin's security is\ntied to the exchange rate via block rewards, it's also an important\nconsideration for security.\n-------------- next part --------------\nAn HTML attachment was scrubbed...\nURL: \u003chttp://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20150815/99104c9c/attachment.html\u003e"}