{"type":"rich","version":"1.0","author_name":"npub1m230cem2yh3mtdzkg32qhj73uytgkyg5ylxsu083n3tpjnajxx4qqa2np2","author_url":"https://nostr.ae/npub1m230cem2yh3mtdzkg32qhj73uytgkyg5ylxsu083n3tpjnajxx4qqa2np2","provider_name":"njump","provider_url":"https://nostr.ae","html":"📅 Original date posted:2015-05-06\n📝 Original message:On Wed, May 06, 2015 at 10:12:14PM +0000, Matt Corallo wrote:\n\u003e Personally, I'm rather strongly against any commitment to a block size\n\u003e increase in the near future. Long-term incentive compatibility requires\n\u003e that there be some fee pressure, and that blocks be relatively\n\u003e consistently full or very nearly full. What we see today are\n\u003e transactions enjoying next-block confirmations with nearly zero pressure\n\u003e to include any fee at all (though many do because it makes wallet code\n\u003e simpler).\n\nAgreed.\n\nI'm not sure if you've seen this, but a good paper on this topic was\npublished recently: \"The Economics of Bitcoin Transaction Fees\"\n\n    Abstract\n    --------\n\n    We study the economics of Bitcoin transaction fees in a simple static\n    partial equilibrium model with the specificity that the system security\n    is directly linked to the total computational power of miners. We show\n    that any situation with a fixed fee is equivalent to another situation\n    with a limited block size. In both cases, we give the optimal value of\n    the transaction fee or of the block size. We also show that making the\n    block size a non binding constraint and, in the same time, letting the\n    fee be fixed as the outcome of a decentralized competitive market cannot\n    guarantee the very existence of Bitcoin in the long-term.\n\n-http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2400519\n\nIn short, without either a fixed blocksize or fixed fee per transaction\nBitcoin will will not survive as there is no viable way to pay for PoW\nsecurity. The latter option - fixed fee per transaction - is non-trivial\nto implement in a way that's actually meaningful - it's easy to give\nminers \"kickbacks\" - leaving us with a fixed blocksize.\n\n\u003e This allows the well-funded Bitcoin ecosystem to continue building\n\u003e systems which rely on transactions moving quickly into blocks while\n\u003e pretending these systems scale. Thus, instead of working on technologies\n\nI think this lack of understanding of the limitations of blockchain tech\nis very dangerous, never mind, downright misleading. I keep running into\nstartups at conferences with completely unrealistic ideas about how\nlarge they'll be able to grow their on-blockchain businesses. For\nexample, a few weeks ago at the Stanford blockchain conference I spoke\nto a company planning on using multisig escrow contracts to settle\nfinancial instruments, and expected to be doing about as many\ntransactions/day on the blockchain for their business within a year or\nso as all other Bitcoin users currently do combined. These guys quite\nfrankly had no understanding of the issues, and had apparently based\ntheir plans on the highly optimistic Bitcoin wiki page on\nscalability.(1) (I'd fix this now, but the wiki seems to not be allowing\nlogins)\n\nWe'd do a lot of startups a lot of good to give them accurate, and\nhonest, advice about the scalability of the system. The wiki definitely\nisn't that. Neither is the bitcoin.org developer documentation(2), which\ndoesn't mention scalability at all.\n\n\u003e which bring Bitcoin's trustlessness to systems which scale beyond a\n\u003e blockchain's necessarily slow and (compared to updating numbers in a\n\u003e database) expensive settlement, the ecosystem as a whole continues to\n\u003e focus on building centralized platforms and advocate for changes to\n\u003e Bitcoin which allow them to maintain the status quo[1].\n\nEven a relatively small increase to 20MB will greatly reduce the number\nof people who can participate fully in Bitcoin, creating an environment\nwhere the next increase requires the consent of an even smaller portion\nof the Bitcoin ecosystem. Where does that stop? What's the proposed\nmechanism that'll create an incentive and social consensus to not just\n'kick the can down the road'(3) and further centralize but actually\nscale up Bitcoin the hard way? The only proposal that I've seen that\nattempts to do this is John Dillon's proof-of-stake blocksize vote(4),\nand that is far from getting consensus.\n\n1) https://en.bitcoin.it/wiki/Scalability\n2) https://bitcoin.org/en/developer-guide\n3) http://gavinandresen.ninja/it-must-be-done-but-is-not-a-panacea\n4) http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg02323.html\n\n-- \n'peter'[:-1]@petertodd.org\n000000000000000004dc867e4541315090329f45ed4dd30e2fd7423a38a72c0e\n-------------- next part --------------\nA non-text attachment was scrubbed...\nName: signature.asc\nType: application/pgp-signature\nSize: 650 bytes\nDesc: Digital signature\nURL: \u003chttp://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20150506/113bc44d/attachment.sig\u003e"}