rich1.0npub16wtdr5grjycaw37553u5vvlfq09rwxhzz4kler6pz952a7ny6mtqslgem7https://nostr.ae/npub16wtdr5grjycaw37553u5vvlfq09rwxhzz4kler6pz952a7ny6mtqslgem7njumphttps://nostr.ae📅 Original date posted:2015-08-15 📝 Original message:On Fri, Aug 14, 2015 at 3:55 PM, Jorge Timón <jtimon at jtimon.cc> wrote: > On Wed, Aug 12, 2015 at 9:52 PM, Elliot Olds <elliot.olds at gmail.com> > wrote: > > -Reduce the utility of people using the network, even if the higher fees > > don't reduce their amount of transactions. > > "Utility" like "value" is always subjective and very vague. I prefer > to identify more concrete ways in which "utility is reduced". Change 'utility' to 'money.' I'm just saying that paying more money for the same thing is worse for users. If I'm a user who is used to making txns for 1 cent each and suddenly all my txns cost 1 dollar each. then the benefit I get for each of my transactions that I still make is reduced by 99 cents per tx. This is as concrete a negative effect as I can imagine. It might seem obvious that this is a cost, but it seems to be ignored by a lot of participants. > > -Make some use cases nonviable, depriving people of Bitcoin's > decentralized > > benefits. > > It is clear that not all use cases fit the blockchain, but it's still > unclear which ones don't fit yet. > But the amount of use cases supported is not a valid metric for > decentralization. > Not sure what you mean by "valid metric for decentralization." I thought the goal here was to list all negative consequences of high fees. Not just consequences to decentralization. We're trying to figure out how to trade off risks to decentralization against these other things we're listing which aren't necessarily about decentralization (such as reduced use cases). > In any case, it would be interesting if we could list some concrete > cases that would be lost. > If tx fees rise to $1, then I'll stop making on-blockchain purchases of less than about $100, meaning pretty much all retail purchases are eliminated. It's hard to list a lot of use cases that will be lost because Bitcoin usage is very low right now. I assume most of us believe that there are lots of interesting use cases that have not developed yet. Just because they don't exist now doesn't mean we should ignore the fact that high fees might make them nonviable. Some examples of stuff that doesn't exist now but might be prevented or significantly harmed by high fees: small international remittances, machine to machine payments, decentralized prediction markets (maybe people like making lots of small bets). Just take any potential use case you can think of: if the per-tx benefit to the person is less than $1, then $1 tx fees will prevent it. See below for another example. > > -Discourage experimentation with new Bitcoin use cases, making it more > > unlikely that such cases are discovered/improved/popular before Bitcoin's > > security relies on having many users. > > Experimentation can be done with worthless testchains. I'm not sure > I'm following on this one. > I think this is one of the most important costs to worry about. So much of experimentation can't be done on a testchain, because most experiments that are being done by early stage companies are about product market fit, and which services are valuable to users. Let's say that you and I start a company that allows people to charge money to people who want to email/message them. There are so many things that we need to figure out that can't be figured out without participating in the actual market, with real people, who are really trying to use our service. It might take us years of making little tweaks to the product before we hit on some solution that people finally like enough to use in large numbers. Let's say that right now tx fees are $1, and imagine that the highest amount that most people are willing to pay to email people is 25 cents. If we are experimenting in a market with $1 tx fees, perhaps our company will just die and we'll never figure out how to bring people this service that they want. Perhaps there are a lot of other innovations relating to 'pay to message' that would have otherwise been developed (maybe celebrities like doing AMAs via pay-to-message and devote the funds to charities. Maybe this becomes a huge source of charitable giving in the future), but because Bitcoin's high fee environment didn't allow us to explore these ideas, this whole service category goes undeveloped for many years. > -Reduce the amount of time we have between now and when tx fees need to > pay > > for a significant portion of Bitcoin's security, by keeping the exchange > > rate and thus the value of block rewards low > > (https://en.wikipedia.org/wiki/Equation_of_exchange) > > Related to exchange rate. > Elsewhere you write "I believe 'fear of exchange rate declining' can probably be added to any concern/risk 'leaf', so we should probably leave that for the end or just omit it." It's true that you could tell some indirect story about how pretty much anything could affect the exchange rate, but separate from all the hypothetical stories there is a strong theoretical reason to believe that the exchange rate will be higher the more value is transacted in the Bitcoin ecosystem. See the wiki link on the equation of exchange. More people using Bitcoin for transactions will drive up the price, all else being equal. Perhaps many people care about the price for irrelevant reasons (they just want to be rich), but as long as Bitcoin's security is tied to the exchange rate via block rewards, it's also an important consideration for security. -------------- next part -------------- An HTML attachment was scrubbed... URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20150815/99104c9c/attachment.html>