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Date: Tue, 11 Aug 2015 23:51:55 +0200
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From: Pieter Wuille <pieter.wuille@gmail.com>
To: Michael Naber <mickeybob@gmail.com>
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Subject: Re: [bitcoin-dev] Fees and the block-finding process
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On Tue, Aug 11, 2015 at 11:35 PM, Michael Naber <mickeybob@gmail.com> wrote:
> Bitcoin would be better money than current money even if it were a bit
> more expensive to transact, simply because of its other great
> characteristics (trustlessness, limited supply, etc). However... it is not
> better than something else sharing all those same characteristics but which
> is also less expensive. The best money will win, and if Bitcoin doesn't
> increase capacity then it won't remain the best.
>
If it is less expensive, it is harder to be reliable (because it's easier
for a sudden new use case to outbid the available space), which is less
useful for a payment mechanism.
If it has better scale (with the same technology), it will have higher
centralization pressure. The higher price you potentially pay (in fees) to
get your transactions on a smaller block chain is the price of higher
security and independence. Perhaps the compromise is not at the optimal
place, but please stop saying "below what the technology can do". The
technology can "do" gigabyte blocks I'm sure, If you accept that you need a
small cluster to keep up with validation, and all blocks are produced by a
single miner cartel.
IMHO, Bitcoin (or any cryptocurrency) on-chain as a payment system is:
* Expensive: there is a (known in advance and agreed upon) inflation that
we're using to pay miners. But by holding Bitcoin you're paying for the
security of the system, even if it is not in fees.
* Unreliable: you never know when suddenly there will be more higher-fee
transactions that outbid you.
* Slow, unless you already trust the sender to not double spend (in which
case you don't actually need the security of the blockchain).
I don't know the future, and I don't know what use cases will develop and
what they'll want to pay or what reliability they need. But let's please
not throw out the one quality that Bitcoin is still good at: lack of
centralized parties to trust.
--
Pieter
--001a1140269a58a081051d101cba
Content-Type: text/html; charset=UTF-8
Content-Transfer-Encoding: quoted-printable
<div dir=3D"ltr">On Tue, Aug 11, 2015 at 11:35 PM, Michael Naber <span dir=
=3D"ltr"><<a href=3D"mailto:mickeybob@gmail.com" target=3D"_blank">micke=
ybob@gmail.com</a>></span> wrote:<br><div class=3D"gmail_extra"><div cla=
ss=3D"gmail_quote"><blockquote class=3D"gmail_quote" style=3D"margin:0 0 0 =
.8ex;border-left:1px #ccc solid;padding-left:1ex"><div dir=3D"ltr">Bitcoin =
would be better money than current money even if it were a bit more expensi=
ve to transact, simply because of its other great characteristics (trustles=
sness, limited supply, etc). However... it is not better than something els=
e sharing all those same characteristics but which is also less expensive. =
The best money will win, and if Bitcoin doesn't increase capacity then =
it won't remain the best.<br></div></blockquote><div><br></div><div>If =
it is less expensive, it is harder to be reliable (because it's easier =
for a sudden new use case to outbid the available space), which is less use=
ful for a payment mechanism.<br><br></div><div>If it has better scale (with=
the same technology), it will have higher centralization pressure. The hig=
her price you potentially pay (in fees) to get your transactions on a small=
er block chain is the price of higher security and independence. Perhaps th=
e compromise is not at the optimal place, but please stop saying "belo=
w what the technology can do". The technology can "do" gigab=
yte blocks I'm sure, If you accept that you need a small cluster to kee=
p up with validation, and all blocks are produced by a single miner cartel.=
<br><br></div><div>IMHO, Bitcoin (or any cryptocurrency) on-chain as a paym=
ent system is:<br></div><div>* Expensive: there is a (known in advance and =
agreed upon) inflation that we're using to pay miners. But by holding B=
itcoin you're paying for the security of the system, even if it is not =
in fees.<br></div><div>* Unreliable: you never know when suddenly there wil=
l be more higher-fee transactions that outbid you.<br></div><div>* Slow, un=
less you already trust the sender to not double spend (in which case you do=
n't actually need the security of the blockchain).<br></div><div><br></=
div><div>I don't know the future, and I don't know what use cases w=
ill develop and what they'll want to pay or what reliability they need.=
But let's please not throw out the one quality that Bitcoin is still g=
ood at: lack of centralized parties to trust.<br><br>-- <br></div><div>Piet=
er<br><br></div></div></div></div>
--001a1140269a58a081051d101cba--
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