Bitcoin Forum

Hmm. I've been reading Thomas Sowell's Knowledge and Decisions and A Conflict of Visions lately, and his works have impressed upon me how decisions that are made by "ivory tower intellectuals" can often be problematic, as they deal with abstract symbols and are far away from the actual substance of the problems at hand and have little personal incentive to correct their thought patterns (the specific bias at hand is often, but not always, scope insensitivity), and I'm seeing some parallels to that here. If you look at the kinds of people that have opinions on this issue either way, you notice that the kinds of people in favor are businesses that are directly involved in serving thousands of actual customers, whereas those against are largely those with some kind of ideological interest. On the other hand, of course, you could argue that businesses just want to make a profit and don't give a crap about decentralization, and so a weaker blockchain actually benefits them because it lets them build more centralized add-on services on top (the description that Coinbase gave me when I interviewed them for bitcoin magazine back in 2013 was that they want to be "like Gmail on top of SMTP"). In this particular case, I am inclined to side with the businesses more, simply because mining is so centralized already that full node count is not going to be the weakest link in the system at least for another 1-2 orders of magnitude.

If you divorce the decision from its current political context and ask me "what is the optimal block size for a payments blockchain", then I would say exactly what I've done for ethereum: target a limit equal to 1.5x the exponential moving average of the current block size (with perhaps 0.1% replacement per block). Hence my judgement would be to ignore the short-term contingencies and go that way here as well.

On the third hand, yet another perspective is that given the existence of other more powerful blockchain technologies and the fact that even better ones will continue being developed, bitcoin's best chance right now may well be to keep its block size limited and target the niche of digital gold. If that is what Bitcoin users want, then they should keep the limit, and perhaps even decrease it. But if Bitcoin users want to be a payment system, then up it must go.

The current price of bitcoin is based largely on expectations of future growth. Choke off that growth and I suspect a large portion of its current valuation will evaporate.

Doesn't that imply that the priority is maintaining bitcoin as a payment system? Or rather, that the only way towards "future growth" is with low fees/fast confirms? It seems that the digital gold crowd doesn't necessarily see things that way. I, for one, don't see the payment protocol as the primary value; it is wholly secondary to that of decentralized store of value.

Doesn't that imply that the priority is maintaining bitcoin as a payment system? Or rather, that the only way towards "future growth" is with low fees/fast confirms? It seems that the digital gold crowd doesn't necessarily see things that way. I, for one, don't see the payment protocol as the primary value; it is wholly secondary to that of decentralized store of value.

Doesn't that imply that the priority is maintaining bitcoin as a payment system? Or rather, that the only way towards "future growth" is with low fees/fast confirms? It seems that the digital gold crowd doesn't necessarily see things that way. I, for one, don't see the payment protocol as the primary value; it is wholly secondary to that of decentralized store of value.

Regarding the third point, for bitcoin to be an analog to gold we must keep in mind that gold is universally known and valued. If bitcoin prematurely choked off its own growth and abandoned efforts to mainstream it, I suspect it would slowly wither and die as competing altcoins rose to take its place as an everyday, mainstream cryptocurrency.

The current price of bitcoin is based largely on expectations of future growth. Choke off that growth and I suspect a large portion of its current valuation will evaporate.

It is also important that you reconsider this myth that capping Bitcoin's transactions is a cap on its userbase.

Bitcoin, as is, can provide a refuge for the wealth of ANY person on the planet. It can currently accommodate an infinite amount of capital.

The distinction is important because reality shows us that actual Bitcoin users are by and large not much interested in transacting or spending their coins. A great majority of the coins in existence have been and should continue to sit pretty in their cold wallets for years to come.

Why should we expect this to be different for future users? If you believe, much like I do, that the next trove of adopters is likely to be institutional investors with an interest in Bitcoin as a commodity/asset then why should we be worried so much with the system's transactions throughput? Do you expect the Winklevies to go on a shopping frenzy with their 100,000 coins? The analogy with gold is tired but it remains true: it should be expect that most bitcoins in circulation will be stored in digital vaults and shall remain untouched for a long period of time.

All of this is to say that you should stop focusing on "mainstream" users and what you assume their interest in Bitcoin will be. We should expect these to be last in line in your mass adoption scenario.

Although he might not have much stake in Bitcoin I believe his opinion can be interesting for one or the other.

https://np.reddit.com/r/ethereum/comments/380q61/i_know_this_may_not_directly_be_ethereum_related/crrofl6 (https://np.reddit.com/r/ethereum/comments/380q61/i_know_this_may_not_directly_be_ethereum_related/crrofl6)

I can't imagine how this would positively affect price.
primary value or not, price WILL be affected.
at this point if devs don't fix the TPS limit ( bumping the block size limit slightly is a fine solution for now), i'm stepping out, not because it would imply bitcoin will never be a payment system, but because I will no longer trust the dev team to make smart decisions, or make any hard decisions at all for that matter, and would deem bitcoin's development process borken. but i am confident they will up the TPS limit in some form or another in due time.

I can't imagine how this would positively affect price.
primary value or not, price WILL be affected.
at this point if devs don't fix the TPS limit ( bumping the block size limit slightly is a fine solution for now), i'm stepping out, not because it would imply bitcoin will never be a payment system, but because I will no longer trust the dev team to make smart decisions, or make any hard decisions at all for that matter, and would deem bitcoin's development process borken. but i am confident they will up the TPS limit in some form or another in due time.

I guess I take the opposite approach. If the devs were to implement something so reckless as BIP101 (as an example), my confidence in bitcoin would be crushed and I would largely exit my investment position. At least, I would never transact on the XT chain -- outside of double spending :P -- should a valid chain coexist with it.

Many don't realize it, but the robust, secure system that we have now, the consensus on the protocol that exists now -- these are the priorities. When it comes to "the dev team mak[ing] smart decisions," I hope that whatever populist arguments and arbitrary timelines that segments of the community produce are tertiary to those concerns. Conceding to those largely arbitrary and tertiary concerns would indicate to me that the development process is broken.

You make a valid point that a large number of users can still adopt bitcoin IF the transaction velocity of the money supply remains low enough. But this doesn't address my point that gold has a high value in part because everyone values it. To get to that point I think the average person needs to have some kind of tangible contact with bitcoin, obtaining and using it at least occasionally. And that would mean that mainstreaming of bitcoin as a payment processing system has to come first. The digital gold function (with the implication of high value) would derive from that success, IMHO.

this is perfect example of ivory tower thinking.

No, it's called a meritocracy.

Of course it doesn't work like democracy hence why you are so butthurt because you'd like to be able to pretend that everyone has equal weight in these decisions. Matter of fact is they don't.

its ivory tower thinking plain and simple.

in reality the system would be no less robust & secure should the the limit be bumped to 2MB or even 8MB, MAYBE at 32MB your arguments would START to make SOME sense beyond ideological interest.

this is perfect example of ivory tower thinking.

in reality the system would be no less robust & secure should the the limit be bumped to 2MB or even 8MB, MAYBE at 32MB your arguments would START to make SOME sense beyond ideological interest.

I don't see how that is true. In fact I'm quite certain a majority of the biggest bitcoin owners have never really bothered using it as transactional currency aside from for some niche use case or outright curiosity.

Don't forget that we are not targetting the "average person". They are not the ones that will bring value to Bitcoin.

The digital gold function, as a store of wealth, is the primary natural function of Bitcoin. It is the first step toward any considerable rise in its currency application.

http://nakamotoinstitute.org/mempool/the-two-ideologies-in-bitcoin/

Do you possess any technical credentials that can support this statement or should we just trust your gut?

Regarding the third point, for bitcoin to be an analog to gold we must keep in mind that gold is universally known and valued. If bitcoin prematurely choked off its own growth and abandoned efforts to mainstream it, I suspect it would slowly wither and die as competing altcoins rose to take its place as an everyday, mainstream cryptocurrency.

The current price of bitcoin is based largely on expectations of future growth. Choke off that growth and I suspect a large portion of its current valuation will evaporate.

I guess I take the opposite approach. If the devs were to implement something so reckless as BIP101 (as an example), my confidence in bitcoin would be crushed and I would largely exit my investment position. At least, I would never transact on the XT chain -- outside of double spending :P -- should a valid chain coexist with it.

Many don't realize it, but the robust, secure system that we have now, the consensus on the protocol that exists now -- these are the priorities. When it comes to "the dev team mak[ing] smart decisions," I hope that whatever populist arguments and arbitrary timelines that segments of the community produce are tertiary to those concerns. Conceding to those largely arbitrary and tertiary concerns would indicate to me that the development process is broken.

What's the point of having a ULTRA secure useless thing? There is NONE.

Expect a good portion of the market to leave out if the value proposition is not keeping up. Myself included. Another system will prevail.  
Bitcoin's value is derived from its use cases and every speculator with half of a brain understand that.  There is no point of speculating on a coin that have no use case prospect unless you are shorting it to death.

Why with 18+ millions achieved fro ico there is no a fu***** standard wallet for eth?
I'm really disappointed.

What's the point of having a ULTRA secure useless thing? There is NONE.

Expect a good portion of the market to leave out if the value proposition is not keeping up. Myself included. Another system will prevail.  
Bitcoin's value is derived from its use cases and every speculator with half of a brain understand that.  There is no point of speculating on a coin that have no use case prospect unless you are shorting it to death.