So many spats between husbands and wives end up revolving around the dishes. What is it about dirty dishes that causes so much friction?

It's not so much that the annoyance of doing the dishes causes the contention, but more that the dishes serve as a focal point for all the various little things that bother the spouses about each other. The dishes merely bring matters to a head.

The recent controversy over the coming change in blocksize reminds me of this, and specifically I think we are witnessing the first wave in the clash between ideological bitcoiners and practical bitcoiners.

The first party are more motivated by what they perceive as Bitcoin's ideals than its practical benefits, and the second party care more about benefits than ideology. Some people wear both hats at different times, and insofar as ideology is ultimately (if roundaboutly) aiming at some kind of benefit there is a degree of overlap and interplay between the two. For example, the concern that larger blocksizes will leave poorer people behind can be called both ideological and practical. Moreover, Bitcoin's immense practical advantages inevitably move the world toward shifts that happen to be favored by certain ideologies.

At first the ideologues dominated, and this was good because it gave bitcoins their initial value. Inasmuch as Bitcoin continues to be advertized in terms of its ideological points, it is clear that the ideological side is both strong and persuasive. But as we leave the innovator/early-adopter phase and the general public starts pouring in, the ideologues will be drowned out, and the pace of this drowning out will only accelerate.

As such I expect more controversy going forward, and I think recognizing the undercurrent and pedigree of the controversies will be of great assistance in sorting them out.

No. Banks are the goliaths they are solely because they have the politicians in their back pockets. A Bitcoin mining lobby is a hard thing to imagine. This makes new entry prohibitive, not merely expensive. Watch "Bank of Dave."

Nope, just the ethical central planner libertarians who think their interpretation of what is voluntary and what is coercive is the objectively best one. Rothbardians and Randians always encounter problems because of their moralizing, but Misesians and especially Hayekians can understand what Bitcoin is about. Bitcoin isn't about monetary sovereignty; it's about not having centralized power over money, allowing the free market to work. The idea of "objective" sovereignty is a minarchist holdover stuck in the old statist paradigm. In a stateless system the benefits are myriad, but being able to "control your own money" in the sense of controlling the system itself to any significant degree is not one of them. The endpoint of such reasoning is going off to live in the woods as a hermit. That is not what libertarianism is about.

Big whoop. Unless you live self-sufficiently in the mountains, every last morsel of food, all your clothing and shelter and everything else that constitutes your livelihood comes only at the discretion of others. This is the modern economic reality, and by the way it is wonderful.

This myth that Bitcoin gives you total control over your money isn't helpful; you'll always be at the mercy of the herd - this is how civilization works, and this is how Bitcoin works. It is not the rules that give Bitcoin its stability and reliability, but rather the consistency over time in the beliefs and desires of those who participate in this social experiment.

This blocksize change will only be an problem if people manufacture one out of it.

Bristol Bay is a perfect example of a forcible ban on ownership, exactly opposite to the situation with Bitcoin: there are laws preventing anyone from owning or homesteading any part of the fishing waters. This is what causes the tragedy of the commons and artificially removes the incentive of each user to maintain the resource. Commons (in the economic sense) are always created by government fiat.

This is why Bitcoin has no commons. Each node is self-owned. Each can do whatever it wants. There is never anything forced on anyone, unlike in a commons. The organism will adapt in accord with its interests.

Indeed, having a "commons" is the problem in the first place: no commons, no tragedy of the commons.

Bitcoin has no commons. Every node is owned by someone and they control it, therefore no commons, therefore no tragedy.


That's good, because most economic reasoning seems exactly backwards from common sense.


This can only happen when there is a commons ("public property"), which can only happen when there is a ban on ownership. There is no ban on ownership of Bitcoin nodes; each node operator owns his or her node and has control over it. No commons for there to be a tragedy in.


Only the nodes are owned, not "Bitcoin" (the system).

I just don't see why widespread norms wouldn't emerge to have the blocksize be within a certain reasonable range at any given time (the norms would change dynamically/organically as the mining community sees fit), with the result that rogue miners would be more or less completely isolated.

Tragedies of the commons only happen if there is a forcible ban on anyone taking ownership or control of any part of the commons. Since each node is in control of itself, at least, I don't see how this situation can be subject to a tragedy of the commons. It seems that if any behavior was know to be harmful it would become taboo and miners would understand that to protect their long-term investment they had better reject rogue behavior.

Isn't the debate then a matter of how many people would reject? My sense based in economic reasoning suggests that norms like this could cover much more than 5%.

Can you elaborate on this "natural engine"? What is your plan?

Why wouldn't miners reject interactions with miners who set the block size too high, for instance?

While I understand what you're getting at and it may be a concern if we are to have a single fork, in terms of economics you're talking about virtual oligopolies, not actual ones, because the "barriers to entry" you mention are not barriers to entry into the cryptocurrency market proper, but barriers to entry into mining in a certain implementation of Bitcoin. That is, there is still no barrier to creating a Bitcoin fork that has low/high barrier to entry for mining.

My point is that as long as there is no actual oligopoly - no actual barrier to entry into the market itself - natural order should sort everything out.

"Let a thousand forks bloom!"

...keeping in mind that forks will only arise when and if there is an insurmountable lack of unanimity in the system, which should only happen if there is a huge fundamental rift in terms of vision or application, such as it in fact turning out to be infeasible to have a single Bitcoin that is optimized as both as payment system and a store of value. This can only happen once or perhaps twice, I would think, and if it needs to happen I think it should. Take the bitter medicine if it's really needed; hopefully it isn't.

An oligopoly is a situation where there are very high barriers to entry.

With Bitcoin, anyone can participate. The only thing resembling a monopoly situation is the core dev team, but that resemblance is only superficial: it's a natural monopoly for the moment, but the barrier to entry is not prohibitive since other, possibly even more capable software engineers could form their own team or even their own Bitcoin fork and it's possible that the majority would eventually support their fork.

This is the free-est market in the history of the world, because there is no coercion in it at all. It is entirely voluntary.

So we are faced with the seemingly paradoxical situation wherein we have a completely free market yet there is a natural monopoly development team. This means that, in the short term, the dev team has a lot of power and can seemingly maintain a uniform set of rules by "fiat."

But I think it's a myth that this ability to quasi-legislate is what underpins the uniformity and solidity of the Bitcoin protocol. The existence of this debate shows that many will not automatically follow the core devs (even if they were unanimous). Rather, the source of the uniformity is the belief each node has in the core protocol rules, with the hard BTC limit being the most staunchly supported. Adherence to the original protocol in all aspects seems to be supported as well, but to a lesser extent, and may be amenable to persuasion.

In other words, Bitcoin as a system has always been underpinned by the beliefs and wills of its participants, including the belief that the original protocol should not be changed lightly. The only way to make changes, then, is by convincing people to go along with them, and although the dev team may be in the best position to do that, there is no monopoly on persuasion.

Sure, in theory anything can happen. The only way to resolve these kinds of arguments with finality is to examine many cases (not hand-picked ones), and that will take too long. Suffice it to say that such large, amazingly outperforming oligolies are extremely difficult to form on completely unregulated markets. I can't comment on your specific example, but this just general economic reasoning.

Some relevant videos for this blocksize issue:

http://www.tomwoods.com/blog/the-problems-with-antitrust/

https://www.youtube.com/watch?v=IYO3tOqDISE

That remark about hidden costs seems disingenuous. The flour was in fact cheaper, and everyone who needed to eat bread was better off for it. Restricting that cheap flour would have been the same, at the marginal level, as starving people to death. Which are the real hidden costs?

A free market will centralize as much as is efficient, but no more. Each market actor has incentives that change with the level of centralization. I think things will take care of themselves if the miners are free to float their own limits.

Also, I can't help but think that there is some fallacy in assuming that Bitcoin is reliable because it's "legislated." Even the 21-million BTC limit, which is the very backbone of its value as a currency, can be seen as not being maintained due to legislation, but due to consent. What really is the difference between tens of thousands of nodes consenting to a legislated protocol, and those nodes simply consenting to "a" protocol? The 21M BTC limit being set in stone isn't what makes Bitcoin a reliable store of value; it's simply that people choose to support that hard limit.

What users are relying on is not any kind of contractual obligation or unbreakable rules, but rather just the will of the preponderance of nodes to stick to those rules. It is that social phenomenon, that will, that is the source of Bitcoin's ironclad value guarantee.

When we tell people, "Only 21 million bitcoins will ever by created in the Bitcoin system," we are speaking not of a set of rules per se, but of something more like a social movement that is characterized by its dedication to those rules. That may not sound very reliable, but it has proven to be.

Yes, why not let the miners deal with it? They'd develop best practices. I'm automatically suspicious of any argument that sounds like "laissez faire = chaos." Many speculations about miner incentives are likely to fall prey to central planning fallacies, ignoring the unseen and long-term adaptive measures miners would take as the market situation unfolds dynamically. Rogue miners who tried to pad or whatever would likely be dealt with by the response from the rest of the miners. Solutions evolve spontaneously.

It looks like the natural order will take care of this.

If transactions fees rise and confirmation times prove an obstacle and there is no fork, Mt. Gox and others will be incentivized to set themselves up as clearinghouses, large and low-priority transactions will still happen on-chain, and to the extent that the centralized nature of those clearinghouses becomes problematic eventually Ripple or other spontaneous solutions will arise.

If on the other hand there is a hard fork split about half and half, we may end up with a sort of "gold and silver" bi-bitcoinism with each coin's value ending up halved (which would set the price back a whole month), confidence would be shaken because the 21 million coin limit would seem to some to be continually expandable, but then the problem would be solved and in a few years/months confidence would be regained. Not ideal, but if there is really a problem here there may have to be some slowing in adoption for it to be resolved.

What is that step forward? What besides a different culture do you hope to provide to differentiate your product from the Bitcoin subreddit?

The price looks like it's gunning ravenously for $30. Can't contain itself.

Seems like either there will be some consolidation under $32 for a while, or else just blast through it and - if news about it adds gasoline to the fire - we could be up fiddling with $40+ or who knows.

What's surprising is how many people said 2014 and beyond