there is no max block size problem

[justusranvier]

Bitcoin will never be a viable store of value in the long term if it's not first and foremost a medium of exchange. Trying to make it work the other way around is pushing on the string.

[Anon136]

i just want to set the important precident if you dont like it you should create your own and fix it there and never undermine the promises made by the protocol of a crypto currency. Those promises are sacred to some people, those people will flee to silver and gold if they start seeing rule changes occurring, even for the noblest of intentions.

Am not sure who you are addressing with this as I was not advocating *changing* anything at all (the promises are surely what the source code *is* at the moment and nothing more).

it was not my intention to insinuate such.

[CIYAM]

Bitcoin will never be a viable store of value in the long term if it's not first and foremost a medium of exchange. Trying to make it work the other way around is pushing on the string.

Sure - but how is it *worse* than gold right now (I think that gold is still considered about the best store of value and it is not at all an easy medium of exchange compared to Bitcoin as of today)?

[CIYAM]

it was not my intention to insinuate such.

No worries - I think we are actually reading from the same page.

[justusranvier]

Sure - but how is it *worse* than gold right now (I think that gold is still considered about the best store of value and it is not at all an easy medium of exchange compared to Bitcoin as of today)?

Gold is also hoarded by central banks, and traded by firms that get to borrow play money from the Fed at negative real interest rates. How well would it do as a store of value without the support of government intervention?

I don't think it would be worthless, but metals like copper are actually used to build useful things much more so than gold.

[CIYAM]

I don't think it would be worthless, but metals like copper are actually used to build useful things much more so than gold.

Understood (although I think gold is an important metal in creating a lot of quality equipment) - I just think that if the *main* point of Bitcoin was just tx's then the *main reason* to be a miner would be to earn fees (and quite likely that will be how things come to pass down the track) so if we are going to wish for more and more tx's to be processed then I would not surprised to see the fees becoming >= Paypal's (in which case Bitcoin is *dead*).

[justusranvier]

Understood (although I think gold is an important metal in creating a lot of quality equipment) - I just think that if the *main* point of Bitcoin was just tx's then the *main reason* to be a miner would be to earn fees (and quite likely that will be how things come to pass down the track) so if we are going to wish for more and more tx's to be processed then I would not surprised to see the fees becoming >= Paypal's (in which case Bitcoin is *dead*).

We're in the bootstrapping phase right now so the incentives for mining are distorted by the block subsidy.

In the future I think mining will be done by organizations that have a lot of transactions to process, and the incentive to mine will be the commerce those transactions enable. Whether they do it themselves, or in pools, or outsource it to dedicated mining companies is impossible to predict.

[hazek]

I find it strange why this has become such a big issue recently (is all the fuss just because of SD?) - the software has survived with the "mining" part of it basically being removed (was there the same amount of fuss when that occurred?) and I don't see why the large tx issues can't also be handled by other external means (whether it is done through other chains or through Ripple or off chain tx's or a combination of various methods).

Maybe I am wrong but I really think that the main point of Bitcoin is it being a decentralised *store of wealth* rather being a transaction system designed to replace all others (i.e. does "digital gold" really *need* to be transacted hundreds of times per second and if so then why have 10 minute confirmation times?).

Actually the real value in Bitcoin arises from its use as a transaction system. If I just wanted to store wealth precious metals do this very well and will likely continue to do so regardless of whether  Bitcoin succeeds or fails.

It's a package deal for me. I have 0 use for Bitcoin if it can't maintain its monetary rules and its no central authority feature.

[CIYAM]

It's a package deal for me. I have 0 use for Bitcoin if it can't maintain its monetary rules and its no central authority feature.

Yes - this is exactly what I think too (so changing the software to allow increased #s of tx's isn't as important to me as keeping the system as decentralised as possible and keeping the 21M limit in place).

Bitcoin *needs* transactions to survive - but does it really need to compete with Paypal or the like?

[niko]

In the future I think mining will be done by organizations that have a lot of transactions to process, and the incentive to mine will be the commerce those transactions enable. Whether they do it themselves, or in pools, or outsource it to dedicated mining companies is impossible to predict.

Could you elaborate on this? A few examples, maybe.

[justusranvier]

In the future I think mining will be done by organizations that have a lot of transactions to process, and the incentive to mine will be the commerce those transactions enable. Whether they do it themselves, or in pools, or outsource it to dedicated mining companies is impossible to predict.

Could you elaborate on this? A few examples, maybe.

Right now Silk Road and Satoshi Dice are the most obvious examples. Their businesses can not exist without the features Bitcoin provides so if other people stopped mining for some they would have an economic incentive to step in and mine so that their businesses can continue operating.

Soon we might be able add a growing list of web businesses who deliver products and services to customers who can not access the legacy financial system. Any of that that commerce can't take place without Bitcoin creates an economic incentive for those businesses to mine (directly or otherwise).

If Bitcoin grows to the point at which huge companies like Walmart and McDonalds are depending on it they would spend money to keep the network operating, because it would be necessary to protect their revenue.

[johnyj]

Good post, and I think there is no need for alt chain at all

Just like someone pointed out, gold still works as a store of value and it seldom get moved once a year, bitcoin will work the same

People will abuse more and more transaction capacity, they will get wise and plan their transactions accordingly if the transaction becomes expensive. Today, Credit Card companies always charge you a fixed amount of dollar for cash withdraw, but that won't stop people from doing withdraw, they just withdraw as much as possible to reduce the fee. So does bitcoin, if the transaction becomes expensive, people will plan their transaction with bigger amount and reduce the frequency of transaction, problem solved

And due to the fact that fiat currency are still 99.9% mainstream, to replace fiat currency is totally impractical and unnecessary, they suit much better for daily small transaction, they are created to be spent

Bitcoin should function as the saving heaven for average people (retirement saving now get eaten by government and inflation), in current debt based monetary system, there is no other better alternative, even gold can not compete