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January 23, 2016, 05:59:27 PM |
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We all should strive to maximize the value of one bitcoin. Not because of greed, but because when you maximize the value of one bitcoin, you maximize the value of the Bitcoin network. And when you maximized the value of the Bitcoin network, you maximize the utility of the Bicoin network. The price of one bitcoin is a proxy for how much value Bitcoin brings to the world. Maximal value means maximal utility and thus we see that the philantropic goal of helping in the best way possible the humanity is similar to the goal of maximizing the value of one bitcoin.
When there is an artifical limit to the blocksize, this means that the use cases of Bitcoin are reduced (higher transaction costs drive out the demand for transactions). That means the utility of Bitcoin is diminished and that means the long term value of a Bitcoin is lower than without that limit. It's a completely different limit than the 21 million one. The 21 milion limit increases the demand for bitcoins because fixed supply is highly wanted feature (on the contrary, cheap transaction is a highly wanted feature). Bitcoin owners, if they want to maximize the value of one bitcoin, should choose to remove the blocksize limit while regarding as sacred the 21 million limit. Some people like theymos, Jon Matonis or Greg Maxwell try to confuse you by mixing up the meaning of these two limits (maybe it's involuntary, maybe they are just confused themselves about that point).
An important point is that removing the artificial limit doesn't mean that there will be not limit at all. Some people think the world is a frictoinless place, but this is not true. There will always be a limit to the blocksize. The bigger a block, the higher the risk that he gets orphaned. Even without an artifical limit, miners will not produce infinitively big blocks because it won't be rational for them to do so. There will be a natural limit. There will always be scarity in blocks space and therefore there will always exist the need for transactions fees that will allowed the network to be secured when the coinbase moves toward zero.
One of the main argument of people who wants to keep 1Mb blocksize limit is that it will increase the cost of running a node. What is comical is that it is implied in their argument that if the cost of running a node increase, it's means that their are more transactions on the network: They involuntary admits that by increasing the limit we allow the transaction level to increase, thereby increasing the value of one bitcoin and the utility of the system. The core of their argument lies on a technological pessimism where technology progress would cease to follow it's empirical trajectory. Imagine if video games developpers had stopped to improve the graphism of the video games because "maybe computers will stop to improve and it's not rationale to postulate that they will". That is exactly the mindset of people who wants to keep a 1Mb limit.
If the cost of running a node increases, it's means the demand increases faster than the technological progress, which would be a really good outcome for every bitcoin owners. Where is the treshold at which point the decentralization of the system (which guarentee that the 21 million limit is enforced) is threatened? Even if it's cost 100 000$ a year to run a nodes there would still be a shit load of node around the world. Do you know how many busineses in the world have fixed cost >100,000$? Answer: a fucking lot. And do you know what will be the value of one bitcoin when the cost of running a node will be 100,000$ a year (and this is hypothetical, all this shit lies on the very dubious that the technological progress will somehow stop). Answer: a fucking lot.
Today the bottleneck of decentralization is not non-mining node but mining nodes. Blocking demand adoption because it might decrease the number of nodes while it may reshape the mining market and re-distributed the hashrate is very weird from people who say they care about decentralization.
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