My thoughts about the blocksize thing

[bg002h]

i'll hop on the bandwagon too...more transactions per block means more fees for the miners

While you're hopping on the bandwagon you might to...actually read the posts in the Development & Technical Discussion forum regarding block size instead of merely regurgitating your view that "hard coded limits are bad." More transactions per block means less fees for miners. I'll leave it as an exercise for you to figure out why.

I wouldn't take it as a given that more transactions per block would mean fewer fees. If the network could've been processing 2000 transactions per second instead of seven, I bet the miners would make more In fees.

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[bg002h]

Sorry, but I can't sai this often enough. Long term, Mining wont be providable.

I don't necessarily agree. It's obvious if the state of bitcoin remains like it is now, when the reward drops to zero security by mining will drop ridiculously low. There are only two ways to make it work (keeping the same security), either increase the fees or increase the number of transactions (with fees) per block. There are currently about 0.5 btc of transaction fees per block, so if the transaction rate would increase 40-fold that would take care of things.

I don't see any problem to begin with.  Just like any other business, the amount of competition in the mining business automatically increases to the point where it is just barely profitable enough to keep the most efficient operators in business.  It reaches an equilibrium, yes, but at that equilibrium point, the work still gets done and the surviving miners still make a living.

I think the price of Bitcoin will drop like a hot potato as soon as people can't spend them Due to the low transaction limit. There's absolutely no question that the transaction limit will go up , because Bitcoin will become practically worthless If people can never spend them At a reasonable cost and miners will Miss out on getting Small fees from many many many many more transactions.

[johnyj]

I think the price of Bitcoin will drop like a hot potato as soon as people can't spend them Due to the low transaction limit. There's absolutely no question that the transaction limit will go up , because Bitcoin will become practically worthless If people can never spend them At a reasonable cost and miners will Miss out on getting Small fees from many many many many more transactions.

If a lot of people is rushing to sell, due to transaction limit, they won't be able to sell, only one person per hour can sell his coin, so the price will stay stable

And, if price dropped, the people's interest (and thus transaction volume) will decrease, then the system will become good again

So the block size limit will function like a valve to stop the mass volume sell off and constantly lock the bitcoin price higher and higher. It is the most genius design in human history to stable the exchange price 

[Maged]

And, if price dropped, the people's interest (and thus transaction volume) will decrease, then the system will become good again

...and doomed to stagnation. No more innovation would occur, no more moderately sized and up businesses would start accepting bitcoins, and the businesses that do accept it would phase it out over time. Interest in bitcoin would drop, and it would be declared a failure. Because of that stigma, businesses would become even more hesitant about accepting crypocurrency in general than they already are, and it would stay that way until either something radically different from bitcoin was created or several generations passed. Later on, people would look back in awe about how Bitcoin was far ahead of its time and wonder what happened. That is our worst-case scenario, and it's more likely than you might think.

[Akka]

And, if price dropped, the people's interest (and thus transaction volume) will decrease, then the system will become good again

...and doomed to stagnation. No more innovation would occur, no more moderately sized and up businesses would start accepting bitcoins, and the businesses that do accept it would phase it out over time. Interest in bitcoin would drop, and it would be declared a failure. Because of that stigma, businesses would become even more hesitant about accepting crypocurrency in general than they already are, and it would stay that way until either something radically different from bitcoin was created or several generations passed. Later on, people would look back in awe about how Bitcoin was far ahead of its time and wonder what happened. That is our worst-case scenario, and it's more likely than you might think.

+1

Exactly this is what I'm (and I think most are) worrying about.

It's not about having free transactions (as some seem to think).

[Mageant]

I think Bitcoin's distant future is more of taking the role of gold (i.e. the value underlying a currency) than actually replacing a large currency such as US$.

Small transactions would be handled by processors such as Ripple or Coinbase and actual changes in the blockchain would be only worthwhile for large transactions.

[bg002h]

I think the price of Bitcoin will drop like a hot potato as soon as people can't spend them Due to the low transaction limit. There's absolutely no question that the transaction limit will go up , because Bitcoin will become practically worthless If people can never spend them At a reasonable cost and miners will Miss out on getting Small fees from many many many many more transactions.

If a lot of people is rushing to sell, due to transaction limit, they won't be able to sell, only one person per hour can sell his coin, so the price will stay stable

And, if price dropped, the people's interest (and thus transaction volume) will decrease, then the system will become good again

So the block size limit will function like a valve to stop the mass volume sell off and constantly lock the bitcoin price higher and higher. It is the most genius design in human history to stable the exchange price 

The actual trading occurs at the exchange...not on the block chain. People might have trouble getting Bitcoin into their accounts, but, that's about it. I'm not in favor of an unspendable Bitcoin. Why not set the limit to 1 transaction per second? Or 1/10 that? Will that make Bitcoin better or stabilize the price?

[Littleshop]

Why is this even a thing?
So we're going to solve a deficit issue by jumping right to inflation?

Great way to show off your principle, Bitcoin.

Full retard mode engage

You really do not understand what you are talking about.  Block size increases do not cause bitcoin inflation.  This allows more transactions to be processed per block.  If we reach block size limit we could slow the adoption of bitcoin which would limit economic activity.

You seem to be confusing increasing block size with increasing block reward.

[johnyj]

And, if price dropped, the people's interest (and thus transaction volume) will decrease, then the system will become good again

...and doomed to stagnation. No more innovation would occur, no more moderately sized and up businesses would start accepting bitcoins, and the businesses that do accept it would phase it out over time. Interest in bitcoin would drop, and it would be declared a failure. Because of that stigma, businesses would become even more hesitant about accepting crypocurrency in general than they already are, and it would stay that way until either something radically different from bitcoin was created or several generations passed. Later on, people would look back in awe about how Bitcoin was far ahead of its time and wonder what happened. That is our worst-case scenario, and it's more likely than you might think.

As long as price stay strong, I don't worry any of this. Businesses will have much higher incentive to receive a high valued but difficult to transfer coin vs low valued but easy to transfer coin. If the price is enough strong, there will be commercial solution to overcome the transaction problem, if the price do not stay strong, they will abandon it, no matter how fast the transaction is

Bitcoin gained mainstream acceptance is because it's value get stable increase, despite the fact that now people have to download 7G blockchain

[johnyj]

Why is this even a thing?
So we're going to solve a deficit issue by jumping right to inflation?

Great way to show off your principle, Bitcoin.

Full retard mode engage

You really do not understand what you are talking about.  Block size increases do not cause bitcoin inflation.  This allows more transactions to be processed per block.  If we reach block size limit we could slow the adoption of bitcoin which would limit economic activity.

You seem to be confusing increasing block size with increasing block reward.

No, block size increase will cause a hard fork, and that is a 100% inflation immediately, and once it started, it could happen again, so the promise of limited supply is forever broken, bitcoin will be no more different than any fiat currency

[Akka]

Why is this even a thing?
So we're going to solve a deficit issue by jumping right to inflation?

Great way to show off your principle, Bitcoin.

Full retard mode engage

You really do not understand what you are talking about.  Block size increases do not cause bitcoin inflation.  This allows more transactions to be processed per block.  If we reach block size limit we could slow the adoption of bitcoin which would limit economic activity.

You seem to be confusing increasing block size with increasing block reward.

No, block size increase will cause a hard fork, and that is a 100% inflation immediately, and once it started, it could happen again, so the promise of limited supply is forever broken, bitcoin will be no more different than any fiat currency

That's not the first hardfork. Not even in recent times. Remember the reward halving. There was a fork made by some where the reward didn't halve.

So this was a 100% inflation immediately, too? OMG!

[twolifeinexile]

Why is this even a thing?
So we're going to solve a deficit issue by jumping right to inflation?

Great way to show off your principle, Bitcoin.

Full retard mode engage

You really do not understand what you are talking about.  Block size increases do not cause bitcoin inflation.  This allows more transactions to be processed per block.  If we reach block size limit we could slow the adoption of bitcoin which would limit economic activity.

You seem to be confusing increasing block size with increasing block reward.

No, block size increase will cause a hard fork, and that is a 100% inflation immediately, and once it started, it could happen again, so the promise of limited supply is forever broken, bitcoin will be no more different than any fiat currency

Why hard fork in your opinion is a inflation, hard fork essentailly make two versions of bitcoin, and in the end, only one could win or both lose.

[johnyj]

That's not the first hardfork. Not even in recent times. Remember the reward halving. There was made a fork by some where the reward didn't halve.

So this was a 100% inflation immediately, too? OMG!

1. Tell me where is that fork, I'm interested to mine some coin on that fork, I just don't know it even existed
2. That fork is not driven by core developers
3. It diviate from the bitcoin protocol that much so it not even can be called bitcoin, it has unlimited suppply

[Akka]

1. Tell me where is that fork, I'm interested to mine some coin on that fork, I just don't know it even existed

https://bitcointalk.org/index.php?topic=128370.0;topicseen
   
https://github.com/treazant/treazant

- don't know if this is still alive, though.

[johnyj]

Why hard fork in your opinion is a inflation, hard fork essentailly make two versions of bitcoin, and in the end, only one could win or both lose.

Same money, now you can spend them twice in two different network, isn't that inflation?

After the fork, it is very difficult to explain to people why they need to know which version of bitcoin they are using, and since old coin can be used on both network, they will worth more than the new coin... and business owner have to give two price for their product: one for old coin and one for new coin... All of these will create confusion and the normal business owner will regard this as a result of failed experiment by computer geeks, and they just drop it

At least the adoption rate will drop for several years until people forget about this fork

[twolifeinexile]

Why hard fork in your opinion is a inflation, hard fork essentailly make two versions of bitcoin, and in the end, only one could win or both lose.

Same money, now you can spend them twice in two different network, isn't that inflation?

After the fork, it is very difficult to explain to people why they need to know which version of bitcoin they are using, and since old coin can be used on both network, they will worth more than the new coin... and business owner have to give two price for their product: one for old coin and one for new coin... All of these will create confusion and the normal business owner will regard this as a result of failed experiment by computer geeks, and they just drop it

At least the adoption rate will drop for several years until people forget about this fork

More than half of bitcoins have been mined, so if I were the business, simple, only accept old coin, same amount in both chain, using the highest exchange rate of the two, the guy having old coin is not paying me twice, since ultimately only fork become longer than the other and miners would jump to and hash for it so it gains more hashing power and dominate again later.

[jgarzik]

That's not the first hardfork. Not even in recent times. Remember the reward halving. There was a fork made by some where the reward didn't halve.

Wrong.  Mining a side chain for a small amount of time is not a hard fork.

A hard fork is where it is impossible for older clients to continue with the new bitcoin, without a software upgrade, because they would find some post-fork detail invalid (when it should be considered valid).

We still have many older clients on the network, verifying the chain.

[Akka]

That's not the first hardfork. Not even in recent times. Remember the reward halving. There was a fork made by some where the reward didn't halve.

Wrong.  Mining a side chain for a small amount of time is not a hard fork.

A hard fork is where it is impossible for older clients to continue with the new bitcoin, without a software upgrade, because they would find some post-fork detail invalid (when it should be considered valid).

We still have many older clients on the network, verifying the chain.

Sure, I didn't say any different. But you are wrong here. The example was a fork. It is build on the Blockchain until the point of the halving. In was impossible for older clients to continue with the new bitcoin, without a software upgrade, because they would find some post-fork detail invalid (when it should be considered valid).

It just wasn't successful.

Or is it only a hard fork if the core developers change something on the protocol?
Did you even read my post?

[johnyj]

Why hard fork in your opinion is a inflation, hard fork essentailly make two versions of bitcoin, and in the end, only one could win or both lose.

Same money, now you can spend them twice in two different network, isn't that inflation?

After the fork, it is very difficult to explain to people why they need to know which version of bitcoin they are using, and since old coin can be used on both network, they will worth more than the new coin... and business owner have to give two price for their product: one for old coin and one for new coin... All of these will create confusion and the normal business owner will regard this as a result of failed experiment by computer geeks, and they just drop it

At least the adoption rate will drop for several years until people forget about this fork

More than half of bitcoins have been mined, so if I were the business, simple, only accept old coin, same amount in both chain, using the highest exchange rate of the two, the guy having old coin is not paying me twice, since ultimately only fork become longer than the other and miners would jump to and hash for it so it gains more hashing power and dominate again later.

How do you identify which coin is old and which coin is new?

BTW, there will be two chain, the length will be the same

[johnyj]

1. Tell me where is that fork, I'm interested to mine some coin on that fork, I just don't know it even existed

https://bitcointalk.org/index.php?topic=128370.0;topicseen
   
https://github.com/treazant/treazant

- don't know if this is still alive, though.

Based on author it failed after the split (technically), if he spend bitcoin on one chain, it will be broadcasted to another chain thus invalidate the coin's spendability on another chain, maybe his code is not enough good to run a seperate chain

I can imagine, if it really worked, there will be many people hashing on that chain by now, since it doesn't hurt to be able to double spend the old bitcoin on another chain, no matter how little value that chain has