Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[Chef Ramsay]

You're back!  Joy!!

lol

Just leave on this high point, nobody here wants your craft or shit at this point. And, you make no difference in price at this point so bon voyage.

[1713520149]

1713520149

[1713520149]

1713520149

[1713520149]

1713520149

[Cconvert2G36]

I thought billyjoe was being silly and hyperbolic about the fight being over tor mining... Damn

Oh yeah, and we need to focus on building a fee market at the 25 per block level...

When do you propose we focus on this? When they disappear? Raising the block size is basically a subsidy. If you insist on constantly subsidizing transactions cost people will begin expecting it and it will be considerably more difficult to say no in the future. That is the slippery slope of raising the block size.

Miners are being subsidized in these early stages precisely because we want the security of the network to be greater than what would be provided using only the current fee income. This is part of BTC's competitive advantage. While this subsidy exists, the transaction cost should be as close to zero as possible to capture market share from other value transfer and storage systems. Growing now is what allows survival later.

Of course there are limits and dangers, I haven't been convinced that removing the limit entirely is safe or wise. I most identify with Jeff Garzik's approach to this debate (maybe not in bip100's proposed mechanism), and hope we find some common ground.

[brg444]

I thought billyjoe was being silly and hyperbolic about the fight being over tor mining... Damn

Oh yeah, and we need to focus on building a fee market at the 25 per block level...

When do you propose we focus on this? When they disappear? Raising the block size is basically a subsidy. If you insist on constantly subsidizing transactions cost people will begin expecting it and it will be considerably more difficult to say no in the future. That is the slippery slope of raising the block size.

Miners are being subsidized in these early stages precisely because we want the security of the network to be greater than what would be provided using only the current fee income. This is part of BTC's competitive advantage. While this subsidy exists, the transaction cost should be as close to zero as possible to capture market share from other value transfer and storage systems. Growing now is what allows survival later.

Of course there are limits and dangers, I haven't been convinced that removing the limit entirely is safe or wise. I most identify with Jeff Garzik's approach to this debate (maybe not in bip100's proposed mechanism), and hope we find some common ground.

As I have just explained I think this is a dangerous road to follow as it amounts to selling people onto Bitcoin using features which are not inherent or guaranteed given its design. We should absolutely avoid the danger of instilling into Bitcoin users some kind of belief that they have a right to free transactions. Nothing in life is free and the costs of security & decentralization cannot forever be externalized to nodes & miners.

In that sense it is perfectly reasonable to suggest we should strive to keep block size limit as close as possible to actual network demand. Flex cap proposals are interesting in this aspect.

[Cconvert2G36]

I thought billyjoe was being silly and hyperbolic about the fight being over tor mining... Damn

Oh yeah, and we need to focus on building a fee market at the 25 per block level...

When do you propose we focus on this? When they disappear? Raising the block size is basically a subsidy. If you insist on constantly subsidizing transactions cost people will begin expecting it and it will be considerably more difficult to say no in the future. That is the slippery slope of raising the block size.

Miners are being subsidized in these early stages precisely because we want the security of the network to be greater than what would be provided using only the current fee income. This is part of BTC's competitive advantage. While this subsidy exists, the transaction cost should be as close to zero as possible to capture market share from other value transfer and storage systems. Growing now is what allows survival later.

Of course there are limits and dangers, I haven't been convinced that removing the limit entirely is safe or wise. I most identify with Jeff Garzik's approach to this debate (maybe not in bip100's proposed mechanism), and hope we find some common ground.

As I have just explained I think this is a dangerous road to follow as it amounts to selling people onto Bitcoin using features which are not inherent or guaranteed given its design. We should absolutely avoid the danger of instilling into Bitcoin users some kind of belief that they have a right to free transactions. Nothing in life is free and the costs of security & decentralization cannot forever be externalized to nodes & miners.

In that sense it is perfectly reasonable to suggest we should strive to keep block size limit as close as possible to actual network demand. Flex cap proposals are interesting in this aspect.

It's important to consider those who forgo investing in utilizing the system because it is currently capped at 2.7 effective tps.

If you put the actual cost (without block reward) of processing a bitcoin transaction on the user, bitcoin would die tomorrow. Maybe not completely, but it would be like pokemon cards for the "old money" hodlers.

You may think that permissioned sidechains will deliver us from not having the throughput to survive on fees alone, but I think that's an even bigger gamble.

It sounds corny, I agree, but billyjoe's Scale or Die has some truth to it.

[ChartBuddy]

Coin
Explanation

[brg444]

It's important to consider those who forgo investing in utilizing the system because it is currently capped at 2.7 effective tps.

If you put the actual cost (without block reward) of processing a bitcoin transaction on the user, bitcoin would die tomorrow. Maybe not completely, but it would be like pokemon cards for the "old money" hodlers.

You may think that permissioned sidechains will deliver us from not having the throughput to survive on fees alone, but I think that's an even bigger gamble.

It sounds corny, I agree, but billyjoe's Scale or Die has some truth to it.

It is equally important to recognize the actual utility value of Bitcoin. I wouldn't blame anyone on foregoing transactional use of Bitcoin seeing its very real shortcomings as a payment system. Let us be honest with ourselves this system is absolutely not ready for mainstream consumer acceptance and we shouldn't be concerned about consumers looking the other way.

Give it some time and the necessary infrastructure and tools to abstract the highly technical and generally confusing nature of Bitcoin will be built. We should also admit that these mainstream users looking for an efficient payment system do not care at all about the decentralization or security of the thing. Let's be real here regular joes just want something that works, centralized or not.

The people pouring big money into Bitcoin (I'm talking about buying bitcoins) couldn't care about its transaction capacity at the moment. Most rational investors are in it for the long haul and a majority of the coins are kept in cold storage and paper wallets where they haven't and won't move for years.

There shouldn't be any urgency to cater to a userbase which is inexistent as it stands. Technology will evolve over the next few years and will provide the necessary tools for proper, actual scaling of the system. No amount of block size increase will allow us to serve a mainstream consumer base doing hundreds of thousands of transactions per seconds. Bitcoin is not designed to handle this load while staying secure & decentralized.

[JorgeStolfi]

[Greg Maxwell:] For fees to achieve this purpose, there seemingly must be an effective
scarcity of capacity.

The error is in that very first claim.  There need not be a scarcity of capacity for the fees to serve their purpose.  The fees could, and should, be mandatory and set in the 'consensus rules'.

In fact, scarcity of capacity in a network means lousy service, which means loss of users, which means that the fees will not rise as hoped....

[brg444]

[Greg Maxwell:] For fees to achieve this purpose, there seemingly must be an effective
scarcity of capacity.

The error is in that very first claim.  There need not be a scarcity of capacity for the fees to serve their purpose.  The fees could, and should, be mandatory and set in the 'consensus rules'.

In fact, scarcity of capacity in a network means lousy service, which means loss of users, which means that the fees will not rise as hoped....

Fortunately Bitcoin is not meant to be a service.

You are interpreting the argument in the wrong way. There needs to be a scarcity in order for a fee market to be sustained. Fees need to adapt to the ever changing reality of the system and could not possibly be forced or determined through any algorithm.

[Cconvert2G36]

I think a fee market that is relative to demand for blockspace is perfectly reasonable... but not today. We're too small to sustain the demand in the face of countless competitors. Bitcoin doesn't have the benefit of the periodic table, if we don't capture share while miners are subsidized and incentivized to secure and process transactions... it becomes like rpietila's castle game, with you and a few thousand others trading pogs back and forth. (A scenario in which a 1MB block limit will be generously sized.)

[JorgeStolfi]

Fees need to adapt to the ever changing reality of the system and could not possibly be forced or determined through any algorithm.

The Blockstream plan is to FORCE a particular capacity, by setting the block size limit in the consensus rules, and then let the fees "naturally" adapt to that artificially constrained capacity.

Why is that better than forcing the fee directly, and ensuring that the capacity is well above the demand?  (I ca think of several reasons why it is much worse.)

Is it possible that the devs do not see that their plan is just as "ideologically impure" as setting the fee directly?

[brg444]

I think a fee market that is relative to demand for blockspace is perfectly reasonable... but not today. We're too small to sustain the demand in the face of countless competitors. Bitcoin doesn't have the benefit of the periodic table, if we don't capture share while miners are subsidized and incentivized to secure and process transactions... it becomes like rpietila's castle game, with you and a few thousand others trading pogs back and forth.

Again you seem to confuse what it is you'd like to or perceive Bitcoin should compete with and what Bitcoin's unique value and properties are.

If we can't agree on this I guess we can never agree on the rest but my opinion is we want Bitcoin to compete with gold, offshore saving accounts, safe havens of all sort , therein lies the value (and the "moon" valuations), not competing with VISA/Mastercard or Square.

[Cconvert2G36]

I think a fee market that is relative to demand for blockspace is perfectly reasonable... but not today. We're too small to sustain the demand in the face of countless competitors. Bitcoin doesn't have the benefit of the periodic table, if we don't capture share while miners are subsidized and incentivized to secure and process transactions... it becomes like rpietila's castle game, with you and a few thousand others trading pogs back and forth.

Again you seem to confuse what it is you'd like to or perceive Bitcoin should compete with and what Bitcoin's unique value and properties are.

If we can't agree on this I guess we can never agree on the rest but my opinion is we want Bitcoin to compete with gold, offshore saving accounts, safe havens of all sort , therein lies the value (and the "moon" valuations), not competing with VISA/Mastercard or Square.

I didn't reply with a hope to change your mind. But I do hope we can build a bridge from the middle of the river 

[brg444]

Fees need to adapt to the ever changing reality of the system and could not possibly be forced or determined through any algorithm.

The Blockstream plan is to FORCE a particular capacity, by setting the block size limit in the consensus rules, and then let the fees "naturally" adapt to that artificially constrained capacity.

Why is that better than forcing the fee directly, and ensuring that the capacity is well above the demand?  (I ca think of several reasons why it is much worse.)

Is it possible that the devs do not see that their plan is just as "ideologically impure" as setting the fee directly?

Blocksize limit already exists in the consensus rules, nobody from Blockstream forced it into them.

Again, "fees need to adapt to the ever changing reality of the system and could not possibly be forced or determined through any pre-determined algorithm."

It is better because the block size limit also serves an anti-spam function and a "check" on inherent economies of scale within mining which, removed, would necessarily lead to a precipitated centralization of mining.  Regular users running nodes would lose their ability to keep up with the required resources to maintain their access to , and therefore decentralize, the governance of the system.

[brg444]

I think a fee market that is relative to demand for blockspace is perfectly reasonable... but not today. We're too small to sustain the demand in the face of countless competitors. Bitcoin doesn't have the benefit of the periodic table, if we don't capture share while miners are subsidized and incentivized to secure and process transactions... it becomes like rpietila's castle game, with you and a few thousand others trading pogs back and forth.

Again you seem to confuse what it is you'd like to or perceive Bitcoin should compete with and what Bitcoin's unique value and properties are.

If we can't agree on this I guess we can never agree on the rest but my opinion is we want Bitcoin to compete with gold, offshore saving accounts, safe havens of all sort , therein lies the value (and the "moon" valuations), not competing with VISA/Mastercard or Square.

I didn't reply with a hope to change your mind. But I do hope we can build a bridge from the middle of the river  

I'm just thinking you are hoping to sell 1. the wrong people onto Bitcoin using 2. the wrong "features" of Bitcoin. This necessarily creates a steep obstacle to the "adoption" you are wishing for.

To be quite honest I have been guilty of this in the past and have long maintained this delusion that Bitcoin was somehow this fantastic payment network that would replace credit cards, etc etc. Until I finally came to sense and understood what the true value of it was. Note that you shouldn't forego your dreams of moon because of this. The markets I am suggesting we target are enormously more valuable than replacing simple payment processors!

[ChartBuddy]

Coin
Explanation

[rjclarke2000]

Every thread seems to be a mixed topic thread recently

[Cconvert2G36]

I think a fee market that is relative to demand for blockspace is perfectly reasonable... but not today. We're too small to sustain the demand in the face of countless competitors. Bitcoin doesn't have the benefit of the periodic table, if we don't capture share while miners are subsidized and incentivized to secure and process transactions... it becomes like rpietila's castle game, with you and a few thousand others trading pogs back and forth.

Again you seem to confuse what it is you'd like to or perceive Bitcoin should compete with and what Bitcoin's unique value and properties are.

If we can't agree on this I guess we can never agree on the rest but my opinion is we want Bitcoin to compete with gold, offshore saving accounts, safe havens of all sort , therein lies the value (and the "moon" valuations), not competing with VISA/Mastercard or Square.

I didn't reply with a hope to change your mind. But I do hope we can build a bridge from the middle of the river  

I'm just thinking you are hoping to sell 1. the wrong people onto Bitcoin using 2. the wrong "features" of Bitcoin. This necessarily creates a steep obstacle to the "adoption" you are wishing for.

To be quite honest I have been guilty of this in the past and have long maintained this delusion that Bitcoin was somehow this fantastic payment network that would replace credit cards, etc etc. Until I finally came to sense and understood what the true value of it was. Note that you shouldn't forego your dreams of moon because of this. The markets I am suggesting we target are enormously more valuable than replacing simple payment processors!

Peer to Peer Electronic Cash System
vs
Peer to Peer Electronic Wealth Storage System

I think we've distilled it down. I also think it can be both, but the former facilitates the latter.

Every thread seems to be a mixed topic thread recently

A $5 variation in price for days on end will do that.

[billyjoeallen]

We should absolutely avoid the danger of instilling into Bitcoin users some kind of belief that they have a right to free transactions. Nothing in life is free and the costs of security & decentralization cannot forever be externalized to nodes & miners.

In that sense it is perfectly reasonable to suggest we should strive to keep block size limit as close as possible to actual network demand. Flex cap proposals are interesting in this aspect.

Those transactions aren't free for the user even if the miners eat the cost. They STILL have to suffer exchange rate risk while using bitcoin. If they have to pay a fee higher than nominal WHILE BITCOIN IS STILL IN ALPHA, for the vast majority of people, that just isn't worth it. 

Miners have to subsidize transaction costs to bootstrap usage or this baby will die in its crib. That's why you're getting the goddamn block reward. I am the customer. I am the user who buys your fucking coins. What am I getting for my money if I have to take this monster risk and have to pay a fee anyway?  VISA gives me cash back for chrissakes. They are your competition. If you can't beat them, you won't earn their customers.

Don't you small block fuckers know how business works?

[Peter R]

Why is that better than forcing the fee directly, and ensuring that the capacity is well above the demand?  (I ca think of several reasons why it is much worse.)

It's not.  In fact, Nicolas Houy shows in this paper that a block size limit is economically equivalent to a minimum fee:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2400519

One criticism of the minimum-fee approach is that it would be possible (albeit awkward) for miners to refund fees out-of-band.

I think this paper was quite helpful, however, one thing it did not consider is the fact that miners may have their blocks orphaned, thereby forfeiting the block reward.  This orphaning risk serves as a production cost for our new economic commodity called block space.  In this paper (which I know you've seen), I build from Nicolas Houy's work to show that if orphaning is included, that a healthy fee market would exist without a block size limit.

[brg444]

I think a fee market that is relative to demand for blockspace is perfectly reasonable... but not today. We're too small to sustain the demand in the face of countless competitors. Bitcoin doesn't have the benefit of the periodic table, if we don't capture share while miners are subsidized and incentivized to secure and process transactions... it becomes like rpietila's castle game, with you and a few thousand others trading pogs back and forth.

Again you seem to confuse what it is you'd like to or perceive Bitcoin should compete with and what Bitcoin's unique value and properties are.

If we can't agree on this I guess we can never agree on the rest but my opinion is we want Bitcoin to compete with gold, offshore saving accounts, safe havens of all sort , therein lies the value (and the "moon" valuations), not competing with VISA/Mastercard or Square.

I didn't reply with a hope to change your mind. But I do hope we can build a bridge from the middle of the river  

I'm just thinking you are hoping to sell 1. the wrong people onto Bitcoin using 2. the wrong "features" of Bitcoin. This necessarily creates a steep obstacle to the "adoption" you are wishing for.

To be quite honest I have been guilty of this in the past and have long maintained this delusion that Bitcoin was somehow this fantastic payment network that would replace credit cards, etc etc. Until I finally came to sense and understood what the true value of it was. Note that you shouldn't forego your dreams of moon because of this. The markets I am suggesting we target are enormously more valuable than replacing simple payment processors!

Peer to Peer Electronic Cash System
vs
Peer to Peer Electronic Wealth Storage System

I think we've distilled it down. I also think it can be both, but the former facilitates the latter.

Every thread seems to be a mixed topic thread recently

A $5 variation in price for days on end will do that.

I was hoping you'd bring this up.

Did we ever consider what Satoshi insinuated by "cash"?

Is it because of the ability to be easily transferable at low cost or because of its nature as a bearer instrument free of censorship from authorities or third parties?

After all, Bitcoin is proposed as a solution to the Byzantine Generals problem isn't it? I think Satoshi makes it pretty clear the essence of his proposition is to remove trust from transactions.

It makes sense considering his design of the system that Bitcoin can not ever reach the ubiquity of cash in transactions worldwide. This would necessitate such as scale as to effectively centralize Bitcoin and therefore defeats the original attempt to remove trust. Even the proposition to remove trust is admittedly naive. There exists inherent trust in Bitcoin as it exist. We currently trust a handful of miners to behave according to everyone's interest and game theory suggest they should do so provided with the right incentives but what happens if they somehow become coerced into taking a different road?