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

[notme]

Secondly, it doesn't matter what you make the blocksize - 2 Mb, 16 Mb 32 Mb. It will still get full and still be spammable.

You keep saying this, but consider that if you double the available space without halving the minimum fee then you double the cost of DOSing legitimate transactions.  If blocks are full, there will be fee pressure that ensures this floor (besides the fact that transactions without sufficient fees aren't even relayed anymore).  If blocks aren't full, then miners are perfectly capable of determining what transactions are worth the long term cost to include.  They are the ones who have to bear that cost after all.

[ImI]

Also you are contradicting yourself: "Ability to move around Bitcoin isn't affected" contradicts "Moving $3 in Bitcoin doesn't make much sense either. The blockchain is a limited resource."

The problem is that bitcoin (or any blockchain) cannot be a commercial payments system AND an efficient store of value both at once since the two objectives have priorities which are in conflict.

For a start, the purpose of a payment system is to clear trades, not to settle them and as such the commercial realm is adequately catered for by worldwide payment networks such as Visa and Mastercard. There is anything a blockchain can improve on there - even in terms of fees, because the merchant isn't paying those fees to clear the trade, they're paying for access to a massive customer base.

Secondly, it doesn't matter what you make the blocksize - 2 Mb, 16 Mb 32 Mb. It will still get full and still be spammable. Paying a $3 fee to transact on it isn't comparable to paying  2% fee with Visa because the merchant is purchasing different things in each case:

 • with Visa they aren't paying for realtime settlement, with bitcoin they are
 • with Bitcoin they aren't paying for access to a majority client base, with Visa they are
 • with Bitcoin they aren't paying for merchant services, with bitcoin they are

So with bitcoin it's all about settlement, not trade which is why its technical properties should be prioritised around monetary security, stability and confidence rather than commercial versatility.

Against that background, $3 is nothing for moving an asset that is fundamentally a deflationary store of value and that has liquidity worldwide.

The biggest threat for Bitcoin's function as store of value are multiple forks. If Bitcoin splits up into several competing instances of the same original store of value, the value of each single chain and also all chains combined diminishes. So it should be a top priority to keep everyone on board, even if that means doing compromises which are eventually seen as suboptimal.

[Ibian]

Really, increasing the block size seems to have no drawbacks to me. The only ones personally affected by it will be miners, and all that will mean is that the top miners stay the top miners and shit tier miners stay shit tier miners. Nothing changes.

Where is the major problem here?

[toknormal]

Just keep the blocksize the same.

Bitcoin's job is to store value, not to be the next Visa. It *should* be expensive to move around.

[Ibian]

Just keep the blocksize the same.

Bitcoin's job is to store value, not to be the next Visa. It *should* be expensive to move around.

Explain.

[Lauda]

Really, increasing the block size seems to have no drawbacks to me.

Then you do not understand anything. Let's start with the crucial one:
1) DoS attack vector due to quadratic validation time O(n^2) at 2 MB. You are able to construct a transaction/block that takes longer than 10 minutes to validate, essentially preventing others from catching-up to you.
2) Increased orphan rates.
3) Increased node centralization/decreased node count.
4) Increased mining centralization (direct effect of the 2 above).
5) Risk of chain-split.
There's probably more, but these are the first ones that come into mind.

Just keep the blocksize the same.

Explain.

You can scale Bitcoin to a fair extent without modifying the block size. Segwit -> Schnorr + Signature aggregation -> LN/sidechains/TumbleBit/Mimblewimble.
I just noticed this wall at Bitstamp:

[Ibian]

Really, increasing the block size seems to have no drawbacks to me.

Then you do not understand anything. Let's start with the crucial one:
1) DoS attack vector due to quadratic validation time O(n^2) at 2 MB. You are able to construct a transaction/block that takes longer than 10 minutes to validate, essentially preventing others from catching-up to you.
2) Increased orphan rates.
3) Increased node centralization/decreased node count.
4) Increased mining centralization (direct effect of the 2 above).
5) Risk of chain-split.
There's probably more, but these are the first ones that come into mind.

How does any of that conflict with the top miners staying on top, and shit tier miners staying shit tier?

The thing that ultimately matters is, how many people can use bitcoin at a time. Orphaned blocks and whatever might turn out to be a cost of increased size, but it is better than never rising much beyond where we are now.

Mimblewimble

What the fuck does it tell you that we are using terms like that?

[toknormal]

Just keep the blocksize the same.

Bitcoin's job is to store value, not to be the next Visa. It *should* be expensive to move around.

Explain.

We tend to couple in our minds the processes of "clearing a trade" and "making payment".

So, for example when you checkout of an order on Amazon the last thing you do is enter your credit card details and submit the page. We refer to that process as "paying".

But at an engineering level it isn't paying. It's simply getting the trade out of the way so the retailer can deal with the next trade and the customer can get on with their life. In that respect, the job of a 'payment system' is to clear trades like this. The process of settling them is necessarily decoupled because it has different priorities.

On the other hand if you wanted to move $100,000 from one bank to another you might pay a $500 fee. It's a completely different and distinct commercial/monetary process.

If you re-couple these processes in a retail situation (for example by introducing blockchain payments as POS), you just create a huge headache for retailers that would simply bring everything to a grinding halt due to the lack of performance and flexibility of a blockchain solution.

My point is that the fees people are complaining about are incorrectly compared with trading fees for payment of goods and services. When you look at the cost of moving $100,000 on the bitcoin network and take into account that it clears within an hour with good confirmations, the fees are positively cheap.

The advantage of keeping the blocksize at 1 Mb is that it consolidates Bitcoin's value proposition against alt coins. The only reason it has value is because it is unique, original and is seen as a 'safe haven'. In other words, unlike the altcoin world, the less that's done to it the better (obviously within reason as long as doing nothing doesn't actually do it damage).

[Ibian]

Just keep the blocksize the same.

Bitcoin's job is to store value, not to be the next Visa. It *should* be expensive to move around.

Explain.

We tend to couple in our minds the processes of "clearing a trade" and "making payment".

That's because they are one and the same. Whatever happens behind the scenes is none of the average person's business. And you did not explain why it "*should*" be expensive to move bitcoin around.

On the other hand if you wanted to move $100,000 from one bank to another you might pay a $500 fee. It's a completely different and distinct commercial/monetary process.

What the fuck kind of bank are you using.

My point is that the fees people are complaining about are incorrectly compared with trading fees for payment of goods and services. When you look at the cost of moving $100,000 on the bitcoin network and take into account that it clears within an hour with good confirmations, the fees are positively cheap.

And still ten times as high as they used to be - and that's just in terms of btc, not even in terms of fiat.

The advantage of keeping the blocksize at 1 Mb is that it consolidates Bitcoin's value proposition against alt coins. The only reason it has value is because it is unique, original and is seen as a 'safe haven'. In other words, unlike the altcoin world, the less that's done to it the better (obviously within reason as long as doing nothing doesn't actually do it damage).

That makes no sense.

In any case, the DISadvantage is that it limits the number of people who can use bitcoin. Higher blocksize, more people, more transfers, more fees, more profit to miners and a higher price. It is an extremely simple choice that needs to be made. Growth or stagnation.

[toknormal]

Just keep the blocksize the same.

Bitcoin's job is to store value, not to be the next Visa. It *should* be expensive to move around.

Explain.

We tend to couple in our minds the processes of "clearing a trade" and "making payment".

That's because they are one and the same. Whatever happens behind the scenes is none of the average person's business.

They are not one and the same, not even remotely.

Thats one of the reasons this debate gets do confused, because people are clueless as to what the mechanics of a commercial trading network really are and are therefore ill equipped to prioritise the most appropriate properties that bitcoin should have. They think "store of value", "payment system", "commercial trade transaction", "monetary asset"...it's all the same thing.

Well, they are not all the same thing and can't be supported by a single monetary medium.

[Ibian]

Just keep the blocksize the same.

Bitcoin's job is to store value, not to be the next Visa. It *should* be expensive to move around.

Explain.

We tend to couple in our minds the processes of "clearing a trade" and "making payment".

That's because they are one and the same. Whatever happens behind the scenes is none of the average person's business.

They are not one and the same, not even remotely.

Thats one of the reasons this debate gets do confused, because people are clueless as to what the mechanics of a commercial trading network really are and are therefore ill equipped to priorities the most appropriate properties that bitcoin should have. They think "store of value", "payment system", "commercial trade transaction", "monetary asset"...it's all the same thing.

Well, they are not all the same thing and can't be supported by a single monetary medium.

It is the same thing with bitcoin.

And I absolutely insist. Why "*should*" it be expensive to move bitcoin around? What is the useful purpose of such a position?

[toknormal]

It is an extremely simple choice that needs to be made. Growth or stagnation.

Growth of what ?

Bitcoin doesn't have to grow in trade usage for it to grow in value. That's because the more it establishes itself as the *only* crypto who's job it is to be a safe haven (as opposed to doing something useful) it will indeed grow in value which is why most of its investors are investing in it.

1 BTC that sits on the blockchain for 30 years and holds its value till the owner retires is doing a job. It's having 'use'.

They're not investing so they can buy their cornflakes with it.

And I absolutely insist. Why "*should*" it be expensive to move bitcoin around? What is the useful purpose of such a position?

It isn't expensive. It's cheap.

[Ibian]

It is an extremely simple choice that needs to be made. Growth or stagnation.

Growth of what ?

The price. Obviously.

Bitcoin doesn't have to grow in trade usage for it to grow in value. That's because the more it establishes itself as the *only* crypto who's job it is to be a safe haven (as opposed to doing something useful) it will indeed grow in value which is why most of its investors are investing in it.

It requires that people use it. In whatever way they want. Supply and demand is possibly the most basic of economic laws. What are you having trouble with here?

1 BTC that sits on the blockchain for 30 years and holds its value till the owner retires is doing a job. It's having 'use'.

Why do you prefer stagnation over growth?

And I absolutely insist. Why "*should*" it be expensive to move bitcoin around? What is the useful purpose of such a position?

It isn't expensive. It's cheap.

You specifically said that it should be expensive. Don't puss out now. Justify your position.

But you won't. Because you are a sophist. I will not spend more time on you past this point.

[Torque]

Ibian tries to distill every argument down into a black and white, yes or no result so that he can claim victory.

Ok here's one for ya Ibian.

Why do you want the price to increase? So that you can be rich one day?

Yes or no? Just answer the question with 'yes' or 'no'.

[Spaceman_Spiff]

Really, increasing the block size seems to have no drawbacks to me.

Then you do not understand anything. Let's start with the crucial one:
1) DoS attack vector due to quadratic validation time O(n^2) at 2 MB. You are able to construct a transaction/block that takes longer than 10 minutes to validate, essentially preventing others from catching-up to you.
2) Increased orphan rates.
3) Increased node centralization/decreased node count.
4) Increased mining centralization (direct effect of the 2 above).
5) Risk of chain-split.
There's probably more, but these are the first ones that come into mind.

Just keep the blocksize the same.

Explain.

You can scale Bitcoin to a fair extent without modifying the block size. Segwit -> Schnorr + Signature aggregation -> LN/sidechains/TumbleBit/Mimblewimble.

Nice summary

[Ibian]

Ibian tries to distill every argument down into a black and white, yes or no result so that he can claim victory.

Ok here's one for ya Ibian.

Why do you want the price to increase? So you can be rich?

Yes or no? Just answer the question with 'yes' or 'no'.

Yes. Of course.

Now here is a question for anyone who thinks this is a BadWrong thing. Why do you want the price to go down? Doesn't even have to be a yes or no, I'm generous like that.

[Torque]

Ibian tries to distill every argument down into a black and white, yes or no result so that he can claim victory.

Ok here's one for ya Ibian.

Why do you want the price to increase? So you can be rich?

Yes or no? Just answer the question with 'yes' or 'no'.

Yes. Of course.

Now here is a question for anyone who thinks this is a BadWrong thing. Why do you want the price to go down? Doesn't even have to be a yes or no, I'm generous like that.

Nope, you don't get off that easy.

So yes, you only care about the price increasing so that you can sell bitcoin to be rich one day. So you don't actually care about bitcoin beyond anything other than being able to sell it for fiat. Got it.

Which then begs the question, why not devote your time invested in an altcoin where you can potentially get rich quicker?  Because all the other benefits of focusing on Bitcoin other than to get rich seem to elude you.

[Ibian]

Ibian tries to distill every argument down into a black and white, yes or no result so that he can claim victory.

Ok here's one for ya Ibian.

Why do you want the price to increase? So you can be rich?

Yes or no? Just answer the question with 'yes' or 'no'.

Yes. Of course.

Now here is a question for anyone who thinks this is a BadWrong thing. Why do you want the price to go down? Doesn't even have to be a yes or no, I'm generous like that.

Nope, you don't get off that easy.

I get off exactly as easy as I want. Feel free to try again without the condescending attitude.

[Torque]

Ibian tries to distill every argument down into a black and white, yes or no result so that he can claim victory.

Ok here's one for ya Ibian.

Why do you want the price to increase? So you can be rich?

Yes or no? Just answer the question with 'yes' or 'no'.

Yes. Of course.

Now here is a question for anyone who thinks this is a BadWrong thing. Why do you want the price to go down? Doesn't even have to be a yes or no, I'm generous like that.

Nope, you don't get off that easy.

I get off exactly as easy as I want. Feel free to try again without the condescending attitude.

Didn't answer my question, as typical.  Face it dude, you're just an asshole that likes to pick fights with people with your condescending attitude of superiority.  But once again, when faced with truth, you switch direction.

[Ibian]

Ibian tries to distill every argument down into a black and white, yes or no result so that he can claim victory.

Ok here's one for ya Ibian.

Why do you want the price to increase? So you can be rich?

Yes or no? Just answer the question with 'yes' or 'no'.

Yes. Of course.

Now here is a question for anyone who thinks this is a BadWrong thing. Why do you want the price to go down? Doesn't even have to be a yes or no, I'm generous like that.

Nope, you don't get off that easy.

I get off exactly as easy as I want. Feel free to try again without the condescending attitude.

Didn't answer my question, as typical.  Face it dude, you're just an asshole that likes to pick fights with people with your condescending attitude of superiority.  But once again, when faced with truth, you switch direction.

You are projecting.

And here no further communication is useful. People can decide on their own what is actually the case.