Increasing Block size lowers the value of Bitcoin

[BitcoinBarrel]

Just think about the Blockchain as high demand realestate. If there is an office building right in the middle of town, and all the local businesses want to rent office space; creating more offices will just lower the scarcity.

Transaction fees are proportional to the price of Bitcoin. If the fees rise due to increased transactions then that means demand is high, thus increasing the price/btc.

[monsterer2]

Just think about the Blockchain as high demand realestate. If there is an office building right in the middle of town, and all the local businesses want to rent office space; creating more offices will just lower the scarcity.

Transaction fees are proportional to the price of Bitcoin. If the fees rise due to increased transactions then that means demand is high, thus increasing the price/btc.

Ever increasing the block size sends transaction fees towards 0 at the limit.

[Enkeci]

Many people are seeing Bitcoin as a way to easily make money, to understand someone exactly what Bitcoin offers need to look over the price, in 2017 to send 0.001 is required to add as fee the 50% of the tx amount, if the Increasing Block size lowers the value of Bitcoin, the increasing of fees can lower bitcoin users..

[skyline247]

Just think about the Blockchain as high demand realestate. If there is an office building right in the middle of town, and all the local businesses want to rent office space; creating more offices will just lower the scarcity.

Transaction fees are proportional to the price of Bitcoin. If the fees rise due to increased transactions then that means demand is high, thus increasing the price/btc.

The problem with your analogy is just because fees are high does not mean the price will go up or that is why the price is up. Think of it this way yes when fees are high it means there is more demand, but also people will stop using Bitcoin if the fees stay high and the supply will go up and demand drops and the price drops. We need a measure to keep fees lower in order to assure that everyone can continue using Bitcoin not only rich people or big drug dealers who can afford to pay high fees. Hope this makes sense!

[xskl0]

I believe that force your costumers to pay in order to open a "lightning" channel making transactions with 0 or very low fee impossible lowers the value of Bitcoin because no one will want to use it   

[25hashcoin]

Complete opposite. Increased velocity of on chain transactions is directly correlated to increased value. Off chain solutions retard growth of value.

Source: https://nchain.com/app/uploads/2017/07/SegWit-and-the-illusion-of-scale.pdf

[5trade]

perhaps, op, but having small blocks/slow transactions also lowers the value of bitcoin. i think the key is balance here.

[ranih]

Complete opposite. Increased velocity of on chain transactions is directly correlated to increased value. Off chain solutions retard growth of value.

Source: https://nchain.com/app/uploads/2017/07/SegWit-and-the-illusion-of-scale.pdf

You're probably right in a long-term view. Currently, it's hard to see any correlation between changes in the protocol and Bitcoin value...

[jonald_fyookball]

Just think about the Blockchain as high demand realestate. If there is an office building right in the middle of town, and all the local businesses want to rent office space; creating more offices will just lower the scarcity.

Transaction fees are proportional to the price of Bitcoin. If the fees rise due to increased transactions then that means demand is high, thus increasing the price/btc.

Wrong thinknig, sorry.

Transaction fees need to be low because of substitute goods.  Who the fuck is gonna pay $10 or even $5 a tx??  Not me.  I'll just use another coin.

Big blocks are going to allow small fee tx, but loads of them... leading to higher prices.   You'll see.

[iamTom123]

Just think about the Blockchain as high demand realestate. If there is an office building right in the middle of town, and all the local businesses want to rent office space; creating more offices will just lower the scarcity.

Transaction fees are proportional to the price of Bitcoin. If the fees rise due to increased transactions then that means demand is high, thus increasing the price/btc.

The problem with your analogy is just because fees are high does not mean the price will go up or that is why the price is up. Think of it this way yes when fees are high it means there is more demand, but also people will stop using Bitcoin if the fees stay high and the supply will go up and demand drops and the price drops. We need a measure to keep fees lower in order to assure that everyone can continue using Bitcoin not only rich people or big drug dealers who can afford to pay high fees. Hope this makes sense!

What happened was that because there was a huge congestion the fees astronomically surge because everyone wants to be prioritized...so in this case the fees came about because of the increasing demand for the service. Now, with higher fees for the transactions there will come a time when users would be complaining because this is not what Bitcoin is all about and in this case it can dampen the demand somehow. This is actually just a cycle. Hopefully, by next year there will be less chances for a congestion and we can experience better fees.

[mobnepal]

Increasing block size will only make transaction faster and cheaper, average time between two blocks will always be 10 minutes even after increasing the block size so this might not have any significant change in demand for bitcoin. Miners might earn less from transaction fee but block reward will be enough for them to remain in profit.

I don't find any connection between block size and price of bitcoin, when bitcoin transactions will be cheaper and faster demand for bitcoin might increase significantly and new investors might get interested in bitcoin that will increase price and marketcap.

[Mandoy]

Just think about the Blockchain as high demand realestate. If there is an office building right in the middle of town, and all the local businesses want to rent office space; creating more offices will just lower the scarcity.

Transaction fees are proportional to the price of Bitcoin. If the fees rise due to increased transactions then that means demand is high, thus increasing the price/btc.

You are right with your second statement but wrong on the first statement. Your comparison between the increased blocksize and increasing offices in a town is not applicable. It means that the analogy is wrong. The purpose of increasing the blocksize of in mining bitcoin is because the current cannot handle the transactions in the mempool. It means that there is a need to upgrade to increase the speed of transactions. Increasing the blocksize does not lower the scarcity of bitcoin since the amount of bitcoin is fixed at 21 million.

[pooya87]

things aren't as easy as "increase or not increase" block size as it may seem. there are a lot of issues with either of them.

a small block size with no scaling solution (meaning the old bitcoin without SegWit) means higher fees which increase with increasing demand and at some point it will rise over the tolerance of users who will stop using bitcoin and demand will fall.

a bigger block size specially if it is too big, or faster blocks like what altcoins have means a much much bigger blockchain size, lower number of nodes because there is a need for much stronger machine to store, download, load up UTXOs in ram,... and people are currently struggling with the current size as it is.

Transaction fees are proportional to the price of Bitcoin. If the fees rise due to increased transactions then that means demand is high, thus increasing the price/btc.

they used to be proportional to price. when it was $10 the fees were 0.01BTC then it was lowered and lowered and at some point blocks became full and fees stopped being proportional to price and started directly being linked to block size.
and as i mentioned above, there is a tolerance for fees. people won't pay higher than certain amounts and that can potentially be a big block over the increasing adoption.

with that said hopefully with SegWit capacity increase and the additional options this issue is solved for years to come and maybe in 5-10 years with the advancements in technology we can think of additional solutions for that time and be good until then.

[Schuyler]

Increasing the block size would only mean that there will be more space to accomodate more transactions. You can compare it to widening the road to accomodate more vehicles to lessen congestion. That wouldn’t hurt the value as it leads to more transactions with faster confirmations, which would then lead to higher usage rate of bitcoin.

[Wind_FURY]

Just think about the Blockchain as high demand realestate. If there is an office building right in the middle of town, and all the local businesses want to rent office space; creating more offices will just lower the scarcity.

But the value is derived from Bitcoin the asset which is limited in supply, and not Bitcoin blocks.

Transaction fees are proportional to the price of Bitcoin. If the fees rise due to increased transactions then that means demand is high, thus increasing the price/btc.

No, it just means there are a lot of people competing to in make their transaction included in a block by paying a higher fee. The price of Bitcoin comes from demand from the coin itself.

[Beerwizzard]

Transaction fees are proportional to the price of Bitcoin.

Nope. Transaction fee only depend on the number of current tranactoins, not on the current bitcoin value. 1 BTC = 1 BTC and that is the price of bitcoin for the network. Due to uncreasing bitcoin price counting in USD the transaction also increases and increasin the block size will only lower the transaction.

[BitFinnese]

Just think about the Blockchain as high demand realestate. If there is an office building right in the middle of town, and all the local businesses want to rent office space; creating more offices will just lower the scarcity.

Transaction fees are proportional to the price of Bitcoin. If the fees rise due to increased transactions then that means demand is high, thus increasing the price/btc.

I do not think you can compare Bitcoin and real state, if so then, think of a place where improvement and development  took place, then we can say that having to develop the block size of bitcoin means increase in price of it since with block size increase, there will be an easy access to the transaction and fast confirmation of transaction.  A place where access is easy and transportation is convenient gives that place a higher value.

[Wind_FURY]

I believe the OP is just confused with how bigger or smaller blocks affect Bitcoin. It affects only the fees but not the price of Bitcoin as an asset itself.

[tiger2monkey]

Block size increase => Can handle more transactions per block => Lower fees => More people will use it => Increase price and stability

[JohnBitCo]

Just think about the Blockchain as high demand realestate. If there is an office building right in the middle of town, and all the local businesses want to rent office space; creating more offices will just lower the scarcity.

Transaction fees are proportional to the price of Bitcoin. If the fees rise due to increased transactions then that means demand is high, thus increasing the price/btc.

I dont think that Bitcoin transaction fee are proportional to the price of Bitcoins as more or high fee does not determine the demand of bitcoin. Bitcoin tx can increased many more times with no tx fees even , because the blockchain size determine the tx and there is no collaboration of bitcoin demand with transaction fee.  The bitcoin demand is determined by the usage of bitcoin and its limited supply will make bitcoin price very high in the near future. Increasing blocksize rather makes the transaction confirmation time a lot faster.