- Aug 28, 2015
- 728
- 1,191
By americanpegasus
Quoted in it's entirety
https://redd.it/3nfqf3
I'm wracking my brain this morning thinking about value of an asset vs. its velocity as money. Obviously the faster and easier it can be transferred, the greater its real world usage (and by extension value). As well, you might initially think that the more people that can participate in a system (theoretically) the greater the value of that system as well.
...not necessarily. Look at gold, which still carries a hefty price despite being totally unsuitable for transacting in the modern world and being a logistical nightmare to trade in large quantities. I was forced to conclude that gold only stubbornly held onto its value because until crypto that's the best that humans had. For a second example, look at fine art, a collectible with little utility that still manages to command titanic prices per unit.
So considering all that, does Bitcoin need a larger blocksize? It lacks the qualities necessary to handle worldwide consumer transaction volume (would need to be capable of confirmation times < 10 seconds) and considering the fungibility plight it faces it's a foregone conclusion that unless they made radical and socially impossible changes to bitcoin it will never be used as a consumer payment mechanism around the world.
So the way forward for them should be to stop worrying about consumer payments then and preserve their value by catering to enterprise that needs a slow, reliable, and public blockchain. For this, a 1MB blocksize actually makes sense because it preserves the value of being able to write to the blockchain. Since consumers won't be able to make use of it anyway on a worldwide scale, bitcoin might as well embrace its destiny and become a tool for large financial institutions that don't mind paying the equivalent of $3,000 in transaction fees to write something permanently to a ledger.
But if we accept this premise, where does that leave us? What will Monero's eventual destiny be? Will we become a slightly larger, private ledger that isn't suitable for worldwide commerce? We can handle about 1700 transactions a second from what I understand but even our 1 minute confirmation time is too slow still (and 1 minute blocks are already dangerously undercutting the security of the network). Will we be able to change to a proof system that allows us sub-10 second confirmation times when the time comes? Will our estimated maximum of 1700 transactions a second eventually rise as the network and computer hardware grows in strength?
Or is the future a series of blockchains starting with large, sluggish, and ultra-secure and trailing down to agile and infinitely scalable but not very trustworthy?
I ask this question here, because I'm pretty sure I know the answer I'll get on /r/bitcoin[1] already: "just wait for sidechains" and other technological denial. I've found our community to be a little more open minded and able to think critically.
Quoted in it's entirety
https://redd.it/3nfqf3
I'm wracking my brain this morning thinking about value of an asset vs. its velocity as money. Obviously the faster and easier it can be transferred, the greater its real world usage (and by extension value). As well, you might initially think that the more people that can participate in a system (theoretically) the greater the value of that system as well.
...not necessarily. Look at gold, which still carries a hefty price despite being totally unsuitable for transacting in the modern world and being a logistical nightmare to trade in large quantities. I was forced to conclude that gold only stubbornly held onto its value because until crypto that's the best that humans had. For a second example, look at fine art, a collectible with little utility that still manages to command titanic prices per unit.
So considering all that, does Bitcoin need a larger blocksize? It lacks the qualities necessary to handle worldwide consumer transaction volume (would need to be capable of confirmation times < 10 seconds) and considering the fungibility plight it faces it's a foregone conclusion that unless they made radical and socially impossible changes to bitcoin it will never be used as a consumer payment mechanism around the world.
So the way forward for them should be to stop worrying about consumer payments then and preserve their value by catering to enterprise that needs a slow, reliable, and public blockchain. For this, a 1MB blocksize actually makes sense because it preserves the value of being able to write to the blockchain. Since consumers won't be able to make use of it anyway on a worldwide scale, bitcoin might as well embrace its destiny and become a tool for large financial institutions that don't mind paying the equivalent of $3,000 in transaction fees to write something permanently to a ledger.
But if we accept this premise, where does that leave us? What will Monero's eventual destiny be? Will we become a slightly larger, private ledger that isn't suitable for worldwide commerce? We can handle about 1700 transactions a second from what I understand but even our 1 minute confirmation time is too slow still (and 1 minute blocks are already dangerously undercutting the security of the network). Will we be able to change to a proof system that allows us sub-10 second confirmation times when the time comes? Will our estimated maximum of 1700 transactions a second eventually rise as the network and computer hardware grows in strength?
Or is the future a series of blockchains starting with large, sluggish, and ultra-secure and trailing down to agile and infinitely scalable but not very trustworthy?
I ask this question here, because I'm pretty sure I know the answer I'll get on /r/bitcoin[1] already: "just wait for sidechains" and other technological denial. I've found our community to be a little more open minded and able to think critically.
