All of the properties you describe are also properties of many of the
alternative blockchains that currently exist. In this space, Bitcoin gives
up these advantages. Much like anywhere else where liquidity moves within a
system, value will move to the network of least friction. The reality right
now is it's very easy to move value from Bitcoin to another blockchain with
less friction. Because of this, there will never be a high value settlement
network created by an artificially imposed limit on transaction rate. The
value will simply bleed out of Bitcoin to alternative blockchains offering
lower fees if this is attempted. This is basic economics.
-----Original Message-----
From: Owen via bitcoin-dev
Sent: Wednesday, July 29, 2015 12:56 PM
To: Bitcoin Dev
Subject: Re: [bitcoin-dev] Why Satoshi's temporary anti-spam measureisn't
temporary
On July 29, 2015 7:15:49 AM EDT, Mike Hearn via bitcoin-dev:
Consider this: the highest Bitcoin tx fees can possibly go is perhaps
a
little higher than what our competition charges. Too much higher than
that,
and people will just say, you know what .... I'll make a bank transfer.
It's cheaper and not much slower, sometimes no slower at all.
I respectfully disagree with this analysis. The implication is that bitcoin
is merely one of a number of payment technologies. It's much more than that.
It's sound money, censorship resistance, personal control over money,
programmable money, and more. Without these attributes it's merely a really
inefficient way to do payments.
Given these advantages, there is no reason to believe the marginal cost of a
transaction can't far surpass that of a PayPal or bank transfer. I
personally would pay several multiples of the competitors' fees to continue
using bitcoin.
Sure, some marginal use cases will drop off with greater fees, but that's
normal and expected. These will be use cases where the user doesn't care
about bitcoin's advantages. We must be willing to let these use cases go
anyway, because we unfortunately don't have room on chain for everything
anyone might want to do.
Therefore, bitcoin tx fees can go much higher than the competition.
Remember how Satoshi referenced the banking crisis in his early work? The
2008 banking crisis was about a lot of things, but high credit card and
paypal fees wasnt one of them. There's more going on here than just
payments. Any speculative economic analysis would do better to include this
fact.
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