Re: [bitcoin-dev] Why Satoshi's temporary anti-spam measureisn't temporary

From: "Raystonn ." <raystonn@hotmail•com>
To: "Owen" <ogunden@phauna•org>,
	"Bitcoin Dev" <bitcoin-dev@lists•linuxfoundation.org>
Subject: Re: [bitcoin-dev] Why Satoshi's temporary anti-spam measureisn't	temporary
Date: Wed, 29 Jul 2015 13:23:51 -0700	[thread overview]
Message-ID: <COL131-DS2142721BF08CD332BA7620CD8C0@phx.gbl> (raw)
In-Reply-To: <37D282C2-EF9C-4B8B-91E8-7D613B381824@phauna.org>

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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