Post
Topic
Board Economics
Re: Is it time to give Bitcoin a Use Value?
by
DeathAndTaxes
on 09/01/2015, 00:08:26 UTC
Blockchain as file storage is a fundamentally bad concept because it is incredibly expensive and the ledger provides a poor compromise between redundancy and cost.  When you store or backup some data how many copies do you need.   The correct answer is one.   The only reason we use redundancy in some form is because failure is a possibility.  0 surviving copies is worthless and 1 copy is maximum value.   Since we can't know how, when, or why a copy will be destroyed the cheapest form of insurance is to maintain more copies.   The problem is that each additional copy provides a smaller incremental gain however the cost of that additional copy increasingly linearly.   The blockchain isn't partially redundant it is perfectly redundant for security reasons.   If there are 100,000 nodes you don't gain incrementally much more by having 100,000 copies of your data than you do by having say 100 copies but the true cost is 1000x more. That is a bad tradeoff for bulk storage.