Quote from: NewLiberty on February 20, 2015, 11:22:00 PM

Quote from: justusranvier on February 20, 2015, 06:16:05 PM

Quote from: NewLiberty on February 20, 2015, 05:54:41 PM

Quote from: Pete Dushenski on October 8, 2014 at 5:47 PM in #bitcoin-assets

This is what it boils down to: scarcity. Theres no room in Bitcoin for inflation of any kind. Other applications and whatnot can be built on top of it as is. Its for the world to adapt and conform to Bitcoin, not the other way around.

I don't see transaction volume increase as a change in inflation so much as a change in velocity. Henry Hazlitt who is credited with bringing Austrian Economic theory to the English speaking world, would I think agree that is not something that ought to be artificially influenced either by constraint or encouragement. Hitting the limit would be an artificial constraint, removing it ahead of (3) would be an encouragement, but for inflation it is a no-op.

With some people, watching them wield economics terms of art they do not understand is like watching a child run with scissors.

Many others may also conflate these, so a few words around it might be useful? Lest some think that there is any attempt to equate Bitcoin with anything else, but who also may think that the principles that govern human behavior are all different with respect to Bitcoin and do not apply to it.
On Block Size and the Velocity of Money...

When the Keynesians attempt to increase velocity they do it by increasing money supply in order to attempt to get the money to 'burn a hole in your pocket'. So that quote from above may be relating the max block size increase as a velocity increasing move (which for Keynesians usually means money supply increases).

However, with Bitcoin, an increase in the max block size does not increase the money supply at all. There is not even any new spending incentive created. Bitcoin doesn't start to burn a hole in your pocket. All it does is potentially reduce the confirmation time, and remove an artificial floor in the transaction cost (which is a form of economic friction). Removing the friction is a good thing. It is one of the things that Bitcoin is very good at doing.

And in further contrast to the Keynesians, the contrary is more the empirical truth with Bitcoin. Transaction volume (velocity) has never yet been constrained by the protocol's Max Block Size, only by miners. The queueing we have is almost entirely constrained to the no-fee transactions. So now in approaching the point where the protocol constrains it, intelligent people may disagree whether or not Bitcoin undergoes changes simply by keeping the limit the same. Such queueing would serve to artificially subsidize mining at the expense of users rather than let a freer market dictate transaction pricing.

I'd aver that consistently hitting the transaction velocity limit is a change. It is as much a change as is changing that limit. Neither have occurred in recent times and there are those that reasonably expect both. Further, let me suggest that the change it is one which is very different in nature and effect from hitting a limit on supply (the 21M limit).
This difference is one where supply being inflationary, and velocity not so...not at all. Velocity (transaction volume) increase is a measure of the health of Bitcoin. It is a virtue.

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Personally, I do agree with danielpbarron on the notion of running a full node.
To wit, I expect to maintain my nodes as full. I do not expect everyone else to do so, and I do not hope to force them to do so either. Daniel and Immanual Kant have the ethics right on this.

You talk about Keynesian economics yet you ignore 20 years of lectures redefining the subject. I cannot be more clear that the answer to this problem lies in the relevation of those lectures. Those lectures explain the future, not because of voodoo, but because one can foretell the future with GREAT science.

For example Greece's conspiracy plan Z which is to peg their money to gold using smart contracts is really a function of the lecture Ideal Money that was given in Athens maybe 10 years ago: http://www.zerohedge.com/news/2015-02-19/grexit-gold-backed-drachma-conspiracy-theory-or-plan-z

Its not really a conspiracy but rather good economics.

And here is the (rough) formalization of everything we have learned thus far from this whole project:

Quote

We have 3 basic needs, food, freshwater, and shelter.
Add to import this (and in relation to TWON and Nash/Szabo) the need for barter (ie money).

This arises 4 basic needs for the creation of wealth among nations.

Then if we can think about the 4 color map problem upside down. We have defined the base Nash equilibrium needed for such growth.

Or in other words, if 5 nations arise and 2 provide "food" you do not have an equilibrium.

This shows then why humans evolved with 3 base needs and in-relation to inter-universal geometry (4 color problem). And begs the important question of whether life needs water, or if water is the most abundant or convenient progenitor of life on this planet.

Please don't delete my work Sad