Quote from: billyjoeallen on August 20, 2015, 03:08:23 AM

Back clearly does not understand economics. Mining gets more centralized because of economies of scale. this is unavoidable unless you intentionally want to keep mining and our whole project as a hobby. Look at gold mining. At the beginning of the California Gold Rush, anybody with a shovel and a pan could make a buck. After the low hanging fruit all got picked,you had to invest more and more capital and have more knowledge and specialized knowledge.

Speaking of gold: Gold has been demonetized (ie, there are no gold coins in circulation as national currencies), so it's not like millions of gold transactions are happening every day. In terms of transactions per second, it's not very unlike Bitcoin. Yet, the ~5.8bn ounces / ~180 kilotons of gold have a marketcap of 6.5 trillion USD.

BTC is digital gold. It doesn't need to scale its transactions to billions per day for fear of death. You are only looking at the transaction aspect / epayment system aspect, and you are overlooking the store-of-value aspect.

The store-of-value aspect of Bitcoin benefits massively from the ability of any individual to run a full wallet, with the entire blockchain, and the individual being able to be their own banker and have their own bitcoins under their control, while these BTCs appreciate even from their ...non-use and scarcity, relative to the fiat money supply which is inflating and devaluing itself.

Quote

Every single barrier can be overcome if the price of bitcoin gets enough. The same thing happened a few years ago when gold prices jumped so high that placer mining became profitable again. Smart rich people from lower margin industries come in and compete--But that WON'T happen if most bitcoin transactions go off blockchain because of economics.

Bitcoin, aside from being a coin and payment system, is also code that can be cloned/duplicated in altcoins... so it can scale if you make multiple bitcoin-like coins, use them for fast and cheap transactions and then discard them in the long run when their blockchain is bloated (if they can't be pruned). It's like using silver, copper and nickel for other coins that are traded daily, while you leave your gold coin under the mattress.

Right now we are using our gold for dust transactions of a few thousand satoshis and pretend that we need larger block sizes. This is ridiculous waste of blockchain space - which represents a barrier to entry as it increases in size (not to mention what happens when it increases dramatically, in terms of mining, centralization etc). Let the fees take care of this kind of waste and not multiply this wasteful behavior.

Quote

Off blockchain transactions increase the velocity of money which has the same effect of increasing supply. You're not trading with bitcoin. You're trading with bitcoin IOUs.

MV=PQ money supply times velocity equals price of goods time quantity of goods. How long before Coinbase starts operating as a fractional reserve or gets out-competed by someone else who does?

Supply and demand. Effectively increasing bitcoin supply drives the price down.

Scale or die.

Dogecoin, IIRC has 1mb blocks per minute, so, in that sense, it scales 10x compared to BTC - which is even larger than XT. But it's not like people are saying "hey the dog can scale like crazy, let's all buy the dog and go to the moon"...

I mean why hasn't anyone brought it up as a major selling point for altcoins like LTC (4x), DASH / DRK (4x), DOGE (10x) that they can scale much more than BTC due to their more frequent blocks (of similar size) if that's all it takes to overtake bitcoin, that will supposedly die from not scaling, while these coins have already "solved" that and thus they will scale much better?

If it was such an issue, the money would have already decided in favor of altcoins that are "better" than the "flawed" Bitcoin - which is also "flawed" with its very slow confirmations compared to most alts that are lightening fast when, say, you deposit into an exchange. But the reality is that the parameters of Bitcoin are known for years. People know that btc is more expensive in its tx's, that it's slower, etc etc, yet it is still dominating the crypto-market due to the store-of-value aspect which seems to be (to the market) more important than the transaction aspect.

So why all that "urgency" with the XT crap and the stress tests that were in line with a problem-reaction-solution modus operandi? Who, really believes that bitcoin will ...die, if several dust and faucet transactions which are now conducted for peanuts, are replaced by more valuable transactions?

As for the IOU argument, that's partly correct and that's why, personally, I'm less in favor of such fractional tactics, as I am in favor of altcoins or some embedded system on BTC that does something similar, instead of a third party running a fractional reserve scheme.