Quote from: iCEBREAKER on September 08, 2015, 02:38:59 AM

Quote from: jonald_fyookball on September 08, 2015, 02:21:55 AM

Quote from: iCEBREAKER on September 08, 2015, 02:19:41 AM

Quote from: Peter R on September 07, 2015, 07:42:37 PM

My paper says nothing about this. It just shows that a distorted transaction fee market insufficient for the Bitcoin network to be able to pay for its own security exists without a block size limit

I fixed it for you.

Your most glaringly flawed assumption is to ignore the fact

Quote

block space is a scarce resource that is sold, but not paid for, by the miners...which is why a "tragedy of the commons" situation can only be avoided by a block size cap.

we already debunked that myth if you were paying attention. Just because it was said on reddit doesn't mean it's true.

So you are claiming which of the following?

A. block space is *not* a scarce resource
B. miners *don't* sell block space
C. miners *do* pay for block space
D. tragedy of the commons *won't* ensue
E. tragedy of the commons *can't* be avoided by a size cap
F. tragedy of the commons can be avoided by something *besides* a size cap

I think you're going for F. but since you simply assert debunking with no elaboration I can't really be sure.

It doesn't matter, because we know from empirical data 1MB is already too large to completely prevent the negative externalities, false economies, and negative marginal returns which are occuring due to information/accountability/incentives destroyed or perverted by subsidizing free riders in the mining and user subsystems.

Peter's shiny new illustrations are indeed excellent. But besides the slick graphics to impress the Redditurd mob, his paper is a giant obfuscatory nothingburger. Cite: https://botbot.me/freenode/bitcoin-wizards/2015-08-30/?msg=48477664&page=1

#REKT

Mostly I'm saying D -- tragedy of the commons won't ensue, or at least not fatally.

The reason is simple. The endgame "tragedy" of miners not securing the network will never happen
because an equilibrium will be reached where 1. some miners will stay profitable and
2. Those remaining miners will charge enough to achieve an acceptable network hashrate,
even with NO subsidies and NO blocksize limits.

How do we know 1. will happen?

This:

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However, how does the pool that is driving everyone out
pay their bills? They have to eventually raise their
fees to at least cover costs.

Any way you slice it, a new equilibrium will be reached.

How do we know 2. will happen?

Well, to be fair, we don't know for sure. There are too many variables such as what will the transaction
volume be, and what an "acceptable network hashrate" will be. However, it stands
to reason that if the community agrees it needs a certain minimum hashrate and
calculates what the minimum fee should be to support that hashrate, users would
likely pay it if miners charged it... and it would be in the miner's interests to charge it
both in terms of profitability and supporting the network.

Furthermore: If the users won't pay the fee because its simply too high, what makes you think
they will pay it when its enforced by the blocksize rather than the miners directly? (It would
actually have to even HIGHER because now we are artificially limiting the number of
transactions).

Or do you think they won't pay it for another reason...but somehow will under your
scenario with small blocks?

Or do you think the miners will just refuse to charge that much and leave us with
a lower hashrate?

What exactly do you think will happen under this "tragedy" scenario?

Regarding your "empirical data", what data do you have? You claim "negative marginal returns".
To me, that means you have P/L numbers from major mining companies. Do you?

Now, as to the question of: Could you get MORE revenue to the miners by instituting a cap, just as you can get more money to egg farmers by fixing prices? Probably. But I would also bet that the increase would be limited, probably less than an order of magnitude and thus not overwhelmingly impactful as far as changing the security. In other words, users might pay a dime for a transaction, but they ain't gonna pay a dollar...Not when they can use litecoin or whatever. A very simplified example but hopefully you get my point.