Re: Enforcing a production quota on block space that fights the free market
Your premise: Bitcoin consensus operates as a free market.
Why this is wrong: Bitcoin is ruled by a protocol enforced by a consensus of the nodes on the network.
The block size limit is not unlike like other consensus rules in the protocol: block interval time, 21M cap. It is indeed a security rule that carefully gages the incentives of the actor in the system and helps to align them toward an equilibrium.
It served as an anti-spam measure and still does.
The reason it is so is because the true cost of the spam is not bore by the miners but by the nodes. The block space is not a commodity produced by the miners but the effect of a limit on the costs of resources for the system.
"There's only one difference between a bad economist and a good one: the bad economist confines himself to visible effects; the good economist takes into account both the effect that can be seen and those effects that must be foreseen." Frédéric Bastiat
This is the total economic activity:
Any of you seeing a "dead weight loss"
Clearly the "will of the market" is not clamoring for more block size at present. Especially considering surely 20% of that space is filled with spam.
More about this "free market": if it cannot pay for decentralization then it cannot afford more utility. THIS is the negative externality that gets hand waved away by Peter. While he seemingly is very able at drawing lines on charts his ability to discern game theory dynamics are poor at best.
What he is campaigning and openly support is a tragedy of the commons that would create a disproportional and ultimately tragic rise of the resources costs of becoming a peer in the network.
It should be clear then that the anti spam limit should represent a measure of the cost of running a node. http://www.truthcoin.info/blog/measuring-decentralization/
Why this is wrong: Bitcoin is ruled by a protocol enforced by a consensus of the nodes on the network.
The block size limit is not unlike like other consensus rules in the protocol: block interval time, 21M cap. It is indeed a security rule that carefully gages the incentives of the actor in the system and helps to align them toward an equilibrium.
It served as an anti-spam measure and still does.
The reason it is so is because the true cost of the spam is not bore by the miners but by the nodes. The block space is not a commodity produced by the miners but the effect of a limit on the costs of resources for the system.
"There's only one difference between a bad economist and a good one: the bad economist confines himself to visible effects; the good economist takes into account both the effect that can be seen and those effects that must be foreseen." Frédéric Bastiat
This is the total economic activity:
Any of you seeing a "dead weight loss"
Clearly the "will of the market" is not clamoring for more block size at present. Especially considering surely 20% of that space is filled with spam.
More about this "free market": if it cannot pay for decentralization then it cannot afford more utility. THIS is the negative externality that gets hand waved away by Peter. While he seemingly is very able at drawing lines on charts his ability to discern game theory dynamics are poor at best.
What he is campaigning and openly support is a tragedy of the commons that would create a disproportional and ultimately tragic rise of the resources costs of becoming a peer in the network.
Assuming yearly 20% increase blockchain size & 10% reduction in bandwidth costs, after 15-20 years no new nodes can enter system except maybe huge datacenter operations. https://www.youtube.com/watch?v=TgjrS-BPWDQ&feature=youtu.be&t=7331
It should be clear then that the anti spam limit should represent a measure of the cost of running a node. http://www.truthcoin.info/blog/measuring-decentralization/