Re: Bitcoin XT - Officially #REKT (also goes for BIP101 fraud)
How can we loose that free choice if anyone is free to release an alternate client the same way XT would have. If it get enough support it will simply be adopted.
Yes, at this point, the block size limit debate is sound and fury, signifying nothing. If the market wants to increase the block size limit, then it will increase the block size limit.
I've shown these diagrams a lot because I think they reveal the essence of the situation. If the limit remains to the right of Q*, then it doesn't really matter what the limit is because it does not affect the free market dynamics. However, if the limit falls to the left of Q*, then the pressure due to the deadweight loss will eventually cause a fork to move the limit back to the right of Q*!
TL/DR: There is no way to stop Bitcoin from growing.
Peter, your economic analysis is flawed, as it simply wishes away the external costs that the market may choose to impose on the users running their own node. The scaling solution needs to take account of this, and your proposed solutions as well as your analysis does not. Stop promoting faulty ideas (economic and technical alike).
I'm not asking what scaling solution is best. I'm asking the question: if the market wants to be at Q* but the production quota forces it to be at Qmax, who exactly will enforce the quota (especially over the long term as forking pressure builds)?
Normally, the answer is "the government" (or some powerful organization). But something like Bitcoin is governed by the market itself, is it not? How can the market enforce a quota that the market itself does not want? Well, I don't think it can.
There's a subtlety here: is the "thing" that will enforce the quota necessarily the same "thing" that wants to break the quota? The answer is not completely clear to me...
The code Peter, the code!
Bitcoin is not governed by the market! It's governed by its peers. How soon we forget this is a peer-to peer network...
I have repeatedly stated so but your question pretends that the market has no other alternative to transact on than the Bitcoin blockchain, this is obviously wrong!
If there is market demand for transactions that cannot be satisfied by or pay for block space on the Bitcoin network because of a quota enforced by its peers then this demand will simply pivot toward another alternative that can satisfy it.
These alternatives could be fiat, payment channels, off-chain platforms or even alt-coins.
Again, it doesn't matter what "the market" wants, Bitcoin is not governed by free-market but by rules enforced by a consensus of its peers so as to keep every network actors' incentives aligned.
How soon we forget the peer-to-peer network is useless and worthless if it doesn't serve a market...