Quote from: johnyj on October 08, 2015, 02:21:46 AM

Quote from: Peter R on September 15, 2015, 06:22:10 PM

Question: is it possible for Bitcoin to enforce a rule that goes against the will of the market? How can we enforce rules that most of us disagree with?

As an example, consider the block size limit. When it was put in place five years ago by Satoshi, it served as an anti-spam measure. It was actually 800x larger than Q* so the vertical line marked Q_max was actually 100 ft off the chart! Since the production quota was to the left of the free-market equilibrium point, it didn't affect the market dynamics. There was no economic pressure to change the limit.

However, Bitcoin has grown tremendously over the past five years and I believe the limit is now serving as a political measure instead. It is to the right of Q*, resulting in what economists call a "deadweight loss." This is the total economic activity lost as a direct result of the quota. It also represents the will of the market (people) clamouring for change.

If the market wants to be at Q*, but the production quota is forcing it to be at Q_max, what can a group do to continue to enforce the production quota against the will of the market? How can the invisible hand be restrained?

I rechecked these charts, the "deadweight loss" part means that when there is a blocksize limit on the left of the Q*, some transactions will not be included in the block no matter how people adjust their fees

But my view is that supply and demand curve is not fixed, they would move once the Qmax moved, so that a new Q* will always appear at the left of Qmax regardless of Qmax's position

Imagine that Qmax moved to left of Q*, thus the tranaction capacity is not enough, so the natural reaction of normal user is to reduce the transaction frequency, so demand curve will shift down, and the supply curve will shift up: miners charge much more when the transaction capacity is less. So these two lines will cross at some where left of Qmax to make a new Q*

Basically there is two possible outcome to this, either the pressure for more capacity will increase OR as you state, demand will lower down by driving users away. If demand is lowering down then transaction fees won't rise up.