Quote from: r0ach on January 17, 2016, 06:21:34 PM

Quote from: JorgeStolfi on January 17, 2016, 05:52:34 PM

Bitcoin is not a viable a longterm store of value, because it has no mechanism to stabilize its value. (Even if it were truly scarce -- which it isn't -- there are plenty of things that are just as scarce but totally worthless.)

Bitcoin's real value can only be determined by on-chain transaction volume. If nobody is doing business on-chain, there will be no demand for coins, meaning no liquidity in markets, and price will drop seeking liquidity. Which is why not raising block size is utterly stupid if you care anything about price with Lightning Network not released yet.

If Lightning Network is ever released and functions, it's technically just bundling the same on-chain transactions, so price would continue to increase with an increase in LN volume, just not with an increase in security from fees being bundled. Most people would probably argue Bitcoin has enough security already, and mining increasing to the point of infinity where the entire planet is covered by a bitcoin miner is probably not a good idea.

Exactly. Problem is i guess most here are not understanding or dismiss principal economics, and forget the one and only rule: the free market - if it is indeed free - always wins in the long run, and no politically driven central controlled engineering can go against the collective wisdom and need of the users. That is supposed to be the whole point of bitcoin.

If the market wants bigger and bigger space for transactions ON the blockchain in the future - most tend to forget how great things like asset registry, stocks, bonds, etc have been told will be residing ON the blockchain, not on some 3rd party, semi centralized pseudo solution mechanism- , developers* have no choice, than to give it. If they do not, and the expanding market sees that the utility/liquidity of the most prevalent version stopped serving the market, they leave, either to another implementation - like Classic seems to be right now -, or choose another solution. Creative destruction, the mechanism of free market evolution.

I do not understand how "smallblockers" or elitist (read Hayek's Fatal Conceit) forget this simple fact:
the utility hence the value of the network is solely based on the judgement of the USER - who might have no clue about the technical part, bandwidth, storage space - but the system is for them. It can not exist for the will of developers/miners. Without millions of users, whom voluntary agree to hold, move, invest economic value in the network, mining and development is meaningless. If core can not find a solution for the needs, someone else will, for there is economic reward for it!

Without ever increasing adoption, and new utility, like colored coins for example, the price will stop growing, and mining becomes ever increasingly useless - because the coinbase reward diminishes, fees can not go up - no new users who would compete for blockspace -, and network value diminishes**.

Just as r0ach and others tried to explain, and frankly, it gets frustrating after a while:
Economic reasons trump technical/engineering/ideological reasons in real life EVERY time, especially in an open, competitive market.

It does not matter, if someone against ever increasing blocks because "oh noes, decentralization!!!***", if the majority of the users value more blockspace, increased tx/s more than home PC run nodes, they will sacrifice the ability to do home PC run nodes for them; if the market reaches a consensus about an increase, it will happen, for the market sees it as a change to deliver greater value for the majority of the participants - that is essentially the consensus reaching mechanism, what satoshi described. There are no all knowing wise guys, who tell the peasants what is good for them (and that his tx is "spam". Such arrogant elitism!). That is whats happening with Bitcoin Classic in front of our very eyes, and yet some still do not get that the market always wins!

And yes, participation is voluntary in the network. If some do not like the decision of the majority****, leave, or stay and stop sulking, it does not help anyone.

*and anyone can be a developer, bitcoin is permissionless, hence "true bitcoin" has no meaning;
**if the total value of economic activity increases globally, and bitcoin is at a fixed non increasing capacity hence value, than the ratio of bitcoin value/global value gets smaller with time, towards zero;
***bitcoin is not exempt of economic principles. If it gets robust enough, it also has to operate on the rules of economic scaling. CPU mining vanished as network value went up, same will happen with cheap PC run nodes, it is inevitable.
****this is not democracy, this is meritocracy. Build up 30% hashpower, or buy a million BTC, than you can influence the consensus greater. Stop the culture marxist bullshit about "all ideas are equally valid, i do not like yours, so everything must stop". They are clearly not, and that is good. More risk taking investment (knowledge, resources, service) equals more "votes".