Quote from: jubalix on May 24, 2017, 01:28:26 AM

Quote from: freedomno1 on May 23, 2017, 11:14:58 PM

for now 2MB will do the trick for the expand faction without wiping out miner fees significantly and get us there, only this route leads to a fork.
(We can call this period the excess profit period where on top of block rewards high txt fees exist and with 300,000 Transactions in the mempool that is not going to change for a while yet and is the opportunity of a lifetime if we do fork all new chains will retain the Bitcoins owned today.)

I never understood this argument, say price is related to adoption, and if the blocks become 2x larger, your going to attract >2 x people wanting to send at 1/2 the price.

It clears the Mempool backlog, this reduces the total cost of transactions for an individual to send Bitcoin on the blockchain, reducing the friction and barriers to Bitcoin usage high sending costs reduce demand hence organic growth is stigmatized.
2MB temporarily means more users will use Bitcoin again as their primary means of sending value and boost organic adoption.

The high fees we pay in a 1MB block result in less users transacting on the blockchain in the long run and moving to altcoins as the main means of payment.

Paying lower fees but similar amounts in aggregate by increasing the blocksize to 2MB is a stopgap solution to allow people to participate in daily transactions at a reasonable cost.
If 100 people pay $1 to transact and 200 people would be willing to pay 0.50 if the capacity is raised we would see some users who were not interested in transacting at higher fees using it again, plus new users would be more willing to transact, you can imagine that as a simple widget curve an increase in capacity 2MB and a lower price to transact can move demand to a new price equilibrium.

The key point is that 2MB does not change the block reward and will eventually see the same issues reappear at 2MB which makes it a stopgap solution. It's main virtue is to not reward miners egregious sums to confirm a transaction between two users and provide time.

2MB does not reduce usage in the short term as it's primary goal is to keep costs low enough for new users to transact and participate in the Bitcoin economy promoting organic growth for services like Xapo and on-chain games like luckyb.it.

If the usage is limited in day to day purchases because of high fees there is a leakage to another means of transaction such as altcoins, as users are tempted by the lower transaction costs and sacrifice utility, over time though this increases the value of altcoins and the rising price attracts more services boosting the utility of them all due to Bitcoin issues. Therefore we see some adoption leak to altcoins over time as people move and transact on their preferred second choice coins.

So we either treat 1MB as choking and putting a limiting throttle on Bitcoin growth in the future, or we can transition Bitcoin to an Asset Class and keep the 1MB block turning Bitcoin into the de facto pricing mechanism by which all Altcoins are priced.
The second more popular route at this point is increasing the number of transactions and capacity of the network or I guess to go back to the oldest proposals Blockchain compression and related ideas.

(That brings us back full circle to we can resolve this with Segwit, BU, Hard Fork, spending more time hunting the low lying fruit's all over again etc. as long as consensus is achieved in the end but until then the original is the status quo)