Cross-posting...
https://bitcointalk.org/index.php?topic=583449.msg6698221#msg6698221 I have asked about the bloat on the chain before, and the consensus was that with the visible competition enforcing a 10% tax on mining to afford some privacy, then the storage space used to hold the blockchain would be a much less cost. I would like to know much more about this though, because the blockchain is noticeably larger in this protocol by a lot.
The issue is not only the cost of the storage. There is the download speed also. And other complex factors. A tax is probably also going to have Tragedy of the Commons effects, as I explained in my numerous discussions of why transaction fees will never work for Bitcoin in the long-run. There are other articles out now about these by others. Such discussion will take us off on tangents I don't feel like having right now.
Someone from your group private messaged me and ask I provide references.
Here is the recent article I was referring to:
http://radar.oreilly.com/2014/04/bitcoin-what-happens-when-the-miners-pack-up-their-gear.htmlI raised similar issues last year as follows.
Transactions Withholding Attack"Spiraling Transaction Fees Destruction" of bitcoin (Transactions fees are a Tragedy of the Commons)
Well I see as January 2014, others below started to expound upon what I had explained in November 2013 at the threads given by the quoted links above.
On The Longest Chain Rule and Programmed
Self-Destruction of Crypto Currencies5.4 The Increasing Fees Argument
The question of why fees are not enough to support miners has been brilliantly
explained by Robert Scams in [20].
The argument is that basically sooner or later "defationary currencies" and
"growth currencies" will be in competition. Then all the other things being more
or less in equilibrium, in defationary currencies most of the pro t from appre-
ciation will be received by holders of current coins through their appreciation.
Therefore less pro t will be made by miners in these currencies. However min-
ers control the network and they will impose higher fees. In contrast in growth
coins, there will be comparatively more seigniorage pro t and it will be spent on
hashing. Miners will make good pro ts and transaction fees will be lower. Thus
year after year people will prefer growth currencies due to lower transaction fees.
Overall we see that this is crucial question of how the cost of the infrastruc-
ture necessary for the maintain a digital currency is split between new adopters
(which pay for it through appreciation) and users (which pay through transac-
tion fees. It is obvious that there exists an optimal equilibrium between these
two sources of income, and that there is no reason why the creator of bitcoin
would get it right, some adjustments will be necessary in the future
Btw, the above linked paper is a siren call for strictly CPU only alt-coins, with
constant perpetual debasement and 0 tx fees, and which have some mechanism to limit pool sizes.
The rest of the point of the above paper regarding tx timestampes is really a flawed ad hoc way of attempting to achieve the decentralization that the prior sentence would achieve more correctly.
http://arxiv.org/pdf/1405.0534.pdf#page=29A big question is whether timestamps are needed at all, see Section 7.3. An
alternative to timestamps could be various pure consensus mechanisms without
timestamps by which numerous network nodes would certify that that they have
seen one transaction earlier than another transaction. In this paper we take the
view that they should be present by default and further con rmed by (the same)
sorts of additional mechanisms.