The Bitcoin Forum

WhyBitcoin block space is like Starbucks coffee.


Recently I've seen a number of people in the Bitcoin ecosystem commenting that they think that Bitcoin blocks should always be completely full. This is analogous to thinking that Starbucks should always be completely sold out of coffee. Block space is like coffee in that it is a consumer good. When consumers buy coffee, they are expressing their desire for this consumer good. When Bitcoin users pay transaction fees for inclusion in a block, they are expressing their desire for the consumer good of block space as well.


In the coffee market, there are numerous suppliers of coffee. We have Starbucks, Tully's, Costa, and numerous others. We also have competitors to drinking coffee, such as Coke, Pepsi, water, caffeine pills, and a myriad of other options. Consumers will look at the price of coffee from the various suppliers, and coffee alternatives. They will then decide the amount they wish to purchase based on their individual preferences. Some will be willing to pay almost any price for coffee, but others will simply chose to do without. If the price offered on the market for coffee is high enough, additional suppliers will be attracted to enter the market and fill this demand. If the price of coffee is low, the coffee producers who are the least efficient will be forced to leave the market.


The exact same situation applies to Bitcoin block space as well. We the consumers, have lots of options. They include Bitcoin, Litecoin, Ripple, Ethereum, Dogecoin, and many many others. We also have non-blockchain based options as well. These include banks, credit cards, PayPal, cash, or simply forgoing a specific economic transaction. Potential Bitcoin users will look at the costs involved in using all of these systems. These costs include network fees, ease of use of the wallet software, the number of accepting merchants, payment confirmation speed, safety, difficulty of opening an account, legal risks, and numerous other aspects. Consumers will choose the one that most closely matches their desires, and it certainly wont be Bitcoin if Bitcoin doesn't do the best job of meeting their desires.


Just as it would be a mistake for Starbucks to intentionally not have enough coffee to meet the demands of their customers, it would also be a mistake for Bitcoin miners to not supply enough block space to meet the demands of their users. Any time a Bitcoin user is willing to pay a fee that is larger than the marginal cost of including the transaction in a block, it makes economic sense for a miner to include it. Whether it is for the sale of coffee, or block space, only someone who lacks an understanding of economics or business would want to turn away paying customers.


This brings us to the topic of externalities. An economic externality is a cost or benefit not born directly by the parties involved in a transaction. In an ideal world,we would find a way to internalize all externalities so the costs are born solely by the participants. When Starbucks sells coffee, there are likely some externalities that should be taken into consideration. Perhaps people on caffeine drive more aggressively, causing more traffic accidents. Or perhaps they are more alert, and therefore more productive at their jobs. It's hard to know exactly, but these externalities need to be taken into consideration when it comes to both coffee sales, and the Bitcoin block size.


The only negative externalities I can think of regarding mining an extra bitcoin transaction in a block are:

• The additional bandwidth required to relay that transaction across the network.
• The extra CPU time required to validate the transaction.
• The extra storage space that will be required to store the transaction.
• The potential for fewer nodes in the network because of some combination of the three issues above.

Let's consider these one at a time:

• 1. Additional bandwidth.
  • It's hard to know just how big of a problem this is, but with connectivity becoming faster and faster, year by year, more and more places around the world will have the ability to relay more and more transactions each year. If a block takes too long to relay the chances of it being orphaned increases. This chance puts a downward pressure on the maximum block size that miners will be willing to create. The right size today is certainly different than the right size next year. In the end, I see the best option to be letting the individual miners and nodes decide how much bandwidth they are willing to allocate to the relaying of individual transactions, and bitcoin blocks. The least efficient miners and nodes will drop off the network, just as the least efficient producers in any industry would.

• 2. Extra CPU Time.
  1. Every transaction included in a block requires some additional time to be validated by a full node, or for a miner to create a block that includes it. Only the parties involved in the transaction directly benefit from it, but every full node across the network has to pay the price of validating it. The time it takes to add additional transactions to a block increases the likelihood of a block being orphaned, and therefore puts a downward pressure on the block size that miners are willing to create, or relay. Even without a maximum block size hard coded into the protocol, there would still likely be a practical maximum block size because of this, as well as point #1.

• 3. Extra Storage Space.
  1. For me, this seems to be one of the most troubling externalities. All of these additional transactions need to be stored in the block chain that is held by everyone running a full node. If the block chain becomes too large, not enough people will be willing to run a full node. If there are too few nodes on the network, Bitcoin becomes more susceptible to outside influences, and looses some of its censorship resistance. The good news is that like bandwidth, storage is getting cheaper and cheaper every single year. Even today, storage in a relatively modest computer could keep up with 100 MB blocks, or about 5TB worth of data per year. In the not so distant future 1GB, or even 1TB blocks wont be an issue from a storage perspective either.

• 4. Fewer Nodes
  1. If the above three issues become serious enough, fewer and fewer people will be willing to run full nodes, and bitcoin will lose some of it censorship resistance. I think this is one of the biggest risks we have regarding Bitcoin, but as the great Frederic Bastiat reminded us, a good economist always considers what is seen, and what is not seen. Today we have around 5,000 full nodes around the world, with a user base of just a few million people. If Bitcoin is allowed to scale to have hundreds of millions of users, or even a billion users, there will be a much larger pool of people to draw from to run full nodes. This means that there will likely be a much larger absolute number of full nodes, even if it's a smaller percentage of bitcoin users that are running these full nodes. When it comes to censorship resistance the absolute number a full nodes is the most important characteristic, not the percentage of users running a full node.

It's also important to keep in mind that there are dozens of positive externalities from wide Bitcoin use.

• Governments will no longer be able to inflate the money supply.
• Capital controls will come to an end.
• Wars will no longer be able to be financed by inflation.
• It will be made much harder for governments to hide financial waste or corruption.
• People around the world can interact financially with each other much more freely than they can today.
• The value of bitcoin will go up, meaning the value of the block reward has gone up, meaning more resources will be devoted to mining, meaning Bitcoin is more secure, meaning more people will use Bitcoin. It's a self reinforcing feedback loop.

This list goes on and on, but it is important to remember than most of these positive externalities only become a reality if the vast majority of the world starts to useBitcoin. That will never happen if Bitcoin is artificially restrained from growing to meet the demands of people who want to use it.


Numerous people from Bitcoin Core have directly told me, there is no technical reason why the block size can't be increased today. They are simply not allowing it for “economic” and social reasons. A point made by the great economist Murray Rothbard is entirely relevant to this situation: It is no crime to be ignorant of distributed cryptographic consensus networks, which are, after all, a specialized discipline, but it is totally irresponsible to have a loud and vociferous opinion on this subject while remaining in this state of ignorance.


I would never dream of telling the current Bitcoin Core team the correct way to build a cryptographic consensus network, but the small block proponents are having loud and vociferous opinions on economic subjects while remaining in a state of ignorance. There is nothing advantageous to artificially limiting the block size. It will simply cause potential Bitcoin users to use something else. It's time to let the cryptographers do cryptography, while the economists consider the economics.

As someone who spent most of my educational career studying economics, I'm sure this was the reason I became the first person in the world to start investing in Bitcoin companies, including many of the most prominent companies in the ecosystem today. As someone who is still hodling the vast majority of own my net worth in bitcoin, I want to do everything I can to make sure that Bitcoin is a world wide success. Artificially restricting the amount of block space we produce is justas insane as Starbucks artificially restricting the amount of coffee they produce. It's time to end the block size blockade.

I think the ideas in the above post are important.
I'd enjoy people's help spreading them:
https://twitter.com/rogerkver/status/747417214047817729

Let's also see how long Theymos tolerates my dissenting opinion on /r/Bitcoin (North Korea)


Here's what happened the last time I tried to submit my thoughtful opinion there:

Update:
Within an hour it seems my post has already been removed from /r/Bitcoin
I just messaged one of the moderators asking why.

I now have a plan to end the censorship, and expose Theymos for the petty tyrant that he is.
I'll be setting this plan in motion ASAP.

Update:
Within an hour it seems my post has already been removed from /r/Bitcoin
I just messaged one of the moderators asking why.

I now have a plan to end the censorship, and expose Theymos for the petty tyrant that he is.
I'll be setting this plan in motion ASAP.

Thank you, Roger. Action clearly needs to be taken here.

Let us know what we can do to help you expose theymos and crew.

It's late here, but I like bounties.
I'm thinking of offering a bounty of a significant amount, for Theymos to turn control of /r/Bitcoin over to a neutral third party to moderate /r/Bitcoin.
Perhaps EFF.org would be a good choice.
The third party's mandate would clearly be to allow dissenting opinions, unlike the current mess over there.

The bounty could be payable to the charity of Theymos' choice.
If he doesn't accept, he is exposed to the world as the petty dictator and opponent of free speech that he is.
If he does accept, a worthy cause get's a large donation, and the bitcoin community gets to engage in free discussion again.

The amount will be large enough that we get some main stream media attention, and hopefully put some direct pressure on Reddit to take action as well.

Any thoughts on this plan?

Update:
Within an hour it seems my post has already been removed from /r/Bitcoin
I just messaged one of the moderators asking why.

I now have a plan to end the censorship, and expose Theymos for the petty tyrant that he is.
I'll be setting this plan in motion ASAP.

welcome to the world of censorship

thank you Roger for this. very well written and articulated.

actually, i don't even think kore dev hides it anymore. they admit that for the incentives to code up offchain solns like LN, they need high tx fees forced by the cap, to incentivize them to spend the time to work on these "solutions". that's a round about way for them to say they need to "force" tx's offchain to cheaper solns like LN or SC's. which, btw, support their proprietary products for Blockstream and the other individual companies each kore dev have established. if LN gets successfully forced onto Bitcoin, LN hubs will be run by well capitalized, for profit "routing providers" who will take a fee cut and also enforce KYC/AML. if there's any doubt about this, look at the 21co model where their micropayment service routed thru 21co servers is currently enforcing filtering of nations like Iran, N. Korea, etc as well as IP's on watchlists.

if LN gets successfully forced onto Bitcoin, LN hubs will be run by well capitalized, for profit "routing providers" who will take a fee cut and also enforce KYC/AML. if there's any doubt about this, look at the 21co model where their micropayment service routed thru 21co servers is currently enforcing filtering of nations like Iran, N. Korea, etc as well as IP's on watchlists.

Great points! Everyone who is interested in off chain scaling should take extra note of this. The entire reason I got involved with Bitcoin is so that human beings, even if they were born in Iran, or N. Korea, will be able to financially interact with anyone else, no matter where they were born.
If we loose that ability due to Bitcoin being forced off chain, I will have lost the biggest motivator for me to stay involved.

A post I made today also was removed or shadow-banned, or whatever. It was the link to my blog about a new feature in Classic. Why that is not of interest to Bitcoin remains an open question.

I personally don't think that any plan that is based on shaming him or showing the world or anything like that will work. The people know, the world can see already. The problem is that they don't.

Apart from somehow going over his head, the only solution I can see is the systematic removal of referals to that sub from any and all commercial sites and news agencies.
Which means that someone needs to make a good list of "This was censored" as proof and things like tweets and other emotional statements that make it easy to believe for those that have too little time to research.

With that list we should contact each and every place that links to the sub and make clear that continuing to link there is choosing sides, and not in a good way.

I actually sent such an email today to a german bitcoin website, lets see what happens.

ps. if there are people actually submitting quality content on a regular basis on that sub, maybe someone can contact them and ask them why. Similar questions and points as above.

if LN gets successfully forced onto Bitcoin, LN hubs will be run by well capitalized, for profit "routing providers" who will take a fee cut and also enforce KYC/AML. if there's any doubt about this, look at the 21co model where their micropayment service routed thru 21co servers is currently enforcing filtering of nations like Iran, N. Korea, etc as well as IP's on watchlists.

Great points! Everyone who is interested in off chain scaling should take extra note of this. The entire reason I got involved with Bitcoin is so that human beings, even if they were born in Iran, or N. Korea, will be able to financially interact with anyone else, no matter where they were born.
If we loose that ability due to Bitcoin being forced off chain, I will have lost the biggest motivator for me to stay involved.

there's not too many of us left in Bitcoin from the old days who espouse to these long term visions. it takes a certain type of idealist who has a deep knowledge of the history of money and how the more modern perversion of it has led to financial elitism and the military industrial complex. i believe, as do you, that sound money in it's idealized version of SOV, MOE, and unit of acct that is also used as a global p2p seamless, instant and cheap payment system as originally envisioned by Satoshi, can indeed lead to decreased conflict and a more equalized distribution of wealth across the world. not everyone wants this or can see the potential of Bitcoin to accomplish this. they will do what they can to preserve the status quo. we need to continue to fight for free markets in money of which i believe Bitcoin is the most ideal with the highest chance for success. keep up the good work Roger!

WhyBitcoin block space is like Starbucks coffee.


.....
As someone who spent most of my educational career studying economics, I'm sure this was the reason I became the first person in the world to start investing in Bitcoin companies, including many of the most prominent companies in the ecosystem today. As someone who is still hodling the vast majority of own my net worth in bitcoin, I want to do everything I can to make sure that Bitcoin is a world wide success. Artificially restricting the amount of block space we produce is justas insane as Starbucks artificially restricting the amount of coffee they produce. It's time to end the block size blockade.

Superb article!!!!!!!!

Bitcoin will be fine once Blockstream Core is out of the way

It's late here, but I like bounties.
I'm thinking of offering a bounty of a significant amount, for Theymos to turn control of /r/Bitcoin over to a neutral third party to moderate /r/Bitcoin.
Perhaps EFF.org would be a good choice.
The third party's mandate would clearly be to allow dissenting opinions, unlike the current mess over there.

The bounty could be payable to the charity of Theymos' choice.
If he doesn't accept, he is exposed to the world as the petty dictator and opponent of free speech that he is.
If he does accept, a worthy cause get's a large donation, and the bitcoin community gets to engage in free discussion again.

The amount will be large enough that we get some main stream media attention, and hopefully put some direct pressure on Reddit to take action as well.

Any thoughts on this plan?

Yeah, don't bother.

Why not start your own forum?
Oh, well, erm, get some users?

Oh you like bounties and forums?
Did you take the time to read my thoughts on that?

Did you take the time to read my thoughts on that?

Your other thoughts were posted where?

It's late here, but I like bounties.
I'm thinking of offering a bounty of a significant amount, for Theymos to turn control of /r/Bitcoin over to a neutral third party to moderate /r/Bitcoin.
Perhaps EFF.org would be a good choice.
The third party's mandate would clearly be to allow dissenting opinions, unlike the current mess over there.

The bounty could be payable to the charity of Theymos' choice.
If he doesn't accept, he is exposed to the world as the petty dictator and opponent of free speech that he is.
If he does accept, a worthy cause get's a large donation, and the bitcoin community gets to engage in free discussion again.

The amount will be large enough that we get some main stream media attention, and hopefully put some direct pressure on Reddit to take action as well.

Any thoughts on this plan?

I really don't like any solution that would put money into Theymos's hands or allow him to take credit for anything at this point. Put the effort into improving and adverting this site and others.

I spent over a year watching every step I took everywhere on reddit not just /r/bitcoin but still got banned there for posting a link to a luke-jr gem in /r/btc. Funny part is I can still do that same thing now and even vote in /r/bitcoin just can't help people there like I used to. When I pointed that out to the mods they tried to get me to agree to censor my own discussions to get the ban reduced but no way. Being banned is great can post what I think now. Unfortunately I can't help people or businesses there anymore or announce events.

It's late here, but I like bounties.
I'm thinking of offering a bounty of a significant amount, for Theymos to turn control of /r/Bitcoin over to a neutral third party to moderate /r/Bitcoin.
Perhaps EFF.org would be a good choice.
The third party's mandate would clearly be to allow dissenting opinions, unlike the current mess over there.

The bounty could be payable to the charity of Theymos' choice.
If he doesn't accept, he is exposed to the world as the petty dictator and opponent of free speech that he is.
If he does accept, a worthy cause get's a large donation, and the bitcoin community gets to engage in free discussion again.

The amount will be large enough that we get some main stream media attention, and hopefully put some direct pressure on Reddit to take action as well.

Any thoughts on this plan?

Great, I support the idea of more mainstream media exposure. At mean time, just make bitcoin.org look more professional, and replace bitcoin.org as the official bitcoin website, current looking and UI is not competitive

The only negative externalities I can think of regarding mining an extra bitcoin transaction in a block are:

In an ideal world, there will be more supply of block space then there is long term demand for block space. Blocks may sometimes be full (although having no block size limit could possibly be feasible in the future as the network matures).

In a scenario in which blocks are actually not full, the reason why a miner may not want to include an additional transaction into a found block would be because adding such transaction will result in an incremental cost that is greater then the incremental benefit to including such transaction in such block.

As a general rule, the only benefit to confirming a transaction would be the tx fee (maybe the sender and/or recipient has some kind of agreement with the miner that involves tx fees being paid separately, but the tx fee will likely be attached to the transaction) associated with the transaction.

The costs associated with including an additional transaction in a block would include the incremental risk that a block will get orphaned as a result of including the additional transaction. I believe the primary reason why a block might get orphaned as a result of an additional transaction is included in a block would be because the additional transaction will cause the block to take a little bit longer to propagate throughout the network and/or to validate, and another block is found and propagated.

The above counters the argument that raising the maximum block size too much will cause all transactions to be free, reducing revenue for the miners. There are also certain situations in which the cost of including an additional transaction in a found block is essentially zero because prior to deciding to include such transaction, the block was sufficiently small.

If the above is assumed to be true, then it is possible that transaction fees may raise from where they are today after an increase in the maximum block size absent advances in network technology (and computing technology). It is also possible that we will see some kind of fee market (to an extent) if blocks are not full.

Regarding your plan to expose theymos as a 'petty dictator who opposes free speech' I think that you and I both know nothing will come of this. AFAIK, there is no mechanism in place to remove someone as an "owner" of a subreddit.

There is a mechanism in place to remove theymos as the head administrator of bitcointalk, and getting the moderation policy of bitcointalk changed/reformed would probably be more beneficial to Bitcoin then getting the moderation policy of r/bitcoin changed. This procedure is described in the treasury agreements that can be found here. A list of important players in this procedure can be found here.

I don't think you will be able to get enough votes from the appropriate people to remove theymos from being the head administrator of bitcointalk, but I do not think it would hurt to try.

I think your best chance to get the moderation policy of r/bitcoin and bitcointalk changed would be to make a logical argument to theymos as to why you think the policy should be changed. I have seen few people try to get theymos to change his policy regarding discussion about the block size debate, and those that have made these attempts have generally made weak arguments.

As a general rule, the only benefit to confirming a transaction would be the tx fee (maybe the sender and/or recipient has some kind of agreement with the miner that involves tx fees being paid separately, but the tx fee will likely be attached to the transaction) associated with the transaction.

I think we also need to keep in mind that the more people who are able to use Bitcoin cheaply and quickly, the more valuable bitcoin becomes.
If the price of bitcoin goes up, the value of the block reward for the miners goes up. So even if miners are not being paid directly for including transactions in blocks, the miners are still incentivized to allow cheap or free transactions, because it will increase the value of their block reward, and increase the value of any bitcoin savings they may have.

Posting to /echo Roger and Cypherdocs words.

And also that I don't think Theymos (or the /r/bitcoin subreddit) can be bought off.

I also think that it also serves as a better 'educational opportunity', not just to the abuse of /r/bitcoin, but also to the Core developers, for us to be able to supplant /r/bitcoin with /r/btc (and related media). In that abusive totalitarian attempts at co-opting said platforms (/r/bitcoin and Core), can, and will, be supplanted.

It's late here, but I like bounties.
I'm thinking of offering a bounty of a significant amount, for Theymos to turn control of /r/Bitcoin over to a neutral third party to moderate /r/Bitcoin.
Perhaps EFF.org would be a good choice.
The third party's mandate would clearly be to allow dissenting opinions, unlike the current mess over there.

The bounty could be payable to the charity of Theymos' choice.
If he doesn't accept, he is exposed to the world as the petty dictator and opponent of free speech that he is.
If he does accept, a worthy cause get's a large donation, and the bitcoin community gets to engage in free discussion again.

The amount will be large enough that we get some main stream media attention, and hopefully put some direct pressure on Reddit to take action as well.

Any thoughts on this plan?

I really don't like any solution that would put money into Theymos's hands or allow him to take credit for anything at this point. Put the effort into improving and adverting this site and others.

I spent over a year watching every step I took everywhere on reddit not just /r/bitcoin but still got banned there for posting a link to a luke-jr gem in /r/btc. Funny part is I can still do that same thing now and even vote in /r/bitcoin just can't help people there like I used to. When I pointed that out to the mods they tried to get me to agree to censor my own discussions to get the ban reduced but no way. Being banned is great can post what I think now. Unfortunately I can't help people or businesses there anymore or announce events.

This is really what it comes down to, media exposure. It benefits not only a cause, but our businesses as well.

May I suggest 3 press releases a week (Monday, Tuesday & Friday) submitted via prnewswire.com, this will hit the mainstream media.

I use this recipe for public companies, try it and you will see I am right

Well I post on this thread last night and wake up with 7 day ban from BCT coincidence?

Well I post on this thread last night and wake up with 7 day ban from BCT coincidence?

I'm sorry to hear that.
Hopefully it will just motivate you to stick around with us in the land of the free a bit more.

As a general rule, the only benefit to confirming a transaction would be the tx fee (maybe the sender and/or recipient has some kind of agreement with the miner that involves tx fees being paid separately, but the tx fee will likely be attached to the transaction) associated with the transaction.

I think we also need to keep in mind that the more people who are able to use Bitcoin cheaply and quickly, the more valuable bitcoin becomes.
If the price of bitcoin goes up, the value of the block reward for the miners goes up. So even if miners are not being paid directly for including transactions in blocks, the miners are still incentivized to allow cheap or free transactions, because it will increase the value of their block reward, and increase the value of any bitcoin savings they may have.

I am not so sure that miners will be able to incur additional costs as an "investment" in hoping that their actions will cause the long term price of bitcoin to rise.

The primary reason behind this is due to the fact that electric costs take up a large percentage of miners' revenue which needs to be paid generally within 30 days of being incurred, so the miners do not have a lot of leeway to be investing in this regard. It has also been speculated that the long term difficulty of mining will be some function of the price of bitcoin and the price of electricity. Since the advent of ASICs, most miners have also had a very short term useful life, making them a relatively short term investment.

Also if most (or even some) miners were to incur additional costs via a higher orphan rate then the rest of the mining network could take advantage of this, only include transactions in their blocks as described above, and end up with more then 100% of EV of mining revenue. In other words some miners might have an incentive to include less transactions in their blocks.

For clarification on my above post, I do not think that raising the maximum block size from 1MB would result in an immediate rise in transaction fees, as I believe that current technology supports a higher maximum block size. Please note however that I am not any kind of network engineer, or any kind of engineer at all for that matter. I believe that if the maximum block size were to increase from 1MB to 2MB then the transaction fee for a "normal" transaction (say one with one input and two outputs) would decrease but overall transaction fee revenue would increase because of sufficient demand for transactions.

Although I do not believe there is currently sufficient demand for block space to fill 4MB blocks on a constant basis, however if there was sufficient demand, then I think current technology would support 4MB blocks being full, and the average transaction fee being lower then it is currently. I believe the same is also true for 8MB blocks. I am less sure about the same being true regarding 16MB blocks, partially because this would force me to speculate too much to make this statement.

So lets, say for example that it costs $0.06 or 0.0001 BTC to send a transaction today. Lets also say that current network technology would support filling an 8MB block for less then this cost. Lets also say that current demand for block space is sufficient so that 1.3MB worth of block space is needed. If we were to raise the maximum block size to 8MB, then only about 1.3MB of block space would be used on average, however the network would be decently protected against large backlogs during spikes in demand. The average transaction fee would likely be lower then it is today.

Using the same example in above, if demand for block space were to increase to say 9MB after say 5 years, and that network technology in 5 years were to improve to the extent that the cost of producing a 15MB block in 5 years is the same as producing a 8MB block today. If we were to increase the maximum block size to 16MB then the average block size would be roughly 9MB, the average transaction fee would probably fall, but overall transaction fee revenue for the miners would probably increase. Then 4 years later, network technology improved to the extent that producing a 18MB block is the same as producing a 8MB block today (and a 15MB block in 5 years), but demand for block space is 20MB. If the maximum block size were to increase to 32MB, then the cost of including a transaction in a block will probably increase from what it is currently, although the increase would probably be fairly mild. However once network technology improves so that the cost of producing a 20MB block falls to the same cost as a 8MB block today, then transaction fees would decline, likely to today's levels.

I think the above example probably under exaggerates the growth of network technology in the future, probably by a large margin. It probably also will not be an accurate representation of demand for block space. I think that growth in network technology will probably be sufficient so that transaction fees will remain the same for longer then 9 years. However the goal behind the example is to illustrate how transaction fees might increase in the future even with larger blocks.

The above is an example as to why it is important to work on off-chain solutions as a backup to on-chain scaling. I do believe that off-chain transactions ("trustless" or not) are inferior to on-chain transaction because they are inherently more complex, less transparent and more prone to errors/problems that can potentially go undetected then on-chain transactions. The current solution. Lightning Network, is probably not going to work though.

it is important to work on off-chain solutions as a backup to on-chain scaling.

So many people miss that important point.
I'm glad you made it so clear.
The long term solution lies with both on, and off chain scaling solutions.
We shouldn't only focus on one to the detriment of the other.

it is important to work on off-chain solutions as a backup to on-chain scaling.

So many people miss that important point.
I'm glad you made it so clear.
The long term solution lies with both on, and off chain scaling solutions.
We shouldn't only focus on one to the detriment of the other.

Well my understanding is that in order for blockstream to be financially successful, transaction fees must be very high for on-chain transactions, so those whose financial incentives align with blocktream will have incentives to prevent on-chain scaling, which I believe is far superior to off-chiain solutions.

I anticipate that after the miners realize that the core devs don't plan on holding their end of the HK agreement, there will be a bunch of drama, a HF proposal by the miners to increase the maximum block size, a bunch of fear mongering, some more drama, a successful HF that increases the maximum block size, and possibly more drama.

it is important to work on off-chain solutions as a backup to on-chain scaling.

So many people miss that important point.
I'm glad you made it so clear.
The long term solution lies with both on, and off chain scaling solutions.
We shouldn't only focus on one to the detriment of the other.

Well my understanding is that in order for blockstream to be financially successful, transaction fees must be very high for on-chain transactions, so those whose financial incentives align with blocktream will have incentives to prevent on-chain scaling, which I believe is far superior to off-chiain solutions.

I anticipate that after the miners realize that the core devs don't plan on holding their end of the HK agreement, there will be a bunch of drama, a HF proposal by the miners to increase the maximum block size, a bunch of fear mongering, some more drama, a successful HF that increases the maximum block size, and possibly more drama.

Besides all the problems you listed, it's a bad business plan from people who have terrible reputations.

If I am going to embark on a venture that manages the majority of peoples Bitcoin, I am going to do it with the right people.

From what I have been told, the Chinese miners have been extremely pleasant to Blockstream Core. If any developer I worked with told me "you need help changing your diapers?", I would fire him on the spot.

"But the banks and governments will do business with us", are you going to tell them they need their diapers changed too? You won't get far.

Nothing good will come out of relations with Blockstream Core.

You can take the man out of the gutter, but not the gutter out of the man.

Did you take the time to read my thoughts on that?

Your other thoughts were posted where?

That is a no then.

No worries they are probably buried at least 2 - 3 posts deep on some thread here. Or somewhere among my 6 post history.
Later.

It's late here, but I like bounties.
I'm thinking of offering a bounty of a significant amount, for Theymos to turn control of /r/Bitcoin over to a neutral third party to moderate /r/Bitcoin.
Perhaps EFF.org would be a good choice.
The third party's mandate would clearly be to allow dissenting opinions, unlike the current mess over there.

The bounty could be payable to the charity of Theymos' choice.
If he doesn't accept, he is exposed to the world as the petty dictator and opponent of free speech that he is.
If he does accept, a worthy cause get's a large donation, and the bitcoin community gets to engage in free discussion again.

The amount will be large enough that we get some main stream media attention, and hopefully put some direct pressure on Reddit to take action as well.

Any thoughts on this plan?

Yeah, don't bother.

Why not start your own forum?
Oh, well, erm, get some users?

Oh you like bounties and forums?
Did you take the time to read my thoughts on that?

Bounties, forums, censorship, ideas?

No sorry I can't think. Old age.