You are viewing a single comment's thread from:

RE: Blockchains Are Not Free

in #bitcoin7 years ago (edited)

Blockchains offering free transactions basically "pay" the transactions through inflation of the money supply. Like with Bitcoin, miners are getting a reward for every block they produce, this is "new printed money". With Bitcoin, we're seeing an ever-increasing demand and that the new supply of money is much lower than the new demand, hence the Bitcoin price is still rising.

If the point of this article is to mock blockchains offering free transactions ... then, yes, the author does have a point. I doubt bitshares, steemit and other platforms offering real free transactions really are as secure as Bitcoin. And yes, someone has to draw the line somewhere. Everyone could theoretically store an encrypted backup of their photo album on steemit, and without any safeguards such abuse is bound to happen (and even with safeguards ... the only good safeguard is to make transactions non-free).

At the other hand, this post is also about Bitcoin fees. Parts of the Bitcoin community argues that the Bitcoin fees are currently artificially high. In 2010, Satoshi threw in a temporary arbritrary 1 MB block size limit just to avoid DoS-attacks (at least according to those cooperating with him at that time; some people contest this and claim the limit was never meant to be temporary and that it's an essential part of the Bitcoin protocol). At the time the limit was thrown in, the median block sizes were some few kilobytes each, so for all practical purposes the limit was "invisible" until around 2014. Yes, the SatoshiDice gambling service has probably caused quite some sympathy for the said limit, but except for that the "free" block space was rarely abused.

If there should be any doubt, I do think that the bitcoin fees are artificially high. Yes, at some distant point in the future, it's probably reasonable that an on-chain bitcoin transaction should cost the same as a full shopping bag of groceries, but right now it's too early, it's killing adoption of Bitcoin as a payment platform.

There is quite some people rallying behind the 1 MB block limit, and I agree that it's a good idea to be prudent and keep some limits on the rate of blockchain data growth, but ... no, neither SegWit nor lightning are "silver bullets" in this regard, we do need bigger blocks - and cheaper transactions!

Sort:  

Wow well written