Oddbean new post about login | logout Respectfully, this is quite a one dimensional argument. The dynamics of the mempool are more nuanced. Instead of a binary approach ie "if bitcoin succeeds ... then ... " or "if bitcoin fails ... then ...". These become self fulfilling tropes. I would rather look at the mempool in 3 parts: 1. High value transactions. These are relatively price insensitive. And can afford higher fees, in general. These are the tx that will always contribute to the security budget, which is protection against (deep) reorgs. Important to realize that as the block subsidy decreases, the sensitivity to fees will become more important. This can be governed by the Nash Equilibrium where miners charge a bit more for priority transit of large tx, and large tx are willing to pay to get in a block. 2. Low value transactions. These are the tx that are crowded out, the poorest in the world, national currencies, hobby developers, and importantly, anyone wanting to use higher layers to scale bitcoin. While higher layers do scale bitcoin through batching, they normally require at least one transaction to set up, and one to tear down. High fees limit the emergence of higher layers. 3. Then there is the middle layer which crowd out the lower layers. This can be busy traffic, it can be spam, putting images and raw data in the chain, it can be gambling or it can be an attack to disrupt bitcoin. Normally an adversarial thinking mindset will consider the disruptive elements, rather than, assume good faith. From a more nuanced position you can start to make design desicions and have a reasoned debate. Syncing the chain on a mid tier laptop is a bit of a nightmare, especially when you are syncing from 2023->2024 it starts to get really slow. Increasing the block size would make that even worse. So any changes to the chain to improve the overall state of the mempool would need to be balanced with decentralization requirements, and the state of current hardware. But the first thing is to see that there is indeed an engineering problem. https://m.primal.net/IcHj.png
You’re always respectful Melvin, even with retards like me. I wasn’t talking about mempool dynamics though. On a medium-long term horizon, Bitcoin; A) succeeds to some massive degree B) doesn’t and putts around in the middle ground C) objectively fails. It won’t go to zero out of pride, but it can effectively die as a money A & B will look different but either way, 99% aren’t transacting on the base layer in those scenarios. The only way base layer is available to normies is C) With that clarification - how do you envision TX prices from here? If you see another scenario to my A/B/C by all means outline it but it seems pretty clear the paths ahead.
Yes, this makes sense. Most people will use higher layers, like they do today. With the current banking system very few have access to central bank money. Most use bank credit, which is claim on the loan book of the banking institute, normally mortgages which wont be paid for many years. So even today people's tolerance for risk is enormous, beating the status quo is a very low bar. Bitcoin denominated finance can happen at all sorts of different layers, at scale. Each with a different trust profile. It's important that the base layer is accessible else people get driven onto single points of failure which incrase systemic risk. The fact that the base layer is accessible is what keeps the higher layers honest. There is a balance to be had. The other aspect is that bitcoin is unique as an asset in that it is a level playing field with a track record, in that respect it has 99% dominance, with 96% of coins mined (and likely 4% burnt by the founder), it will be very hard to find another such non-proprietary level playng field. Bitcoin needed a huge node network to achieve this, and almost failed 2-3 times. It is now in a strong position precisely because it chose decentralization early. Obviously the market like that choice too. There is competition from proprietary copies who want market share, and also internal politics and social attacks, which are probably the biggest threat. Bitcoin now has options. In a sense much of the hard work is done. There is going to have to be a balance between layered solutions, trust in those layers, and the base layer used to create trust channels. The block size could grow to match hardware, and also keep the minimum level of decentralization needed for bitcon to keep its dominance, and not be too heavily disrupted. Important to remember that bitcoin can still be disrupted by a high fee attack, and that a bigger mempool tiers mitigates that attack. A state could launch such an attack for example. I generally see bitcoin competing with gold in the medium term, and growing layer 2+ technology. Having a good open discussion recognizing the threat surface, the history, current state of affairs, and the trade-offs seem a sensible way forward. Of course there will be political agitation, and social attacks too, and bitcoin will have to survive those. It's up to us to help bitcoin survive those, and not unwittingly fuel them!
(C) can likley only come from well-intended bitcoiners trying to "fix" bitcoin. The easiest way to attack bitcoin is to agitate for a civil war and split into two coins. That is a bigger threat than a 51% attack, because it has happened more than once already, and a 51% attack has yet to happen. Aside from that a well managed mempool is a way to manage fees, and mitigate agains fee based attacks, which we are just starting to see.
