(T)he famous classical “Gresham’s Law” also reveals the intrinsic difficulty. Thus “good money” will not naturally supplant and replace “bad money” by a simple Darwinian superiority of competitive species. Rather than that, it must be that the good things are established by the voluntary choice of human agencies.~Ideal Money
In the eyes of many, block-size seems to fundamentally change the utility of bitcoin. An oversimplified explanation would be that some want bitcoin to be a highly transactional-able currency, whereas others are not so interested in bitcoin as a frequent use type money (ie coffee purchases) but are more concerned with the security and usefulness of bitcoin in it’s current form. It seems these two view are quite comparable to how we view and use gold versus paper money today.
There are of course many more ideas for how bitcoin’s parameters could be or what bitcoin’s use could or should be but this fundamental division seems useful for the observations below.
…it occurs to me to think that that which is not achieved by a grand action of establishment by “fiat” may alternatively tend to come into existence as a consequence of a process of evolution. And of course, after a certain degree of progress by “evolution” the rest of the progress could possibly be realized by a convention or a process of “fiat”.~Ideal Money
I don’t think we have understood the significance of the comparison of the above to the question of “What is ideal money?” We might not even be specifically asking about bitcoin (or money), but what we really want to start with is the question of, and some form of an answer for, “How do we want the global economy to function? What would be ideal?
We seem to be well read on the different possible fates from different possibly choices however I read little about the possible favorable (or not favorable) economics of the future of our global society.
Peoples seem to be coming to an understanding that, in John Nash’s view, STABILITY is the fundamental property of an ideal money. There is quite an extensive argument given, I invite you to engulf yourself in the works, but for this dialogue I would suggest most of it cancels itself out. For Nash this stability is to be seen as a price, and although this price is in regards to a certain specially created consumption index, it is not irrelevant that this discussion and debate is certainly effecting bitcoin’s price in relation to nearly any such index.
To me what is left then is the obvious observation that bitcoin cannot be maximally stable while this debate rages on.
This brings about a strange observation I would like to share, but it is not easy to see in its parts. There are people that want change, and those don’t want change, however EVERYONE is suffering from instability-the whole world suffers.
It seems there is an impasse. And this is partly because a non-consensus is much easier to get than a consensus. Unfortunately non-consensus means the debate continues on indefinitely.
I would like to suggest there is an equilibrium solution to this non-cooperative game that involves not a strategy change per se but rather a paradigm shift (keeping mind that an equilibrium is reached when no party can unilaterally change strategies and gain).
Before I finish, we must levate the mining pools as another possible party. Some people believe some sort of vote (like a ballot or referendum) to the mining pools will and should be the ultimate deciding factor of what bitcoin should be. The (seemingly unsolvable) issue here is that it’s somewhat as if the peoples are giving up their power to mining pools.
It’s relevant to point here we decentralized the pools in the first place and spent considerable political effort (ie 51% attack education) doing so to keep centralization of power from any such parties that are separate from the citizens of the world.
So now it seems we have a perfect perspective for an equilibrium solution but parties are simply unwilling to admit it, or that they simply need to see it. Every argument, debate, blog, rant is truly helpful in the way that arguing something to death might ultimately reveal the truth that such a debate is not solvable.
Perhaps people that want consensus for change, need to compromise for an ultra stable future of bitcoin (ie consensus it will NEVER be changed), in order that bitcoin passes this giant hurdle of mass adoption.
One wonders if the markets are not as stupid as we thought after all and they can sense this in-security.
By nature of entropy (or maybe another word) it seems that if there cannot be reached a consensus today, then it will take a very different society in the far future in order to finally change bitcoin in this significant way.
Perhaps we should leave such a decision for the future of bitcoin to that society?
It is something akin to Greece or Portugal or Italy exiting the euro currency in a disorderly way. Economists and central bank policy makers are extremely worried about such an eventuality and talk about related factors in careful, measured terms, watch Mario Draghi when he speaks.
It’s a very interesting problem and a very interesting time, I think we all agree with this. But it would be sad if we kept this project in a perceptual unstable state of Greek/Euro crisis simply because the more intelligent side would not compromise on what it knew to be ideal.
If all of the “I want a larger block size” peoples, changed to “Ok, for the future of bitcoin I will accept no changes at this level ever” who would be left behind?
If you believe in prophesy you might believe we can make the wrong choice…isn’t it much like the questions of determinism/free will? Aren’t we destined for natural evolution anyways, from cells, to shells, to animals, to monkeys, to humans…that use shells, and mine gold, build pyramids, create telecommunications networks, and mine bitcoins and build block-chains?
…my personal view is that a practical global money might most favorably evolve through the development first of a few regional currencies of truly good quality. And then the “integration” or “coordination” of those into a global currency would become just a technical problem. (Here I am thinking of a politically neutral form of a technological utility rather than of a money which might, for example, be used to exert pressures in a conflict situation comparable to “the cold war”.)~Ideal Money
Certainly the INDIVIDUAL has free will to make intelligent choices, but aren’t we truly bound at this point to the current progress of our civilization when it comes to societal consensus?
Can we really make the wrong choice here (I mean in reality, not in theory can their be consensus on something destructive), and so shouldn’t we reach for the easiest most available “favorable” choice to find a stable consensus?
Is ultimate stability for all time that which is “Ideal Money”? The solution here might be to stop trying to find a consensus on one side or the other, and rather try to find out if the debate isn’t “stuck” already for all time. For those that want change, it might not be possible, but certainly stability of consensus, the second best option (compromise), still is.
What should happen, in short, is nothing. There should be no increase to the block size limit. There should be no attempt to keep transaction fees from hitting a market rate. The block size limit is a good thing. Real transaction fees will be a good thing. Any changes to the block size limit will hurt both of those, create a significant risk of major disaster, and damage the credibility of Bitcoin as a reliable system. The best thing for everybody involved would be for the proposed changes to be simply dropped, and Bitcoin developers to get on with making proper technical solutions rather than hacky patches.
The current proposals for raising the block size are reckless, unnecessary, and potentially disastrous. Perhaps it is not nice of me to put it this way, but this is not a game. There is real money and real business on the line, and the people who are affected and have say in the matter should know what’s going on.”~Bram Cohen Bitcoin’s Iconic Crisis