Re: [bitcoin-dev] The need for larger blocks

[Aaron Voisine <voisine@gmail.com>]

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Moving the list to BCC, since this isn't really a technical discussion.

On Sun, Jun 28, 2015 at 9:37 AM, Venzen Khaosan <venzen@mail.bihthai.net>
wrote:

>
> Bitcoin's exchange rate, as a commodity money floating freely in the
> market, will go up and down according to speculative cycles and we
> should conceptually separate its valuation in fiat terms, from its
> fundamental value which is: mathematical consensus, cryptographic
> transaction security and censorship resistance, etc.


I get the feeling we might be reasoning from different underlying
assumptions, but I don't think you can separate value that way. Those
fundamental properties were chosen to serve the goal of creating a digital
commodity money. They are useful only in as much as they serve ends that
people value. Consensus, security, censorship resistance are valuable
because they are desirable properties for money to have.

If you want to argue that the properties of bitcoin are valuable for other
things besides money, that's fine, but those other uses presumably can be
accomplished with tiny amounts of bitcoin, so don't appreciably increase
demand.


> These values are
> critically reliant on Bitcoin's *degree of decentralization* for them
> to remain true and for Bitcoin to retain its meaning, and, therefore,
> its value. That is what I point out when I say "greater adoption has
> not reflected in the price chart". And that may remain the case for
> evermore because the value is in the protocol, the blockchain and its
> utility and degree of decentralization, not in the chart or the size
> of the user base
>

I think it depends on what you mean by "adoption". Adoption as a
store-of-value must necessarily increase the market price given the
restricted and eventually fixed supply. If we're talking about merchant
adoption as a payment system, or increased transaction volume, the yes,
these things have no direct impact on the price. They only impact the price
indirectly in as much as they encourage further adoption as a
store-of-value.


> I argue that we already know what the value of Bitcoin is. In its
> current form Bitcoin most likely fulfills 80% or 90% of its eventual
> fully evolved value. Increased adoption will not strengthen the
> fundamentals, so let's proceed with scaling that will safeguard
> Bitcoin's fundamental value and implement protections that ensure
> quality of decentralization.
>

Increased adoption does strengthen the fundamentals. The most important
fundamental for money is how many other people standardize on the same
money, and want to hold it. This drives it's price in terms of other
commodities. You want to hold what everyone else wants to hold.

Aaron Voisine
co-founder and CEO
breadwallet.com

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