It recently came to my attention that some people still don't understand the market for transaction processing on the Bitcoin network, which has led them to the conclusion that blocks should and must be full in order for the network to sustain itself. Ruben Somsen claims, in the linked Twitter thread, that:
Block space is given to the highest bidder - if nobody bids, it's practically free. If you think mass replicated immutable blockchain data is at least worth something, then it logically follows that blocks WILL be full.
Unfortunately, he misses a key point. Miners set the minimum acceptable fees, always. To extend Ruben's auction analogy, miners are quite free to set a "reserve price" on bids for block space. They can do this without full blocks. If nobody meets a miner's reserve price for block space, guess what happens? The miner mines an empty block. This is absolutely essential to understand when thinking about the supply and demand dynamics for transaction processing and block size.
Unfortunately, Ruben does not understand this. Therefore, he thinks that the only way to make people pay for their Bitcoin transactions is to limit the block size with a cap. I have tried to educate him and others in the small block camp, but they refuse to consider that they might be wrong and have an open mind. They prefer to stick to places where they can benefit from censorship of ideas they find distasteful. It's their loss.
We do not need full blocks for Bitcoin to sustain itself, even after the block reward drops to 0 after we're all dead. We simply need miners who are able to set minimum transaction fees. And, guess what, we already have that! Miners, who determine Nakamoto Consensus, can and should be able to dynamically adjust the size of their blocks in order for supply to meet demand naturally and unconstrained by supply caps. I can get behind block size caps that are based in technological limitations, but that is not what the 1MB size/4MB weight cap in Bitcoin is about. If nothing else, Bitcoin Cash has demonstrated that the emperor has no clothes.
Written by: gotamd
Source: http://bit.ly/2GeiR6H
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