Block size has nothing to do with the supply of Bitcoin. It has to do with the transaction throughput of the network. No one has ever proposed a change the Bitcoin supply. The original Bitcoin release from Satoshi set the block size at 32MB (it's currently at 1MB) so increasing the block size to 2MB as is being proposed by classic would bring Bitcoin closer to it's original implementation.

Perhaps your comment is genuine but when people say stuff like "if we increase the block size next they will want to increase the money supply!" I feel like they are trying to hood wink less technically adept Bitcoin users into supporting their small block view.

After reading the article, I get that now, but is there a difference? If there are 1,000,000 bitcoins and you can only use 100,000 of them per day in transactions, then there are only 100,000 bitcoins in supply. I understand there may be more than one bitcoin per transaction, however, the fact remains. The supply of bitcoins, via the ability to use bitcoins to transfer value, is controlled by human beings.

The consequence is identical. Is it not? Perhaps, the consequence is the opposite? If there is no ability to transact with the currency, the currency has no value?

I'm seriously ignorant, you can tell, but I would like to understand. Perhaps my questions can help reveal the answer? If not only to me, then to the community? Is that too scary? The truth? Too scary?

No, the consequence of increasing the block size is not related in any way to the money supply of Bitcoin. That argument has no merit.

Bitcoin's value is limited by small block size though. A large part of the value of BTC is the value of the total transactions done through it. Limiting the number of transactions will severely limit the price in in the long term. BTC will probably lose out to an alt coin if the transaction back log due to the small block size continues and is not resolved sooner rather than later.

Thanks for clarifying that blocksize controls only transaction volume. I get that now. I didn't when I made my original post.

I think, still though I'm not articulating my point well enough. Fiat currency fails 100% of the time because it is controlled by humans. My understanding thus far was that bitcoin was controlled by physical limits in the real world, that of electricity, compute power, ultimately: Math.

Now, here, we are not talking about the supply of bitcoins themselves, but rather, the number of transactions with them that can occur.

That too is a factor in the value of a currency. It's not just the supply of currency that affects the value, but whether or not the person receiving that currency believes in its value, in this case, they must believe they can themselves use that currency to conduct future transactions.

It is this belief, in the case of bitcoin -- transactability for the lack of a better word, that is controlled by human beings -- and this is the same failing that has caused the collapse of every fiat currency in history prior to the US Dollar.

Now I'm learning that bitcoin has not solved this problem and I can't understand how bitcoin will survive this failure.

For a money to survive, it must be bound by physical laws beyond the reach of humans to change. It is human fallibility that is the culprit behind all fiat failures in history. We must invent a currency immune to the decisions of humans to solve the problem that has plagued fiat throughout history.

Gold is very dense. There are physical constraints making it difficult to transact large amounts of it.

Even though humans can constrain the transaction throughput of bitcoin, bitcoins or other crypto currency, will probably, eventually, converge on a solution where the possible tx rate is far larger than we can use. Tx rate limiting won't be a feature of any crypto coin that survives. You're just observing the effects of imperfect initial engineering. I wouldn't draw broad conclusions about the impossibility of successful cryptocurrencies based on this current limitation.

I'm not a gold bug, but technology can enable us to use micro or even nano-ounces of gold. We used to use half-pennies too. Canada doesn't even use pennies anymore.

Just store both olympic sized swimming pools of gold in the same place and put numbers in accounts that represent the weight owned by the person.

We typically think about ounces of gold, but we could go down to the atom if necessary, theoretically anyway.

The difference between government issued currencies (what you call fiat) and Bitcoin is that. Policies controlling Government currencies are decided by a small group of people generally well connected to banks and other wealthy interests (ie: a central bank with an appointed board of governors)

Bitcoin's governing rules on the other hand are enshrined in software and can only be changed through a democratic consensus process. It's a big step forward over fat cats deciding monetary policy in smoke filled back rooms.

It's not what I call fiat, it's the definition of fiat. I thought bitcoin was not a fiat currency, but in fact it is, because it's value is controlled by supply and demand based on the decisions of humans.

I am now convinced that bitcoin will, like all fiat currencies, inevitably fail. It doesn't matter if its value is controlled by one human or a democratic process controlled by humans, it is controlled by humans and humans are fallible, therefore bitcoin will fail.

There is no question of this. The only question is, When?

Yes, but you created a new account to troll so that conclusion was inevitable.

Democracy doesn't require consensus and it doesn't require coding. Bitcoin is not democratic, and it is definitely not a big step forward over monetary policy being decided by people who have been appointed by democratically elected officials (which is what we have now).

Two remarks:

- There are a lot of exchanges that don't involve direct transactions on the blockchain (buying and selling BTC is nonlimited in terms of quantity or time).

- There are many altcoins, claiming to do certain things better such as proof of work or block size etc., however, the most convincing argument for using BTC seems to be the current market capitalization. As such, it is understandable that the Core wants to introduce the least amount of distraction possible, i.e. go against improvements whatsoever.

Can anybody please explain why increasing block size would mean more centralization?

No. The proof of work requirement constrains the money supply. It's a hard constraint. The block size constraint was never designed to constrain the money supply by constraining the number of transactions per day. It is adequately constrained by the proof of work.

Some group could not just change the blocksize. Instead, what can happen is that someone publishes a piece of software implementing a protocol - call this Bitcoin 2.0 - that can process all previous blocks correctly, but relaxes the rules for future blocks. People can then choose whether or not to run this piece of software.

However, Bitcoin is only useful because of the consensus on what the protocol is - so in practice, people must generally run whatever everyone else is running. At the moment, there's a general consensus that everyone should be running software implementing the same protocol as the latest version of the Bitcoin software implemented by a certain group of people. That could, theoretically, change if the majority of the community doesn't like some change to the protocol, forcing the dissenting minority to follow along with them.

Only miners get a vote, because they validate all blocks. The design of Bitcoin is such that what a majority of the miners want, happens. The two top miners have just over 50% of the mining power, and the top four pretty much do most of the mining. The top four or five miners are all companies in China. They've issued joint statements in the past, and what they say, goes.

The "core developers" and the Bitcoin Foundation don't matter, although they sometimes act like they do.

> Only miners get a vote, because they validate all blocks.

No, everyone validates all blocks. (Or at least they theoretically should.) Otherwise you could get miners lying about whether they've validated a block. Changing the Bitcoin protocol is essentially creating an altcoin - the only difference is that the money distribution is "pre-seeded" with everything that's happened on the Bitcoin network so far. If all users move along, the altcoin succeeds and the "original" Bitcoin fails.

If everyone except the current miners decided to follow new rules, the miners would be forced to follow - there's not much point mining a currency which nobody will accept in exchange for goods, services or other currency.

"altcoin" is a highly misleading term for that. That term already means "a cryptocurrency unrelated to bitcoin", typically having a different genesis block, subsequently an entirely different chain, and often further differences.

We already have a term exactly for what you're talking about: a hard-fork (or just a fork if you like).

On either side of the fork is bitcoin, not the "original" bitcoin and an "altcoin".

You're also incorrect in other ways. In the case of most forks, you fork via voting by "x% of the last 1000 blocks were mined by this implementation". Because of that, if everyone except the current miners use the alternate implementation, the new "fork" will never activate.

That's because forks are not altcoins, but typically run on the same exact chain, behave compatibly with each other (prior to activation), and wait for consensus in mined blocks (to activate).

That method of voting does mean that only miners get a vote. It's not because they validate all blocks, but rather because mining a block is the same as voting in basically all fork-consensus-algorithms so far.

> On either side of the fork is bitcoin, not the "original" bitcoin and an "altcoin".

The point is that on one side you have the original protocol in use, and on the other side you have a different protocol in use. Both of them are called Bitcoin and use the same database up to the point of the fork, but they're not the same protocol in much the same way that Dogecoin is not the same protocol as Bitcoin - someone who attempts to use the pre-fork protocol will not be able to achieve consensus with someone attempting to use the post-fork protocol.

> In the case of most forks, you fork via voting by "x% of the last 1000 blocks were mined by this implementation".

That is not the only way to implement a fork. As I say, you can fork the chain simply by convincing enough users to use your fork - there's no hard requirement for any miner-level voting to be done at all.

The bitcoin protocol is doing whatever the most popular bitcoin client does. After a fork it's the same.

> but they're not the same protocol in much the same way that Dogecoin is not the same protocol as Bitcoin

What you're arguing is essentially that "EMCA6 is not javascript because it supports features the previous javascript didn't, much the same as ruby does".

Bitcoin is a cryptocurrency. They're the same cryptocurrency both before and after the fork. Dogecoin is not. Can you see how that term is not a good term when we have a better one?

Also "achieve consensus" there is absolutely incorrect. The correct term is "will have to update their software, else they will be incompatible". Software updates are normal, and we don't demand that each program rename itself every time it updates.

> That is not the only way to implement a fork

That's the only way anyone's trying to fork though. Yes, gavin said he'd just do a hard-cut over, but he didn't and it'd be a bad idea.

Forking the chain is only useful if the economic majority and miners come along, else your chain will be less secure and less useful (also, double spending problems etc).

> EMCA6 is not javascript because it supports features the previous javascript didn't, much the same as ruby does

Or, rather, ECMAScript 6 is not ECMAScript 5 because you can write code in the former that doesn't work in the latter, and probably vice versa on edge cases. They are separate languages. If you continue writing in ECMAScript 5, you're missing out on all the nice ECMAScript 6 libraries.

But with Bitcoin it's even worse - if you continue using pre-fork Bitcoin, you cannot reach consensus and thus transact with people using post-fork Bitcoin. They're not precisely the same protocol, by definition - they bare the same name but they're not the same protocol, they are different protocols and for the fork to win, the first protocol dies. The name is irrelevant to this.

Similarly, HTTP 2.0 isn't the same as HTTP 1.1, and claiming one is equivalent to the other is nonsense, even if they bare the same name.

I'd also argue that if the amount of hash power put into the network can be derived from the value of the network (trivially provable), the result of the economic majority choosing to adhere to different rules is that either the miners will follow or new miners will pop up quickly as there's a demand for them.

Yeah, we obviously agree that two different protocols are different protocols.

I'm not saying pre-fork and post-fork bitcoin are equivalent, or the same protocol version. That's a strawman. the term "Bitcoin" is obviously different from "ECMAScript 5/6" and "HTTP 1.1/2.0" in that it's not a version of a protocol/standard. Bitcoin is a term for the overarching thing, just like "Javascript" and "HTTP" are overarching terms for those, encompassing multiple standards etc.

Again, "altcoin" already has a term unrelated to protocol. "altcoin" means a cryptocurrency that is not closely related to bitcoin.

You're talking strictly about protocols and versions there (which, btw, bitcoin should just version its protocols), but that's not what "Bitcoin" means to the common man.

You're making my argument for me by comparing "HTTP 2.0 isn't HTTP 1.1", but they're both HTTP, not gopher or ftp.

You're conflating two fundamentally different kinds of forks. The ones activated through voting were soft forks, where old nodes still accepted all blocks mined by the new ones, and the voting was to ensure that enough miners would enforce the new rules to overtake any chains created by the old nodes and bring everyone back onto the same chain - that is, it was necessary to ensure there wasn't a permanent fork. This simply doesn't apply to hard forks because by definition, the old nodes will not accept the newer fork no matter how long it grows. Calling it "voting" is kind of a misnomer - it's a purely technical measure to make sure soft forks don't break Bitcoin when they activate.

"voting" is a technical concept used in many distributed systems; even if it's a purely technical concept that term is correct.

Voting also applies in hard-forks. Case-in-point, XT/classic both had activation thresholds and voting.

Splitting the chain is not really useful unless you have a large majority with you for both technical and non-technical reasons, and so you vote.

Soft-forks and hard-forks aren't so different in the happy-case. They both extend the same original chain, they both have concerns about two competing chains existing and wish to avoid that, they both change the validation layer in some way (though to lesser and greater extents).

With 51% of the hashing power you can asymptotically do whatever you want with the recent transactions. Including erasing some of them and so allowing double spending, or blocking all the transactions. It's much easier if you have more than the 51%.

With the 70% you can do more interesting stuff, like using a 35% to mine in the fork/altcoin you like and use the other 35% to block the other fork/altcoin so no one can make transactions in it.

With the 90% you can play games, like mining during the day as usual, and do fancy stuff at night. From 0am to 4am, keep a 10% as protection against attacks, and use the other 80% to mine empty blocks in the other chain, starting from the last block you mined last night. So in 4 hours with a 8x hashing power is enough to catch up with the other chain and then when they get up in the morning they will see all their transactions reverted.

A fork with little hash power is very insecure.

Assuming that the amount of hash power put into a blockchain is something that can more-or-less be derived from the value of that blockchain, the result of a fork with less hash power than it "should" have is that it will attract more miners until it has the same amount as the network pre-fork.

AFAIK, blocksize is about the size of each transaction (think "packet") while computing bitcoins. The bigger the size, the more data can be stored here.

For example, you could have a bot monitor blockchain data and see that when someone sent payment to your NewShoeStore address, parse the metadata in the block to get their size, color, brand etc.