stevejoseph
New member
block size cap is the amount of transactions that can be processed in one block. Bitcoin (btc and bch both) increases/decreases in difficulty to keep the rate at which blocks are mined more or less constant. (this is why we know more or less when the next halving will be!)
The idea is that fees slowly replace the block reward. block reward halve every 4 years. I think he randomly chose 2032 because the block reward will be a lot less then than now, but block reward will still exist for more than a hundred years.
The idea for bitcoin (BCH) is that the network will be used so much that all the little fees add up to a nice big reward for the miners.
BTC gave up on this idea completely, thinking that the main network should not get used a lot and should rather be an expensive layer to store large quantities of value. This is because they think that bitcoin cannot scale. So they made that you can bid for a higher fee if your transaction gets stuck driving up the fee price. They think this is good because they think the blockchain will get too large with transactions, so they want to keep the main layer expensive to discourage use of it.
Therefore, btc changed the narrative of bitcoin to a digital gold. They made changes so that the max throughput is deliberately limited, and are hoping that when the block reward runs out, that people will be willing to pay very large fees. Almost like gold!
BCH is betting on the fact that hard drive space and network speed to pass a large ledger (listing of all transactions that has happened) around, will become less. (and it already has!) BCH also did not introduce the replace by fee mechanism where people can increase their fee. Therefore BCH payments can be instant. BCH aims to gather many transactions (through use of the network) to eventually build up a big miner incentive that will eventually replace the block reward. Probably by 2032 we would start to want to see increased usage of BCH network, to start contributing to that mining reward via lots of small fees. (if this doesnt happen through, the difficulty of mining will automatically decrease, making it easier to mine the block reward which will still exist in 2032, in turn causing more people to want to mine bch)
With bch a lot of the fees might eventually come from automated processes even.. think things like cash rain, faucets, chaintips, small purchases etc. all these are incentivised because the fees are small, but can add up to a large sum all together.
BTC do not have plans like these at all for its main chain (the small transactions).. it will become more and more a kind of layer to pass value around for banks and big holders (If it even works out as intended)
That is why btc eventually NEEDS high fees.. for when the block reward runs out. and lightning network (which is a very convoluted solution that i think will fail) is meant to solve this issue for btc. But the lightning network does not help contribute to the miner reward, so btc is still left with the problem.. they NEED high fees, because their max transactions is limited by 1 mb blocks.
BCH eventually NEEDS high amount of transactions (network use) for when the block reward runs out, so that miners are incentivised to mine the blocks by receiving many many many small fees that all add up.
I dont really understand why they mention 2032. By the same logic one could say that, by 2032 BTC needs very high fees otherwise it will fail as digital gold. Its just an arbitary date where the effect of a lesser block reward starts being felt more. In reality its like a slider scale that will continue in to the next century.
Anyways, I tried to write this post from both perspectives, even though I am obviously for the larger blocks. Bitcoin that is scalable p2p cash can be a store of value too, but bitcoin that has limited transaction speed can only at best be store of value.
The idea is that fees slowly replace the block reward. block reward halve every 4 years. I think he randomly chose 2032 because the block reward will be a lot less then than now, but block reward will still exist for more than a hundred years.
The idea for bitcoin (BCH) is that the network will be used so much that all the little fees add up to a nice big reward for the miners.
BTC gave up on this idea completely, thinking that the main network should not get used a lot and should rather be an expensive layer to store large quantities of value. This is because they think that bitcoin cannot scale. So they made that you can bid for a higher fee if your transaction gets stuck driving up the fee price. They think this is good because they think the blockchain will get too large with transactions, so they want to keep the main layer expensive to discourage use of it.
Therefore, btc changed the narrative of bitcoin to a digital gold. They made changes so that the max throughput is deliberately limited, and are hoping that when the block reward runs out, that people will be willing to pay very large fees. Almost like gold!
BCH is betting on the fact that hard drive space and network speed to pass a large ledger (listing of all transactions that has happened) around, will become less. (and it already has!) BCH also did not introduce the replace by fee mechanism where people can increase their fee. Therefore BCH payments can be instant. BCH aims to gather many transactions (through use of the network) to eventually build up a big miner incentive that will eventually replace the block reward. Probably by 2032 we would start to want to see increased usage of BCH network, to start contributing to that mining reward via lots of small fees. (if this doesnt happen through, the difficulty of mining will automatically decrease, making it easier to mine the block reward which will still exist in 2032, in turn causing more people to want to mine bch)
With bch a lot of the fees might eventually come from automated processes even.. think things like cash rain, faucets, chaintips, small purchases etc. all these are incentivised because the fees are small, but can add up to a large sum all together.
BTC do not have plans like these at all for its main chain (the small transactions).. it will become more and more a kind of layer to pass value around for banks and big holders (If it even works out as intended)
That is why btc eventually NEEDS high fees.. for when the block reward runs out. and lightning network (which is a very convoluted solution that i think will fail) is meant to solve this issue for btc. But the lightning network does not help contribute to the miner reward, so btc is still left with the problem.. they NEED high fees, because their max transactions is limited by 1 mb blocks.
BCH eventually NEEDS high amount of transactions (network use) for when the block reward runs out, so that miners are incentivised to mine the blocks by receiving many many many small fees that all add up.
I dont really understand why they mention 2032. By the same logic one could say that, by 2032 BTC needs very high fees otherwise it will fail as digital gold. Its just an arbitary date where the effect of a lesser block reward starts being felt more. In reality its like a slider scale that will continue in to the next century.
Anyways, I tried to write this post from both perspectives, even though I am obviously for the larger blocks. Bitcoin that is scalable p2p cash can be a store of value too, but bitcoin that has limited transaction speed can only at best be store of value.