Author: Gregory Maxwell 2015-07-29 20:09:05
Published on: 2015-07-29T20:09:05+00:00
In a discussion on Bitcoin development, Mike Hearn suggested that high transaction fees could cause users to opt for bank transfers instead of Bitcoin. However, Owen argued that Bitcoin offers significant advantages beyond just being a payment system, such as sound money, censorship resistance and personal control over money. He believes that the marginal cost of a Bitcoin transaction can far surpass that of competitors like PayPal or banks, as long as users are willing to pay for these additional benefits. While some marginal use cases may drop off with higher fees, it is necessary to let them go because there isn't enough room on-chain for everything. Satoshi referenced the banking crisis in his early work, indicating that Bitcoin serves a broader purpose than just payments. However, if Bitcoin's focus becomes exclusively on payments, it will fail in the market-place against competing systems that avoid the currency adoption-related obstacles of Bitcoin. To maintain its competitive advantage, Bitcoin must continue to offer important social/political promises beyond just better payments. For instance, Bitcoin's security properties need to be maintained and enhanced so that it can be used to build secure systems that accommodate various applications. If Bitcoin's security properties are weak, advanced tools cannot be built for it. Although Bitcoin doesn't have to catch every conceivable use case, addressing them via a less direct but more focused solution is essential.
Updated on: 2023-05-19T20:55:42.735348+00:00