Author: Venzen Khaosan 2015-07-29 22:11:57
Published on: 2015-07-29T22:11:57+00:00
In an email correspondence with Raystonn, a Bitcoin developer, someone asked how Bitcoin planned to address the loss of value to alternative blockchains due to high transaction fees. They questioned if Bitcoin was trying to provide the cheapest way to send value and whether liquidity moves to the least frictional location. The definition of liquidity as the degree to which an asset/security can be bought or sold in the market without affecting the price was provided. Despite the desire for cheaper fees, people are still willing to pay higher fees and wait longer for transactions to execute because of Bitcoin's powerful features. The case is made on the assumption that limiting the size of the blockchain is an attempt to artificially raise transaction fees, but Greg Maxwell has explained that this is not the case. The reluctance to concede blocksize is an attempt to constrain capacity, as it is currently relied on for security and ultimately, to protect its degree of decentralization. Losing decentralization would mean losing the whole thing.
Updated on: 2023-06-10T04:16:27.858731+00:00