Author: Anthony Towns 2015-10-28 00:15:29
Published on: 2015-10-28T00:15:29+00:00
In a conversation between Rusty Russell and Anthony Towns on October 28, 2015, the two discussed the impact of bitcoin adoption. Towns argued that as bitcoin adoption increases, fees will rise or the number of transactions per block will increase proportionally if there is no lightning network. He used an example of the percentage of people who know about bitcoin, stating that if 1% of people know about it and use it whenever it's cheap, then 2% of people knowing about it would give twice as many transactions at any given price level. Russell brought up Metcalf's law, which states that both sides need to "know about bitcoin" for it to be adopted. However, he pointed out that Metcalf's law would be a lower bound since people are more likely to adopt bitcoin if the people they transact with also use it. He created a formula to calculate the probability of a transaction through bitcoin based on whether the consumer and merchant can use it. He acknowledged that reality would be somewhere in between Metcalf's law and his assumption.Towns provided an example of one billion people initiating 100 transactions per year, but only 1% know about bitcoin and can only use it for one of their annual transactions. At 2%, 20 million people could use it for two of their annual transactions. He added that he wasn't sure how this alters Russell’s calculations, but suggested that the proportion of users would matter for adoption rates and comparing the number of bytes needed for lightning anchor txs on the blockchain.
Updated on: 2023-05-18T15:44:01.642432+00:00