The Bitcoin Roundtable Consensus Proposal – Too Little, Too Late

http://www.coindesk.com/making-sense-block-size-debate-bitco...

Ultimately, you have to understand Bitcoin, and what it could be, to understand the debate, and I really don't think that's an exaggeration. This debate is so complicated and so vitriolic because it gets at the core of what the technology will become, and how that future will come about.

Some of the key issues at play:

* Is BTC more like digital gold, a settlement layer, a payment processor, or some combination of all of those things? For a given goal, what would an effective implementation look like?

* Small blocks allow for fewer transactions, but have very modest network and hardware requirements. Bigger blocks permit more transactions, but could encourage centralization as technical requirements increase by incentivizing co-localization of mining (e.g. behind Chinese firewall), discouraging node operation, etc. What is the right trade-off?

* Transactions aren't free. Limiting the network can create a fee market, but high throughput with low fees could also fund mining after block rewards.

* Who decides? Do we seek user consensus (miners? node operators? protocol devs?)? Is a competitive market for protocol implementations part of Satoshi's vision?

There's so much ideology tied up in Bitcoin that it becomes very difficult; different people want fundamentally different things. A conservative approach might be to leave Bitcoin much as it is, and tie in new protocols on top of it (sidechains, lightning network, etc.). Others feel that 'what they signed on for' is different, citing Satoshi's remarks about how the network would scale and how hard forks would create economic consensus.

What I find heartening is that even the threat of alternative implementations (XT, Classic, etc.) seem to be having an effect on the Core team. We're seeing a market for ideas, and the technical reality that a simple majority can take control, or else split the coin. Some people find this worrying (and certainly this is warranted), but I want to see it tested; dash it against the rocks and see how strong Bitcoin is.

At any rate, the transaction rate continues to increase, so the issue is approaching a resolution one way or another.

Bitcoin is not a payment network, it is digital gold, and any attempt to make it competitive with Visa, Paypal, or Western Union puts the whole project at greater risk of failure. A $10 or similarly large fee to move gold around the world instantaneously is miniscule for the value conferred, especially when that digital gold can reliably serve as an alternative global reserve currently roughly as viable as the USD but with no central issuing authority. That kind of value is not cheap, easy, or free, and cannot be achieved while also compromising its design parameters in favor of expedient commercial concerns.