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Comment by nwh | Hacker News Reader

> The limit is actually there to limit the size of a block. It has nothing to do with transaction fees.

Again, the limit is there to create a market with transaction fees. People jostle for space in the block and a market develops around how much people are willing to pay to get into the next block. It's based on the assumption that miners pick the transactions with the highest fees to include in their blocks, which does happen to a certain degree.

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So then isn't this (or satoshi dice) the sort of thing the limit is trying to create a disincentive for?

No. That is redefining the purpose of this limit. It was meant only as a anti-spam measure and now people like you claim it is necessary. There is a _natural_ limit to the minimum transaction fee which is determined by the orphan cost (including transactions means slower block propagation means higher chance of a found block being orphaned by another, concurrent block). Bitcoin needs to eventually scale to survive and that means removing the block size limit and optimizing the protocol for lowest possible orphan cost.

It's limited so that the blockchain grows at a linear rate instead of an exponential rate.

Huh? If Bitcoin is really successful and eventually used by everyone on the planet and people use it with about constant rate, the blockchain will grow linearly. Until then bitcoin will grow presumably S-shaped which means that there will be a phase of exponential growth that we are in now. If it is crippled by people insisting on 7txn/s for "economic reasons", its transaction rate will probably peak and then decay.

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