Bitcoin is in the middle of a gigantic bull-run, hitting record price heights on an almost regular basis now. This bull run, which, if it follows Gartner’s hype cycle, as it has in the past, may well see it reach $5000 USD this year. Alas, correlation does not equal causation, and only time will tell how aggressive this bullish run ends up being.
The side-effect of this bull-run however is that it is indeed cloaking an otherwise growing issue regarding Bitcoin’s utility and fee prices. At the time of writing, Bitcoin’s mempool has over 108,000 unconfirmed transactions, and over 200 BTC in fees. Those fees equate to well over $300,000 USD.
It doesn’t take a genius to realize that something is very wrong with this picture.
If you have some Bitcoin sitting on an exchange, it makes much more sense economically to buy an altcoin with it, and send the required value using altcoin, and avoid the fee altogether. Even with the conversion fee to the altcoin, you may still be well in front.
There is a tipping point in this scenario. And it’s one that doesn’t look too good for Bitcoin’s market dominance in the cryptocurrency world. But once this bull-run comes to an end, there will be a great disillusionment period, as an exodus of investors look elsewhere to find sustained growth. This isn’t to say that Bitcoin’s price will come crashing down … it will correct itself surely, but on the contrary I believe its very long-term trajectory is only upwards. But its market share will suffer significantly unless the community unites in fighting for a blocksize increase. That is, to increase the current 1MB blocksize which has hampered Bitcoin’s scaling capacity.
The view that Bitcoin’s Core developers have concerning the blocksize is frightening. To avoid changing a very artificial code limit, for reasons that they believe people will ‘grow used to the idea’ of blocksize increases each time a capacity is reached, screams of foul play.
In the past I have written about the many political strategies employed by Core to achieve a desired result, but the glaring one right now is the strategy of degradation. A political scheme used to degrade the state of affairs to a level that is intolerable and therefore bring about a revolution.
Of course, the revolution that Blockstream Core seeks is the implementation of Segregated Witness. Not unlike a filibuster procedure in parliament, the debate over the blocksize has certainly been “talked to death”. This is no doubt a classic form of obstructionism. A method to delay a form of change.
Core developer Wladimir van der Laan says “A mounting fee pressure, resulting in a true fee market where transactions compete to get into blocks, results in urgency to develop decentralized off-chain solutions. I’m afraid increasing the blocksize will kick this can down the road”.
‘Truth’, like a good product, doesn’t need to be pushed down people’s throats. It doesn’t require social engineering, nor manipulative tactics and political strategies to attain a means. “Lies”, like a bad product, however, doesn’t stand on its own merit, and requires various marketing strategies, deceitful plays, and misinformation to make its way around.
Blockstream’s Core devs would like you to believe that you are incapable of making an informed decision on what is best for Bitcoin, because you may not be a developer like they are, and even if you are, you may not know Bitcoin like they do. They forget very quickly that it was people like you that made Bitcoin the success that it is today, and that people like you have the power to dictate its future direction. Core developers hold that they know what is best for Bitcoin because, well, after all they are great developers. But in the real world, rarely do developers ever, dictate what the users want, should have, or need. In any business or software eco-system, it is of course the users which drive special features, enhancements or otherwise. Developers may know how to code, but they are not economists, nor are they business owners that rely on Bitcoin for payments.
If you would like to do your bit, support a block-size increase to keep Bitcoin transactions cheap for all people, and speak out against any centralized organisation that seeks to control it.