The Bitcoin blocksize debacle, a leading contributor to the bubble building in the alternative cryptocurrency market, continues full speed ahead, gunning toward August, when a showdown is scheduled to occur regarding the User-Activated Soft Fork, BIP 148, which will invalidate blocks mined by non-segregated-witness and ultimately cause a mighty chain split and a period of confusion. The belief is that in the end, through these efforts, congestion will be reduced in the network and price will continue on its merry way to infinity.
Adam Back is a computer scientist. It’s typically incorrect to accuse him of basing statements on emotion or personal belief, and given that his own invention, Hashcash, was a necessary precursor to Bitcoin, it’s wrong to ham-fistedly take his words out of context the way some outlets have since Back yesterday tweeted the following:
i bet they'd pay $100/tx for digital gold, and mid-sized international remittance, I would. still be really good if fees were much lower.
People took this out of context. Someone on Reddit made a dramatic post, “Is this a joke?”
Of course, it’s not a joke. In international, high-value remittances, high-fees are perfectly acceptable. There are so many reasons for this it doesn’t bear much explaining. It still raises the question of why the cryptocurrency with the most user adoption and biggest network should be dedicated to one of the smaller use cases, in terms of traffic. If this were all Bitcoin were used for, would there even be significant block congestion?
Also read: Hype Watch: What’s Really Going on with Bitcoin and US Visas?
What Back Actually Meant
Back believes that when Segregated Witness, Lightning Network, Rootstock, and other second-layer services are finally integrated into the main Bitcoin network, fees will plummet. He believes that the current situation could go on, because the transaction fees are still far from unacceptable to some parts of the global market, thus:
@justfathi international wire from US banks costs $40. common fee on exchanges > 20 bp. it's just a fact: that digital gold use can support high fees.
@justfathi would like it very much if people would adopt available tech, and if fees would fall to 1c/tx. for that to happen people need to adopt tech.
And here comes the hype machine:
@justfathi would like it very much if people would adopt available tech, and if fees would fall to 1c/tx. for that to happen people need to adopt tech.
The above statement is hyperbolic because there are, and should never be, any truly accurate pool of statistics to draw such information from. Whatever echo chamber he has installed himself in, he believes the 30% of those people who agree with Back are the whole of its supporters. Both sides are guilty of claiming “majority.” In Bitcoin, majority is supposed to be proved through the use of the governance model, and the USAF is not a violation of this principal, although it is certainly not the ideal way forward, at least it is a way forward. The potential chaos and fallout from it notwithstanding, action is always greater than inaction when facing an existential crisis.
So, does Adam Back want $100 fees? To a rational person, the statement which started this particular social media drama machine does not even raise that issue. It’s simply a point of view being expressed regarding what kind of fees certain markets can tolerate.
For the survival of Bitcoin, it’s imperative that hyperbolic sentiments and unreasonable parties be identified and dismissed (ridicule is a waste of time) on a regular basis.
Featured image from Shutterstock.
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