Today Gavin Andresen, Chief Scientist of the Bitcoin Foundation, released a statement on the foundation's blog regarding Blocksize Economics. Earlier this month Qntra reported on Gavin's proposal to increase the Blocksize by 50% annually. This proposal was met with disapproval from the community.
In his recent statement Gavin cites the two primary complaints to increasing the Blocksize:
- Transaction Fee Death Spiral – Increasing the blocksize decreases the scarcity of a transaction being included in a block, thus as blocksize increases miner fees decrease due to cheaper supply.
- Centralization Death Spiral – Increasing the blocksize increases the burden of resources on full nodes, thus less full nodes will exist as the blocksize increases, centralizing their operation.
He concludes his statement by posing to the reader a thought experiment: "what if we decreased the block size to support just one transaction per minute (ten transactions per block)? Would more or fewer people use it? Would the Bitcoin system overall be more or less valuable?"