Here is my supportive response to Jeff Garzik on the mailing list. Unfortunately, it was censored and I'm still black-listed:



Thank you for the great write-up, Jeff.



Indeed, a transition to a forced-fee market would represent an “economic event,” significantly changing Bitcoin’s nature. From the economics perspective, the event can be visualized graphically as the free-market equilibrium block size moving to the right of (greater than) the limit. Rather than serving its original purpose as an anti-spam measure, the limit would begin to serve as a political measure, resulting in a dead-weight loss of economic activity (and elevated “forking pressure”). Here are two diagrams to help illustrate:





Unfortunately, I think this takes us to the very core of the debate: on which side of the free-market equilibrium block size should the limit be placed?



My position, is that I don’t particular care where the limit is or how the limit is adjusted, so long as it is greater than the free-market equilibrium block size. However, under these conditions there would be no economic subsidy for off-chain solutions such as Lightning Network. Hence the dilemma.



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On this mailing list, developers tend to view Bitcoin as a set of rules encoded by the software. Because of this code-centric viewpoint, words such as “hard fork” enter the community vocabulary and develop mystical powers. The word “hard fork” is now viewed as something drastic, dangerous, and something that necessarily changes Bitcoin’s nature. The truth in this case is the opposite.



An increase to the block size limit is necessary to *preserve* Bitcoin’s nature for the reasons that Jeff mentioned. The fact that it requires a change to a single-line of code that attempts to enforce a rule that hasn’t even been empirically shown to be enforceable, is not a big deal. We will look back on this debate and laugh at how worried some were about changing that line of code.



Here is an animation that shows how Bitcoin empirically enforces the 25 BTC/block inflation limit, yet doesn’t appear to empirically enforce any block size limit at all:





We don’t even know if Bitcoin can enforce a block size limit over the long term. Concern about changing this line of code is misplaced.



Best regards,

Peter