On Block Size and Asymptotic Limits of Inflation Targeting
Nietzsche’s “will to power” was never formally defined by a single work, so it’s difficult to definitively say what is meant; perhaps other than a general observation [that] reality becomes the things we believe.
The current economic paradigm [of inflation targeting] works along these lines: a target of 2% is accepted as appropriate, with measures constructed from observation [on] consuming habits to influence price level stability.
Forking Wars, Hash Rates and Block Size
The moment Bitcoin came into being, a parallel network was created [which] decentralised payments from traditional systems and called into question the Central Bank monopoly on managing economic actuality.
This led to different chains forking from BTC, selling themselves on cheaper fees, faster confirmations and greater transaction capacity.
‘Hash wars’ were made, indicating the popularity of each chain (in the form of energy committed to them) with the Bitcoin Cash (BCH) split probably the most well known.
Asymptotic Limits on Growth
A CTRL+F [word] search on the Bitcoin White Paper reveals the word ‘honest’ as frequently reoccurring. This is used in referring to the honest chain growing fastest and outpacing competing chains: it appears Satoshi was aware of future hashing conflicts.
In a similar vein, Jeff Bezos is attributed with an observation when forecasting the possible limits to growth and adoption rate of Amazon:
“in the short run, the stock market is a voting machine, in the long run, it’s a scale” Invisible Asymptotes
The asymptote is used (in this specific example of Amazon growth) as a way of understanding resistance bounds: shipping fees were identified early as a limit on longer term growth [in] delivering the perfect customer experience (the ‘ideal’) as opposed to lived customer experience.
“However, all honest negative feedback forms the basis of some asymptote in some customer segment, even if the constraint isn’t constricting yet.” Eugene Wei, Invisible Asymptotes
In the macro economic context, John Nash spoke of an Ideal Money asymptotically limiting our inflationary practices — and this can be used in understanding the issue around block sizes.
Observations on Scale
Trust — along with honesty — frequently reoccurs [also] in the Bitcoin White Paper, with the main benefits [of Bitcoin] said to be lost if a third party is required to arbitrate fraud.
Nash’s Ideal Money speaks of a non-sovereign money standard by which sovereign monies can apolitically measure their issuance — and it has been asked if Bitcoin is the asymptote of Nash’s Ideal Money? That an ideally stable currency scheme would narrow toward the zero inflation of Bitcoin.
This would explain why Bitcoin genesis was made with limited transaction capacity in each block: that it was designed for high value transactions between peers (institutions) already scaled.
The Asymptotic Limit of Bigger Blocks
At a consumer level, larger blocks designed for consumer transactions don’t have the safeguard [that] trusted third parties provide on traditional payment networks. This has implications for trusted settlement. Bigger blocks would also require comparatively sizeable volumes of energy to ‘scale’ to the extent of a Visa system, with users probably reluctant to cash ‘coins’ of increasing value.
The Asymptotic Limit of Inflation Targeting
History has shown different economic paradigms give way to others. It is becoming problematic for those who construct and measure inflation to take into account digital services [which are] increasingly consumed for free and with shorter life spans.
The invisible nature of asymptotes are akin to Adam Smith’s famous economic doctrine of the invisible hand: that trust and honesty manifest in cooperative scenarios to greater or lessor degrees as they tend toward ideals.
The reality of how trust and honesty optimise, or ‘scale’, is something still open to conjecture in respect to the immediacy of Satoshi’s electronic peer to peer cash.
Suggested however is, if, legal benchmarks aligned to the blockchain with the most “work” — indicative of trust and honesty — they may provide a stepping stone toward an other worldly fulfilment in such regard: that reality is something in which we come to believe.