The post Bitcoin Blockspace: Dynamics of System Resource Use appeared on BitcoinEthereumNews.com.

Competition for blockspace is and always will be one of the core tensions that exist between different users of the Bitcoin protocol. At the end of the day there are only two restrictions on how it will be used, the technical and consensus layer of what is actually possible or allowed by the protocol, and the economic layer of what people are willing to pay to make use of blockspace to different ends. This is a fundamental and inescapable reality of how the network works. It is a purely market driven distributed mechanism for deciding how Bitcoin is used. Concerning anything that is possible to do, the market is the ultimate decider as to whether or not it will be done. The market is also the ultimate decider when it comes to enabling new things that are not already possible. It’s an important thing for market participants to actually have an informed understanding of the dynamics involved in different use cases of blockspace to really assess how different uses might interact with each other. Blockspace As A Common Resource Blockspace is essentially a commons, no one owns it, both on the production and the consumption side, but it is finite. It is not quite a tragedy of the commons as such, especially given the inescapable cost of using it, but the dynamics of its use does have some similarities. Every use case consuming blockspace has an externality it imposes on every other use case that has a need for that blockspace. On some level, blockspace consumption is very much a zero sum game. One entity or use consuming space pushes out another entity or use that would also consume that space. In any type of normal social context, people would consciously work out such conflicts. If one use arrives that…

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Filed under: News - @ June 21, 2024 4:20 pm