Jim Harper is a senior fellow at the Cato Institute.
In this opinion piece, Harper reflects on recent elements of the bitcoin scaling debate and what it means for perceptions of the digital currency’s viability. Bitcoin doesn’t care. It continues to develop a monetary, financial, economic, intellectual, and social ecosystem around itself. But a pair of reports in the mainstream media makes Bitcoin look broken. Arguing with the messenger is an option. But the better path is to get on with the hard work of fixing up Bitcoin in perception and reality.
Unfair? Perhaps. A Planet Money podcast finding that Bitcoin wouldn’t relay a simple transaction appears to have been conducted on software that didn’t supply the fee required under current conditions. In light of such reports, new users may hesitate to get involved. Their reluctance may retard Bitcoin’s growth and slow desirable advances in global financial inclusion, financial privacy, autonomy, and monetary and financial stability, as well as Bitcoin’s growth in value on exchanges worldwide.
For Bitcoin’s technical sophisticates, doing a transaction that way is just dumb. But there is a good argument that transaction fees were supposed to supplant mined bitcoins over the next hundred years. Wallet software and the knowledge to use it in a market for transaction-inclusion services were arguably meant to evolve over that span, not in the last year.
So if New York Times reporter Nathanial Popper was playing the role of everyman when he sent his transaction to oblivion, he represented a large number of Bitcoin users and a huge number of non-users. The technical and social capital for transaction fees is still in the earliest stages of development.
In his Times piece on mining in China , Popper sounded notes that must surely rankle Bitcoin Core developers and their supporters. He characterized them as […]
