# Last edited on 2015-08-26 23:38:17 by stolfilocal
# Not posted yet

The mythical fee market

* Blockstream wants a "fee market" 

Please do not apply generic market theory blindly to this situation.  Block space doe not have an elastic demand and supply, like copper or beef.   It is more like an intercity bus line: the bus schedule is fixed, the number of seats is fixed, and -- more importantly -- although there are many drivers, the clients cannot choose the driver, and the driver should not be allowed to refuse service to passengers at his whim. 

As far as bitcoin clients are concerned, there is only one supplier: the network.  The goal of the network is to provide the service that the network was designed for: peer-to-peer payments through the internet without the need of a central authority or trusted third party . That is distinct from the goal of the miners, just as the goal of the bus company is distinct from the goal of its drives. 

To better serve the client, (1) the price of the service should be fixed and known in advnace, or at least easily predictable; (2) the price should be proportional to the value of the service as seen by the client, not to the actual cost of serving that client;  (3) clients who pay fror the same service should be served in a first-come-first-serve basis as much as possible;  and (4) every client who paid should get whatever it has paid for. 

It is the job of "management" to pick suitable price(s) for its service(s).  It would be sheer insanity to force clients to waste their time in a stressful blind auction to "discover" the "right" price (which would end up being just some random number), and make many of tem them pay **more** for much **less**.

Providing the best service possible means ensuring that every transaction that pays the proper fee is processed as soon as it is received, apart from propagation, PoW, and other unavoidable delays.  That means ensuring that the capacity is always much greater than the average demand, so that next-block service can be almost guaranteed even during surges of the latter.  Plenty of extra capacity is also one of the two things that can reduce the risk of denial of service by "spam attacks" (the other being a significant minimum fee).

The "market" in question not elastic.  Up until the recent stress tests, "supply" has been substantially higher than demand, so there has not been  , and there is only one suppliers -- the network -- so In 

* Blockstream has zero business sense

* Blockstream has zero consideration for clients; sees them as cattle, or as rats to run experiments on.  They seem to think that users shoud be sacrificed to protect the network.