Talk recorded on January 27th 2015, at the O'Reilly Radar Summit "Bitcoin and the Blockchain" in San Francisco, CA. A talk about bitcoin, network architecture, decentralization, innovation, and the economics of open systems.
Transcript
[AUDIENCE] What do you think about the argument... Bitcoin can only have either security or cheap transactions? Later, when no more bitcoins are being generated, the money spent in mining will be proportional to... [ANDREAS] What do I say to the idea that Bitcoin is a trade-off between either cheap or secure transactions?
Eventually, the block reward will run out and miners will only be paid based on transaction fees. First of all, that doesn't happen for a hundred and thirty two years. As far as I know, in a hundred and thirty two years, we will be building Bitcoin as an interplanetary network. I am less worried about how we optimize the blockchain today to achieve that [goal].
[This question] is a matter of optimization. Quite honestly, I won't be worried about a problem until we start seeing signs, or tiny examples, of that problem. My experience reading concern journalism- I will call it that to avoid calling it concern trolling... When I was working on the internet, every year without fail there would be an article that said, "Ethernet has reached the limits of physical science." "Here is proof: Ethernet cannot exceed one megabit." The next year, it was, "Here is proof: Ethernet cannot exceed ten megabits." A year later, it was a gigabit.
After that, it was ten gigabits. Every time an "Ethernet is about to die" article was published, or "IP can't possibly scale," "we are running out of IP addresses and the whole internet will collapse," "search can't possibly scale and we will run out of the ability to search for things," and all of these doom scenarios. They assume the technology is static, that even when you have something of value, someone won't innovate and solve its problems. In all of these problems, what I see is opportunity.
In 1995, [almost] every article about the internet said it would fail because you couldn't find anything. Some people who saw that as a problem pulled their hair out and cried that the internet would die. Then a couple of guys formed Google and decided to solve that problem. Now they have a $400 billion industry.
So you can either look at it as a problem [and never change anything], or you can consider 'what kind... of value can I generate in this industry if I solve this?' So far, I have not seen any technical problems in Bitcoin that are unsolvable. The problems are solvable and the concerns are mostly academic. The network is incredibly dynamic and resilient.
In summary, I am not worried about optimization. I am not worried about scaling. For every one of these problems, I have seen ten different proposed solutions, [which could take effect] long before these problems would become real. Bitcoin will continue to scale, grow, and adapt to these challenges without much difficulty.