Bitcoin is all about economic incentives

Currently, the demand for Bitcoin is relatively inelastic, therefore miners (as of right now) are not incentivized to mine a bigger-block chain. If the demand for Bitcoin becomes significantly more elastic, miners will be incentivized to increase the blocksize limit or mine a bigger-block chain to maximize their revenue. The important thing to remember for Bitcoin's (Bitcoin Cash) future is that fees don't need to specifically be <$0.01 per transaction, but rather enough to incentivize miners to include a transaction in a given block. Ultimately, having effectively no blocksize limit allows miners to maximize revenue by making decisions between the quantity of transactions included in a block, and the average fee per transaction that they are willing to accept.

The more elastic the demand for Bitcoin becomes, the more BTC is in dangerous waters. Eventually the elasticity of demand will catch up for miners as well when it comes to blocksize limits. When transaction fees are low because blocks aren't being filled, people will be incentivized to make transactions (because they'll feel lucky that transactions are cheap), making fees rise again, hitting the blocksize limit, and making fees expensive again. This will put a "hard cap" on miner revenue, and will incentivize miners to increase the blocksize limit to get the most money they possibly can. All that needs to happen is for miners to hit their revenue cap enough times to get frustrated and actually decide to do something about it.

Whether Bitcoin Cash succeeds or not is not very relevant to this. Ultimately, Bitcoin's blocksize limit has to be lifted eventually because the incentives strongly encourage it. Bitcoin Core is pretty much guaranteed to not increase the blocksize limit, so leadership is bound to change in the future when the security of the chain is in jeopardy. This does not necessarily mean Bitcoin Cash, but a hardfork of Bitcoin some day down the road that will change who is in control...

submitted by /u/1MightBeAPenguin
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source https://www.reddit.com/r/btc/comments/jejowz/bitcoin_is_all_about_economic_incentives/

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