Minimum spend and infochains

Posted on May 6, 2013

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Fascinating article over at Bitcoin Magazine on the new minimum output for any transaction. Note this is not a new minimum fee – it’s actually an attempt to stop high-volume, low-value transactions being sent – or “blockchain spam” as a lot of people see it.

In reality, this is more an engineering practicality than a philosophical decision against certain senders. At the end of the day, the blockchain is just information – bits and bytes with some crypto thrown in (the “bit” in Bitcoin) . The designated value of “storing value” (the “coin”) is fairly small compared to what the blockchain technology can potentially do. And this is where the rules come in.

For this reason, to talk of Bitcoin is different to talking of the blockchain. Satoshidice and Coloured Coins all two examples from the article that use the blockchain to pass “information” more than money. But unless limits are set, the blockchain could easily become a victim of its own success, taking Bitcoin (one implementation of the chain) out with it.

Which raises some really interesting spin-offs somewhere between altcoins and the Internet of Things:

Will a “supplementary” chain exist for passing information? This wouldn’t need to be as “centralised” as Bitcoin’s, depending on the value of the information – who it was relevant to, and how long for.

And would/could/should this integrate with Bitcoin and other chains, e.g. for services such as Coloured Coins, but what about things like the bitcoin-otc web of trust?

I love being at the beginning of all of this 😉

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