OrangeSurf on Nostr: I think there is a strong argument to be made that even if you hold the opinion that ...

I think there is a strong argument to be made that even if you hold the opinion that bitcoin is for financial transactions, not arbitrary data storage, the figurative horse has bolted and efforts to close the stable door are currently futile. The argument looks like this.

1) There are people who want to encode arbitrary data, and are willing to pay for this. Systems are being developed which use arbitrary data pushes to enable bitcoin financial transactions to happen on sidechains/layers, blurring the line between financial transactions and the arbitrary data most people think about (jpegs on the blockchain).

2) Blocking arbitrary data at the relay layer is a sisypheancan task which nobody has succeeded to do for a prolonged period of time.

3) Even if successful the relay network can and will be trivially bypassed if block template builders wish to accept these transactions which encode arbitrary data. So you need template builders to be on board (the more the better).

4) The current block template builders are not likely to be on board, as it goes against their short-mid term financial incentives. This is because they are typically

(a) disengaged / ambivalent about bitcoin development (see radio silence regarding new soft fork discussions)

(b) In favour of any and all use of blockspace which will increase revenue (see the direct submission services, use of librerelay, prevalence of side chain mining)

(c) Of the opinion that their fiduciary responsibility is to construct blocks containing valid transactions which generate the highest possible revenue for their customers.

4) Even IF you were able to successfully persuade template builders to filter these transactions (say by decentralising template construction into the hands of more ideological lower time preference miners) there will be disagreement about what level of data encoding is acceptable, with some arguing that it is permissible in certain formats, and with hardliners arguing that all arbitrary data should be eliminated. The fragmentation will result in some arbitrary data being trivially pushed into the chain.

5) Even IF you were able to persuade the overwhelming majority of hashrate to reject arbitrary data inclusion it becomes difficult to reliably get transactions which clearly encode arbitrary data into blocks, the data would end up being encoded in a slightly less efficient manner with a 2x cost burden.

6) If 2x cost burden is sufficient to stop arbitrary data encoding then it can easily be priced out. If not, all that effort would be wasted because it wouldn't achieve the desired outcome.