How Does a Fixed Block Size Limit Contribute to Fee Competition?
A fixed block size limit creates artificial scarcity of block space. Since only a limited number of transactions can fit into each block, when the demand for transactions exceeds this capacity, users must compete with each other by offering higher fees to incentivize miners.
This competition is the mechanism by which the network prioritizes transactions and ensures that the most economically valuable ones are confirmed first.
Glossar
Block Size
Capacity ⎊ The block size parameter fundamentally dictates the maximum data volume a single block can hold on a blockchain network.
Competition
Market ⎊ Competition in the cryptocurrency and derivatives markets refers to the rivalry among exchanges, protocols, and market makers for liquidity, trading volume, and user base.
Fixed Block Size Limit
Constraint ⎊ A Fixed Block Size Limit is a hard-coded protocol parameter that caps the maximum data size of any single block added to the blockchain, regardless of network demand.
Block Size Limit
Constraint ⎊ Block size limit, within cryptocurrency networks, fundamentally dictates the maximum data volume permitted within a single block added to the blockchain.