How Is the Concept of Scarcity in Block Space Similar to the Supply Constraint on a Physical Commodity Future?
Scarcity in block space is an artificial, protocol-enforced constraint on the supply of transaction capacity, which drives up the "price" (fee) when demand is high. A physical commodity future, such as oil, is subject to a natural supply constraint (finite resource, extraction limits).
Both constraints create a market where price is determined by the intersection of limited supply and fluctuating demand.
Glossar
Supply Constraint
Supply ⎊ A supply constraint refers to any mechanism that limits the total number of tokens available in the market at a given time.
Block Space
Capacity ⎊ Block space, within cryptocurrency networks, fundamentally represents the finite data storage available on a blockchain to accommodate transaction records and smart contract execution.
Commodity Futures
Basis ⎊ ⎊ Commodity futures, within the context of cryptocurrency derivatives, represent agreements to buy or sell an underlying asset ⎊ often a digital asset or a reference rate tied to crypto ⎊ at a predetermined price on a specified future date, functioning as a standardized forward contract traded on an exchange.
Physical Commodity
Commodity ⎊ The term, within the context of cryptocurrency derivatives and options trading, denotes a tangible asset underpinning a financial instrument, serving as the reference point for pricing and settlement.