Bitcoin Forum

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For those that are 'out of the loop' and need a simpler explanation of the roadmap. Keep in mind that this is obviously simplified so don't complain how it doesn't explain every single scenario and detail.

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Notice: The majority of posts will be deleted to keep the thread clean. I will try to reply to every single poster. If someone wants to engage in a rational and technical discussion then those posts shall be left in the thread. Trolling and posts made by people on my ignore list will be deleted.

I think this is a nicely put together visualisation (my only criticism is that it may have actually erred slightly on the side of being too technical but I guess that depends upon the target audience).

Wrong. Don't post nonsense. Lightning is open source and will be free to use. The LN has nothing to do with sidechains.

Added to OP. Thanks.

I don't think it is too technical though. This should help people that aren't good with technology.

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Cleaned & replied.

A hell of an infographic! Well done at least we finally have something to discuss on, I mean real points to be discussed not just thin air.
And, above all yes, this is about changing the world guys, not being a paypal alternative.

The thread is not being censored, it is being moderated. I'm deleting what I dislike, and that is propaganda and FUD. I'm most likely going to create another update post and remove the majority of the posts in this to keep it clean. You're welcome.

Indicative of the levels of cynicism and maturity (not to mention desperation) employed by the blockchain-bloaters: knight22 only really came into the thread so he could run home to bitcoin.com crying "they censored me, nasty fat hobbits with their censoring". Kind of pathetic really, I always thought the ringwraiths were supposed to be badasses  :D

Then go pay them a visit.

The block time is not affected, the validation time becomes much faster. This only concerns you if you are running a full node. It is actually a very good achievement.

It is stated at the end: "u/Cryptoconomy".

That was the point of it; explaining in a simple yet correct way.

Correct. Scaling via the block size is very inefficient.

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He knew what was going to happen if he posted FUD (e.g. Bitcoin is "broken"). According to their deluded minds, 'moderation' is an abstract concept that has left the plain of existence when moment Bitcoin XT released.  ::)

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Cleaned & replied.

Cool, very nice work. Been looking for something like this. Thanks OP.

Fantastic graphic. In storage every bit counts.

It is indeed.

This isn't a discussion about LN.

The roadmap was signed; graphics like this one can be made by anyone though.

There's no need to argue with him, it is pointless.

There is no lack of dates. There's an ETA for everything in 2016. The Classic developers are unable to create anything complex on their own, how is that not a bigger problem in comparison?

Yes there is. That would be equal to a 4 MB block size so: bandwidth, storage, propagation delay, orphans, validation time; should I continue?

For me it is impossible to understand the technical explanations and various details of this kind but it easily understandable that, if eveything in main post is true, there is no need to increase the size of blocks (and that the war of the development core people is made only based at selfish reasons) and that the bitcoin could be a much more better product than it is already. A such improvement of a great invention put in the trash every kind of doubt about its R.I.P. as a product and even its role in the world of peer to peer. Then, if it would be possible to be realized even the last foreseen which see it as the base of the new internet (about which, according to my very poor knowledge in such field, are "fighting" even other peer to peer projects - one of which known by me is the project of them who are behind ethereum) would make it again the King of the Kingdom of peer to peer. As it was when was born but not as it is in the today cryptocurrency world when are not few the cryptos which (as is told by them who can do such kind of comparisons) there are cryptos better than it. If it would be the King of Kingdom of the peer to peer, that mean that it would be the King of the tomorrow real and virtual world.

I'm pretty sure that it is as accurate as it can be for a simple info-graphic. It is exactly meant to combine only a small amount of technicalities with the correct simplistic explanation. Currently there is no need to increase the size of the blocks because there will be Segwit. I'm putting up a wild guess here, but I'd say that a block size is increase due sometime in 2017 (maybe). This becomes much easier and safer to deploy because of: IBLT (reduces bandwidth) and Signature validation time being reduced (currently it is quadratic and can be problematic at 2 MB blocks). Both features are in the works and should be implemented sometime in 2016.

It's not just possible, it's already happening, and happening very fast! Be ready!

It is possible if we scale via off chain solutions. If we focus on scaling via the main chain we will end up centralizing (further) both miners and nodes. The question is where is the limit (e.g. what node count should be considered centralized)? This visualization could be expanded with the Lightning Network added to it (although not sure when we should expect a release).

Node count should be considered centralized when people with decent computers cannot run a node on their bedroom, this is I think very clear. If people can't run a node on a single computer, its when the centralization process starts and once it starts it will expand like mining, it will end up getting "specialized", so it's crucial that we never get past that point where people can run nodes at home.

Exactly. I've asked the 'big blockist' and 'forkers' before and got no reply (aside from insults). Currently there are people that run nodes on Raspberry Pi's. Obviously this won't be possible in the future unless there is an updated version but we can disregard that. Where is the cut-off point, Pentium, Dual Core, Intel i3? They'd be willing to waste a lot of valuable resources and heavily reduce the node count just in order to be able to process small purchases on the main chain. I don't see a valid reason for this; your $1 purchase doesn't need the security of a 1 Exa-hash network.

I don't have a technical background and for me it was fine. It was actually nice to see some of these issues explained.

Great work putting this together, it really sends out a message of hope after the recent negativity.

people have replied to lauda. but he ignores and then deletes posts because it proves his agenda wrong.
EG
Skype videocalls. 30mb every 10 minutes.(upload)
netflix HD tv shows 500mb(download)

yet millions of people can use those services without being a datacenter..

i have made a valid comment in reply to the questions asked in a valid post. if this post gets deleted then so should the posts i have quoted as they are all linked. if only my post gets deleted then it shows Lauda is trying to hide the truth to pretend there is no rebuttal to his mindset

honest question time now lauda. just choose A B or C which statement fits your mindset

A. i know data is not a good excuse to not fork.. but im not sure of how orphans work or blockheights work to bring the network inline so im scared of forks
B. i know how forks work but im paid by blockstream to try ensuring blockstream dominates and has control
C. im not paid by blockstream i am just emotionally tied to the core developers through friendship and want them to be rich and powerful

As usual, Franky: get out of town with that garbage

The processing that gets done when a Skype call or Netflix streaming session gets downloaded is low compared to Bitcoin blocks. Cryptographic proofs need satisfying to validate the new block and it's contents. The way it is now, the amount of processing needed scales quadratically, i.e. to the fourth power every step change. That kind of burden (a doubling then raised to the power of four) could see nodes checking transaction signatures and resolving coinbase merkle roots for the entire block interval i.e. <10 minutes.

So, your simple presentation is a little too simple. Please try to improve.

keeping it short and sweet.

processors and ram are much cheaper,faster, more capable and common now than 2 years ago. and will again be better, faster, cheaper in 2 years.
we are not stuck with 2009 technology! or 2013-14 technology.
but i do like how lauda's example of the processing crisis is referencing raspberry pies rather than normal computers, that atleast made me laugh.

maybe i should complain that segwit wont run on a ZX spectrum as an exaggerated example to show lauda's mindset. and i do like how lauda in the post says that he doesnt think normal users buying normal stuff deserve the security of exahash network.. very bait and switch(common users off of bitcoin) mindset.

which shows blockstream isnt about bitcoin being for the community at all

Intel® Core™ i7-6700K Processor - Launched: 2015; Launch price: 350$
Intel® Core™ i7-3770K Processor - Launched: 2012; Launch price: 342$

Effective Speed +24%
Average User Bench +26%
2.3% more expensive
Source (http://cpu.userbenchmark.com/Compare/Intel-Core-i7-6700K-vs-Intel-Core-i7-3770K/3502vs1317)

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After my initial comparison was "incorrect", here you have it. The numbers sure look better, right? It only took 3 years to gain a ~25% increase in computational power.
https://i.imgur.com/bXCL2FF.jpg

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No more nonsense will be tolerated. Either admit to being wrong, or submit valid technical evidence that supports your argument (you tend to be a straw-man often).

What?   Quadratic means 'squared'.  Where are you getting x⁴ from?

Which is what the hashing problem O(n^2) is about.

So "4 times" = x⁴ by your logic?

You do know that the relationship 5x : 25  is actually 5²?

Never said such a thing, just wanted to post the definition of it that I've used in the past. It might be useful for Carlton.

I wouldn't quote that (incorrect) titbit to Calrton, it will just confuse the old duffer even more.

Incorrect; how? Provide a source please.
I took it directly from a website long ago; now I've found it again. Take a look for yourself. (http://www.aiqus.com/forum/questions/18653/what-does-scale-quadratically-mean) I'm not sure what you're trying to say here nor how it is relevant to OP?

It wasnt relevant to the OP. It was relevant to Carltons post.  He said 'quadratic' was raising to the "fourth power"

The Infographic was updated with corrections from BtcDrak, Adam Back, Eric Lombrozo, and Luke-Jr.

Nice infographic.

What bothers me is the bigger picture (distant future). How would this roadmap work in terms of providing sufficient miners fees when block subsidy becomes irrelevant (or disappear completely).

If I get this correctly, in order for everything to work, we would need to have pretty specific, balanced condition where:

- fees are high enough to prevent average Joe to make his regular txs on the blockchain
- fees are affordable enough to make Joe settle his balance often enough to provide miners with sufficient reward.

I honestly can't imagine what would possibly be the right tx cost. If it's too high, Bitcoin is unattractive to Joe, if too low, Bitcoin is unattractive to miners.

Alternatively:

- Joe stays off-chain (but on LN) his entire life (assuming it's possible) and enjoys cheap txs.
- Miner fees are paid mostly by businesses/institutions.

But then, if it's possible to operate off-chain, why would businesses pay high fees if they could settle balances as rarely as possible (never?) to pay lower fees.

I'm obviously missing something here, there's no way no one thought of that, but can't figure it out. Seems to me like there will have to be an artificial bottle neck and some sort of central planning (by adjusting max-block size) to get it work (but even then it doesn't make sense).

Could anyone be so kind and paint me hypothetical scenario how this could work out?

Bonus question: what % of BTC users would have to start using LN in order for it to get desired traction (I vaguely recall reading somewhere that it's >60%).

I don't think anyone is going to bother with on-chain transations in the future when you can send transactions as safely instantly and cheaply thanks to LN. So the question is: Who is going to use on-chain transactions so the miners get a decent amount of money to justify keep validating transactions?
I mean if LN is as safe as on-chain transactions.. why even use on-chain. Maybe if you are buying something huge like a car or something, but even then, if it's safe to pay with LN and not pay higher fees..

I think that you are spot on, it does not work. Lauda even said it himself, Core wants to rebuild Bitcoin. According to them Satoshi's vision of Bitcoin is not good enough. They are diverging from the original vision of Bitcoin. I think that as decentralized as the internet is good enough. Bitcoin is build on top of the internet after all.

Did you notice how there are no dates in the roadmap whatsoever. Fundamentally changing the economic policy of Bitcoin like this while pretending to intend to scale Bitcoin significantly directly is deceitful. There are fundamentally different visions for the future of Bitcoin that are at odds here.

https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-December/011973.html (https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-December/011973.html)
http://konradsgraf.com/blog1/tag/block-size-debate (http://konradsgraf.com/blog1/tag/block-size-debate)
https://medium.com/@jgarzik/bitcoin-is-being-hot-wired-for-settlement-a5beb1df223a#.7ek47hakx (https://medium.com/@jgarzik/bitcoin-is-being-hot-wired-for-settlement-a5beb1df223a#.7ek47hakx)

I can turn that around actually, who is going to bother with LN and SD when everyone can just transact directly, easily and cheaply using real cryptocurrencies. I would hope that Bitcoin chooses to remain a real cryptocurrency otherwise I am sure it will be obsoleted and outcompeted.

"As decentralized as internet", so you mean as the other endless iterations of "internet money" that have always end up getting raided by the authorities?

That's nonsense, the first priority should be decentralization of the nodes, "as decentralized as internet" in terms of nodes means datacenters running nodes, which means Bitcoin turns into Paypal 2.0 in other words useless, since we already have Paypal.
I don't care what Satoshi said, the current Core view on reality is the most realistic one and the best compromise in terms of pro privacy and pro decentralization.

It should work.

That's not what I said. I said if they could rebuild Bitcoin from scratch they would, but it is not possible right now. What I meant was improve the underlying infrastructure from scratch. The internet is not really decentralized.

Core did not create the infographic. Anyhow this is all much better than Classic regardless of when it comes in 2016.

Transacting via the LN will be cheaper and faster. You don't know what you're talking about. If Bitcoin goes down, so do almost all of the cryptocurrencies.

LN remains the best way to scale Bitcoin worldwide without ruining node decentralization in the process. Until the day a cryptocurrency allows for global level transaction volume, all on-chain without massive node centralization, that is fact. But I don't think that's possible, therefore Bitcoin has 0 competition, realistically.

Bitcoin's predecessors where completely centralized, not a good example at all and that is not what I meant. In regards to the internet, think about it, what it would it take to destroy the internet today? Impossible right? Security through mass adoption, not obscurity is the path forward for Bitcoin and this was always the intention.

The internet has given us so much, freedom of information, communication even Bitcoin I find it hard to understand why you think the internet was a mistake and why Bitcoin should not make these same mistakes again. I am inclined towards the opposite believe actually, we should not use blocksize limit as a economic policy tool, it was never intended for that, the limit should be significantly above the average transaction volume, this way it serves its original purpose as a anti spam measure.

Arbitrarily restricting the organic growth of the network should not be considered a good thing.

I think that you are suffering from the engineers nirvana fallacy. I think that the logic that we can not scale to global levels today, therefore we should not scale bitcoin directly at all is flawed. Technology improves and we can increase the limit as we need, restricting Bitcoin now at one megabyte does not make any sense, we can easily increase it to two megabytes without massive node centralization or whatever. Which would avoid transacting on the Bitcoin network directly becoming more expensive and less reliable, which would not be good for adoption.

If you think that Bitcoin has no competition then you also have your head in the sand, Dash for instance can already do fifty six transactions per second, quickly, cheaply and directly without the inconvenience of having to use the lighting network or any other payment channel build on top of the blockchain.

So are you against Core map or pro?
Blockchain is a backbone of LN, with no incentive to miners both blockchain and LN fail.


Great. But how?

Again, there's a conflict in design, you need both average users to stay on-chain and off-chain. I don't think even central planning would work.

So again, I hope I'm missing something here, but if not, that means this roadmap would put 'expiration date' on Bitcoin.
And to make it clear, it's not about "something can go wrong" but about "it cannot possibly go right", well, unless you make some significant changes in entire Bitcoin design.

The only solutions that comes to my mind (at this moment) are:

- lifting 21 million cap
- switching to different algo (PoS?) but that would affect LN
- increasing block size and making txs cheap again (back to Classic solution), but hoping that users would use both, on-chain + LN (probably not likely to succeed)
- hoping that few BTC businesses would take on mining operations on themselves (mine at loss), but so much for decentralisation
- hoping that BTC businesses will be making regular charity donations by voluntarily paying high enough fees.

Does any of the above sound attractive?

I'm bit surprised to see any serious members in full support of this roadmap without having a clue how the above could possibly be sorted out. Or is it just "who gives a f**k, this problem not gonna happen anytime soon" kind of logic?

I do not see any reason why the "Classic Solution" can not work. Just increase the blocksize, increase it again when we need to, the market will find its own natural equilibrium.

Fortunately the solution already exist, we do not need to reinvent Bitcoin, Bitcoin is already the solution. We have multiple alternative implementations who are staying true to the original vision of Satoshi who are prepared to scale Bitcoin directly now. The way it was always intended, we should allow the experiment to continue, I do still believe in its original vision.

I've revised this statement. There are various ways in which it could work. In general there are going to be more on-chain transactions regardless of off-chain solutions. The users need to open/close their payment channels as well. Additionally the price of Bitcoin could pick up the 'pace' where we need not worry about fees for a considerable amount of time. Increased block size limit does not guarantee an adequate amount of fees in the long-term future either.

This would effectively mean the end of Bitcoin as we know it today.

Because it will never be able to scale that way to accommodate enough users without sacrificing decentralization. Each time you raise this limit by a considerable amount the problem becomes worse. Besides, unlike Classic the developers behind Core are working on infrastructural improvement that should make such 'upgrades' less 'heavy'.

Nobody cares what you believe in. Stop appealing to authority, this argument is without merit.

That is not necessarily the case as technology improves. We can even just scale Bitcoin directly as technology improves, decide on a lower bound, lets say the average desktop computer in the developed world for instance, even if that was our lower bound we could still justify increasing it to two megabyte once like we are now. It is not my preferred position but I would compromise there, however it seems like you are not even open to that possibility, using the blocksize limit as an arbitrary economic policy tool instead, while using IT and engineering knowledge to justify such a position, using Core as an appeal to authority.

That's not exactly my point not was I talking about 2 MB in particular. In the case of wider adoption scaling primarily via the block size limit will never be able to accommodate enough users without sacrificing decentralization. Technology is currently in a 'difficult' position. On one hand we have fiber internet which is a huge improvement over the current world average, on the other hand we are witnessing the death of Moore's law and problems with HDD's. It is quite possible that technology advancement in some fields become really slow (look at the battery technology), however it is also possible that this won't happen. You can't work towards a best case scenario here when scaling large scale systems.

I've told you this a number of times and I'll tell you this again. I'm a very open minded person, especially when it comes to this debate. There was a time that I've agreed to a bigger block size limit; I'm supportive of various proposals such as LN, sidechains, dynamic blocks and even a hard fork (I do think that the system could use the experience in addition to giving us the opportunity to apply certain fixes/improvements). However, in the case of Segwit vs. 2 MB block size limit I'm fully supportive of Segwit. Additionally I highly disagree with the HF rules set by Gavin and the 'workaround' used to avoid the problem of quadratic scaling.

You don't even know how to use a fallacy unless someone uses it beforehand. I'm not appealing to anything. I have at least stated on one occasion that the Core developers did not handle this 'block size debate' situation as best as they could.

Yes, it could work. It's not a pretty solution and will probably face more challenges later on, but at least there's a realistic scenario where everything could work out fine. I can't really see it for Core roadmap (which could work truly amazing, but not the long term).


Personally I don't see Satoshi as a god. I don't have any problem with people suggesting to depart from his vision, but only as long as they're open about it and seek for community support, rather than using mental gymnastics and pretending that complete change of how Bitcoin should function is somehow in line with original design.


I don't think you got my point.
First of all, lets ignore potential high BTC price, I'm specifically referring to situation where block subsidies are irrelevant or non existent.

This system is internally conflicted. To dumb it down: to keep small blocks (and for LN to get/keep traction) you need high fees (the smaller the block-size, the higher the fees). While users need low fees (otherwise BTC becomes completely unattractive and will lose to altcoins/fiat).

For that to work you would need to have some sort of constant balance, basically you'll need to find a way to keep average tx fee on optimal level (if such can be determined), keep number of on-chain txs on high enough level, prevent the channels to be open for too long (to enforce open/close on-chain fees) but let them be open long enough (to keep LN usable). On top of that you would need to be able to adjust the max block size ad hoc (both increase or decrease if needed) to adjust to current needs. Essentially you'd need central planning to get this thing somewhat working. Also, you would definitely need much bigger blocks.

The above would also require 'fee market' (keeping txs/sec capacity below the demand) which is a flaw on its own. If you had constant demand of 10 tx/sec and capacity of 7 tx/sec, that means even if all of the 10 senders put all of their wealth on paying tx fee, at least 3 txs don't go through. That's not what reliable, sustainable model looks like.

I am talking about two megabytes specifically. Stop creating straw man arguments of doomsday scenarios if we increase the blocksize, we can increase the blocksize to two megabytes and we should.

How do you know the rate of adoption, or for that matter the rate of technological progress. I would say that this is a unqualified statement, I am saying increase the blocksize today according to the technological limits that exist today.

First of all we can definitely afford to increase the blocksize to two megabytes in terms of hardrive space today, you should know better then to use that argument, and again I am saying that it can reflect the technological limits of today.

This idea that we can not scale Bitcoin to the whole world today therefore we should not scale Bitcoin any more directly today, allowing a "fee market" to develop, I think is intrinsically flawed. Such a dramatic change to the economic policy has profound effects, the more conservative route would be to continue the course, if we increase the blocksize and the majority chooses to use off chain solutions over using the Bitcoin blockchain directly then that is fine, then we would not need to increase the blocksize as much again and it might stay in step with technological growth. I do not see any reason to restrict the capacity of the network using a centralized economic policy tool, in order to "incentivize" people to move off chain. This seems counter intuitive to me, even wrong in the way that it is being done now, if anything we should encourage more on chain transactions for the health and good of the network, allowing the free market to develop.

The Core guys are very good at what they do, however I think they lack insight in the macro economics of Bitcoin, that is fine. Bitcoin has a governance mechanism however, maybe we could just have the best of both worlds. A hard fork to two megabytes blocksize limit soon, then segwit can be implemented when it is ready, fully polished and reviewed.

I do not think it makes any sense to endanger the economics of Bitcoin over a two megabyte blocksize limit increase. Core might not understand how important the timing of such things are and expect people to pay higher fees and maybe even go through a "economic change event" until their technology is ready, when they could just simply increase the blocksize now and avoid all of this potential damage.

Recognize that there is a governance mechanism involved here, and that fundamentally changing the economics of Bitcoin is not something that should be taken lightly, beyond all technical arguments of the superiority of segwit Core does not intend to increase the blocksize limit significantly over the long term at least not enough for the limit to be above the average transaction volume, they have explicitly stated their intention in this regard as well. They might be experts in IT and Engineering but I think they are seriously lacking in economic knowledge and real world pragmatism and politics. Fortunately Bitcoin relies on the economic self-interest of the masses to govern consensus, and is not reliant or beholden to a group of technocrats in an ivory tower.

Increasing the blocksize limit to two megabytes is possible, and will not cause any sort of doomsday for Bitcoin. If Core refuses to do so the community, miners and business will do so themselves. Bitcoin is freedom.

Lauda, I do like the visualization you made, not its content obviously but its design is very good, that is well done. :)

The lightning network still requires transactions to occur on the blockchain. There still needs to be transactions to fund the payment channel and to close out the channel so that the Bitcoin can be spent elsewhere. That would be the source of the fees as well as other on chain transactions. From what I understand, lightning is not very useful for one time payments. It is less efficient and effective for me to pay for something through lightning that I only do once every so often, e.g. buying a new computer. Those types of transactions would still occur on chain. What lightning is good for is for recurring payments and microtransactions like those from faucets. Instead of having a bunch of transactions with tiny outputs from faucets, there is instead one transaction to close the payment channel when the faucet user wants to spend his Bitcoins somewhere else.

Furthermore people will have to reload their balance when they run out so they must close the payment channel and open a new one with more Bitcoin to be able to pay more. It basically isn't possible to stay off-chain all the time, you will have to make some transactions that are on chain.

So basically the funding and closing transactions are the sources of fees as well as other one-time payments and transfers and such that do not need lightning. It isn't possible

Not necessarily. It isn't just about hard drive space. There is also the thing with hashing which doesn't scale linearly. That requires computing power and by doubling the block size, the computing power required is quadrupled so the time required to verify the block is quadrupled. That is something like a couple of seconds but in today's fast paced world where everything is about being faster, those few seconds are an extremely long time.

Additionally, there are problems with the size of the blockchain itself The sheer size of the blockchain makes downloading it take an incredibly long time. With larger blocks, the blockchain will grow faster. That means that more time will be needed to download the full thing for full nodes, more bandwidth is required, and more storage space is required. Not everyone has the bandwidth to download the entire blockchain nor able to support the amount of bandwidth that a full node consumes, which will also go up with a larger block size.


I am not entirely opposed to having a small block size increase, but I think that we definitely need segwit for its actual purpose of preventing transaction malleability and the side benefits of enabling other scaling solutions that don't require block size increases. In the long run, I don't think that increasing the blocksize is sustainable.

Also, for everyone complaining about lack of dates, the timeline is listed right here: https://bitcoincore.org/en/2015/12/23/capacity-increases-faq/

The above statements directly contradict one another. You are in favour of market dynamics when it comes to one aspect of bitcoin, and yet against it when in respect of another. And yet you constantly cite market dynamics as an overriding principle, and as the impetus for blocksize increases (and for which you provide no meaningful evidence)





Can you explain the reason for the disparity in adherence to your self-professed principles?

In a capitalism based economy, the fee market would be miners deciding the prices of their product, block space.

They used soft limits for years and would do so again. Malicious block construction could be easily prevented, or at least contained to the equivalence of 1MB blocks.

Core devs with their fingers on this dial is central economic planning, something that used to be a good deal less popular around these parts. Sad thing, that.

So LN is not meant to be a scaling solution? If the average Joe can't use blockchain to buy his 'coffee' due to high fees and can't use LN due to high fees x2 (fee for opening and for closing the channel) for one time transaction, then this roadmap is a joke even in the short term and LN will never get any traction among regular users. You would effectively push majority of people away from Bitcoin.

And it wouldn't even work for micro transactions. If faucets are still around they would likely work as they do now, because it's cheaper and simpler than using LN. If the idea is that everyone would have to accumulate more significant amount of BTC in order to make (overpriced) transaction, then, whatever that is, it's not scaling.

I had a mental image of LN channels opened for extensive periods of time (weeks, months or even years), where you can connect to almost everyone and perform all kind of txs with multiple other parties. That would make sense in terms of making Bitcoin usable by masses, but inherently will discourage on-chain transactions, reducing miners fees reward... which you desperately need to keep both blockchain and LN secure and robust.

Again, I can't imagine it possibly working, because for that to work you need to both encourage and discourage on-chain transactions.

Edit: I see on the infograph that LN channels can be opened for indefinite period of time.

It looks like I did not understand in then. However, scaling via the block size limit does not ensure adequate fees either. Why should I include a 'decent fee' when there is so much space in the blocks and my transaction is most likely going to be confirmed 'soon-ish' (transactions that aren't urgent)? This is definitely not my area of expertise. You want to talk about economics in the wrong thread.

It is not a straw-man because I'm talking about the block size limit as a way of scaling. I'm not going to explain why Segwit is better than 2 MB block size limit once more.

Right back at you: How do you know the rate of adoption? You don't. I at least on the other have done some research in this field. Unless something new comes up in the next 5-10 years the technological advancement of processing power (as an example) will slow down. This is why Bitcoin needs to be prepared for worst-case scenarios when scaling or pretty much applying any critical upgrades/changes.

Read the first part of my post.

It probably won't because Gavin implemented a 'bad' workaround for the quadratic scaling problem.

He doesn't make sense either way. If we are to believe in the market dynamic then the 'fee market' would develop naturally.

Your definition of 'high fees' is wrong. Your understanding of LN is lacking and you think that LN is expensive. LN is supposed to be both faster and cheaper than transacting on the main chain. Without the LN (or similar solutions) Bitcoin does not really have a 'decentralized global future'.

The topic doesn't require advanced knowledge of economics, just a common sense really.

There's a (big) uncertainty whether scaling via block size increase will work or not in terms of sufficient fees, but at least you can project theoretical scenario where it could work fine: sufficient adoption rate -> large number of txs with small fees -> big enough rewards for miners. You don't have such mechanism in the Core's roadmap (not long term), instead you have internal conflict.

Why wouldn't you include small, affordable fee to make sure your tx gets included in block? Why do you think vast majority of current txs include fees? You tell me.


Yes, my understanding of LN may be lacking but I was referring to (incorrect) explanation from knightdk.

So again. LN will be cheap (it will have to be). But you still need high on-chain fees to keep things going (maintain relatively small block size + make sure LN gets traction). So who would create high volume of high-fee on-chain txs, when LN provides solid incentive to stay off-chain? How will you make sure block-size is well-adjusted (you need capacity to stay below the demand, but still you need to make sure that all the txs will eventually get confirmed). You would need central planning to make sure there's a balance (push people on or off the blockchain, whatever currently needed) to get this system working.

Then I assume you're in favour of allowing the market to alter the 21 million coin limit? Terrible bit of centralised economic planning, isn't it?


NEWSFLASH: software development is centralised. Because a tiny percentage of the planet are capable of coding Bitcoin.


There will always be, and always has been, A MIX of centralised and decentralised forces steering Bitcoin's direction. All you've proven with your statement is that you've not been paying adequate attention to the facts.

Regardless, I do not want to talk about economics here. This is not the right thread nor section for it. I advise you to stop.

It was explained to you. LN is perfect for occurring payments, not for one time transactions. There will always be demand to transact on chain.

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Let's go back to the technical debate.

I didn't make it.

Even a smaller percentage of engineers.

You can't take the 'economics' part away to have any meaningful discussion about Bitcoin. And if you don't want to discuss then fine, but then why did you reply to my initial post in the first place?


So is "Blockchain for settlements, LN for coffee" a lie?


Anything more than wishful thinking? You don't need some demand. You need high enough demand converting to high enough fees reward. If you cannot define that potential demand even on theoretical level, then you have a flawed model.

Buying coffee is a small and recurring purchase, is it not? These are the kind of purchases for which LN is intended for. Additionally I can see a block size increase of sorts after IBLT and weak blocks.
Yes you can. This is why there is a Economics section. Besides, this is my self-moderated thread and my rules apply. Similarly I also delete almost all of the posts of people who are on my ignore list.

Hmm, no it's not? Unless you have a habit of buying it on regular basis (every day) from the same merchant. To avoid confusion, "coffee" is commonly used as synonym for small to medium everyday transactions (whether recurring or not). Let's use other example, I want to buy Raspberry Pi with bitcoins, what do I do? Will it be possible, will I get penalised with (artificially driven up) high fee?

Increasing block-size could work, but you still have the issues noted above (don't want to repeat myself).


It's equally ridiculous statement as saying that you can take the 'technical' part out in scalability discussion.
Economics board is definitely not the right place (majority of topics there are not even bitcoin related).
Logically, if 'economics' belong to Economics board, then 'technical' belong to Technical Discussion. Then what's the purpose of this thread? To discuss the colours of infographic?

Sure, your thread - your rules. But you're sending mixed messages, you engage in discussion (including 'economics') and say you don't want to discuss. If it's the latter one, I'll just open a new thread, not a problem.

I've replied in a short manner. I did not want to go in-depth about economics. Feel free to start up your own thread on the economics of LN. I'm not forbidding the discussion albeit I'll certainly not take part in it further. Depending on where the discussion goes I might delete replies and quote them all in 1 big post (as done already).

The discussion of (mostly) the technical side of these and similar solutions.

Well that's contradictory, an everyday transaction is, by definition, recurring, is it not? It happens every day.

I would not consider a raspberry pi to be a small purchase. To me small purchases are less than $10. It is also not comparable to the price of a coffee.

Since a raspberry pi is a one time, not really small purchase, it would happen on chain. Again, one time payments would happen on chain. It is not efficient to do those over lightning.

I didn't understand completely what a hard fork and a soft fork are. Does a hard fork require a new Blockchain and a soft fork doesn't?

the real difference is that one is not retro compatible(hard fork) the other yes

so with an hard fork you need to upgrade otherwise you will be cut off, with a softfork not

Not quite. "recurring" at least in this context, mean multiple txs with the same merchant (the one you keep an open channel with).

Not going to address the rest of the post (the RasPi thing) as 1) Lauda wants to keep economics out; 2) It's already indirectly addressed in my posts above.

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Putting the fees issue aside. Can any of you guys give me a quick explanation, how in laymans terms, would LN work in practice (an ideal scenario, when everything goes to plan). Would it look more like:

1 - I'd have to establish multiple, separate channels with separate parties (ie merchants) to service recurring (defined above) txs, or
2 - I could connect to multiple people/businesses through one channel (and be able to both pay/receive).

I know both aren't exclusive, so more of a question whether option 2 is possible.

I support a free market for Bitcoin, not the "fee market" proposed by Core. It is very revealing that you can not tell the difference.

https://ip.bitcointalk.org/?u=https%3A%2F%2Fi.imgur.com%2FHX9m1Km.gif&t=561&c=VtauVopEM3d-bw

I don't think it is actually possible to open a channel in which there are multiple parties. However part of the lightning network is to use hops through multiple channels to reach another party that you want to pay. The problem with that is timing as I think using that method is rather inefficient, especially for something that needs to happen quickly as it relies on everyone in between to act quickly. Furthermore, if the hops charge fees, then the transaction fee for that transaction could grow very quickly if many hops are involved. It also requires that each hop have an open channel to another hop and that may not always be the case, or at least it would require several hops.

For those one time payments, going through all of those hops would probably be inefficient. For your everyday coffee that may not be purchased from the same merchant, there could be a network of coffee merchants so that you can still pay for your coffee through lightning by routing it through several different merchants but you only need a channel to one merchant.

If you artificially raise or lower the limit, the 'free market' is not actually deciding anything.

AFAIK: One of the engineering challenges that the teams are facing now is a decentralized solution to routing. If they get this implemented correctly then LN should look like number 2.

A fee market already exists without a blocksize limit, the blocksize limit represents a restriction placed on the market by Core, restricting the market is the opposite of a free market. The blocksize should be based on the real supply and demand for blockspace, this is best determined by the miners themselves in combination with the participants of the network. Not a group of technocrats sitting in an ivory tower. History has shown us that centralized economic planning does work, Core can not possible know all of the variables at play, especially considering that the variables are different for each participant. Cvonvert2G36 actually explained this distinction well.

Is this slide written to win an election?

libsecp256k1 is good, rest is not needed. Now we have LN realized on 21inc's computer,
https://21.co/learn/intro-to-micropayment-channels/#introduction-to-micropayment-channels

It clearly showed that you don't need to mess with bitcoin protocol to make those extra features. When LN is not needed, SW is not needed, because then the txid problem will be trivial, back to scaling with lifting block size  8)

So your answer is putting more power in the hands of the miners? How lovely.

Bitcoin is not a democracy. How many times does this have to be explained to you guys?

Nonsense. Their system is not comparable to LN. Their micro payments are limited to their systems. I should not be suprised that you'd throw away IBLT and weak blocks. Your knowledge is really limited and faulty.

Thank you for this roadmap visualization.

Users don't care what system they are using, if there is really a market demand, then this solution will be widely spread by the time your solution is ready and pass major consensus threshold (might take years). However if no one is interested in micro payment channels thus no one is buying into 21inc's solution(as my research indicated), then it is a good indicator that your R&D direction is wrong

Yes bitcoin is not democracy, it is consensus, but to form a consensus is extremely time consuming. It could drag you years to make a decision, much less efficient then a simple company like 21 inc directly implement what they want without the need for reaching agreement among core devs

In fact I'm still wondering about the governance model in Git, IMO any of the core devs can wipe out all the changes done by other core devs. I don't see how a controversial change like segwit or blocksize increase can make their way into GIT without all the 5 guys agree to it. Even a 2MB increase could drag for one year, a large change like segwit is estimated about 2 years at best

FUD as always. Please stop posting nonsense. Changes don't take long if they are properly coded, tested and documented. Segwit is coming in ~2 months. It is expected for April, albeit it can come sooner or later.

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I wonder what your price was.

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You're welcome. I'll add more if I find anything useful/interesting.

This is exactly why we need to have the development of Bitcoin distributed across several implementations. This would solve the problem of all open source projects intrinsically being dictatorships, this is why development needs to become more decentralized in order for the governance mechanism of Bitcoin to function better, fortunately that is happening now.

You are confirming what I am saying then. It is true I would like to see blocksize determined by real supply and demand, not economic central planning.

Bitcoin's governance mechanism is a form of democracy, not a democracy in the way that we know today. It is very different, I think better. However there are very democratic aspects to it, like reflecting the will of the economic majority. Which is not that dissimilar to reflecting the will of the people, which is what democracies are supposed to do in theory at least.

I think that Bitcoin is freedom, as long as enough people think this way, it will continue to be free. I suppose your position has been made quite clear here. You do not want Bitcoin to be democratic, and you prefer economic planning over the price being determined through supply and demand. I can respect your directness and consistency here.

Putting the power in the hands of the miner is a form of central planning. Do you not know how this process even works? Either the miners decide or the developers decide, there is not much of a difference in the model and it surely is not based on 'real supply and demand'.

Nonsense. This is not happening to Bitcoin. Nobody is trying to convince people that there should be no freedom. You are free to run whichever implementation you want. If you don't agree with the rules of the system then you need not run the implementation.

Obviously mining is far more decentralized presently then Bitcoin development is, so your argument does not have merit in that sense at all. Furthermore there is another significant difference between the two, which is that miners know best for their own individual circumstances what parameters and risks to take. I do not see how Core is in a better position to judge this, the opposite is obviously true. I can break it down even more for you so that you can maybe understand.

If the miners represent the supply, and the users represent the demand. Who is Core in this picture? Exactly, more like a centralized economic planning committee in this relationship, they neither represent the supply nor the demand, why should they be the ones deciding on the price? The miners who supply the market should determine the price based on the users demand. These are basic economic principles and very relevant to this discussion.

I suppose that you just do not recognize that this is a democratic form of governance.

Mining is currently "far more decentralized" than the development? No. If you count the people with commit access and the people that are are in charge of the pools, you'd probably get to a similar number. Miners don't really "care" not do they know "best". This is one of the reasons for which BIP 100 was rejected. People with common sense don't want to give more power to the miners.

You are spewing nonsense that is off-topic. Core does not decide on the price. Changing the block size limit does not have any effect on the 'supply'.

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These so called principles are not relevant to the roadmap at all. Unless you have something relevant to say I suggest that you do not post. I'll delete replies that do not fit further down the road.

There are thousands of miners all over the world, I am one of them. There are five Core developers with commit access and only one person who has the final say in Core. I think most people here will know that what I am saying here is true.

By deciding on the blocksize they are deciding on the price of transacting on the network. I was referring to blockspace when using the term supply, that in a supply and demand economy, the miners represent the supply for blockspace, and the users the demand. Whereas Core does not actually fit into this model at all.

For you to think that basic economic principles are not relevant in a discussion of free markets and the future economics of Bitcoin then I think you are missing a very large part of the picture. I was going to thank you for being so freedom minded by not deleting my posts. But I suppose I can take this as a threat that you will start deleting my posts, so this will be my last message on this thread then.

You can't know this. If you are talking about people who are running a rig or two at home, then forget about it. This is a thing of the past (unfortunately).

There are five mining pools in which ~80-90% of the hashrate is concentrated.

They've decided to add more space via Segwit.

The thread is about any of the points found on the info-graphic. It is not about the 'free markets', 'future economics' nor any kind of economics. Even if any of this is related, I don't want it in my thread (nor is it suitable for this sub-forum).

Not really. Posts by people who are on my ignore list get deleted automatically regardless of the contents. Otherwise I try not to delete many others. If you keep it on-topic then there is no reason for me to delete you posts (keep in mind that blind propaganda such as "Blockstream is a company and thus must be evil" will not be tolerated).

There are actually seven developers with commit access. Who do you claim has the final say, and how so?

There are 11 major mining pools. The pool operators have the final say on what the pool mines. Even though you are a miner, you have no say in what goes into the block. You could of course change pools if you don't like what the pool is doing, but if no other pool does what you want, then solo mining or starting your own pool isn't going to make much of a difference in anything. So when it comes to mining, only the pool operators of the 11 major pools actually matter, and they make mining centralized.

The developers are not supplying anything except code. Like you said, the miners determine the supply of block space, and the miners can choose whether they want to use one implementation or another, the core developers aren't forcing anyone to do anything.

I believe it is Wladimir who has the final say as the lead developer for Core, and the seven developers with commit access each have veto power over each other as well. Thank you for the correction.

Maybe we should agree to disagree on this point, I have argued extensively that this is not the case. I have argued that the pools are like a form of representative democracy for the miners. The pools serve the miners, it is the miners that have all of the power in this relationship, since they control the hashpower. I think that Bitcoin even depends on this presumption, this is part of the game theory behind mining. If what you where saying where true it would mean that Bitcoin is fundementally broken today, I do not think this is the case. I suppose you think that Bitcoin is broken and that Core has to fix it.

I have the freedom of choice by choosing which pool to mine with. If there are no pools that exist that support my point of view a new pool can be created and if there are enough people that think this way it will be viable. Even the situation today is prove that is the case. We have pools supporting both sides of the blocksize debate presently, some pools even giving people choice within the pool itself.

Exactly, this is what I have been saying. This depends on the will of the participants of the network as well. If people do not think they have a choice then surely they would not make that step. People being well informed makes a big difference.

Wladimir is just the release maintainer, meaning that he tags the releases, signs the final binaries, and publishes them. He doesn't have the final say even though he is primarily the person who merges PRs. Any of the other developers with commit access can override each other.

Agreed (to disagree)

But, I think that many (but not all of them) miners are in it for the money. So while yes the pool is kind of a representative democracy, many miners probably don't care as long as the money keeps coming in. In that case then, the pool operators can do whatever they want and as long as the miners are paid, they don't care.

Agreed, being well informed does help, and I think this thread with its infographic is a good job for that as it can actually explain what the Core plan is in layman terms to better educate the masses.

•Lightning Network and •Payment Channels each has its own bullet point. Why? Isn't LN a payment channel system?

That is how Bitcoin works, the miners are incentivized to do whatever is best for the network, which is what returns value back to the miners, the miners also have a lasting stake in Bitcoin which aligns their incentivizes with those of the economic majority. It is exactly because of this selfish self interest that mining works, much like capitalism, peoples greed bringing about a greater good. I honestly believe if this was not the case Bitcoin would be fundamentally flawed.

I think it leaves out some important aspects myself, but Lauda certainly did do a good job making that infographic, does look nice, explains the things that it does explain well.

I would hope that the Bitcoin Core roadmap would have taken account of the economics of what they are doing. Since they have decided to fundamentally change the economic policy of Bitcoin with this roadmap.

Almost everything in Bitcoin relates back to economics. I find it hard to imagine how you think that economics is off topic for any Bitcoin discussion. Considering that Bitcoin is a cryptocurrency. This question for Bitcoins future whether we have a "low volume high cost" network or a "high volume low cost" network are fundamental and very much do relate to this roadmap.

Thank you for not deleting any of the of the posts I have made on this thread but I can not comment on this thread any longer. I think that the idea that economic discussion will be censored unreasonable. Even the threat of censorship is stifling.

It is supposed to be one, yes. As you've seen recently there are paid shills advocating against LN (e.g. Thread about 21 inc "doing LN the right way").

I'm sure that they have. I've already told you and explained to you that adoption on a global scale is not possible via the block size limit. Not possible without sacrificing decentralization and this is something that the Core developers are trying to avoid.

So if you want to discuss the hash functions you have to include economics? No. You can't have a 'low volume - high cost network'. If there is inadequate volume then the cost can't even go up. I'm certain that the 'fee market' would be fine for some time. Initially what would happen is somewhere along these lines:
Fees are low (blocks are full) -> groups of people keep increasing fees to gain priority -> cost becomes higher -> certain people temporarily don't transact -> fees become lower (as blocks aren't full).
I'm not saying that I prefer people temporarily not transacting, but I'm saying that we should be reasonable and not hyperbolic when it comes to this.

No. This is not censorship, it even says so on the top of the thread:"This is a self-moderated topic. If you do not want to be moderated by the person who started this topic, create a new topic.".

It seems that we're still on track with Segwit for April. Consensus has been reached in China, for now. (https://medium.com/@bitcoinroundtable/bitcoin-roundtable-consensus-266d475a61ff#.7dkpz1h5p)