Bitcoin Forum

I think the wiki article for Scalability is not ambitious enough; Bitcoin should be capable of processing 1 million transactions per second by 2030. This allows a population of 10 billion to each initiate 100 transactions per day.

Can it be done on hardware expected to be available to average users in 2030? What changes would need to be implemented to allow Bitcoin to scale to this level?

Using the ratio from the Bitcoin wiki, 1 million transactions per second requires about 4 gigabits per second. If Nielsen's Law of Internet Bandwidth (http://www.nngroup.com/articles/nielsens-law-of-internet-bandwidth/) holds until 2030 this amount of bandwidth will be start to become available to home users by 2022, and should be a small fraction of the average 2030 user's connection. Broadcasting 1 million tps through the network would not appear to be a problem by 2030.

Transmitting blocks as they are currently constructed would be a problem, because right now they include a complete copy of every transaction so require a burst bandwidth much higher than the average in order to distribute blocks in a timely fashion. There's no reason this must remain the case, however. Assuming that all nodes have a method of retrieving transactions which are not in the memory pool, the block could consist of a header and a list of hashes. This reduces the size of a block by a factor of 16 (512 byte transaction / 256 bit hash). A miner could reduce the requirement for burst bandwidth further by pre-announcing the transactions which will occur in their block so that only the nonce and final hash would need to be broadcast when they solve a block.

CPU: If a common 2012 CPU can process 4000 tps, then a 2030 CPU should be able to process over 100 million tps by Moore's Law.

Storage: Requiring each node to store a complete copy of the entire blockchain back to the genesis block is excessive. A distributed, redundant, content-addressable data store could serve the function of storing history and broadcasting transactions. We already have an example of such a datastore in Freenet (https://freenetproject.org/). Freenet's datastore is useful for this application because nodes automatically specialize without any explicit configuration, and the inter node routing adjusts to demand in real time in order to converge on an optimal configuration. Commonly-requested data is intelligently cached and the store has a provision for pruning unneeded keys when a node runs out of storage space. The P2P aspect of Freenet is slow due to it being optimized for privacy, but without that requirement other performance enhancements are possible.

Other than needing storage space which grows by 35 TB per day you are all set.  While storage capacity likely will grow I doubt anyone is going to have a 12.6 EB drive anytime soon.

On edit: you updated storage ... not storing locally simply trades local storage for even more bandwidth. I say we get to 100 tps then worry about 10,000 tps.  Wondering if Bitcoin can scale to three or four magnitudes larger than the largest global payment network is just silly.

1) It's not necessary for every node to keep a copy of every transaction forever.

2) It probably isn't necessary for anyone to keep all the prunable transactions forever.

3) A 12.6 EB drive should cost less than $1000 (http://www.mkomo.com/cost-per-gigabyte) by 2030.

I accidentally hit the Enter key with the focus in the wrong part of the screen and submitted the post before I was ready.

As Bitcoin scales it becomes increasingly more difficult to introduce changes like new block versions that would support that kind of growth. It's much easier to put algorithms in place now that are sufficiently efficient to scale to those magnitudes well before they are needed.

Avoiding this discussion in the present is a good way to help people who want to prevent Bitcoin from ever succeeding to that degree.

Dedicated persons can run dedicated nodes, but most of us can be apart of a distributed node where we share the storage and bandwidth with other users to make up a full node.

Some might have enough clout to become apart of a 100 computer node, others might join in on a million computer node.

I agree discussion on block size issues are better earlier than later. Actually, I came to this forum section to post a thread asking for current thoughts on the issue. So I'll ask here instead. My belief is most people are letting the information digest as is often helpful with hard problems. Would that be accurate?

To me the ASIC situation is a big concern, until we can order off the shelf consumer ASIC units any thoughts about scaling up are moot.

For all we yet know a few ASICs produced to finance original development might arrive in consumers hands and thereafter ASIC manufacturers simply go private with their own farms, making hashing a centralised industry thus rendering moot whether mining will be centralised or not.

Look at ASICminer for example, hoarding the ASICs to themselves, denying the use of their hashing power for merged mining, not only monopolising hashing to themselves but also to just one chain of potentially many merged chains. They even commented in some thread or other that they don't even see why anyone would even want ASIC at home, well hey guys I want to mine all my chains and you shitheads are failing to mine most chains, heck you dont even mine namecoin you fuckups! A real company might not even be allowed to do that with shareholders money, they are leaving earnings on the table, thus denying potential dividends to their shareholders, by wasting all that power on just one chain!

-MarkM-

Bitcoin faces some challenges, I think, but we've always known that. I think we imagine most any impediment can be overcome by the creative determined efforts of the community.

We take problems as they come. Look at the apparent legal victory, for example, we've recently had with the FinCEN guidance.

The difference between ASICS concern and the block size issue is that ASICS, if ever a problem, could be overcome various ways. By contrast, the block size is built into the community itself. If block size is ever a problem, due to the way it's structured, then that problem remains so long as there is no workable, acceptable alternative.

I think 2 transactions per person per day is good enough; make it a bit more so that people don't immediately hit a scarcity wall during rush hours.

I also think that most transactions can be handled off-blockchain; I'd estimate that about 1 in 1000 transactions need to be registered in the block chain.

There is a thread about how to make trust-free nodes that only store unspent transactions. If this is going to work, block chain storage doesn't need to grow continuously. I once estimated that without off-blockchain handling there would be 30000 unspent transactions per person; with off-blockchain handling that might be about 30 per person, but I'm not really sure about that. It doesn't really sound like a bad estimate though.

Please don't trust too much on Moore's law and similar exponential growth laws. Every exponential growth curve is going to hit some physical limit, and since exponential growth goes so fast, it's going to end in decades rather than centuries. For CPU clock frequency it has already ended; for hard disk capacity we're near the limit (but storage space might continue to rise if we start using different technology); for component density in chips we still have a factor 1000 or so before the limit.

The good news is that even without hardware improvements there are still software improvements that can be a game changer when it comes to Bitcoin scalability.

Off-blockchain transactions defeat the purpose of using Bitcoins in the first place as they reintroduce the possibility of prior restraint and do not have the same security and irreversibility guarantees as the main chain. Off-blockchain transactions don't help users in any way - they just make the lives of thieves and control freaks easier.

Wow. I'm probably the biggest believer in off-chain transactions.

In fact, even before I knew the details surrounding the block size I knew network transactions couldn't scale to global capacity. Still, I had high confidence in Bitcoin knowing off-chain transactions could play a major role.

I think it's key any plans for Bitcoin development take into consideration off-chain transactions, which don't defeat the purpose of Bitcoin any more than Casascius coins would (which obviously omit using the chain), because the core network remains an option. Different use cases fit different transaction channels. The core network, as I've said repeatedly, is not ideal for making everyday transactions.

How do you know this? I'm open to this possibility but I'm not going to accept it as a mere assertion. Show your work if you want me to believe you.

As of right now, with no future changes to the protocol, this is false. The core network will not remain an option because once the blocks reach 1 MB no one else will be permitted to use the core network no matter how much they are willing to pay.

If alternate chains are such a benefit then there is no problem removing the artificial transaction cap on the main chain. Miners won't process more transactions than it is profitable to mine on the main chain, and since the off-chain methods are beneficial in their own right then people will naturally start using them. They are beneficial to the users based on their own merits, right?

You underestimate what is possible with off-blockchain transactions. Basically, the way to make them secure is to always keep the possibility to move them into the block chain, to enforce good behavior.

To make an odd comparison: it's a bit similar to how a small police force can keep a large population under control, as long as everybody can stop/revert a crime by calling the police, and the police is responsive, most people will stay honest even without police intervention(*).

(*) OK maybe most people will stay honest even in a complete anarchy, but you get the idea.

BTW, if you combine my estimates, you'd only need 32MiB/block. That sounds like it's even doable with today's hardware, except maybe for storage (about 12TiB for 10 years of block chain; even that isn't so bad, since it's only needed 10 years from now). If the block size limit is put on 128MiB we'd still have some room in case things turn out different than expected.

I am extremely skeptical that an off blockchain system will be able to secure itself against the kind of computing power that miners on the main chain are accumulating. Ripple claims to be able to do this but it remains to be proved. Any alternate transaction system which require fewer resources to break the network as compared to the main chain is less secure by definition. As the hashing power of the Bitcoin network grows, so also will the resources available to potential attackers.

I think its extremely important to think about being able to scale to this size because all the evidence from other forms of digital adaptation has shown a far higher rate of operation, once its become an option.

e.g. the number of ebooks that now exist since ebook readers became popular, think how much more people download as soon as their internet speeds up.  

We are also forgetting the current off network transactions.

If you are spending cash, its an offline transaction which most likely isn't recorded anywhere meaningful.
Give people the option to have a digital wallet and then its only possible to do online transactions - the number of online transactions is going to grow exponentially - especially when movements from one wallet to another is also considered a transaction.  
We shouldn't consider forecasting the future using only what we know today and adding time.  We have to put in some extra thinking!

100tps is a good target! :)

You're right. I should have phrased that as: "I knew network transactions couldn't [easily] scale to global capacity. "


For the moment completely disregard off-chain transactions. If the network becomes inaccessible due to the 1 MB limit then it is no longer a good option regardless of off-chain transactions. I meant off-chain transactions don't make using the core network less of an option, if it's an option at all.


I personally believe that, yes. The problem is I can't speak for the entire community. So the potential problem of altering the cap seems to remain.


Yes, I believe that's right.

Why? You don't think PayPal's accounts, for example, can be as secure? Off-chain systems means more security options, something not possible with the decentralized nature of Bitcoin.


I completely agree. People gravitate to what's most effective/convenient. There has already been a massive shift away from physical money to digital money in the form of credit/debit cards etc. because of this, with all the fraud, fees and other problems that entails. Imagine Bitcoin adoption as a superior form of e-payment ability.

PayPal has zero security - they can steal from their users at any time. This is a common feature of all centralized systems, which is exactly why I said that off-chain transactions only benefit thieves and control freaks.

What about robots? Sounds like racism, coz robots ought to have the right to purchase goods. Anyway I want my robo-chief-cook will be able to pay for food by itself.

I've used PayPal since about 2002 when they first became popular (with eBay). That's over 10 years that they haven't stolen or lost a penny of mine. I'm not saying I'm a PayPal fan. Any problems with using PayPal are that there are no good alternative options. That's the key.

You should really read the off chain article before making assumptions and comparing it to paypal. Contrary to paypal it is secure by locking funds on the chain, doing multiple transactions offchain, then moving back to the chain for final settlement. It requires minimal trust, comparable to the trust of carrying cash without being robbed.

10 billion users should not each create 100 transactions per day. First the majority most likely will be niggers. Second there absolutely is no need to send bitcoin transaction each time you click on someones boobs.

Bitcoin must act as a backbone when blockchain tx is required. Successful services can operate with BTC eventually like MtGoatse, but only with the same qualities as Bitcoin - anonimity, security and so on.

Another example of people trying to plan future take up and getting it very wrong was IP address needs.  Lucky ipv6 has sorted this problem although it's a messy solution for some.

I would actually aim for 10 times more than we can possibly imagine as a target as it still will be wrong in some cases.

The whole beauty of bitcoin is that technically it should be able to scale to fit and only be held back by matters outside it's control, such as hardware,

this, fucking this.

Aargh, another one who doesn't get it! To me this feels like talking to people who think that Bitcoin can't have value because it isn't backed by anything. It's kind of hard to convince both groups; the difference being of course that the Bitcoin value has proven itself, while trust-free off-blockchain transactions are a theoretical concept at this moment.

If you like reading the theory, please see this thread:
https://bitcointalk.org/index.php?topic=152334.0 (https://bitcointalk.org/index.php?topic=152334.0)
If you think it isn't going to work / there are important vulnerabilities, please describe it in detail in that thread. Your contribution will be appreciated!

I'm working hard on a proof-of-concept; as soon as it's finished I'll invite some critics of the concept to try to steal from me. If even that doesn't convince you, please feel free to stay inside the blockchain, while the rest of the world goes forward.

Before I look at the specific proposal, I want to lay out the general possibilities I see with regards to all off-chain services. Let me know if I've missed any.

1: It relies on trusted authorities for its security - Centralized systems are always less secure than Bitcoin because they are susceptible to dishonest operators, disgruntled employees, compromised servers, government-mandated backdoors, and other attacks which Bitcoin's design prevents. (https://bitcointalk.org/index.php?topic=83794.0)

2a: It relies on distributed consensus using a proof of work system - Less secure than the main chain because no individual off-chain system will have as much processing power devoted to it as the main chain. Some attackers who could not successfuly double spend on the main chain will be able to attack the off-chain system.

2b: It relies on distributed consensus using something besides proof of work which is inferior in practice - It's less secure than the main chain.

2c: It relies on distributed consensus using something besides proof of work which is superior in practice - We should switch to a cryptocurrency that uses this other method for its main chain instead of proof of work.

In none of the above cases does it make sense to use an off-chain transaction system, but if I've left something out please let me know.

Exactly.

This is actually the biggest worry I have about this Bitcoin "experiment". My time on the Internet has shown me people can have diametrically opposing views even when answers seem obvious.

Bitcoin is decentralized, meaning everyone has a say/vote in a way for how things work. If there is not clear consensus on how to move forward things can get messy, like with the block size issue. This problem intensifies as adoption increases and there are more opinions. For this reason I feel we need to get Bitcoin's software/protocol implementation to a sustainable change-free state sooner than later.

Bitcoin's design doesn't prevent dishonest operators, disgruntled employees, compromised servers, government-mandated backdoors etc.

All these things are possible now with things like Mt.Gox and Blockchain.info where thousands of users trust these site operators to manage their funds appropriately.

You do realize you're making my point for me, right?

What are you saying? That services like Mt.Gox and Blockchain.info should not and will not exist in the future?

I'm saying that restricting Bitcoin's transaction processing capability such that most users have no choice but to use off-chain transaction services, including those like Mt. Gox and Blockchain.info, will result in heists, thefts, hacks, scams and losses (https://bitcointalk.org/index.php?topic=83794.0), cuts off nearly all users from the benefits that Bitcoin promised to provide, and makes the entire project a waste of time.

Just a note, blockchain.info encrypts/decrypts the wallets locally on the client's machine.  Assuming you have a secure password, blockchain.info can't steal your funds like MtGox could, for example.

Okay, now I see what you mean. I agree. That's true...

BUT, one thing to remember is that Bitcoin is many things. Right now we all refer to it as the value that's trading on Mt.Gox at $70+. However, Bitcoin is also namecoin which now has a value of a few cents at the BTC-e exchange; it's also litecoin which has a value of $.55 on that exchange; it's also novacoin, etc. In other words, the things you cite as desirable for bitcoin transactions - irreversibility, anonymity, etc. - are always going to be available I believe. A person might not be able to conduct a certain transaction with those exact features with BTC at a time, but they could buy 100K NMC to do it, or 700 LTC, etc. As long as any cryptocurrencies of any value at all exist, people will have access to those features.

There are all kinds of transactions in the world, high priority ones, public ones, private ones. By and large most people don't always need anonymity, irreversibility, etc. I'm speaking of the current financial system. People's bank accounts are subject to all those vulnerabilities you cite. However, for many people that's not a problem. Those problems become more prominent when government encroaches on payment freedom, but that doesn't make great difference in many cases.

For the record, though, I do support large enough network capacity to handle global transactions.


Yes, I know thanks. However, the majority of Blockchain.info's users trust the site operator to (and have a noncompromised server to) do things that way. That doesn't always have to be the case. Many or most people only know what their screen shows them.

And I support optional off-chain services that people can choose to use when if doing so best meets their needs. I oppose deliberately limiting Bitcoin to make those services artificially profitable or necessary.

If it turns out that no set of technical innovations will allow miners to process extremely high transaction rates at prices that users are willing to pay, fine. If miners could process those transactions profitably but are prevented by protocol from doing so because somebody wants to inflate the value of their preferred alternative, that's not fine.

I think we're in agreement.

I think it doesn't fit well in any of these categories. Maybe this is because there is no real global consensus-making involved: only those parties who are involved in the transaction need to reach consensus. In the concept I'm working on, consensus is reached by the publication of data which corresponds to a previously distributed hash value. This is done by the payee, so you could say that for a single transaction, the payee is the "authority" who decides whether a transaction is committed or not.

The attack modes I've found so far are limited to "denial of service": keeping someone else's money "locked" for a limited amount of time so they can't spend it. This risk is completely user-configurable: you can limit the amount of money that can be locked this way (trade-off: it will also limit your own maximum transaction size), and you can limit the time it is locked by others (trade-off: if you set it too short, you end up doing in-blockchain transactions all the time, defeating the purpose of the off-blockchain network). Theft is not possible: someone who tries to assign himself more coins than allowed by the protocol will not be able to spend those coins either in the blockchain or in the off-blockchain network.

I agree as well. "Making off-chain services profitable" is a bad (evil) reason for artificially limiting block chain capacity. All other things being equal, a higher block chain capacity is better.

However, there are several reasons to think that a completely unlimited block chain capacity (or even one that's only limited by hardware capabilities) will destroy the decentralized nature of Bitcoin mining. It's not worth discussing those reasons in this thread (there are other threads for that), but if one of those reasons is true/plausible, that would justify a limitation of the block chain capacity in my opinion, even an "artificial" one. "Artificial" isn't as bad as it sounds: the 21 million BTC limit is equally "artificial", and nobody wants to get rid of that, for good reasons.

Call me biased if you want, but I'm afraid that completely removing the block size limit will make mining a centralized business, thereby destroying (nearly?) all advantages Bitcoin has over fiat currencies.

I don't care if you are or are not biased - all I care about is whether or not your concerns have a basis in reality. I've asked for this several times already, but nobody has ever been able to answer this: please show me a historical example where imposing a production quota (http://en.wikipedia.org/wiki/Production_quota) results in decentralization.

All evidence I am aware of shows the exact opposite happens: production quotas aid the formation of cartels.

Ker-ist it sounds like cjp is saying having no size limit results in forming cartels and justusranvier is saying imposing a limit aids forming cartels.

When something becomes so difficult that only a small fraction of entities can do it, there will be at most only a small fraction of entities doing it.  This is utterly common sense and examples abound.

For instance it is technically difficult and expensive to become an MSB and consequently there are relatively few entities doing it and thus it is possible to exert significant pressure on them from a centralized authority.  Failure to comply with requests will result in forfeiture of a significant investment and opportunity so it is not common to push back sufficiently.

Do you think that those who choose to operate in China (Microsoft, Yahoo!, etc) wish to hand over their customer info to the govt?  No, they do it because that is how the real world works.  Unfortunately we don't live in some fantasy la-la-land where Gordon Moore swoops in and makes everything OK.

I don't think production quota is the correct model, the model seems to me to be more along the lines of strategic arms limitation (http://en.wikipedia.org/wiki/Strategic_Arms_Limitation_Talks).

-MarkM-

Lots of chatter and speculation, but still no real-world examples of how a restrictive quota for the quantity of services a producer is allowed to provide results in increased decentralization.

It is amusing, however, to watch tvbcof confuse cause and effect and argue for the opposite of his conclusion.

A nation wants to provide police/army/government (control-over) services for an entire continent or several continents. Citing a specific example from history runs into the risk of invoking a classical thread-killer argument/political-party.

Failure to prevent them results in them ruling / controlling the entire continent or several continents or world.

You seem to be arguing maybe that the only way to prevent them is by exceeding their own quota of armed forces? They cannot be stopped except by failing to observe the quota yourself?

There is a line between usefully large blocks and denial of service sized blocks. The line tends to vary in position depending on how vast a service you have, the larger you are, the harder it is to DoS you with larger blocks.

Or take strategic arms again. Has limiting the amount of nuke you into oblivion service the providers of nuke-you services can provide resulted in more or less nuclear powers?

-MarkM-

Not at all.

Your argument would result a very significant and very real 'quota' enforced on the number and flavor of 'peers' in the p2p solution.  That would indeed provoke the 'centralization' that you (maybe) disfavor and the associated ills that I describe.

You described the situation of MSBs wherein the costs to start a business in this industry is artificially high because an external agent has created artificial barriers to entry. Because of this excessive cost, competition is limited and the relatively few companies in this space are easily controlled by that agent.

You then go on to imply the solution for this lack of competition is for that same agent to intervene again and impose supply quotas in order to correct the problem it caused when it intervened by imposing barriers to entry.

Typical government apologist "logic", swapping cause and effect by pretending that the effect of bad policy was actually the reason the policy was enacted in the first place.

I used the MSB example as simply an illustration of something which is, for whatever reason, difficult and expensive.  Politics can be left out unless your goal is to muddy the waters.

Every kid has a bike, most adults have a car, and very few people have an airplane.  It is obvious that this has to do with the barrier to entry.  If being a 'peer' requires that one have an airplane because Bitcoin choose to expand to cover a roadless area, it may have been a better to choose ahead of time to not expand into the roadless area.  This is especially the case in Bitcoinland since now everyone artificially MUST use an airplane for any transportation, and usually they must pay an air carrier which are few and highly regulated.  Furthermore, a storm can ground everyone for long periods of time.

The hard and soft limits were inserted by someone, and for a reason.  Just as was the 21x10^6 cap.  The solution is becoming distinctly less 'peer2peer' (as I and many others define 'peers') even with growth staying safely below the hard limit.  That intuitively bothers me.  IIRC, Garzik mentioned as a concern for him as well a number of months ago in a warning that those who think the system is secure against certain forms of attack are probably mis-guided.

This is not a valid approach because reasons make all the difference.

Bringing a new smartphone to market is difficult and expensive because the high demand requires significant resources to supply. It works though because since the demand is driven by the customers there is enough profit available to pay for that infrastructure. We see healthy variety and competition in the smartphone market.

Banking is a difficult and expensive market to enter because of artificially imposed barriers to entry. Those extra costs do not pay for services that the customers want - in fact they are used to provide the exact opposite of what customers want. Because of all this we see stagnation and cartels.

I could go on all day citing examples of industries that are difficult and expensive to enter but remain decentralized and competitive because there is little-to-no intervention. Every one of your examples of a market with centralized cartel will have the smoking gun of government intervention in the middle of it.

The intervention is and always will be the problem, not voluntary trade.

Alright, lets hear your list of such industries.

Not until I see some reciprocity in the form of answering the question I already posed.

Watching.

It would be counter-productive and absurd to even come up with an example since your rhetorical question is a straw-man which does not map to the reality of the situation.

The block size is not a 'quota' but simply a number chosen to effect a design goal or the Bitcoin system.  Namely, provoking miners to mine for a reward.  I don't think there is much dispute about that, at least in a qualitative sense...notwithstanding thoughts on how to subsidize the world's masses and assertions that Bitcoin could function just fine if the full block-chain was held by just six corporations/governments.  Although I don't claim to be a historian or have been involved from the early days, these philosophies strike me as afterthoughts and I didn't spot them in the whitepaper.  (It's still on my todo list to read the historic mailing list archives though.)

Transaction processing is a service. It has a supply curve, and a demand curve, and an equilibrium price. A cap on the block size is a production quota that will have deleterious effects that we haven't seen yet only because the equilibrium demand is below the current cap.

When Bitcoin was first released it had no specific limit on the block size. This was only added on later as a means of preventing an attacker from sabotaging the network before the infrastructure was ready to handle high transaction rates. That's the reason it was set so high above the typical block size of the time.

Now that block size is approaching the limit it's time to take the training wheels off and implement the technical measures needed to support the next phase of growth. It needs to be started early because it will take time and the adoption rate is exponential.

Oh that's easy: agriculture price controls.

Time and time again they've served to limit the profit and efficiency possible by creating larger, more centralized farms in favor of propping up tiny, inefficient family farms. Of course it does mean consumers pay the price with higher, often much higher, food prices than would be possible with open markets.

The Bitcoin blocksize limit does exactly that. But Bitcoin makes for an exceptionally strange, and completely unique market: the point of mining isn't so that we can give money to miners to get SHA256 proof-of-works created. The fact that mining has anything to do with hashing or even stuffing transactions into blocks is a side effect. What we're buying from miners is decentralization itself.

Of course buying decentralization with price controls isn't the least bit novel - that's often the whole point of price controls. Israel is a great example: they don't prop up their crazy farming operations making stuff grow in the desert at great expense because they have any love of family farming, they prop them up so that if their less than friendly neighbors decide they aren't going to sell Israel food they'll still have plenty of options to keep the population from starving. It's the same thinking behind countries propping up shipyards, steelmills, and a whole host of other strategic industries.

But again, Bitcoin is unique in that the only product we're buying from miners is decentralization. Ultimately you can't eat a proof-of-work, but as long as the blocksize limit production quota keeps the barriers to entry for runing a validating node and mining low enough that anyone can participate fully you can rest assured that the actions of miners will reflect the interests of the economic majority, rather than a central cartel.

Bitcoin was released with a 32MiB blocksize limit, which was later lowered by Satoshi to the current 1MB limit for unknown reasons. (the revision control commit message when this was done does not reference the change at all)

At the time this was done the transaction rate was still low enough that almost all blocks had just the coinbase reward transaction in them.

I'd say implement the technical measures, then think about taking off the training wheels.  We are already seeing crack-ups before the hard limit is touched.  At this point it's more than a skinned up knee which I will suffer if things get all balled up.  And much worse, we'll piss away probably the best opportunity to rid ourselves of the bankster scourge that will come along in my lifetime.

Note how the news media has been talking about Bitcoin as a store of value first and foremost; if Bitcoin fails as a payment system, it can still succeed in the long run, just as gold has, but if it fails as a secure, decentralized store of value, it will never make a good foundation to be a payment system.

The technical risk inherent in Bitcoin is huge; keep in mind the fork a few weeks ago was triggered because of a scaling problem. Every time we let the blocksize increase, we risk a whole new set of bugs related to that increase - note how in Bitcoin any performance issue that affects a subset of nodes is itself a dangerous hardfork risk. A good example is the reorganization code: any node that is keeping up with the flood of transaction data, but doesn't have much headroom, can be knocked off the network entirely by a large reorganization if transactions weren't being seen by both sides, risking further damage to the integrity of the system as a whole. It'd take an enormous reorg to cause this problem with 1MB blocks, but with 100MB blocks even just a reorg a few blocks deep could cause a sudden shutdown of large parts of the network all by itself.

As for the media, I'd say that if they got this right it is in the same way a blind dart player can hit a bulls-eye.  Half of the articles I've read have made me laugh out loud in what they get wrong.

For a few reasons I think that Bitcoin is actually kind of a shitty exchange currency.  One of them is the latency which would make native Bitcoin noncompetitive with other solutions.  Another is the permanent ledger which is a huge privacy issue to me.  Yet another is the lack of charge-back support (in simple form at least...and I strongly prefer stone-ax simplicity when possible.)  OTOH, all of these are exactly what I want for a rock solid and reliable reserve currency.

edit: bold italics to be more clear.

Cool! Do you realize this is exactly the number I mentioned in an earlier post in this thread?
Can you give a link that shows this 32MiB limit?

https://bitcointalk.org/index.php?topic=153330.msg1636557#msg1636557

Requiring that all nodes must be able to handle a certain size of block is a production quita, isn't it? Even unlimited sinze blocks is simple an unlimited quota: you have to be able to handle an unlimited size, it is an insanely high quota, a quota that no one might actually be able to meet it, as it could even turn out tht the massive multintional effort to produce the largest block that the fastest fibre backbone can transmit within 10 minutes ends up choking a few such blocks later and ends up finding it cannot even itself handle blocks that large in the long run.

So there is always a quota, it is a technical quota, all we are talking about is keeping the quota from growing too insanely high to be practical for mass decentralisation world-wide, including in places where there is such a thing as too big to hide.

-MarkM-