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Other => Beginners & Help => Topic started by: pyedpyper on June 24, 2012, 10:31:25 PM



Title: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: pyedpyper on June 24, 2012, 10:31:25 PM
Hi,

I've just started investigating Bitcoin, and am very excited about the overall concept. I've only read a small amount of the tech, but as I understand it, the Block Chain contains a history of all Bitcoin transactions, and this Block Chain is replicated and stored on every user's computer (is that correct??). And when I installed Bitcoin for the first time, it took many hours to download the Block Chain - which seems to corroborate with how I understand it...

The immediate question which comes to mind is: As Bitcoin grows and many people start using it then could this file not become so big that the whole system becomes totally unworkable? If a billion people are using Bitcoin as their primary trading currency, with multiple billion transactions happening every single day, and every node is constantly being updated with the new information from all of these transactions then it seems this could be a very real problem. Not just for Bitcoin but in terms of overall Internet bandwidth usage!

And pity the poor soul who has to download the Block Chain for the first time! It seems this will be an absolute limit on Bitcoin growth beyond the relatively small scale it is now... Or do I have it all wrong??

Another thing - if someone wanted to fuck with Bitcoin, especially once it becomes widely used, it seems all one would need to do is set up two accounts to automatically send one Bitcoin back and forth multiple times a second (perhaps hundreds or thousands of times a second) - if the software can be so set up, and if that transaction needs to update all one billion block chains at every node every time, then it seems to me it would all just grind to a dysfunctional halt.

I'm wanting to invest heavily in developing Bitcoin and perhaps even setting up an exchange in South Africa (average bandwidth about 1mbps), but if my concerns are real then it seems that Bitcoin might eventually become impractical to actually use once it gets to a certain size and level of adoption, and that in turn would cause the value of the currency to totally devalue. Seems potentially dangerous...

I would appreciate some solid and in depth responses to this.

Thanks for your help...


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: Kazimir on June 24, 2012, 10:42:11 PM
Not a problem. The block chain could be compressed / collapsed at dedicated reference points in history.

Actually, clients could already do so right now, as this is just a 'local' issue and would not require any change in the protocol whatsoever.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: Mushoz on June 24, 2012, 10:43:35 PM
Hi,

I've just started investigating Bitcoin, and am very excited about the overall concept. I've only read a small amount of the tech, but as I understand it, the Block Chain contains a history of all Bitcoin transactions, and this Block Chain is replicated and stored on every user's computer (is that correct??). And when I installed Bitcoin for the first time, it took many hours to download the Block Chain - which seems to corroborate with how I understand it...

The immediate question which comes to mind is: As Bitcoin grows and many people start using it then could this file not become so big that the whole system becomes totally unworkable? If a billion people are using Bitcoin as their primary trading currency, with multiple billion transactions happening every single day, and every node is constantly being updated with the new information from all of these transactions then it seems this could be a very real problem. Not just for Bitcoin but in terms of overall Internet bandwidth usage!

And pity the poor soul who has to download the Block Chain for the first time! It seems this will be an absolute limit on Bitcoin growth beyond the relatively small scale it is now... Or do I have it all wrong??

Another thing - if someone wanted to fuck with Bitcoin, especially once it becomes widely used, it seems all one would need to do is set up two accounts to automatically send one Bitcoin back and forth multiple times a second (perhaps hundreds or thousands of times a second) - if the software can be so set up, and if that transaction needs to update all one billion block chains at every node every time, then it seems to me it would all just grind to a dysfunctional halt.

I'm wanting to invest heavily in developing Bitcoin and perhaps even setting up an exchange in South Africa (average bandwidth about 1mbps), but if my concerns are real then it seems that Bitcoin might eventually become impractical to actually use once it gets to a certain size and level of adoption, and that in turn would cause the value of the currency to totally devalue. Seems potentially dangerous...

I would appreciate some solid and in depth responses to this.

Thanks for your help...

Multiple solutions have been discussed to address this problem. The first solution involves pruning old transactions from the blockchain, so that the blockchain only contains coins that haven't been spend yet. A second solution involves a meta-chain that only tracks coins that haven't been spend yet, which will coexist with the full chain. This way, most people and lightweight clients can rely mostly on the meta-chain together with a little part of the full chain, namely normal blocks that were created after the latest meta-chain block. People that prefer to keep the entire chain can also do so, so this solution will give people a choice what they personally want. This meta-chain, if implemented, will be merged-mined with a higher difficulty, so that a meta-chain block won't be created every 10 minutes but every X minutes (still to be decided.). For a discussion on this solution please check this thread: https://bitcointalk.org/index.php?topic=88208.0

Also, there's a wiki article addressing some of the scaling complaints. The summary is basically that with pruning and some other compression techniques, together with Moore's Law (exponentially increasing computer power and storage), scaling won't be a problem, even with transaction volumes matching that of Visa (2000 transactions per second!). Here's the link to the wiki article: https://en.bitcoin.it/wiki/Scalability


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: nimda on June 24, 2012, 11:28:40 PM
This problem is so well-known that Satoshi described a fix in his original whitepaper ::)
Now we just need it implemented...


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: Kluge on June 24, 2012, 11:41:49 PM
this Block Chain is replicated and stored on every user's computer (is that correct??). And when I installed Bitcoin for the first time, it took many hours to download the Block Chain - which seems to corroborate with how I understand it...
There are many Bitcoin clients. The "official" Bitcoin client (Bitcoin-qt) is not really official, and there are clients out there which already provide comparable features without requiring you download the blockchain - so no, not everyone needs to download the blockchain to use Bitcoin. It's not necessary to wait hours or days to be able use Bitcoin after installing, and these thin/light clients require only an insignificant amount of computer resources. A fix may be unnecessary (though it would be ideal) while servers can host the blockchain.

Aside from e-wallets (blockchain.info is usually fairly highly-regarded), there are clients such as Electrum (https://en.bitcoin.it/wiki/Electrum) for your desktop computer, and clients such as BitcoinJ and Bitcoin Spinner for Android. There are more if you look, but these are the services/clients I hear the most about. With the exception of e-wallets (in all cases I'm aware of), all these lite clients do not store your private keys on a central server, so you are at no risk of losing coins if one of these services are hacked.

Cheers!


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: pyedpyper on June 25, 2012, 03:11:31 PM
Thanks everyone for the solid answers and follow-up links. I see this matter has had a lot of discussion!

Seems that trimming the block chain is a viable solution if properly implemented.

Is it correct that every transaction that happens is written to the block chain of every user?

If so this would appear to present its own bandwidth problem.

In order to be viable as a long term sustainable currency, Bitcoin ultimately needs to be able to scale to billions of transactions per day (thousands per second). Is this possible if each transaction needs to update every single block chain stored on every user's computer? (Moore's Law aside...)



Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: DannyHamilton on June 25, 2012, 03:32:33 PM
. . . if someone wanted to fuck with Bitcoin . . . it seems all one would need to do is set up two accounts to automatically send one Bitcoin back and forth multiple times a second (perhaps hundreds or thousands of times a second) . . .

This is currently handled with enforced transaction fees.
https://en.bitcoin.it/wiki/Transaction_fees


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: wildgift on June 25, 2012, 06:19:12 PM
I thought the solution was to take a bunch of old transactions, hash them, and replace those transactions with the hash.  Though it's a one-way process, if someone has the original transactions, it's verifiable.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: Meni Rosenfeld on June 25, 2012, 06:37:57 PM
Thanks everyone for the solid answers and follow-up links. I see this matter has had a lot of discussion!

Seems that trimming the block chain is a viable solution if properly implemented.

Is it correct that every transaction that happens is written to the block chain of every user?

If so this would appear to present its own bandwidth problem.

In order to be viable as a long term sustainable currency, Bitcoin ultimately needs to be able to scale to billions of transactions per day (thousands per second). Is this possible if each transaction needs to update every single block chain stored on every user's computer? (Moore's Law aside...)
As mentioned, end users will not need the entire blockchain. Just the headers and transactions that involve them specifically, which is a tiny part.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: MoonShadow on June 25, 2012, 06:54:15 PM
Hi,

I've just started investigating Bitcoin, and am very excited about the overall concept. I've only read a small amount of the tech, but as I understand it, the Block Chain contains a history of all Bitcoin transactions, and this Block Chain is replicated and stored on every user's computer (is that correct??). And when I installed Bitcoin for the first time, it took many hours to download the Block Chain - which seems to corroborate with how I understand it...

The immediate question which comes to mind is: As Bitcoin grows and many people start using it then could this file not become so big that the whole system becomes totally unworkable? If a billion people are using Bitcoin as their primary trading currency, with multiple billion transactions happening every single day, and every node is constantly being updated with the new information from all of these transactions then it seems this could be a very real problem. Not just for Bitcoin but in terms of overall Internet bandwidth usage!


Not all clients need to download the blockchain, just full clients for users who don't want to have to trust anyone as well as miners.  Also, even full clients can prune long spent transactions from their local copy of the blockchain, this is one of the functions of the merkle tree structure within a block.  Certain types of full clients can't do this for practical reasons, but any end-user full client could do it and still be able to verify every transaction that comes it's way.

Quote
Another thing - if someone wanted to fuck with Bitcoin, especially once it becomes widely used, it seems all one would need to do is set up two accounts to automatically send one Bitcoin back and forth multiple times a second (perhaps hundreds or thousands of times a second) - if the software can be so set up, and if that transaction needs to update all one billion block chains at every node every time, then it seems to me it would all just grind to a dysfunctional halt.


Try it.  See what happens.

EDIT: To end your suspense, it won't have any noticable effect upon the network as a whole, as this has been considered and already adapted for.  You will, however, succeed in losing your entire balance due to tiny fees required for 'low priority' transactions.  This will still take some time, however, since the network will largely ignore spammy transactions, due to a built in 'point scale' system that discounts bitcoins that have recently been spent.  This doesn't prevent any valid transaction from occurring, but it does delay those that they system consiers spammy.

Quote
I'm wanting to invest heavily in developing Bitcoin and perhaps even setting up an exchange in South Africa (average bandwidth about 1mbps), but if my concerns are real then it seems that Bitcoin might eventually become impractical to actually use once it gets to a certain size and level of adoption, and that in turn would cause the value of the currency to totally devalue. Seems potentially dangerous...

I would appreciate some solid and in depth responses to this.

Thanks for your help...

there has been much discussion on the topic of end users in Africa, mostly as bitcoin as a replacement for M-Pesa.  Do more research, you will learn much of value to your position.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: MoonShadow on June 25, 2012, 07:00:58 PM
I thought the solution was to take a bunch of old transactions, hash them, and replace those transactions with the hash.  Though it's a one-way process, if someone has the original transactions, it's verifiable.

This is functionally what the merkle tree does.  Each transaction has it's own hash, which is then included into a binary hash tree with one other transaction, and then each of those hashes are paired and hashed again to form the full merkle tree.  The last hash (merkle root) is included into the block header, which is then hashed again when the next block includes it into it's own header, thus forms the 'chain' part of the blockchain.  That merkle hash root inside the block header is intended to represent that entire block (in the sequence of the lifespan of the blockchain) once every transaction included into that block has been spent.  Presumedly in the future a great many blocks would be reduced to only the 80 byte, fixed length, headers after a few years time.  There are already several blocks that could be pruned down this way to only those headers, but the pruning functions have not yet been implimented into any client that I am aware.  Mostly because it's not consider a pressing need at the moment.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: wildgift on June 26, 2012, 02:30:49 AM
I thought the solution was to take a bunch of old transactions, hash them, and replace those transactions with the hash.  Though it's a one-way process, if someone has the original transactions, it's verifiable.

This is functionally what the merkle tree does.  Each transaction has it's own hash, which is then included into a binary hash tree with one other transaction, and then each of those hashes are paired and hashed again to form the full merkle tree.  The last hash (merkle root) is included into the block header, which is then hashed again when the next block includes it into it's own header, thus forms the 'chain' part of the blockchain.  That merkle hash root inside the block header is intended to represent that entire block (in the sequence of the lifespan of the blockchain) once every transaction included into that block has been spent.  Presumedly in the future a great many blocks would be reduced to only the 80 byte, fixed length, headers after a few years time.  There are already several blocks that could be pruned down this way to only those headers, but the pruning functions have not yet been implimented into any client that I am aware.  Mostly because it's not consider a pressing need at the moment.

Thanks for the explanation


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: pyedpyper on June 28, 2012, 08:27:12 PM
Thanks everyone for the solid answers and follow-up links. I see this matter has had a lot of discussion!

Seems that trimming the block chain is a viable solution if properly implemented.

Is it correct that every transaction that happens is written to the block chain of every user?

If so this would appear to present its own bandwidth problem.

In order to be viable as a long term sustainable currency, Bitcoin ultimately needs to be able to scale to billions of transactions per day (thousands per second). Is this possible if each transaction needs to update every single block chain stored on every user's computer? (Moore's Law aside...)
As mentioned, end users will not need the entire blockchain. Just the headers and transactions that involve them specifically, which is a tiny part.

OK, so it's not the case that every transaction (between anyone) needs to be written to every copy of the block chain??


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: nimda on June 28, 2012, 08:51:08 PM
The transactions can be pruned from it later.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: yogi on June 28, 2012, 09:04:07 PM
The current implementation of bitcoin does have upper limits. Primarily relating to bandwidth and processing requirements of transactions.

If the adoption of bitcoin outpaces moore's law, which I believe it will, then it will become unworkable unless a solution is found.

I think a solution will be found which will likely involve multiple chains or clients that operate in clusters.





Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: Alwaysmining on June 28, 2012, 10:15:51 PM
Blockchains can be compressed, so i dont think so


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: Meni Rosenfeld on June 29, 2012, 04:04:15 AM
Thanks everyone for the solid answers and follow-up links. I see this matter has had a lot of discussion!

Seems that trimming the block chain is a viable solution if properly implemented.

Is it correct that every transaction that happens is written to the block chain of every user?

If so this would appear to present its own bandwidth problem.

In order to be viable as a long term sustainable currency, Bitcoin ultimately needs to be able to scale to billions of transactions per day (thousands per second). Is this possible if each transaction needs to update every single block chain stored on every user's computer? (Moore's Law aside...)
As mentioned, end users will not need the entire blockchain. Just the headers and transactions that involve them specifically, which is a tiny part.

OK, so it's not the case that every transaction (between anyone) needs to be written to every copy of the block chain??
It's more accurate to say that every transaction is written to every copy of the block chain, but not everyone has a copy of the block chain.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: pyedpyper on July 01, 2012, 05:55:09 PM
Thanks everyone for the solid answers and follow-up links. I see this matter has had a lot of discussion!

Seems that trimming the block chain is a viable solution if properly implemented.

Is it correct that every transaction that happens is written to the block chain of every user?

If so this would appear to present its own bandwidth problem.

In order to be viable as a long term sustainable currency, Bitcoin ultimately needs to be able to scale to billions of transactions per day (thousands per second). Is this possible if each transaction needs to update every single block chain stored on every user's computer? (Moore's Law aside...)
As mentioned, end users will not need the entire blockchain. Just the headers and transactions that involve them specifically, which is a tiny part.

OK, so it's not the case that every transaction (between anyone) needs to be written to every copy of the block chain??
It's more accurate to say that every transaction is written to every copy of the block chain, but not everyone has a copy of the block chain.

OK thanks for that clarification. To help me understand better: Say there are 1,000,000 people with Bitcoin accounts then how many people would have a copy of the block chain (based on present stats)?

I'm definitely getting the sense from the various answer there actually is a problem in the Bitcoin architecture i.r.o. scalability which has not yet been resolved. And this is clearly an issue. Relying on Moore's Law or hoping that a solution will "emerge" in the future when it is needed, is a dangerous way to proceed IMHO. Has anyone articulated a detailed solution yet whereby Bitcoin could scale to say 1 billion users (each making 1 transaction per day)?

Does anyone know how many Bitcoin users there presently are? Or what the current average transactions per day are?


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: yogi on July 01, 2012, 06:14:50 PM
IMO scalability is the most pressing issue facing bitcoin at the moment.

For stats goto http://www.blockchain.info/ (http://www.blockchain.info/)


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: Meni Rosenfeld on July 01, 2012, 06:18:06 PM
OK thanks for that clarification. To help me understand better: Say there are 1,000,000 people with Bitcoin accounts then how many people would have a copy of the block chain (based on present stats)?
As many as are required to keep the network decentralized. I'd say 3,000 is enough, but it's possible to make do with less.

I'm definitely getting the sense from the various answer there actually is a problem in the Bitcoin architecture i.r.o. scalability which has not yet been resolved. And this is clearly an issue. Relying on Moore's Law or hoping that a solution will "emerge" in the future when it is needed, is a dangerous way to proceed IMHO. Has anyone articulated a detailed solution yet whereby Bitcoin could scale to say 1 billion users (each making 1 transaction per day)?
Did you read the page in the wiki about scalability that was linked in a previous comment?

The solutions don't need to emerge, the solutions are known and just need to be implemented.

Does anyone know how many Bitcoin users there presently are? Or what the current average transactions per day are?
How many users is anyone's guess, depends also on whom you call a user. In the past 24 hours there were 20338 transactions.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: pyedpyper on July 01, 2012, 06:51:32 PM
IMO scalability is the most pressing issue facing bitcoin at the moment.

For stats goto http://www.blockchain.info/ (http://www.blockchain.info/)

I agree. If it can't scale all the way ultimately (primary global currency) then we need to recognize that now. Even assuming 1 billion users (a mere 1/7 of current global population) doing only one transaction per day, that translates to 11000tps. Given Bitcoin's architecture and processing methodology that makes me nervous about whether it can actually ever grow to this kind of scale in practical terms.

Thanks for the link - very useful!  :)


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: pyedpyper on July 01, 2012, 07:09:21 PM
OK thanks for that clarification. To help me understand better: Say there are 1,000,000 people with Bitcoin accounts then how many people would have a copy of the block chain (based on present stats)?
As many as are required to keep the network decentralized. I'd say 3,000 is enough, but it's possible to make do with less.

I'm definitely getting the sense from the various answer there actually is a problem in the Bitcoin architecture i.r.o. scalability which has not yet been resolved. And this is clearly an issue. Relying on Moore's Law or hoping that a solution will "emerge" in the future when it is needed, is a dangerous way to proceed IMHO. Has anyone articulated a detailed solution yet whereby Bitcoin could scale to say 1 billion users (each making 1 transaction per day)?
Did you read the page in the wiki about scalability that was linked in a previous comment?

The solutions don't need to emerge, the solutions are known and just need to be implemented.

Does anyone know how many Bitcoin users there presently are? Or what the current average transactions per day are?
How many users is anyone's guess, depends also on whom you call a user. In the past 24 hours there were 20338 transactions.

Wow only 0.3% - that would make a difference in how I'm thinking about it.

I did read the wiki, and understood it to a degree (I'm not that tech) - but I still get the sense that it's not all worked out - and that it will be tricky to scale. It seems it's the fact that the architecture is decentralized in first place that makes for bandwidth issues. At 1 billion users and 1 transaction each per day (total 11ktps) and assuming 0.3% of people have the block chain that needs updating, that's still 11,000 writes to 3,000,000 locations each second. Sounds like a lot of traffic to me. I haven't worked out the numbers though...

What is your understanding about the practical implementation of the solutions to make for full scalability? Is it happening as we speak? Progress being made?

And a personal question: With all of your knowledge and understanding of the system, do you think it can actually scale to a billion transactions per day, with its present architecture, and not choke the entire global Internet? Do you personally think Bitcoin is truly a sustainable system that could support most of the world using it as its primary currency. Will the architecture actually scale ALL the way?


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: yogi on July 01, 2012, 09:25:44 PM
Bitcoin Forum > Bitcoin > Development & Technical Discussion > Scaling

?


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: MoonShadow on July 01, 2012, 10:36:45 PM
You guys worry too much.  No, the bitcoin network could not scale to the point that every person on Earth has a full client.  Yes, there are known pathways to deal with that, which have been generally known since Satoshi's white paper and are now very well understood.  No, they are not yet coded.  Yes, there are people who are working on those implementations at this time.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: yogi on July 01, 2012, 11:10:27 PM
You guys worry too much.  No, the bitcoin network could not scale to the point that every person on Earth has a full client.  Yes, there are known pathways to deal with that, which have been generally known since Satoshi's white paper and are now very well understood.  No, they are not yet coded.  Yes, there are people who are working on those implementations at this time.

What solution are they using to solve the bandwidth and processing requirements?


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: MoonShadow on July 02, 2012, 03:46:30 AM
You guys worry too much.  No, the bitcoin network could not scale to the point that every person on Earth has a full client.  Yes, there are known pathways to deal with that, which have been generally known since Satoshi's white paper and are now very well understood.  No, they are not yet coded.  Yes, there are people who are working on those implementations at this time.

What solution are they using to solve the bandwidth and processing requirements?

There are several.  Start with researching the 'light' clients defined in the original white paper and work from there.  The bitcoin network is a clearing network, and was never really intended to serve everyone directly.  Most people will, eventually, be accessing the bitcoin network indirectly by some kind of service.  Online wallets are an early example of this, as transfers between users of the same service don't require that a transaction hit the bitcoin network normally.  This is exactly like a bitcoin version of paypal, except if your wallet service upsets you, you can take your business elsewere.  It's also relatively easy for such services to interlink their users so that they can credit their users when a user from another service that they have a receprocity agreement with sends one of their users funds, but settle up on a regular cycle in a collective transfer; likely once each day.  This would only be beneficial for large user bases wherein the two services have a significant number of cross transactions that can be bundled up and largely cancel each other out.

Search for BitcoinSpinner, and understand how it works.  Search also for Stratum & Electrum; understand how they interact via an overlay network.  (basicly, one stratum server holds the blockchain for hundreds of electrum clients in a manner similar to, but more standardized than, the interaction of the BitcoinSpinner main server and the android clients.)

There are also special kinds of transactions that are intended to reduce network traffic.  For example, send-to-many allows one to pay out to huge numbers of bitcoin addresses at once, for one (otherwise lower) transaction fee.  Imagine if WalMart not only started accepting bitcoin, but employees had the option of taking their wages in bitcoin each week.  WalMart could literally pay their entire workforce in a single, huge, transaction; gathering  up the many small bitcoin payments to buy thing from WalMart from customers and paying them directly out to their employees in a single action.  Compared to paying each employee with his own transaction, there is huge savings to be had here.  To some degree, send-to-many would also allow a single household to pay out all of their monthly bills in a single action as well; although the gain of a couple dozen bills in one transaction versus ten's of thousands of employees would be significantly different.  Other specialized transaction types are being considered as well, including transactions that can be signed by multiple users independently or require multiple private keys to spend; as well as scripted transactions that pay the miners to process a script of conditions.  I'm sure I can't even imagine the number of ways this could be used to reduce resource usage.  Just off the top of my head, a scripted transaction might have an external reference to the inputs and/or outputs of that transaction; permitting the actual transaction to be small but compelling the miners to fetch the rest of the transaction from WalMart's Stratum servers.  No, I don't know how external blockchain reference would work either, but they could.

For that matter, a large online wallet service could offer 'cron job' payments for when users don't need to send a transaction immediately for less than it would eventually cost to send a speedy transaction in a congested bitcoin network future.  The fees are tiny now, but we can expect that their costs will rise to meet the market as well as to compensate the miners for the increasingly large amount of network resources that they will have to pay for in order to run their mining businesses.  Right now a single transaction costs about a nickel, but a year ago it was about half a cent.  If in another year, the cost is 50 cents, we will see more people willing to defer to a delay to save on that fee; which the current network permits.  In the future, free transactions may or may not be completed in a realistic timeframe; but one way or another the fees will adjust to the demand.  If you need that transaction to clear in an hour, you are going to have to pay for the privilage.  If you can wait a day or two, you can expect to save money if you permit your wallet service to bundle your transaction up with others.  If you can complete the transaction via an external network, many will favor those networks whenever prudent.  If you are paranoid about your funds, you will still be able to maintain your own full client, but you will bear the costs yourself.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: Meni Rosenfeld on July 02, 2012, 04:45:33 AM
OK thanks for that clarification. To help me understand better: Say there are 1,000,000 people with Bitcoin accounts then how many people would have a copy of the block chain (based on present stats)?
As many as are required to keep the network decentralized. I'd say 3,000 is enough, but it's possible to make do with less.

I'm definitely getting the sense from the various answer there actually is a problem in the Bitcoin architecture i.r.o. scalability which has not yet been resolved. And this is clearly an issue. Relying on Moore's Law or hoping that a solution will "emerge" in the future when it is needed, is a dangerous way to proceed IMHO. Has anyone articulated a detailed solution yet whereby Bitcoin could scale to say 1 billion users (each making 1 transaction per day)?
Did you read the page in the wiki about scalability that was linked in a previous comment?

The solutions don't need to emerge, the solutions are known and just need to be implemented.

Does anyone know how many Bitcoin users there presently are? Or what the current average transactions per day are?
How many users is anyone's guess, depends also on whom you call a user. In the past 24 hours there were 20338 transactions.

Wow only 0.3% - that would make a difference in how I'm thinking about it.

I did read the wiki, and understood it to a degree (I'm not that tech) - but I still get the sense that it's not all worked out - and that it will be tricky to scale. It seems it's the fact that the architecture is decentralized in first place that makes for bandwidth issues. At 1 billion users and 1 transaction each per day (total 11ktps) and assuming 0.3% of people have the block chain that needs updating, that's still 11,000 writes to 3,000,000 locations each second. Sounds like a lot of traffic to me. I haven't worked out the numbers though...
It doesn't scale linearly. I wouldn't be surprised if a single node could technically serve all users. But we need many nodes to keep the network healthy, robust and competitive. My guesstimate is that 3,000 is good, and that's just as true when there are 1B users as when there are 1M.

Assuming each transaction is 1KB, we're talking about 10K tps * 1KB = 10 MB/s per node, which is a high-end home internet connection now, let alone a business-grade connection in the future. It should be well within the ability of any company that receives a lot of payments and has an interest both in the health of Bitcoin and its own safety of payments.

What is your understanding about the practical implementation of the solutions to make for full scalability? Is it happening as we speak? Progress being made?
I'm more of a theory guy but there's progress. We have some lightweight clients, and there's a new construct design by etothepii that gives lightweight clients even more power than in Satoshi's original design. Also I think there's work being done with respect to pruning, which will keep storage requirements relatively low.

And a personal question: With all of your knowledge and understanding of the system, do you think it can actually scale to a billion transactions per day, with its present architecture, and not choke the entire global Internet? Do you personally think Bitcoin is truly a sustainable system that could support most of the world using it as its primary currency. Will the architecture actually scale ALL the way?
Yes, I believe even with the existing ideas and technology it can technically scale to a billion transactions per day. No doubt there will also be new ideas and hardware advances that will make things even easier. If someone comes up with a completely different architecture that is even more scalable, Bitcoin can migrate to it while keeping people's savings intact.

Also, as MoonShadow points out, it doesn't need to scale to a billion raw transactions per second. Bitcoin's role main role is to be a superior alternative to physical cash; just as there are services to overcome the deficiencies of cash, so can there be services to overcome any deficiencies of Bitcoin. But because Bitcoin is digital and has a very powerful scripting system, these services can be much more lightweight and competitive, and hence better and more efficient, than with the current system.

For example, you can have a client that stores the majority of your savings locally (preferably with some multiple signature arrangement for added safety) but automatically keeps some in an eWallet service. Whenever you make a small transaction it is done internally in the eWallet (with reciprocity with other eWallets); only for large transfers/eWallet replenishment you make a raw Bitcoin transaction. This already can cut maybe 90% transactions.

Also, solutions such as Ripple and Open Transactions can work much better with Bitcoin as their foundation, and they have much lower resource requirements for global commerce.


The real problem isn't with the feasibility, it's with the incentive structure. Running a node should be relatively easy, but it will still have costs, and not much direct gain - it's a Tragedy of the Commons problem. There could be a situation where everyone tries to freeload on the other. This can be resolved if the costs can be kept low enough that companies won't be fussy about it, with a market for node services, or with a transaction propagation incentivization schemes as in the "On Bitcoin and Red Balloons" paper.

And, the real problem isn't with the marginal resource cost of handling transactions, either. It's with the amortized cost of securing transactions with hashing. Depending on how strong the incentives of potential attackers, funding the defense efforts is going to cost a lot for the Bitcoin economy, regardless of the technical solution chosen. This I think is the main challenge, and while there are some proposed mitigating schemes, they are not popular.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: yogi on July 04, 2012, 04:31:12 PM
Bitcoin is vastly more utilizable that other payment methods and I think it could mature to handle many times more transactions that other payment methods such as visa.

Essentially your solutions to scaling involve the centralization of the block-chain.

Or am I wrong?

If I am right then I think all the good things about bitcoin will be gone. I suspect that once bitcoin starts to centralize, people will move to an alternative chain.

There must be a better solution.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: Meni Rosenfeld on July 04, 2012, 05:41:00 PM
Bitcoin is vastly more utilizable that other payment methods and I think it could mature to handle many times more transactions that other payment methods such as visa.

Essentially your solutions to scaling involve the centralization of the block-chain.

Or am I wrong?

If I am right then I think all the good things about bitcoin will be gone. I suspect that once bitcoin starts to centralize, people will move to an alternative chain.

There must be a better solution.
Whom is this directed at? The solutions I mentioned don't centralize Bitcoin.

By the way, Sir Gavin has recently posted about a new way to scale Bitcoin, Off-the-chain transactions (http://gavintech.blogspot.co.il/2012/07/off-chain-transactions.html). I haven't studied it yet but it looks promising.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: yogi on July 04, 2012, 05:52:30 PM
The question was aimed at anyone who cared to answer it.

Ok, i see some ways of reducing network traffic but I would estimated that it would only be by a small percent.

Have I missed a method in your post?

I will look at the off-the-chain transaction thing, sounds interesting.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: paraipan on July 04, 2012, 05:56:06 PM
Bitcoin is vastly more utilizable that other payment methods and I think it could mature to handle many times more transactions that other payment methods such as visa.

Essentially your solutions to scaling involve the centralization of the block-chain.

Or am I wrong?

If I am right then I think all the good things about bitcoin will be gone. I suspect that once bitcoin starts to centralize, people will move to an alternative chain.

There must be a better solution.
Whom is this directed at? The solutions I mentioned don't centralize Bitcoin.

By the way, Sir Gavin has recently posted about a new way to scale Bitcoin, Off-the-chain transactions (http://gavintech.blogspot.co.il/2012/07/off-chain-transactions.html). I haven't studied it yet but it looks promising.

Sir, you serious?

On topic, are you implying that bitcoin protocol and blockchain would scale by taking most of the transactions out of it? Or i don't get the picture...


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: Meni Rosenfeld on July 04, 2012, 06:39:24 PM
Ok, i see some ways of reducing network traffic but I would estimated that it would only be by a small percent.

Have I missed a method in your post?
The methods can be used to reduce network traffic as much as we want, depending on what tradeoffs we are willing to make. The local/eWallet separation for small/large transactions could easily cut 99%.

Sir, you serious?
Nope, I just like calling him that as a homage to Sir Gavin's (http://en.wikipedia.org/wiki/Gawain) character in King Arthur's Disasters (http://en.wikipedia.org/wiki/King_Arthur%27s_Disasters).

On topic, are you implying that bitcoin protocol and blockchain would scale by taking most of the transactions out of it? Or i don't get the picture...
If all else fails, yes. A transaction will always be cheaper if it doesn't need to be processed by every Bitcoin node on the planet, it's just a matter of finding how to make it reasonably secure without it.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: paraipan on July 04, 2012, 06:48:59 PM
...
On topic, are you implying that bitcoin protocol and blockchain would scale by taking most of the transactions out of it? Or i don't get the picture...
If all else fails, yes. A transaction will always be cheaper if it doesn't need to be processed by every Bitcoin node on the planet, it's just a matter of finding how to make it reasonably secure without it.

Ah ok, got it. I would like to see all methods exhausted before implementing that one, just my opinion.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: yogi on July 04, 2012, 07:36:33 PM
Ok, so off-the-chain transactions is when Bob & Alice both use the same centralized third party but third party can't run off with money because of some multi-sig trickery.

Quiet nice, but its still centralization.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: Meni Rosenfeld on July 04, 2012, 07:46:10 PM
Ok, so off-the-chain transactions is when Bob & Alice both use the same centralized third party but third party can't run off with money because of some multi-sig trickery.

Quiet nice, but its still centralization.
It's not really centralization because there can be many such third parties. The barrier to entry is low and the trust required is low.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: paraipan on July 04, 2012, 07:54:26 PM
Ok, so off-the-chain transactions is when Bob & Alice both use the same centralized third party but third party can't run off with money because of some multi-sig trickery.

Quiet nice, but its still centralization.
It's not really centralization because there can be many such third parties. The barrier to entry is low and the trust required is low.

So resuming what i got from the Gavin's blog post: bitcoin developers don't know how to scale the project and Gavin proposes making off-the-blockchain tx's with the help of p2sh. Is this true?


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: yogi on July 04, 2012, 08:01:37 PM
So, as long as there is more than one It's not centralization?
Whats to stop them colluding?
They may not be able to run off with your money, but they can control other things such as prior restraint.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: MoonShadow on July 04, 2012, 08:05:57 PM
Ok, so off-the-chain transactions is when Bob & Alice both use the same centralized third party but third party can't run off with money because of some multi-sig trickery.

Quiet nice, but its still centralization.
It's not really centralization because there can be many such third parties. The barrier to entry is low and the trust required is low.

So resuming what i got from the Gavin's blog post: bitcoin developers don't know how to scale the project and Gavin proposes making off-the-blockchain tx's with the help of p2sh. Is this true?

That's just one proposal.  Basicly it's the same as what I proposed about a 'paypal' type company serving many members and keeping a single collective wallet, but in my case one has to trust the company that you are using to not be doing anything with the funds without your concent.  In Gavin's proposal, they can't do anything with the funds without your consent, but neither can you without their's.  I think that there are better ways, but this one would work.  It would likely also permit bitcoin banking while also prohibiting fractional reserve bs. 


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: MoonShadow on July 04, 2012, 08:08:05 PM
So, as long as there is more than one It's not centralization?
Whats to stop them colluding?


The threat of getting caught, mostly.  If your customer base even starts to suspect you're doing strange things with their funds, one of them is going to start another server and your base is going to abandon you.

Quote
They may not be able to run off with your money, but they can control other things such as prior restraint.

I don't understand this question in this context.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: MoonShadow on July 04, 2012, 08:09:45 PM
Ok, so off-the-chain transactions is when Bob & Alice both use the same centralized third party but third party can't run off with money because of some multi-sig trickery.

Quiet nice, but its still centralization.

It's a matter of degree.  Central banking today is what we're trying to avoid, and that is easily avoidable under bitcoin; no matter how many or how large a bitcoin banking cartel may grow in the future.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: paraipan on July 04, 2012, 08:10:12 PM
Ok, so off-the-chain transactions is when Bob & Alice both use the same centralized third party but third party can't run off with money because of some multi-sig trickery.

Quiet nice, but its still centralization.
It's not really centralization because there can be many such third parties. The barrier to entry is low and the trust required is low.

So resuming what i got from the Gavin's blog post: bitcoin developers don't know how to scale the project and Gavin proposes making off-the-blockchain tx's with the help of p2sh. Is this true?

That's just one proposal.  Basicly it's the same as what I proposed about a 'paypal' type company serving many members and keeping a single collective wallet, but in my case one has to trust the company that you are using to not be doing anything with the funds without your concent.  In Gavin's proposal, they can't do anything with the funds without your consent, but neither can you without their's.  I think that there are better ways, but this one would work.  It would likely also permit bitcoin banking while also prohibiting fractional reserve bs.  

Ok, i get it, what i'm interested to know if a true p2p proposal exists. Someone must be working on it, or not?

A solution will come, I'm sure about that.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: yogi on July 04, 2012, 08:15:39 PM
Quote
They may not be able to run off with your money, but they can control other things such as prior restraint.

I don't understand this question in this context.

It's a statement, I would be interested in your opinion of its validity.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: MoonShadow on July 04, 2012, 09:53:14 PM
Ok, so off-the-chain transactions is when Bob & Alice both use the same centralized third party but third party can't run off with money because of some multi-sig trickery.

Quiet nice, but its still centralization.
It's not really centralization because there can be many such third parties. The barrier to entry is low and the trust required is low.

So resuming what i got from the Gavin's blog post: bitcoin developers don't know how to scale the project and Gavin proposes making off-the-blockchain tx's with the help of p2sh. Is this true?

That's just one proposal.  Basicly it's the same as what I proposed about a 'paypal' type company serving many members and keeping a single collective wallet, but in my case one has to trust the company that you are using to not be doing anything with the funds without your concent.  In Gavin's proposal, they can't do anything with the funds without your consent, but neither can you without their's.  I think that there are better ways, but this one would work.  It would likely also permit bitcoin banking while also prohibiting fractional reserve bs.  

Ok, i get it, what i'm interested to know if a true p2p proposal exists. Someone must be working on it, or not?

A solution will come, I'm sure about that.

Bitcoin is the true p2p solution.  If most people choose to use services to cut their own costs, this still will not prevent you or anyone else from starting their own client and running directly upon the main bitcoin network, or using an overlya such as Stratum.  It's not an all or nothing system.  You can favor p2p privacy and control and I can favor convience, speed & lower costs of transactions; and we don't affect one anothers' choices and we can still exchange with each other using bitcoin in many flavors.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: MoonShadow on July 04, 2012, 09:53:36 PM
Quote
They may not be able to run off with your money, but they can control other things such as prior restraint.

I don't understand this question in this context.

It's a statement, I would be interested in your opinion of its validity.

Try restating it so that I can parse it.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: yogi on July 04, 2012, 11:23:33 PM
Quote
They may not be able to run off with your money, but they can control other things such as prior restraint.

I don't understand this question in this context.

It's a statement, I would be interested in your opinion of its validity.

Try restating it so that I can parse it.

Whats to stop them from blocking my account, or anything else that's not in my best interest?


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: MoonShadow on July 05, 2012, 12:10:57 AM
Quote
They may not be able to run off with your money, but they can control other things such as prior restraint.

I don't understand this question in this context.

It's a statement, I would be interested in your opinion of its validity.

Try restating it so that I can parse it.

Whats to stop them from blocking my account, or anything else that's not in my best interest?


Who is 'them' in this context?  If you mean the bitcoin bank, then the answer is nothing.  Excepting, of course, that they lose a customer & they have no access to your funds, so there is no incentive for them to do so.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: yogi on July 05, 2012, 12:19:46 AM
Quote
They may not be able to run off with your money, but they can control other things such as prior restraint.

I don't understand this question in this context.

It's a statement, I would be interested in your opinion of its validity.

Try restating it so that I can parse it.

Whats to stop them from blocking my account, or anything else that's not in my best interest?


Who is 'them' in this context?  If you mean the bitcoin bank, then the answer is nothing.  Excepting, of course, that they lose a customer & they have no access to your funds, so there is no incentive for them to do so.

Yeah, but the cops told them to ban me cos I used silk road. Now my addresses are banned from all the bitcoin banks.



Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: MoonShadow on July 05, 2012, 03:09:03 AM
Quote
They may not be able to run off with your money, but they can control other things such as prior restraint.

I don't understand this question in this context.

It's a statement, I would be interested in your opinion of its validity.

Try restating it so that I can parse it.

Whats to stop them from blocking my account, or anything else that's not in my best interest?


Who is 'them' in this context?  If you mean the bitcoin bank, then the answer is nothing.  Excepting, of course, that they lose a customer & they have no access to your funds, so there is no incentive for them to do so.

Yeah, but the cops told them to ban me cos I used silk road. Now my addresses are banned from all the bitcoin banks.



All of them?  All your addresses & all the bitcoin banks?  Well, the long arm of the law stretches to the ends of the Earth & the deepest parts of the Internet then.  In that, rather extreme, distopian future why can't you fall back to starting your own client?  Does anyone here not use a bank for something today?  Does anyone here really trust them?


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: yogi on July 05, 2012, 01:55:45 PM
All of them?  All your addresses & all the bitcoin banks?  Well, the long arm of the law stretches to the ends of the Earth & the deepest parts of the Internet then.

Bank and payment processor are subject to rules and regulations, even though there are lots of them and they are located all around the world. Our own bitcoin exchanges are being subjected to ever growing regulations and it will be no different for bitcoin banks or transaction gateways.

In that, rather extreme, distopian future why can't you fall back to starting your own client?  Does anyone here not use a bank for something today?  Does anyone here really trust them?

The reason I had to start using the bitcon bank in the first place was that the resource requirements of the client had grown beyond those available to the average user.

It would be interesting to know what percentage of bitcoin users would prefer a p2p solution to this problem.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: Meni Rosenfeld on July 05, 2012, 02:06:35 PM
All of them?  All your addresses & all the bitcoin banks?  Well, the long arm of the law stretches to the ends of the Earth & the deepest parts of the Internet then.

Bank and payment processor are subject to rules and regulations, even though there are lots of them and they are located all around the world. Our own bitcoin exchanges are being subjected to ever growing regulations and it will be no different for bitcoin banks or transaction gateways.
What, in your opinion, is the difference between miners and banks in this regard? Sure, miners are anonymous by default, but Bitcoin banks can also be anonymous, unlicensed and operating through TOR if they want. Exchanges have a problem because they deal with traditional money which isn't a cryptocurrency.

What makes Bitcoin decentralized is that there are many nodes and miners, with a low barrier of entry to becoming one. The situation is almost as good if there are multiple payment processors which have a low barrier of entry and trust requirement. Barrier of entry is really the key issue, and what the raw Bitcoin network allows, with all its power, is the lowering of barrier of entry to processors.

You may also want to take a look at my new idea for trustless payment processors: https://bitcointalk.org/index.php?topic=91732.0.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: MoonShadow on July 05, 2012, 02:21:36 PM
All of them?  All your addresses & all the bitcoin banks?  Well, the long arm of the law stretches to the ends of the Earth & the deepest parts of the Internet then.

Bank and payment processor are subject to rules and regulations, even though there are lots of them and they are located all around the world. Our own bitcoin exchanges are being subjected to ever growing regulations and it will be no different for bitcoin banks or transaction gateways.

Not those on Tor.  The Silk Road is, in effect, both an online wallet & a mixer, while also creating a convient market.

Quote

In that, rather extreme, distopian future why can't you fall back to starting your own client?  Does anyone here not use a bank for something today?  Does anyone here really trust them?

The reason I had to start using the bitcon bank in the first place was that the resource requirements of the client had grown beyond those available to the average user.



Not likely, many will exist long before it's a resource issue.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: yogi on July 05, 2012, 03:10:17 PM
What, in your opinion, is the difference between miners and banks in this regard?

The difference from my perspective is that I can use a bitcoin bank but I can not use a miner for sending transactions due to not having enough resources to run the full client.

Sure, miners are anonymous by default, but Bitcoin banks can also be anonymous, unlicensed and operating through TOR if they want.

I agree, there probably will be shady unlicensed operators in country beyond the reach of the regulations. But, I do not want to entrust them with my transaction history.

Exchanges have a problem because they deal with traditional money which isn't a cryptocurrency.

So are you saying bitcoin will never be view by the authorities as real money? because I think its probably just a matter of transaction volume.

What makes Bitcoin decentralized is that there are many nodes and miners, with a low barrier of entry to becoming one. The situation is almost as good if there are multiple payment processors which have a low barrier of entry and trust requirement.

The growing resource requirements are a barrier to entry, as are the regulations that will be imposed on payment processors.

Barrier of entry is really the key issue, and what the raw Bitcoin network allows, with all its power, is the lowering of barrier of entry to processors.

Barrier of entry is 'an' issue, for the average user there is also freedom and privacy.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: Meni Rosenfeld on July 05, 2012, 03:25:54 PM
Exchanges have a problem because they deal with traditional money which isn't a cryptocurrency.
So are you saying bitcoin will never be view by the authorities as real money? because I think its probably just a matter of transaction volume.
No, I said it's not a cryptocurrency and thus you technically can't do with it what you can do with a cryptocurrency.

What makes Bitcoin decentralized is that there are many nodes and miners, with a low barrier of entry to becoming one. The situation is almost as good if there are multiple payment processors which have a low barrier of entry and trust requirement.
The growing resource requirements are a barrier to entry, as are the regulations that will be imposed on payment processors.
The resource requirements will be lower if we keep most transactions off the chain. And payment processors of the kind I'm considering can't really be regulated any more than miners and network nodes, if they choose not to be.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: yogi on July 05, 2012, 04:11:15 PM
The resource requirements will be lower if we keep most transactions off the chain.

This is a circular argument, the reason people started using bitcoin bank in the first place was because of the resource requirements.

And payment processors of the kind I'm considering can't really be regulated any more than miners and network nodes, if they choose not to be.

Even if you are able to create an un-shutdownable bitbank (TOR I assume?) it still doesn't solve the privacy issue.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: Meni Rosenfeld on July 05, 2012, 04:31:15 PM
The resource requirements will be lower if we keep most transactions off the chain.
This is a circular argument, the reason people started using bitcoin bank in the first place was because of the resource requirements.
Not circular argument, positive feedback loop. People using Bitcoin banks will make the blockchain lighter, which in turn will make it easier to make competitive and efficient banks.

An analogy to explain the distinction: Why, quantitatively, does Bitcoin have (edit: fundamental) value? Because you can buy stuff with it. Why can you buy stuff with it? Because it has value. Is this a circular argument? No, it's a positive feedback loop with two equilibria - one where the value is 0, and one where the value is proportional to the commerce Bitcoin enables. Luckily, we have managed to bootstrap ourselves away from the 0 equilibrium.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: MoonShadow on July 05, 2012, 05:10:05 PM

Even if you are able to create an un-shutdownable bitbank (TOR I assume?) it still doesn't solve the privacy issue.

Why not?  What says that a bitcoin bank (on Tor or otherwise) needs to have your true identity?  Unless they are forced by some government edict, the bitcoin bank doesn't need that in order to either pay your bills, they have your money (or, at least, a irrevocable contract to do so, enforceable within the bitcoin network itself).  I can see no reason why a bitcoin bank, uncoerced by some government ditate, would need to know your name, your home address, or any other such stuff.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: yogi on July 05, 2012, 05:50:23 PM
The resource requirements will be lower if we keep most transactions off the chain.
This is a circular argument, the reason people started using bitcoin bank in the first place was because of the resource requirements.
Not circular argument, positive feedback loop. People using Bitcoin banks will make the blockchain lighter, which in turn will make it easier to make competitive and efficient banks.

An analogy to explain the distinction: Why, quantitatively, does Bitcoin have value? Because you can buy stuff with it. Why can you buy stuff with it? Because it has value. Is this a circular argument? No, it's a positive feedback loop with two equilibria - one where the value is 0, and one where the value is proportional to the commerce Bitcoin enables. Luckily, we have managed to bootstrap ourselves away from the 0 equilibrium.

Bitcoin had speculative value before you could buy things with it, but this is beside the point.

If the resource load lightens then people will start using the full client again. The system will attempt to reach equilibrium but there will be a resource impoverished underclass that will always be forced to use the bitbank.


Even if you are able to create an un-shutdownable bitbank (TOR I assume?) it still doesn't solve the privacy issue.

Why not?  What says that a bitcoin bank (on Tor or otherwise) needs to have your true identity?  Unless they are forced by some government edict, the bitcoin bank doesn't need that in order to either pay your bills, they have your money (or, at least, a irrevocable contract to do so, enforceable within the bitcoin network itself).  I can see no reason why a bitcoin bank, uncoerced by some government ditate, would need to know your name, your home address, or any other such stuff.

Google doesn't have to build profiles on us and sell our data to other companies, but they do. Our data has value and that provides incentive.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: MoonShadow on July 05, 2012, 05:55:12 PM
Google doesn't have to build profiles on us and sell our data to other companies, but they do. Our data has value and that provides incentive.


Oh, I see what you mean now.

That's true enough, but still true regardless of whether or not you have an account or not, so nothing changes.  If your bitbank asks for personal data, in order to sell it or for any other reason, just find one that does not or start your own.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: ymer on March 25, 2014, 03:30:42 AM
2 years later... Blockchain is too damn big


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: MoonShadow on March 25, 2014, 03:56:06 AM
2 years later... Blockchain is too damn big

compared to what, exactly?


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: ymer on March 25, 2014, 04:05:49 AM
2 years later... Blockchain is too damn big

compared to what, exactly?

Well it's almost as big as my windows folder


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: MoonShadow on March 25, 2014, 04:11:45 AM
2 years later... Blockchain is too damn big

compared to what, exactly?

Well it's almost as big as my windows folder

Yeah, that's pretty big.


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: Kluge on March 25, 2014, 12:30:55 PM
2 years later... Blockchain is too damn big

compared to what, exactly?

Well it's almost as big as my windows folder
Bigger than mine. Five years since last fresh install, too. :D Ran out of room on SSD drive long ago and had to shove it all on the mechanical storage drive.

https://i.imgur.com/BJqU4Bi.jpg


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: vnvizow on March 25, 2014, 01:05:48 PM
Well that's why light wallets are created. And, spamming does occur in transactions but it's so tiny it's basically useless and the spammer will be wasting a lot in transaction fees


Title: Re: Can the Block Chain get too big and make Bitcoin unworkable?
Post by: razzbee on September 29, 2017, 09:44:51 AM
One of my mentor yesterday said bitcoin and this whole blockchain thing is likely to fail in a massive scale, he later said it might get too huge to load, glad there are plans for that.