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That was great Hazek. The only problem I see (as raised by others) is that there is nothing there to "protect decentralization" because as long as the numbers of transactions are continually rising, even at increasing costs per block, so too can block size. The biggest objection I've seen to increasing the block size using an adaptive algorithm like this is that there is the possibility of resource needs increasing to the point of that disenfranchising some portion of Bitcoin users. Personally I don't feel this is a concern because
A) I don't believe it is in Bitcoins interests for the majority of its users to be running full nodes, which is why I point newly interested friends and family members to online wallets
B) I do believe that for even HUGE numbers of transactions (several orders of magnitude larger than now), interested parties with minimal resources could always either have direct or pooled access to full nodes, protecting their interests
C) I believe that Bitcoin will remain as decentralized as it "needs to be", always. This is because those concerned with it becoming too centralized can expend resources (individual or group) to them make it then become less centralized.
The best part of your solution is an implicit agreement with users, which is that if the blocksize and therefore "resources needs" ever increase in the future, so too have the value of Bitcoins. If Bitcoins are worth several thousand USD each, I'm more than happy to purchase many terrabytes of storage to continue acting as a full node regardless of transaction volume and I doubt I'm alone there.
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Free transactions, as they are currently performed, are charity. The last thing we really want to do is get an entire economy accustomed to such a charity, no matter how nominal that cost might be.
Actually, free transactions do earn money. They encourage new users. More people will try bitcoin, accelerating its growth. By implication this contributes a proportion to its exchange rate against fiat. So, miners that include free transactions are indirectly benefiting from them as their block reward is higher in fiat terms. THIS RIGHT HERE Every person that converts his USD to BTC to play SatoshiDice (at minimal fees) accelerates its growth and therefore its exchange rate against fiat. Transactions shouldn't be free, they should cost what the market dictates they should could. A market that doesn't limit them based on an arbitrary technical restriction that fails to scale forever with computing resources. |
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Bitcoin's value comes from its function and trust. If it becomes expensive to use Bitcoins, the game is over.
The market doesn't work like that. The free market involves parties reaching an equilibrium. "too expensive, therefore collapse" is not a realistic scenario depicting an open market adjusting to costs. We know that the equilibrium when not restricted by block size is minimal fees per transaction (even free transactions) because that is the reality now. An imposed sub optimal block size does not create a free market, it restricts one. |
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Something just occured to me.
Free transactions, as they are currently performed, are charity. The last thing we really want to do is get an entire economy accustomed to such a charity, no matter how nominal that cost might be.
Bitcoin definitely doesn't need free transactions to be successful. But it needs transaction costs on the order of around a cent (to prevent spam), not a $15 wire fee. What is the actual cost to store a single transaction forever? Some very small (and decreasing) number. |
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You know what would be almost functionally equivalent. Release bitcoin2 as soon as it becomes a problem. it could be literally exactly the same as bitcoin1 in every way except 2. The market would drive people to adopt bitcoin 2 and 3 and 4 when transaction fees became unresonable, but they would also have incentive not to addopt too early since the more established chains would be more marketable...
Anon136, the problem is that while competing alt-currencies is perfectly acceptable within the cryptographic community, it would be a major pain to the public at large. The public just want The Bitcoin. They have no stomach for multiple variations, it would be like the VHS/Betamax or Blu-Ray/HD-DVD debacles all over again, but worse, bitcoin 1,2,3,4 would be the same kind of problem but on steroids! If it can all be done in the background with multiple blockchains seamlessly integrated, invisible to the public so that there is only bitcoin - then great. But how soon can that kind of technical solution emerge? Not as quickly as saturated 1Mb blocks will happen. And thats why, even if Bitcoin isn't the theoretically the best system for micropayments, it WILL be the system for micropayments. Betamax was technically superior to VHS, didn't matter, it lost. Alt currencies might be fine if you are a crypto nerd, but the public won't accept them. We are having enough of a challenge convincing ordinary people that Bitcoins are money. But when we do, they want them and they use them and THEY BECOME MORE VALUABLE. Bitcoin's value comes from its function and trust. If it becomes expensive to use Bitcoins, the game is over. |
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10a Use cases for Bitcoin decrease as more transactions types become economically not feasible
10b New investment in Bitcoin decreases as potential use cases decrease
10c Additional integration into Bitcoin decreases
10d Network effects decrease value in Bitcoin
10e BTC / USD drops
Ask Friendster what happens when you can't f'in scale. Anybody remember Friendster?
And this is exactly why some of you guys shouldn't be so hostile towards out-of-band transaction systems, even if that results in some degree of localized centralization. For that matter, member2member transactions on MtGox is localized centralization, but does not imply that MtGox suddenly has some special power over the Bitcoin community. I'm definitely not hostile towards out-of-band transaction systems. They're GREAT, if you trust the centralized resources that provide them. I'm hostile towards a hard permanent limit of 7 transactions per second / 50GB per year transaction growth in Bitcoin regardless of the growth of storage and bandwidth capabilities because some people believe that fewer total transactions of a less used currency (with then decreasing utility and value) will somehow make themselves more money, perhaps, in the very short term until the system dies. Buy hey, at least you can run a full node on your wristwatch! |
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we should see what happens as we run into the soft blocksize limits...what do you predict will happen? In this order: 1. Most blocks are at or near the 250 kilobyte soft limit. 2. The memory pool of transactions grows due to insufficient space in blocks. 3. Users notice trend of transactions taking longer to confirm, or not confirming at all. 4. Fees increase as users pay more to improve confirmation times. 5. Miners (or mining pools) modify code to select transactions with the highest fees per kilobyte to fit into blocks. They remote the 250 kilobyte soft limit. Some miners disallow free transactions entirely. 6. Transactions clear much more quickly now, but fees decrease. 7. Blocks increase in size until they are at or near the one megabyte hard limit. 8. Fees start increasing. Free transactions rarely confirm at all now. 9. Small transactions are eliminated since they are not economically feasible. SatoshiDice increases betting minimums along with fees. The volume of SatoshiDice transactions decrease. 10. Users at the margins of transaction profitability with respect to fees are pushed off the network. 11. Many people, most non-technical, clamor for the block size limit to be lifted. 12. Fees reach an equilibrium where they remain stable. 13. Spurred by the profitability of Bitcoin transactions, alternate chains appear to capture the users that Bitcoin lost. 14. Pleased with their profitability, miners refuse to accept any hard fork to block size. While BTC/USD > 0 (15. Alternate chains become more and more popular. 16. People sell bitcoin and buy altcoins 17. BTC/USD exchange rate decreases. Profit of bitcoin mining decreases 18. Miners switch to SHA256 altcoins 19. Goto 15) 20. End of bitcoin 10a Use cases for Bitcoin decrease as more transactions types become economically not feasible 10b New investment in Bitcoin decreases as potential use cases decrease 10c Additional integration into Bitcoin decreases 10d Network effects decrease value in Bitcoin 10e BTC / USD drops Ask Friendster what happens when you can't f'in scale. Anybody remember Friendster? |
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I feel at some not so distant point in future I'll be forced to evaluate alternatives to Bitcoin, because Bitcoin's features I've enthusiastically embraced in the beginning will have been changed beyond recognition.
Bitcoin will always be massively decentralized with thousands of full nodes. Just because I can't currently run a full node on my smart phone doesn't mean that it isn't decentralized. If someone can't run a full node through a 56.6k modem connection routed through TOR that doesn't mean that bitcoin isnt still massively decentralized. The problem of finding max block size based on some type of network consensus (consisting of full nodes) will ultimately be solved, just as the solution of adjusting difficulty solved the problem of hashing power increases. |
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Because if the core devs become corrupter, the users of the community will not accept a fork to centralization. The 50 threads about block size limit changes are stupid. You've got a dozen people crying don't destroy bitcoin and they don't know WTF they are talking about.
I do know this, the people investing real money in Bitcoin related companies and technologies aren't doing it because they believe that its going to be a system that can only handle 7 transactions per second forever. A wire transfer replacement technology that can only be used for high value transactions (because of high transaction costs due to artificially limited number of transactions) where the value following a transaction THEN has to be converted into another currency (since its now too expensive to spend in Bitcoins), is worth less than the current "market cap" of $300,000,000.00 that Bitcoin currently has. Its not even digital gold at that point... I can trade a piece of physical gold for free. |
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The current limit is to protect against transaction spam...at least According to the wiki. I don't think the intent was ever to leave the block size at seven transactions per second. Compared to approximately 10,000 transactions per second For a real payment processing network, seven is slightly anemic. We can't expect Bitcoin to be of any significant value if we limited to only seven transactions per second.
There are people who actually want this. They are arguing for a hard max blocksize limit forever. They want Bitcoin to be forever limited to 7 transactions per second TOTAL. These people do not understand that Bitcoin gets its value from network effects. That when Reddit, Mega, Wordpress, Bitpay merchants, Porn companies, Gambling companies, VPN companies, cab companies, restaurants, youth hostels, etc accept payment in Bitcoin it gives Bitcoin its value AND its trust (which then reinforces its value). Those companies then also need some quantity of Bitcoins for transactions which reinforces the steady demand for the currency. If Bitcoins cost more to send they are worth LESS. They are less competitive against other methods. They are less useful, and they are certainly less used. You think the recent run up in price is due to people thinking that long term Bitcoin is basically a crippled wire transfer replacement? Maybe for people who send a lot of wires. There are more than 7 wires sent per second sent in the world. Ultimately Bitcoin couldn't even be price competitive against that one single shitty use case. In the US we use credit cards for everything. Bitcoin makes all goods purchased with credit cards about 2% cheaper. That's an unbelievable achievement. This fear over losing the decentralized nature of Bitcoin is ridiculous. Mining already requires specialized hardware and resources. Validation could theoretically too. However that will likely never happen. The max block size could increase 10x TODAY without affecting the the ability of almost anyone to validate on commodity hardware and bandwidth. That's today, ignoring that even if you believe Moore's law is over, some improvement will continue to be realized in storage and bandwidth. And certainly in technology as well. If you want a crypto currency that is forever limited to 7 transactions per second go start another one. Because if this is what you want, then you ultimately want Bitcoin to fail. |
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"Soveriegn control of one's money" may be a desirable property, sure, but not if the value of that money eventually collapses because its protocol isn't scalable and so people abandon it.
Right. And if it becomes expensive to issue a Bitcoin transaction, solely because through a non scaling limit the entire world can only perform 7 per second, the value of the technology which currently allows for almost free almost instantaneous money transfers to anyone will collapse. Bitcoin is becoming more valuable because of integration of industry, and that stops it in its tracks. |
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I don't understand the argument some people are making that the block size limit is OK because the main chain will only be used for relatively rare high-value transactions while new blockchains will arise to serve the masses. Why would Bitcoins on the main blockchain hold their value if new blockchains are popping up left and right? A few die-hard curmudgeons who don't want to change the rules isn't enough to keep the market price propped up.
You idiot. You really didn't understand anything did you? Did you even read my OP? Did you understand what it was about? It's not about a rule change btw.. The problem isn't that we, as you call us "A few die-hard curmudgeons who don't want to change the rules", don't want to change any rules. The problem is that this particular rule change is likely going to have consequences that will change Bitcoin from what it is today to something else. Right now Bitcoin is a decentralized peer to peer payment system and a currency without a central authority. By removing the block size limit there is a very real chance it will change into a centralized payment system with a currency with a central authority, a system that you no longer have any control over like you do right now. If you're fine with that, then I don't understand what you're doing here. Paypal meets your how many transactions you think Bitcoin is suppose to handle on a daily basis just fine. Just don't cry to them if you don't like their rules because if you let Bitcoin become impossible to be in your personal control that's exactly what will happen, other rules that you wont like. And that, you idiot, is the point of my OP. To remind people that if you can't somehow validate what rules are being validated on the network, if you aren't an equal peer on this network, you don't matter and what you want doesn't matter. In the worst imaginable case, the ability to validate the currency becomes more expensive, not impossible. As long as it is not impossible, Bitcoin does not become a centralized payment system and you still have sovereign control over your money. Its still peer to peer, at worse its peer group to peer group. Of course this won't happen, because the devs are well aware of the dangers and are reasonable people who continue to put the technology and its users first. Reasonable people can come to compromises that provide for the greatest benefit for all parties. To your other point, Paypal is a shitty comparison that does not meet people's needs because A) My funds can be seized B) I cannot send money to people in specific countries C) It is not pseudo anonymous D) The fees are too high to enable micro transactions E) The fees are too high to provide adequate competition with other merchant processors F) Paypal places artificial limits on withdrawals G) Paypal can be much slower than Bitcoin despite being centralized H) I have absolutely no say in any rule changes that Paypal makes People saying that Bitcoin shouldn't aim to replace Paypal have no idea how badly Paypal sucks and how much better for humanity a solid Paypal competitor with Bitcoins advantages would be. Nor do they seem to understand or care about how much more important of a disruption that would represent than the "just slightly cheaper" wire replacement service that Bitcoin is designed to become with a hard block size limit of 7 transactions per second. I know you want and demand sovereign control over your money. I do not believe that is in any danger. |
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More use of Bitcoin means significantly less trust to me. The crypto-currency world is rife with participants who have difficulty running a reliable forum (and I like it just fine this way.) The suggestion that the class of ordinary citizenry who currently move Bitcoin are going to be able to run a reliable economic solution at scale (with load-balanced processing clusters, high quality provisioned bandwidth, etc, etc) is absurd to me. Throw in the potential to need to deal with coordinated state level attacks and the trust I would have in the solution is next to nill.
The alternative is that if the infrastructure required to operate the Bitcoin network shifts to well capitalized corporate entities. My 'trust' in this solution is nearly nill as well. And it is much less palatable from a philosophical level besides.
You like it fine that people using the currency have a hard time with it? I don't even understand what you are saying. You don't want it to be run by "ordinary citizens" or "mega corps", you want it run by a select few with specialized skills. That's the definition of centralized. But to your point about big fee-savings advantage, fewer transactions = higher cost per transaction. Higher cost per transaction = less advantage over existing methods, which equals less value at all. It also means, fewer use cases. Why, on earth, do we want fewer use cases?
Almost certainly wrong. The transaction cost at current scale is so close to zero that it is not worth thinking about. The cost of performing a transaction is not related to the BTC size of the transaction. Even at the current block size the Bitcoin solution could handle a fair part of the worlds need for high value transactions (I suspect.) It's probably about perfect for balancing between other crypto-currency systems...accident???
The dream that my skittles purchase, your penny-ante Satoshi Dice bet, and someone's goat cheese sale in outer Mongolia coexist in a common block chain is nice and cool and all that, and I like it, but it is something I would trade for a robust solution which looks vaguely like what we see today.
Its not wrong, its very simple math. A hard limit of 7 transactions per second means that once we hit our transaction bandwidth (already 25% there!), the price of individual transactions will go up. Free transactions will disappear and paid transactions will enter into an increasingly expensive auction. If you think this is wrong, explain why. I said nothing about the BTC size of the transaction. Also total value from transactions may end up going down because even with higher individual transaction prices, so many previously possible cheaper transactions will become impossible to perform, and total value (all fees paid on all transactions) may decrease by removing the ability for those other transactions to exist at all. And with the individual transaction price going up, many use cases (micro transactions, retail transactions) will disappear. Huge numbers of individuals will not be able to participate as users at all (except perhaps to validate transactions that they themselves cannot take part in, but at least it works a 56.6k modem.... give me a fucking break). Centralization of ACTUAL USE will increase and total usage stops growing by the network limiting to 7 transactions per second. The remaining advantage over expensive wire transfers will be diminished as the price difference decreases. And ultimately the value of Bitcoin as a payment network and currency of the people will disappear. The dream that my penny-ante dice bet, your skittles purchase, and someone's cheese sale in mongolia coexists in a common block chain IS THE REALITY TODAY. It needs to be the reality tomorrow as well. Anything less than that is total failure. |
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There are people out there with whom things that go up in value faster than inflation, faster than a savings account, faster than pretty much anything short of a Ponzi, are not popular, it is true. It is a large part of why some communities on the web are very fond of claiming bitcoin is itself a ponzi. But long term I suspect what drove us down from $2 last time around was not people's lack of interest in small block size cryptocurrencies but, rather, the massive onslaught of major hacks and the lack of time tested value storing utility that left us short of past performance evidence with which to refute the "bitcoin is a ponzi" / "bitcoin is a scam" claims so many vocal detractors were making.
Blockchains are not ideal for retail sales payment processing, but for large transfers with small percentage fees they should be reasonably competitive.
Since we do not know which, if any, output of a transaction is change, nor even if a transaction with between someone and themself rather than someone and someone else, we really only have the price per bitcoin on exchanges and the number of bitcoins paid in transaction fees go by in measuring useful (as in paying for our infrastructure and operating -expenses) adoption.
We need to be adopted by money. Lots of money. People are less and less important in that regard the less and less money they bring in. The more money they bring in the more in fees and/or more in exchange rates, provided circulation involves fees. CIrculation that does not provide fees is mere churn, not useful in paying for the infrastructuire and operating-expenses of the network.
We should be looking to retain value, to store value, not to throw it away to freeloaders in the form of free transactions nor increase the cost of storing it by catering to decipayments nor even decapayments. We should aim at the centapayments and kilopayments markets not the centipayments and millipayments markets.
Lets store amounts of value that are actually worth going to the trouble and expense of storing them, while providing also the ability to transfer such amounts in and out of storage.
-MarkM-
First, I have a really hard time reading and understanding your posts... I usually skip over them. " Blockchains are not ideal for retail sales payment processing, but for large transfers with small percentage fees they should be reasonably competitive." So reddit, mega, wordpress are not what bitcoin is meant for? That's what you are saying because those are all retail transactions baby. If bitcoin isn't "meant for" small transactions it's only because there is a minority of people that want to keep an artificially low transaction limit. And I don't even think those people are miners (or bitcoin miners) . I think they just want bitcoin to fail for whatever reason. Maybe they own a bunch of litecoins . Agreed. Bitcoin is how it is used. Crippling it because you don't like how it's used means you want it to fail. |
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isn't this about facing a deficit of transaction numbers vs. block size? and hacking a solution that involves making the rules arbitrarily larger?
i must be confused.
The opposite. Really. We face a deficit of paying transactions as compared to our ever-since-we-started huge oversupply of block size. There have never been anywhere near enough paying transactions to fill our blocks, thus some of us are maybe doubting we can afford to increase the size of our blocks, because the capital cost of equipment to accommodate larger blocks is not being paid for because blocks have always been far far from full. Our blocks are too large compared to the number of paying transactions in them, and people are claiming that no one is going to provide us enough paying transactions per block to come anywhere close to filling our blocks unless we increase the size of our blocks, that is, start leaving them far more empty, far less well supplied with paying transactions, than they have always so far been. It seems to amount to "no one is going to pay you for a cup of water while you only have a lake full available, you need to have ten lakes full first then maybe people might consider buying a cup". -MarkM- Ahh we get to the crux of it. You want to be paid more to mine blocks, period. You are hoping that with a hard block size that each block you mine will be worth more and require less work to mine and store. You don't care if fewer people use Bitcoin, or if Bitcoin is less useful to the world. And you ignore that as a niche with higher transaction fees more closely resembling those of its competitors, Bitcoin will remain less valuable as either a technology or a payment system. I'm sorry if mining isn't currently as profitable as you want it to be. The network is already the worlds largest distributed computing platform and very secure. I care more about the average person using the technology easily and cheaply, and the industry that will ultimately enable (impossible at this point to even imagine), then making mining more profitable. |
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isn't this about facing a deficit of transaction numbers vs. block size? and hacking a solution that involves making the rules arbitrarily larger?
i must be confused.
It has nothing to do with the money supply (inflation). Its about not being able to perform enough transactions to keep up with usage. The current hard limit of 1MB block size coupled with the fixed number of blocks means about 7 transactions per second. To put that into perspective about 220 million people could do 1 transaction per year. That's less than 2/3 of the United States (ignoring the rest of the world). ONE PER YEAR! There are people here who seriously think this is acceptable. 220 million transactions per year for the whole world, total. Those people have a very very different vision of Bitcoin then the one that I do. |
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Why is this even a thing?
So we're going to solve a deficit issue by jumping right to inflation?
Great way to show off your principle, Bitcoin.
Full retard mode engage
In no way will raising the number of transactions per block (not the number of blocks, the number of coins, or the reward per block) increase inflation. |
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Respectfully, I think you are conflating BTC price with adoption. Last time the price was $32 per bitcoin, the network was doing 10-12k transactions per day. It is now doing nearly 6x that number and at still not yet at that price level. We are approaching 25% of max block size. The price could drop and we could still end up saturating the blocks.
If it is not adopted by money, sucking in more penniless peasants will just invite them to lose what little money they have by putting into a system they do not have enough money to pay the costs of securing. We need the people paying $15+ per wire to wire half their paycheque home to their family abroad much more than we need people who might as a novelty buy a coffee with it some day but don't even think about the fee they pay with their current electronic payment method (credit cards and such) when buying coffee currently with fiat because heck not only is bending over to pick up a penny a waste of calories but a handful of pennies in fees to buy a coffee is also not worth one's time to even think or worry about. Our big fee-savings advantage is on the big-ticket transfers, not on puny sums. -MarkM- I disagree. More usage is more trust. More trust is more value in a crypto-currency. But to your point about big fee-savings advantage, fewer transactions = higher cost per transaction. Higher cost per transaction = less advantage over existing methods, which equals less value at all. It also means, fewer use cases. Why, on earth, do we want fewer use cases? |
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We are giving several fucks about actual adoption.
Actual adoption has been such that even $32 per bitcoin worth of adoption never came near to saturating the blocks, and a couple of years later as we approach a $32 per bitcoin level of adoption again now, we are still nowhere near saturating the blocks.
Thus, adoption is still nowhere near enough that we need larger block sizes yet.
When we reach a $64 per bitcoin level of adoption lets see how full our blocks are; maybe we can easily handle even a $100 per bitcoin level of adoption and still have oodles of space left in our blocks.
-MarkM-
Respectfully, I think you are conflating BTC price with adoption. Last time the price was $32 per bitcoin, the network was doing 10-12k transactions per day. It is now doing nearly 6x that number and at still not yet at that price level. We are approaching 25% of max block size. The price could drop and we could still end up saturating the blocks. |
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