" 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." I am not saying if this is good or bad. I am describing the reality of the situation that exists. Has no one heard of a loss leader? http://en.wikipedia.org/wiki/Loss_leaderBitcoin is exponentially growing against fiat currencies and established payment systems. By accident or design some/lots of this growth is via its loss leader of free transactions. Arguably, SD abuses this facility. However, loss leading might be the best "winning" strategy that will have BTC kill off most of fiat in the shortest time (if that is the goal). When the competition is decimated all transactions can have compulsory fees (if that is the goal). Bitcoin does not exist in a vacuum and obtaining value in fiat during the growth phase is sensibly leveraging an external. The network benefits as most participant nodes would have a long-term BTC holding. Hotmail and Yahoo mail, Google search, Facebook social network, Huffpost news: all are free, all are loss leading to get market-share! Once/if they decimate their respective competition their fees will rise. Their goal is transparent. In the vernacular: to monetize eyeballs. Loss leading is essential to get 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. |
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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 are 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, worse, bitcoin 1,2,3,4 would be the same kind of problem 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. |
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Exactly. In fact, BradZimdack's thoughts are exactly same thoughts that I had a few days ago, except my thoughts were on an individual level. So, let me be clear: what set me into panic mode was not the discussions about how the limit would be raised, but the discussions about whether it would be raised at all with opposition from a significant amount of people. That turned the idea of raising the limit into a complete non-starter since it requires a hard fork, despite the fact that changing the maximum block size has been the plan since the very beginning. I can understand not liking Gavin's plan of just allowing the blocksize to be unlimited and having the market sort things out (I don't, either), but I'm sorry, it takes a special kind of stupid to say that no hard forks can happen ever because you "subscribed to the constants" instead of the spirit of Bitcoin like the rest of us did.
If you are arguing for staying at 1 MB/block because that is the constant you would choose today if you pretend that we could reset the constant to whatever we wanted to (whether that be another constant or an algorithm), that's fine. It's a valid choice. I'd be interested to know why you prefer specifically that number over the other options. But to argue that we should keep the limit there because all change is evil is both irrational and stupid. Whatever we decide to do, it's not going to be something that we rush into. Also, you'll notice that in these discussions not a single supporter for this change has even proposed changing the important constants like the total final money supply, so the slippery-slope argument does not apply.
+1 I fully agree. Also, we should turn the max block size problem into an opportunity. As many posters have already said: it is an opportunity to replace it with an algorithm which provides an incentive for users to add fees to their transactions, maintaining an element of block-space scarcity enhancing miner revenue. |
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... A good way to let that undesirable outcome happen would be to fail to upgrade Bitcoin to support some critical property that is (or soon will be) in high demand, such as scalability to high transaction rates.
Yes. And I wonder how long it will take for one of the new alt-chains to replicate all the features of bitcoin except it also offers 20Mb blocks...? |
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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.
All this might have to happen in a frantic week! I think it is terribly sanguine to just assume that alternate chains can appear quickly and integrate seamlessly alongside the main blockchain. This is extremely speculative. We need some of these alt-chains to be up and running right now, taking volume, and proving themselves. Is coinbase an "alt-chain" in your example? markm. You seem to advocate waiting until the last minute before executing the hard-fork. Yes, more information will be available to set the increased value/formula, but surely in opensource the best hard-fork is one that is executed as early as possible so that people can upgrade at their convenience. The lily pads are increasing 10-fold per year (500 transactions per day in Jan 2011, 5000 per day in Jan 2012, 50000 per day in Jan 2013. Jan 2014 will require 1.8Mb blocks if that continues. Yes SD could be throttled or killed, yet I think it is doing bitcoin a favor, by highlighting this issue "within the community". It would be different if it was Mega or Wordpress racking up the volume. |
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I'm glad you asked  Being the person who actually posted a faux-patch increasing the block size limit, it is important to understand why I disagree with that now... it was erroneously assuming that the block size was the whole-picture, and not a simple, lower layer solution in a bigger picture. The block size is an intentionally limited economic resource, just like the 21,000,000-bitcoin limit. Changing that vastly degrades the economics surrounding bitcoin, creating many negative incentives. I, like many others who have commented in support of changing the max block limit, have a primary objective: to prevent bitcoin hitting a wall. This is where the 1Mb limit is reached and transaction delays occur to such an extent that the chaos and negative press stops enough people from using bitcoin that it can limp along with saturated 1Mb blocks. Just when everyone thinks the problems are resolved they pile in again and the delays occur again. In this scenario, which may be within a year, the alternative layers/systems may not be mature enough to handle bitcoin volume growth without a lot of bad press and very upset people, badly tarnishing bitcoin's reputation. Surely , making the limit algorithmically flexible so that it increases by a minimum to support growth without bottlenecks, until alternative layers/systems take up the slack, on their own merits, will NOT " vastly degrade the economics surrounding bitcoin, creating many negative incentives.". |
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Bitcoin is now a US$300 million enterprise. You have a seat at the top table and are being asked for an opinion on a strategic direction, a high-level approach. That is why a minimum of options are presented. "Leaving as one megabyte" could also be a rejection of any future hard-fork proposals which are not unanimously accepted by those running full nodes. "Let Core Dev decide" could also be an abstention. "Agree to increase" is simply consent that those with technical knowledge can go away and work out the detail, which could be anything - but it is a change. If you have technical knowledge you might want to suggest ideas. But that is jumping the gun and out-of-scope of this high-level discussion. Future X is what is going to happen. No one knows what this will look like in detail, all we can say is that because changing the max block size is a binary decision (yes/no) then Future A or Future B will more accurately predict the state of Future X. In the commercial space "senior user" opinion is very important. All successful enterprises need to take seriously their feedback: https://bitcointalk.org/index.php?topic=145498.msg1543934#msg1543934If other senior user opinions come to light then I will link them here too. |
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Satoshi Nakamoto decided upon a one megabyte block size limit for Bitcoin. He viewed it as a temporary measure, but because it has remained fixed for so long it can reasonably be considered by some as a permanent limit. This means currently that the Bitcoin blockchain can not grow faster than 1Mb every 10 minutes. If the limit remains fixed then Future A will be the road ahead. If the limit is raised or set by an algorithm, then Future B lies ahead.Future A: Bitcoin will never handle more than 7 transactions per second. This is a tiny fraction of that handled by major payment systems. Evenutally 99+% will need to be handled by third-party services (such as Coinbase), bitcoin "banks", trusted transfer layers or even alt-chains. Only large transactions (with high fees) get included on the main blockchain. Bitcoin never makes large payment systems obsolete (Visa, Mastercard, PayPal) but full nodes can be run by individuals with moderate computing power and bandwidth. People can personally verify the integrity of the bitcoin network, even though it operates analogously to an internet backbone, but for currency, and people's transactions and holdings are held elsewhere. Mining the main blockchain will remain a niche business, Future B: Bitcoin grows to handle hundreds or thousands of transactions per second. Perhaps Moore's Law can keep up so that some individuals can run full nodes, although lightweight nodes will be necessary for nearly all. Big companies run nodes. All transactions which people want to have on the main blockchain (with low fees) are supported. Third-party services do not have to be used unless they add value, faster confirmations, etc. Existing large payment systems will wither. Mining the main blockchain will become a big business. It is fair to say that this subject has been exhaustively discussed in many threads. There are many arguments for and against, so people are invited to wade through the history of the debate before deciding to vote. Any change will require a hard-fork i.e. everyone will need to upgrade their software. It will likely be necessary before the end of 2013 based upon transaction growth rates. Of course, if no change is decided upon then the limit will become a real constraint, fees will rise, zero-fee transactions will no longer be processed, third-party services must fill the gap. Jgarzik > [PATCH] increase block size limit https://bitcointalk.org/index.php?topic=1347.0caveden > Block size limit automatic adjustment https://bitcointalk.org/index.php?topic=1865.0barbarousrelic > Max block size and transaction fees https://bitcointalk.org/index.php?topic=96097.0Jeweller > The MAX_BLOCK_SIZE fork https://bitcointalk.org/index.php?topic=140233.0Misterbigg > Why do people pay fees? Why are free transactions accepted by miners? https://bitcointalk.org/index.php?topic=144421.0Retep > How a floating blocksize limit inevitably leads towards centralization https://bitcointalk.org/index.php?topic=144895.0notig > The fork https://bitcointalk.org/index.php?topic=145072.0hazek > Why the Bitcoin rules can't change (reading time ~5min) https://bitcointalk.org/index.php?topic=145475.0 |
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Like I already said, if there where 180 Mil. Bitcoin users, that would allow one Blockchain transaction per User per Year. Directly meaning, that the average User would need to Use some kind of (centralised, intransparent, unanonimous, etc.) Provider and never be able to validate his BTC ownership on the Blockchain.
That can't be a solution.
Also, Disk space is already cheap and will become cheaper. It will still be possible for many users to run full nodes for a long time, ever if the space and bad with requirements increase.
+1 You are absolutely correct. I have a lot of respect for Hazek, but if I read the OP correctly: that Bitcoin can't change unless 100% of its (full node) users agree, then it will lead to paralysis. In the worst case, because 100% agreement can never be achieved, Bitcoin will split into different coins, or fail completely. There needs to be some way forward even if a *small* percentage of users object. The real world is not perfect, in case some people are forgetting... |
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That's what intrigues me too, because it is salient as to whether Bitcoin will succeed in the long-term and realize a lot of the hopes of its community, or whether it will suffer recurring problems and wither away as rival ideas/projects eclipse it.
Bitcoin was designed by a genius. But even a genius cannot foresee all eventualities, achieving perfection. Now, especially as it has had four years running live, various improvements to Bitcoin are possible. Perfection might never be achieved, but it can be brought closer with small considered changes. One problem was solved with Version 2, there are others awaiting a resolution.
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s/the blockchain/the primary blockchain/
Also, I am pretty convinced we can double the max block size every eighteen months fairly safely, or if not that much then maybe increase it 50% every year, so I am really more on the lets do absolutely minimal increases to ensure normal consumer machines upgraded every five years or so can keep up side than the lets never increase even when the machines we pick up at the furniture bank for free see the entire blockchain as trivially small and 7G networks flood the city making internet free pretty much everywhere that isn't a total middle of nowhere wilderness/backwoods side.
-MarkM-
Agreement! I also think the max block size should be increased only by what is necessary. It still allows bitcoin to grow. It also means that that, unfortunately, a hard fork is necessary. Gavin - the 250Kb test results. My prediction is that Eligius will pick up the slack when the blocks are saturated. Because there is a safety valve at present. |
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It is not, at extremis, about a little bit of profit margin more or less... It is about total PWNing of everyone not in the top however many percent you have to be in to get the limit raised to where you are just fine thanks and all the moaners and crybabies who were, afterall, just cutting into your top percenter obscenely vast income, people who you can employ far better as menial codemonkeys or sysadmins or branch-managers or whatever than by letting them run around encroaching into your top-percenter domains of rulership.
It is a slippery slope, and there might not even be any mechanism to prevent the already existing pre-bitcoin establishment's 1%-ers from remaking the entire resistance movement against them that bitcoin once might have been into just another back forty of their empire.
So far our primary stength has been the world's most difficult proof of work, in the hands of we the people, a power hopefully sufficient to enable we the people to finally, after all these centuries escape the whole paradigm of 1%-ers versus the 99%.
Now some of us seem to suspect we are starting to see the arguments of the 1% insidiously arising ready to corrupt and undermine the entire experiment, turning it into just another too big to fail, too big to hide from Big Brother therefore too vulnerable to being seized by Big Brother tool of, ultimately good old Big Brother himself, in poison.
-MarkM-
MarkM, the problem I have is that not increasing the max blocksize will eventually force 99% of transactions off the blockchain. So only millionaires buying Ferraris and pirate funding his gox account get onto the blockchain. In order to keep Mr. Slowpoke miner's node running most of the rest of us are forced off the blockchain. Madness |
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*To increase max block size by n%, more than 50% of fee paying transactions(must meet a minimum fee threshold to be counted) during the last difficulty window were not included in the next X blocks. Likewise we reduce the max block size by n% whenever 100% of all paying transactions are included in the next X blocks.
This is a smart idea as it keeps the max block size to a minimum which still allows bitcoin to grow, so is TierNolan's solution. SimonL's solution seems a variation on this theme too. Even a pathetic solution: the 1000000 constant is changed to a 1000000 config variable (which can then be changed quickly) is an improvement over what exists today. All I care about here is helping to prevent bitcoin hitting a wall.Thus far, all the scams, hacking of sites, lost/stolen coins etc are "user error". Despite all this bitcoin itself has performed perfectly, and this is regularly pointed out to critics. However, if transaction throughput chokes up due to the max block size limit then the "Great Bitcoin Failure of Late 2013" will be written in the history books. Critics will always be able to point out this event whenever bitcoin is promoted to new users. It will not be as good as "virtual gold" anymore, and that would be terribly sad. |
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There are also some bears, like Proudhon, preaching the theory that a few people controlling large amount of bitcoins which they bought at very low prices are going to cash out at anytime, in that case I would say let the dump come then, for the general safety of the system, the bitcoins must be distributed as even as possible, so the sooner the dump, the better.
It is happening. After June 2011, this month has had a record day for coins coming out of cold storage onto the market... https://blockchain.info/charts/bitcoin-days-destroyed-min-yearVery good discovery, thanks. But does it have to do with the coins being stored twice as long that the number is so high, yet the amount of coins is not as large as it was in June 2011? Absolutely that would be the case. All this gives is an indication that at least some old coins are changing hands. I think the best way to know how bitcoins are becoming more widely distributed is to extract the top 1000 "richest" addresses every month, and determine the percentage change each time. |
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There are also some bears, like Proudhon, preaching the theory that a few people controlling large amount of bitcoins which they bought at very low prices are going to cash out at anytime, in that case I would say let the dump come then, for the general safety of the system, the bitcoins must be distributed as even as possible, so the sooner the dump, the better.
It is happening. After June 2011, this month has had a record day for coins coming out of cold storage onto the market... https://blockchain.info/charts/bitcoin-days-destroyed-min-year |
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Doctors have the right idea: Primum non nocere. Or if you prefer: if it ain't broke, don't fix it.
Clearly Bitcoin, as currently implemented, 1MB limitation included, is doing something right. ...
Except that Satoshi had foreseen the limit being a temporary requirement and gave an example of raising it by block 115,000 (in the future). That is now the past. I have 25 years experience in commercial systems, much of that processing $US billions per day, and am fully aware that software issues ignored invariably blow up badly. The human body is different as it has the capability to fix itself (in fact that is 99% of modern medicine). |
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Gold and silver are perfectly suited for being money? Okay, I'll give you $10,000 for 1oz of Silver if you personally deliver it to me within the hour. Actually, I take that back, I don't want 1oz. Since it's easily divisible as you say, give me exactly 0.98765 ounces in 1 hour, and you have your 10 grand.
That's one hell of a deal I'm giving you. Lucky for you silver is perfectly suitable so you should have no problem fulfilling this request. Tick, tock.
Absolute classic. Love it! Great! |
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this time its different, this time its a bubble! oh wait nvm its the same..  Last time price went from $24 to $32 in 4 hours. So this time IS different. That's what I am looking for to call a top to this bull-run. Which is why $27.50 was a road-bump, not the top. It really does look like a spike into the mid-30s would occur, at least, before a medium-turn downtrend happens. |
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