This is interesting. I wasn't aware that Bitcoin M0 was already so higher in aggregated price than those of some governmental currencies like the ISK.

Does anyone know a place with a ranking of countries per M0? It would be nice to see where Bitcoin is in such ranking. I still see some people arguing that Bitcoin is "not serious enough to be called money... it's only used by junkies, come on!".

Of course they shouldn't be "disallowed", but regardless of what they represent elsewhere, these dust transactions may be a "nuisance" to Bitcoin if they are not majorly composed of fees.

I don't understand why using Bitcoin for this inherently centralized use cases (like asset issuing), when there are better suited protocols like Open Transactions, for instance.

The block subsidy will be determined by the free market once inflation is no longer relevant, iff the block size limit is dropped. Even Bitcoin inflation itself in a sense may one day be determined by the free market, if we start seeing investment assets quoted in Bitcoin being traded with high liquidity: such highly-liquid BTC-quoted assets would end up being used in trades, and would become a flexible monetary aggregate. Fractional reserves is not the only way to do it.

Concerning the time between blocks, there have been proposals of ways to make such parameter fluctuate according to supply and demand. I think it was Meni Rosomething, IIRC, who came up once with such ideas. Although potentially feasible, that's a technical risk that might not be worthy taking. Perhaps some alternative chain will try it one day, and if it really shows itself worthwhile as a feature, people might consider it for Bitcoin, why not. I'm just not sure it's that important, 10 min seems to be fine enough.

And you really think the masses care about Bitcoin non-inflationary nature? You're the minority there, my friend!

A thing that people do care, though, is relative appreciation of currencies. They tend to migrate their money toward safer currencies. Just check how the Swiss Franc was going up in value before being tied to the euro. But people don't really understand monetary policy, and most that eventually accept using Bitcoin, will either be due to its appreciation, or because it's cheaper, or due to its privacy, or due to its censorship-resistance etc. The majority of people don't even know what "monetary policy" is.


Please, are you claiming that letting bitcoin be useful to millions by dropping this hard limit of 7tps would create a "central authority"? First you believe in 'dumping techniques', now this? Do you realize what "central authority" actually means? Do you understand that Google, for instance, is not a central-authority of internet search and videos? And that it would be practically impossible for a single pool operator to aggregate the same "market share" in bitcoin mining than Google has in internet search and video?

Where are you taking these fears from? I thought you were more versed in economics. You're sounding like people who have never heard of spontaneous order.

Even in retep "successful dumping" scenario, it would still be easier to have a full node than to understand the entire complexity of bitcoin source code.

But... wait, even you believe in "dumping techniques to rule out competitors"? Seriously?


Are you a peer in Bitcoin development? Do you review and understand each line of the source code?


No, they can't give a "rats ass", that's what I'm trying to say. Seriously, just look the amount of noise any little thing can provoke around here. The same way that would be extremely difficult to get away with silently tampering the source code, it would be extremely difficult to get away with silently tampering with the blockchain. Actually the latter would likely be more difficult (without having >50% of course). Every attempt to change anything would have to be open and public, and once again you'd have your freedom to choose without being lied to.

I can't afford to read 100+ posts on this subject again, so I'll just address OP. Pardon me if I'm repeating something that has already been said.


Hazek,

It seems you want Bitcoin to be an absolute trust-free system to anyone, even people running lame machines which can't handle the number of transactions per second a serious payment network would generate.

But... how do you even know, for sure, that the code you're running really does implement the contract you claimed to have "signed"? Is it really trust-free? Or do you trust on the fact that, being open source, somebody with the skills to validate such code will do it, and the day some contract violation is inserted in the code, it would be quickly spotted by code-review? You see how that's not "trust-free" anymore? Very few people, even among computer specialists, are really capable of digesting Bitcoin source code. It's just a tiny "elite" if you will. And that's enough for you, for me, and for everybody else, apparently.

A 4000tps blockchain would be pretty much the same thing, with the difference that, considering how optimized Bitcoin is, it would be much easier to run a full validating node doing 4Ktps than it is to dig into Bitcoin source code and understand it. A much higher percentage of people will be capable of running full nodes than understanding the source. If you can trust the openness of the source code to provide enough reliability for you to use it, why can't you trust the openness of the blockchain to provide the same reliability? Actually, with some effort and expanses, you'd likely be able to finance a 4Ktps full node only for the purpose of validating the chain yourself. Or, at least, get together with like-minded people and finance a full node for that purpose.

Take wikipedia for instance. It's gigantic, fully supported by its supporters donations, and some researchers claim it is more reliable than old-fashion encyclopedias. Nobody can validate its entire content. For every complex article on a particular topic, only a small minority of people in the world have the knowledge to keep it correct, and from these people, only an even smaller minority will actually do it. Yet, it's openness provide this great reliability: http://news.cnet.com/2100-1038_3-5997332.html

The blockchain is open, and as such, it can be validated by anyone with the means to. That's more than enough to trust it not to change to something "evil" without major repercussion.

Exato.


A dificuldade de se gerar um bloco se adapta. A cada 2016 blocos (~2 semanas), ela é recalculada. Se esses últimos 2016 blocos levaram em média <10min para serem gerados cada um, então a dificuldade é aumentada. E inversamente ela pode diminuir se os blocos estiverem sendo gerados mais lentamente do que um a cada 10min.

AFAICT P2Pool requires each participant to be a full validating node. Maybe that changed and I'm not aware of it. But if such requirement still exists, then it cannot scale as is.
Of course, P2Pool protocol per se could remain. But its participants would eventually be pool operators, and the actual miners (owners of processing power) would connect to these pool operators participating in P2Pool. It would fallback to the model of centralized pools, with the difference that they would be constrained by P2Pool protocol, what might convince some miners to support them. Or not. Can't tell that. What I can tell is that all individual miners doing full validation is not something that scales.
For instance, if BFL really ships their products, I might consider buying the USB-miner thingy. But that would have to run without a full node.

An automatic adjustment is definitely better than keeping the limit as is, for sure. I used to support it.

Until I realized there's actually no better "automatic adjustment" than spontaneous order. Allow miners to set their own limits, together with "tolerance levels" (a way to say that if an "offending chain" is 2 or 3 or N block longer than mine already, I end up accepting it). Also allow them to define how large the block they build will be.
That's what you need.

I don't believe that pool operators would voluntarily decrease their revenues (by increasing the chance of losing their blocks) and increase their expanses (by paying for wider than necessary bandwidth) in the hope of kicking out lower-bandwidth pools. That's pretty much like price dumping, and price dumping doesn't work. (also, botnet operators have already kicked low-bandwidth pools out anyway... what's the percentage of bandwidth-expenses a pool must have just to be resilient against DDoS? That's likely to be more than what it takes to upload their blocks ).


Which doesn't scale AFAICT.

I'm sorry for cross-posting, but unfortunately I have a hard time seeing this thread as a "Technical Discussion". This is much more an economical discussion than a technical one by now. And in another thread I said what I think about it while replying to hazek:


The main economical principles of Bitcoin are not being threatened. If they were, I would be among the "resistance" for sure.
What happens is that there's this damn constant limit Satoshi inserted in the code because he couldn't think of something better at the moment he was coding, and now this thing is haunting us.

Wanting to cripple Bitcoin scalability just because you fear that a super-cartel of pool operators would pop up without such handicapping limit? Seriously?
That looks very much too me like the argument for anti-trust laws. This talk that high-bandwidth pool operators would voluntarily pad their blocks with useless data in a desperate attempt to kick out low-bandwidth pools*, risking with that to increase their propagation time and thus also increase the chance of losing their reward... to me it sounds just like the argument that price dumping works. History and economical theory show us that price dumping doesn't work.

That summarizes it in economical jargon for me: the resistance against dropping the limit believes that "dumping techniques" can work, and fear that dropping the limit would be like dropping anti-trust laws. They are wrong.

* By the way, for totally different reasons, it's already not really possible to be a low-badwidth pool. The reason for this is not the Bitcoin protocol per se, but DDoS attacks from bot operators mining on different pools. Unfortunately most major pools were already DDoSed. Ultimately the only defense against such kind of attach is large bandwidth.

Yeah yeah right, and your block will propagate because pool operators are incapable of setting their own tolerance levels. Right.

I can't avoid seeing it that way too.


The main economical principles of Bitcoin are not being threatened. If they were, I would be among the "resistance" for sure.
What happens is that there's this damn constant limit Satoshi inserted in the code because he couldn't think of something better at the moment he was coding, and now this thing is haunting us.

Wanting to cripple Bitcoin scalability just because you fear that a super-cartel of pool operators would pop up without such handicapping limit? Seriously?
That looks very much too me like the argument for anti-trust laws. This talk that high-bandwidth pool operators would voluntarily pad their blocks with useless data in a desperate attempt to kick out low-bandwidth pools*, risking with that to increase their propagation time and thus also increase the chance of losing their reward... to me it sounds just like the argument that price dumping works. History and economical theory show us that price dumping doesn't work.

That summarizes it in economical jargon for me: the resistance against dropping the limit believes that "dumping techniques" can work, and fear that dropping the limit would be like dropping anti-trust laws. They are wrong.

* By the way, for totally different reasons, it's already not really possible to be a low-badwidth pool. The reason for this is not the Bitcoin protocol per se, but DDoS attacks from bot operators mining on different pools. Unfortunately most major pools were already DDoSed. Ultimately the only defense against such kind of attach is large bandwidth.

Esse termo "mineração" é fonte de confusão. O que "mineradores" fazem é incluir transações nesse banco de dados distribuído chamado blockchain. Essa tarefa é custosa, então eles recebem uma recompensa monetária. Essa recompensa é composta de "bitcoin novas" (inflação, dinheiro previamente não existente) e "taxas de transação", gorjetas voluntariamente adicionadas às transações por quem as enviou.

Eles não "mineram" nada no final das contas.

I'd say "bumping all the time" is what should be avoided. Ideally the change should be done before that start happening.

Seeing how Bitcoin grows, it wouldn't surprise me if we start bumping on this 1Mb limit yet this year.

You can't predict how much the monetary base will be worth nor how much security is enough. You can't set prices like that.


That's what I'm saying, you can't know what's enough or more than enough, so you can't simply set a mandatory amount per Mb.
You seem to be contradicting yourself in the same post...

They could eventually support both chains.
But yeah, it would likely be easier for services to simply choose one. No modification on their side other than updating their bitcoind install.

As a protocol rule?
I find that worse than an automatic adjustment of the max block size. You can't set prices like that. You can't predict what 50BTC will represent in the future.

Disaster or not, the more I read these discussions, the more I see an actual fork (as in different chains) as inevitable.

Some people seem determined to keep this handicapping 1Mb limit, and envision Bitcoin as nothing more than a SWIFT 2.0. Some people, me included, want Bitcoin to be much more than that eventually, what would require more than 7tps.

At a certain point, a fork will happen. Everybody who had coins before the fork, will have the same amount of coins on both chains, the old and the new one. People like me will sell part of their old coins in exchange for coins in the new chain (the one without the limit). Some other people will do the other way around. Lots of price turbulence will happen. I can't predict how major services will behave. Would MtGox support trading of both Bitcoins, old and new? Or would they pick one?

Eventually, one of the two chains may die. Or not.

I knew from the day I learned about this block size limit that it would be a problem in the future: https://bitcointalk.org/index.php?topic=1865.0
(OBS: I changed my mind about the "automatic adjustment" thing, I don't think it should be done that way anymore)

Only miners (and by that I mean solo miners + pool operators, not pooled miners) need to be a full node. They're your "everyone" there.

Please people, understand one thing: you can't run a full payment network used by millions as a hobby. The day Bitcoin becomes something really serious (i.e., thousands of transactions per second), being a full node will necessarily be a professional task. It won't be something you can do on your laptop, "just for fun".

EDIT: And, as Mike said, the idea of converting Bitcoin into some replacement to SWIFT with $20 fees for transactions, which would force people to use bank-like institutions for daily transfers, just because you want "ordinary people to verify transactions", totally turns me off. Bitcoin can be much more than that. If you actually want it to remain this censorship-resistant currency that it is, it has to remain suitable for small transactions like buying some plugin from Wordpress. If you want Bitcoin to remain an alternative for those seeking financial privacy, you have to keep it suitable for SR users and alike - otherwise all these "bank-like" payment processor would ruin your privacy. If you want Bitcoin to remain an alternative for those trying to protect their purchasing power from inflation, you have to keep it suitable for those who want to protect their daily money on their own, without having to use a bank just for storage purposes which would recreate the incentive for fractional reserves. The list can go on. Bitcoin has the potential to be much more than SWIFT 2.0. But for that, processing transactions will have to become a professional activity (it kinda already is actually).


Succeed in what? Killing everybody else? Do you realize that would likely require more than 50% of the network processing power, otherwise the "unacceptably-gigantic" block would always be an orphan? Miners would likely reject blocks way too large, specially if it's filled with transactions never seen before (i.e., a likely attempt of flooding).


I'm glad you see it's not so black-and-white. I'm sad though that you think you can actually "choose what point between there is acceptable". Such point cannot be found arbitrarily, even because it is not fixed: it varies all the time according to different demands for security, transaction space, speed etc, and different supply of resources. Basically, you'll never be able to even list all data that is necessary to take such decision, as it involves subjective opinions of thousands and eventually millions. Let alone calculate anything.



Only if you want to totally avoid the fork actually. Otherwise, you may have both chains living in parallel for some time. Then eventually one might "beat" the other, as people migrate. Or both keep alive "forever", that's a possibility too.
The more I see these discussions, the less I believe in totally avoiding the fork.

EDIT: And also, as a general comment on the discussion, you people fearing "too much centralization", as in "too few market participants", should realize that, at most, what would happen would be a few pool operators, like we have now. Pool operators do not own the processing  power. Such processing power will remain scattered among thousands of people, who may easily migrate to different pools if they feel like. Pretty much like what already happens. Current pools need to have some "professional bandwidth" if only for protecting against DDoS, It already require professional resources to run a mining pool.