Per https://blockchain.info/unconfirmed-transactions, at height 346151, we have a recent count of unconfirmed transactions around 5,700 and rising fast.  Does anyone chart the unconfirmed count over time?

Investor Letter — March 02, 2015 I info@grayscale.co

OTCQX® Update

We are pleased to announce that the Bitcoin Investment Trust's shares (BIT) have been assigned the ticker symbol GBTC by FINRA in connection with its approval of the Form 15c-211 filed by the BIT's market maker. The BIT's sponsor is now finalizing the process of obtaining approval from OTC Markets to allow BIT shares that have been held for at least 12 months to be quoted on OTCQX®, the top marketplace operated by OTC Markets Group, under the Alternative Reporting Standards. In addition, the BIT's sponsor is in the process of making the shares DTC-eligible to facilitate trading once it commences.

We anticipate that the BIT's shares will be eligible to be quoted on OTCQX® and DTC-eligible during the next few weeks, although we can make no guarantees as to exact timing. It is important to note the price of shares traded on OTCQX® will be established by market bids and asks and will not necessarily reflect the BIT's NAV/share or the spot price of bitcoin. In addition, no assurances can be given as to whether an active public secondary market for the shares will develop or be maintained.

As always, qualified accredited investors may choose to invest in shares of the BIT directly through the BIT's ongoing private placement at the daily NAV/share¹. Please note that BIT shares purchased through the ongoing private placement are subject to significant resale and transferability limitations and will not be eligible to be sold on OTCQX® until held for more than one year. BIT shares purchased on OTCQX®, however, are freely tradable once purchased.

Steps to Sell Shares on OTCQX®

Once we obtain the necessary approvals to enable the BIT shares to be quoted on OTCQX®, we will send you further details. In the meantime, please see some information that will be of interest to investors that have held BIT shares for at least 12 months and who will be eligible sell those shares on OTCQX®.

• Our transfer agent, Continental Stock Transfer & Trust, will be mailing each eligible shareholder a share ownership statement.
• This statement will include instructions on how to have your shares electronically transferred via Direct Registration System (DRS) to the broker of your choice.
• Once your shares have been transferred to your brokerage account, you will be able to place an order to sell your shares.
• Shareholders may continue to hold their shares in DRS book-entry form with Continental if they so choose.
• If you have any questions regarding your share ownership statement, if your address has recently changed, or if you have any other questions at this time regarding transferring your shares to your own brokerage account, please contact Continental at (800) 509-5586 or (212) 509-4000.

As always, please also do not hesitate to contact us with any questions or concerns about this process.

To the extent that you do not already have a personal brokerage account and would like to establish one, we would be happy to put you in contact with Merriman Capital, the broker dealer that is both the BIT's initial market maker and its Designated Advisor for Disclosure (DAD).

¹The BIT's NAV/share will be published each U.S. business day on the sponsor's website: www.grayscale.co

Ah, that's plenty big for now; has it been tested?  If blocks that large can reliably be put through consistently then that would easily handle 10k transactions/second.

If one wants/needs to transmit a block of transactions that a miner has discovered that meets the required difficulty then one calls an API to do it.  That API has a maximum size.  If the block is larger than that size then the block is chopped into pieces and then reassembled at the receiving end.  Whether the block is held in a single contiguous buffer is irrelevant although almost certainly common.

The point is until the code do the chopping and reconstruction is ready blocks are limited in size to the API maximum.  Given a large enough sustained workload, i.e. incoming transactions, the backlog will grow without bound until there's a failure.  Having Bitcoin fail would not be good.

The ability to handle a large block is a functional topic; e.g. apparently there is an API limit which will force blocks to be transmitted in fragments instead of one large block.  If we want blocks larger than this limit then we have no choice but to do the code to handle fragmenting and reconstructing such large blocks.  Having an artificial block size maximum at this API limit is necessary until we do that code.  Alternatively I suppose we could look at replacing the API with another one (if there even is one) that can handle larger blocks.

The desire/need for large blocks is driven by the workload.  If the workload is too much for the block size then the backlog https://blockchain.info/unconfirmed-transactions will grow and grow until the workload subsides; this is a trivial/obvious result from queuing theory.  Well, I suppose having some age limit or other arbitrary logic dropping work would avoid the ever-growing queue but folks would just resubmit their transactions.  Granted some would argue the overload condition is ok since it will force some behavior.

I, for one, would recommend avoiding all fancy logic for an adaptive block size; just set the maximum block size to the API maximum and be done with it.  I also recommend hurrying up to figure out the code to fragment/reconstruct blocks bigger than that.

All of this is largely independent of figuring out how to suppress spam transactions.

Have we tried increasing the block size limit on a test coin yet?  We should make sure the functions operate as expected under high and bursts of saturation workloads.

The one to watch is https://blockchain.info/unconfirmed-transactions; if/when that grows and grows then the trouble begins.

One thing I wonder/worry about is miners deliberately mining small blocks when the pile of unconfirmed transactions is waiting.

Ah, now it makes sense.  "Delighted to stay the course" means that I have content with my current position and have no plans to make any big changes.  I will stay on the course/path I am already on.  I will not change to a different path.

It would be disingenuous to ever delight in enduring a loss.  Anyone claiming to be delighted with a loss would be insincere.

One can endure a loss while still being delighted to stay the course.

... "delighted to stay the course" is different than "delighted to endure a loss".  Is English not your best language or are you deliberately misconstruing?

What's so great about a global currency?  Local currencies are good for some things.  Once upon a time a group of parents created a local currency.  It was used to track babysitting time in the group.  As I recall a 10 point note got you 1 hour of babysitting per kid.  The trouble started when my wife hoarded.  She babysat until she had almost all of the notes.  She complained when more notes were created to keep the system from collapsing.  I suggested she either give some of the notes away as gifts to get them back in circulation or use some for actual babysitting services.  What I missed at that time was suggesting the exchange rate be allowed to float.  If a 10 point note became worth 2 hours or even more of babysitting then the missing hoard didn't hurt anyone.  Eventually we could have replaced a 10 point note with 10 1-point notes, etc., to satisfy the needs of the group.  No one expected to exchange our notes into anything else except babysitting time within our group.  Still, my wife, despite her hoard, needed to buy gas and food, etc.  Our group eventually disbanded as the kids grew up and families moved away, etc.  The notes became artifacts.  One can imagine lots of local currencies with suitable scopes.  Of course it could become tedious to track all of them.  Hmm, maybe a single global currency would be useful.

Oh.  I fully expect the money I put in through SM will indeed come out again someday.  Your "project" is clearly fraud and not like Bitcoin or SM at all.  Well, I suppose SM or even Bitcoin could turn out to be frauds but so far I doubt it.  Do you have evidence that either are indeed frauds?

Although I'd be even happier to go to da moon directly, I haven't lost anything yet, I still have my full investment denominated in Bitcoins.  *If* I exchanged back into US dollars today then indeed I would realize a loss.  Btw, I have another pile of Bitcoins I bought at around $100/btc making it somewhat easier to still be delighted to stay the course.  I even took some profits at around $850/btc so that helps make me happy too.

Well, I won't have to find another investor to buy my position; rather, I just order my investment converted into the ETF (trivial, might even be automatic) and then trade it just like any other ETF.  Naturally there must be buyers of the ETF in order to make a deals but I don't have to find them myself.

Gosh, that's incredible.  How do you know?  If you know for sure then that is actionable to make a profit.  Are you taking a short position today?

When I last spoke with the SecondMarket folks they indicated redemptions will be through the ETF, so, no, no specific date is known yet.

You wanted to use tulip bulbs to pay for gas?  Please use less funny talk and instead use more straight talk.

Bitcoins aren't worthless yet and I for one have a great deal of confidence they will be worth a lot to folks that want a monetary tool.

Even tulip bulbs are worth something today.  And this despite there are numerous other kinds of flower bulbs in circulation.

Air is worth a lot to a suffocating person.  Water is worth a lot to a thirsty person.  Food is worth a lot to a hungry person.  ...  What do you really need?  Does anyone need a tulip bulb?

Once the most basic needs are met then wants rise up.  One could want a tulip bulb.

A tool is worth a lot to a person who can use that tool to fulfill a need.  A well, a bucket and a rope are three excellent tools and worth a lot to a thirsty person.  A tulip bulb is an excellent tool for growing a tulip and worth a lot to someone who wants a tulip.

Money is a tool.  It is an excellent tool for a person that wants to transact reliably and accurately with other folks.  It can also be an excellent tool for storing wealth until a future need or want arises.  The attributes of a specific kind of money can make it a better tool.  Few would find the attributes of a tulip bulb desirable for using it as money.

Bitcoin is an excellent form of money.  The utility of Bitcoin as a tool makes it worth some amount to the folks that know how to use it.

The exchange rate of Bitcoin with other currencies is a measure of confidence.

Speculation, panic buying, panic selling, etc., contribute to price bubbles and crashes.  Both tulip bulbs and Bitcoin are subject to the same dynamics.  Recognizing the similarities is hardly brilliant.  Recognizing the differences isn't hard.

OP, what's your point?  Tulip bulbs and Bitcoins will follow different paths.  To invoke the tulip bulb analogy yet again is rather boring.

Such investors (one wonders what percentage exists) could have used Bitfinex to sell short (pseudo-naked) to protect their position.