I don't think there are people which are actually on a "1mb forevah" camp. This, obviously, doesn't scale. So no permasmall.


In absence of serious antispamming fees, and in the presence of "willing-to-process-junk-for-free" miners, the block size is the ultimate safeguard for abuse.

Personally I have no problem with big blocks if minimum fees get higher and if the game theory, or code, or network, doesn't break somewhere else.

Ok, let's say you hit the "real world constraints", what then?

Someone will come along, proclaim the new version of fullblockalypse, say the end is near because blocks are at the technological limit and we now have to make people pay fees, etc etc... then they will say they have that fantastic solution of changing the X parameter in the network (like block times issued in 20 minutes instead of 10m to allow larger blocks to get propagated without getting orphaned, or the implementation of some other "hack", to "solve" the "problem") and if we don't do that NOW, it would be a frickin' disaster.

A new rift ensues etc etc and then we have yet another currency after BTC and BTCC.

This is bullshit. It never stops.

Plus, there is an issue I thought of the other day, triggered by a discussion I was reading. In a big block scenario and if most miners are in china from what I understand -and please someone correct my misunderstanding if I'm wrong-, the problem will be that they are communicating the big blocks through their national backbones in great speed while the rest of the world is orphaned all the time because they are lagging behind them and they don't have 51% hashpower to build longer chains than the chinese.

In this sense, the chinese could actually be ...incentivized to put out as large blocks as they want to disadvantage the rest of the world - even filling blocks with junk in a prearranged manner, where they act like a cartel to push others out and get all the BTCs for themselves. If it works, why not?

He states the obvious.

If BTCs were endless why would anyone pay 400$ for them?

Likewise, if blockchain use was infinite in terms of transaction capacity & storage, why would anyone pay fees?

You don't pay for things that are provided in abundance.

If the system is designed in a "go-ahead-use-as-much-space-as-you-want-for-free" the lack of scarcity would lead to few incentives for those using the space to pay the fees.

Theoretically miners would prevent this thing. The game theory would say "but it is not in their interest to process spam, dust, zero-fee txs etc etc". In reality they do. They don't act like rational miners and the irrationality in the mining business where the miner subsidizes (!) blockchain abuse breaks the system of supply/demand in the case of larger and larger blocks.

But devs aren't waiting, they are coding solutions or half-measures / band-aids.


What we need is a tx/s capacity increase plus entering a more grown-up phase where the network stops processing spam and junk and stops acting as a third-party storage database for near zero or zero cost.

Practically all developers agree to it, whether it is in 3 months, 5 months, 1 year, it'll happen and we'll be ok.

Hard forking a currency into 2 currencies with the "orthodox" and the "catholics" each supporting their own part of the schism? No, that's the stuff with which nightmares are made of. Gavin, Hearn and all who sided with them are extremely dangerous to bitcoin, either because they lack the awareness of what they are trying to do, or because they are intentionally doing what they are trying to do and camouflaging it with the pretext of "saving" bitcoin in a situation where it doesn't need saving. At most a few fees will be bumped and some dust/spam will be crowded out if core devs are slow in their own rollout. That's all that will happen when blocks get full. It will not harm the "network effect" of normal users. But a fork will definitely destroy confidence in bitcoin forever because it sets the precedent where for each consequent "disagreement" we can have a new schism. Do you think that's good news for a 20-year horizon investment?

Just think it through. Is the precedent of a violent hard fork (and the knowledge that at any time the currency can split into two currencies / diluting the money supply / having people rage dumping on the "opponent" fork which they don't believe into etc etc) more beneficial than a few months delay in a more proper transaction capacity increase - when the issue isn't even pressing? Can the answer ever be yes to that?

A relatively good crypto does have a market for

- the unbanked
- capital control bypass / making payments online despite the "barriers", for countries where foreign reserves controls are imposed to prevent currency devaluation and capital flight
- accepting payments from all over the world without the government confiscating your hard currency and automatically replacing it with the national currency equivalent in your bank account
- store of value if foreign currency and/or gold is hard to find, for countries that have devaluing currencies
- black markets (in some cases)
- non-reversible transactions where paypal / visa etc fail
- ...investment / speculation

The killer app and marketing is actually done by ...the powers that be, by pushing on our throat the digital economy where they want to monitor and control all our transactions, by eliminating cash and imposing their electronic transactions. So anything that you don't want to go through *their* electronic currency, will, by necessity, either be cash (impossible for online transactions), or ...an e-cash alternative to the government's currency.

In terms of marketing, I believe a wallet simplification would be in order for most crypto. Human-readable addresses or virtual "bank accounts" that approximate the balances people already are familiar with, would be a good "front-end" solution to addresses like 490138410924809135u22fdjfwu;r92qu8weudwq09, change getting "lost" into addresses that people do not understand, etc. The front end should ensure a good user experience, the code should ensure best practices in terms of security and efficiency of transactions.

Yep, I can take no credit for that

The future is kind-of-accounted for (considering the problems of BTC in scaling, which are much deeper with current technology than a change in block size) through

a) devs working on scaling
b) fees that will eliminate a lot of dust/spam that are now processed when they shouldn't

Blocks getting full is a meaningless factoid without seeing the quality of transactions and fees involved. We could have 2 mb blocks tomorrow morning and someone could activate a script and fill them up for peanuts. He wouldn't be in any hurry of course for inclusion, so he'd pay the absolute minimum he could get away with. After all even if 500kb legit transactions are ahead of him and he takes the last 1.5mb of the block with zero/near zero fees, the effect for an outsider would be that "...oh my gawd blocks are full - even after we went from 1mb to 2mb... Oh shit we need 4mb!!!"

If you see threads back in 2013, you'll see they anticipated that given the size used they were expecting a problem in 2014 or so and some were like, bullshit, it's just a lot of spam by satoshi dice and similar stuff. Those who went with just the quantity of data failed to predict that we'd be still running in 2016 with 40-50% capacity to spare, those who examined the quality of data knew there was nothing to worry about. That's not to say that an increase is not needed. Of course it is. Multiple increases will be needed. But nothing will happen even if blocks are full 100% of the time with junk. We've seen emulation runs with the various "stress tests". All normal txs went through with a fee, spam stayed in the queue. The fullblockalypse that never was.

https://blockchain.info/charts/avg-block-size?showDataPoints=true&timespan=30days&daysAverageString=1&scale=0&address=

0.71mb = there's an extra 40% capacity.

Ane people are still paying peanuts for the bulk of transactions (free or near free): http://www.cointape.com/

....with not much "urgency" in their tx confirmation - otherwise they'd bump their fees up by a few satoshis.

On the other hand those that pay more normal fees, get included in 0-1 blocks.

I was saying upthread there is a market-gap in terms of a website that analyzes and suggests fees, lol... Cointape does that, apparently: http://www.cointape.com/

I don't know the nuts & bolts of the US tax system to answer the tax-related question, but money is quite different in terms of regulation. That's why an exchange can be quite "loose" if you simply trade btc/alts and then you get a jump up in verifications and checks when you engage in any coin/USD markets.

Has the US Government accepted crypto tokens as ...money? Last time I heard they were saying that bitcoins are like commodity or something.

Ah, found it: http://www.coindesk.com/bitcoin-as-a-commodity-what-the-cftcs-ruling-means/

If anyone making virtual tokens is dealt with as a money-transmitter then every online game dev that involves some kind of online currency (and some times you actually buy this type of currency from the game company to promote your own game account, buy virtual products etc etc) should be in prison.

The "problem" here is we have 53-58% more taxis available than actual demand (1mb blocks vs 620-650kb avg use)

1-block inclusion for every single transaction that isn't mid-to-high priority is the only way this could work out.

There is no way that a spammer can activate a bot, generate 100mb of txs in a few minutes and then expect to be served in 1 block, whether that block is 1, 2, or 20mbyte. If you have a situation like that, with spikes, it doesn't prove that you need ...bigger blocks. The fees will take care of how txs will even out and get processed.

https://www.linkedin.com/in/evan-duffield-98645515

Software Developer / Owner
Hawk Financial Group
February 2014 – Present (2 years)

Evan's own limited liability company.

Seriously, why don't you use google?

With blocks getting issued in either one minute or 30 minutes, your main problem is confirmation time, not fees.

If you can do it with 0-conf, obviously fees are not an issue. You are confirmed even if the transactions goes in 10 blocks.

But 0-conf is ...well... double-spendable.


It's a paradox only because you mentally choose the losing side. You could make an equally valid paradox saying you will always beat the "loser" by paying 5.02 as he would always pay 5.01 or less and thus be left out due to space scarcity... lol?


Parcel delivery services overcharge you to avoid dynamic charge.

If they feel, for example, that their cost is 1.3$ to 4.5$ depending the workload, destination, economy of scales during certain circumstances of mass deliveries etc etc, they may charge you 5$ "just in case", so that they always make profit.

Bitcoin is far more efficient and that's not a problem, it's a feature in the sense that you don't need to pay more than you have to.

So, for example, if first-block inclusion fees fluctuate between, say, 10 cents and 30 cents, yes of course you could be paying a "fixed" dollar to be always in and I could give you an answer like that, but you would be overpaying by doing that. If you pay 31cents though you'll be relatively assured of inclusion (unless you hit a miner where he is not even interested in your peanuts compared to the block subsidy and mines 0-txs). Still you might be overpaying a bit compared to a riskier 20 cents.

Actually there is a market gap here for some kind of website / service that monitors broacasts, sees when txs are included and finds out precisely what the cut-off for first block inclusion is by seeing which went through and which didn't in prior blocks (provided prior blocks actually mined txs and were not 0-tx blocks). I feel that bitcoin-qt's estimations could be improved and from what I read, the same goes for light clients.


It is genius but it can't cover everything. It didn't forsee the aggressive takeover through a developers schism which wants to fork the currency and create a precedent of the currency splitting again and again in the future because devs disagree and promote division.

Money can't be forked / have the supply diluted / create 2 parallel currencies of believers in BTC and believers in BTCC - and then in every critical junction have this happen again and again. This is bullshit. The human component vulnerabilities were underestimated and I feel Satoshi's warning back in August might be true: If the fork succeeds he will be forced to officially declare it a failure.

From what I'm seeing in the poll: https://bitcointalk.org/index.php?topic=1331385.0

...it's up to 77.2% for "no" and "probably no". Now, that's way too low for my risk-aversion preferences... I don't know if I can "afford" a 23% uncertainty or risk (going by the wisdom of the crowd). According to my assessment the risk is actually higher because the substance is solid.

The thing is, every democratic process can be used to create rifts.

Let's say you have a community and then you have 10 issues to solve.

You start with 100 people who vote 50-50 in every single issue.

After the first round / first issue, and if it involves "heated" debates people have split in 50-50 and may have hostilities between them, like we do right now with "core / classic".

Then in the second issue, let's say the 50% who thought they were "friends" because they sided on the same side of round 1, may be in opposite sides in issue number 2. For example say after a classic fork some disagree about where classic should be going and create a new fork.

So community is now divided in 4 parts

-25% voted yes in issue 1 / voted yes in issue 2
-25% voted yes in issue 1 / voted no in issue 2
-25% voted no in issue 2 / voted yes in issue 2
-25% voted no in issue 1 / voted no in issue 2

In the third voting about a third issue, the community will have split in 16 parts.

That is problematic and can never be applied to currencies.

If it does, the currency is useless - at least as store of value which requires confidence. The assumption that most people will side with the miners even if they disagree may hold some truth, but even so if you lose even 10% in each round that sticks with an old fork for ideological reasons, then you have created 16 currencies over the first fork and 2 consequent decisions in each fork - while losing a good chunk of people in the process and preventing a whole lot of others from coming onboard due to the constant "cell division" in each "democratic rift" or "free market choice" or whatever term one may use. It's a weird mechanism.

It's a united we stand / divided we fall situation.

Now you are arguing that the market is broken because you can never be in the top 1500+ bidders (1500+ txs that go through)?

That's impossible.


It would depend on what others are paying at a certain time. It's not fixed in time. That much is obvious.

My postal service has at least 3 different speeds. A priority, B priority and express. And I can also use private courier for even faster. So 4 types of fees for 4 different delivery speeds.

If I don't care about the speed, I'll go second priority. If I do, I'll pay the premium. It's that simple.

There's no entitlement that I can produce all kind of spam and they have to be included in one or a few blocks (for peanuts).

You pay the fee, you are in. In a timely manner.

https://blockchain.info/charts/avg-block-size?timespan=30days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

Avg seems to be at around 0.63 - 0.65mb right now.

This means the protocol can accommodate an increase of an extra 53-58% in txs (and that includes dust and spam txs like the ones we have now).

The real question is why miners aren't mining these transactions to get to the limit. Why are they issuing empty blocks, why don't they even care to change the 750kb parameter to 1mb etc etc. The obvious answer is because the fee incentives are too low, so why should they?

So, one could argue that while the free market partially works regarding miners and transaction mining (some miners don't care to mine everything), an increase in block size is in effect a valve-relief / bypass of the free market.

1.The protocol allows 1mb
2. Miners mine up to 0.65mb because some don't feel incentivized enough and want to mine empty or 750kb blocks - so due to the lack of fee incentives, the extra 53-58% capacity is unrealized
3. The solution would be a free market one (people pay more fees / miners start mining transactions until we reach 950-980kb on avg), instead some developers create a free market bypass-valve, increasing block size to 3x our current level of txs.

I wonder how much this rationale can "scale" if miners start rejecting more and more transactions for mining due to low tx fees. Can the solution be "ah yeah, fuck the 90% of the network that doesn't even mine, we'll simply raise the block size for the rest of the 10% of the miners who actually mines transactions"? I guess we'll find out.

On the other hand, if, say, Chinese miners have an extra incentive to mine large blocks because they have like 60-70% hashrates and the slow propagation to the rest of the world would put them into a superior position, they might even have an incentive to mine all kind of junk for free and then emit full blocks which get insta-verified through the Chinese "intranet" but make all other irrelevant because they are too slow to catch up. Thus you get a bloating incentive

I've read a counterargument, like the one Hearn says, about China not wanting big blocks due to the great firewall etc - but most of them more or less signed up for classic, didn't they? So I guess if they are confident due to their supermajority and that intra-Chinese propagation will be a peace of cake, then why worry about block sizes? It's the rest of the world that would have to worry about them. And I'm not sure I even understand 5% of the depth of the problem in all its angles and dimensions.

Now you care about miner compensation and network security? Weren't you the one complaining that you don't want to pay fees because you've bought the right to transact when you bought your coins, etc etc?

High fees = "fuck core devs"
Low fees = "fuck core devs"

For real?

Well, I'm not debating core devs here, rather their "attackers".

All this time I was hearing "ohhh core people are bad, they want to price squeeze out the small guy", then I see someone saying to a chinese miner that classic is good for them because lightning will reduce their mining fees in the long run - or something to that effect, and now you saying "ohhh fees will go down" etc.

It seems that people will go to any stretch just to attack core devs. Even when their attackers have flaws in their reasoning because they are attacking both directions (low & high fees), it's still core devs fault for not understanding economics