New Solution to Block Size Debate

[coins101]

Blocks sizes could be based on a dynamic model, say a moving average.

This allows for block size re-targeting.

If transactions keep going up, miners can still earn fees on the leading edge cases, but eventually block sizes will go up to accommodate the majority of transactions.

If the network sees a quiet period, blocks can scale back down, again letting miners earn some fees.

How the re-targeting model should work.....err, that's above my pay grade.

Nobody is talking about increasing the block size - only the maximum block size.  The idea that "blocks can scale back down" in a "quiet period" is not new.  Block sizes automatically vary based on the number of outstanding transactions, and the miner's preferences.  If the limit were changed to 20MB today, it would absolutely, positively have ZERO immediate effect on the block sizes.  They'll continue to be only as large as they have to be.  The only difference that raising the limit will have is that when more than 1MB is needed for a particular block (will likely happen at least a few times this year), the transactions won't have to queue.  That's it.

Hey, thanks for the clarification.

I didn't need it  

Increasing blocks to 1GB could still see blocks with 400kb transactions.

Some of the miners care about earning fees. Keeping block sizes dynamic could mean that there is always someone prepared to pay a fee to have their transaction processed a bit faster, as the network would be constantly working to stay just ahead of peak transaction demand.

From 1mb blocks in 2016 to 100GB blocks in 2100, it would be a just-in-time model.

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[Klestin]

Some of the miners care about earning fees. Keeping block sizes dynamic could mean that there is always someone prepared to pay a fee to have their transaction processed a bit faster, as the network would be constantly working to stay just ahead of peak transaction demand.

If miners want higher fees, they have the ability right now to get them.  They can set whatever fee policies they like and include only those transactions that meet the requirements.  Transactions that don't meet them are slower to process since they have to way for a more lax miner to include them.  It's a free market system between transactors and miners.  Artificially limiting the block size is completely unnecessary for fee control.  However, with the current 25 BTC reward, the transaction fees are entirely inconsequential.  The miners realize this, and so the current rules they endorse are lax when it comes to fees.  Therefore the entire discussion of fees is moot.

Let me guess, you didn't need this clarification either?  And now you want to move on to yet a third reason why the 1MB limit is the way to go?

[SuperClam]

Some of the miners care about earning fees. Keeping block sizes dynamic could mean that there is always someone prepared to pay a fee to have their transaction processed a bit faster, as the network would be constantly working to stay just ahead of peak transaction demand.

If miners want higher fees, they have the ability right now to get them.  They can set whatever fee policies they like and include only those transactions that meet the requirements.  Transactions that don't meet them are slower to process since they have to way for a more lax miner to include them.  It's a free market system between transactors and miners.  Artificially limiting the block size is completely unnecessary for fee control.  However, with the current 25 BTC reward, the transaction fees are entirely inconsequential.  The miners realize this, and so the current rules they endorse are lax when it comes to fees.  Therefore the entire discussion of fees is moot.
Let me guess, you didn't need this clarification either?  And now you want to move on to yet a third reason why the 1MB limit is the way to go?

Larger blocks (with more kB of tx data) propagate across the network more slowly, increasing the risk of the new tip becoming an orphan.
There is a direct cost to the miner of including additional transactions within the block - lost subsidy rewards (hence empty blocks).

Given this, an intelligent miner (many do not bother) should reach a point of equilibrium, given enough data, at which the risk of lost income due to increased orphan risk is out-weighed by the increased income of including an additional kB of tx data.


I may be mistaken, however, it appeared to me that the OP was suggesting that a fee market (resulting in larger tx fees, and hence a higher equilibrium) might be able to be sustained in concert with a clearing mechanism (in this simplistic case, a single block without limit).

The argument would be that the fee market would exist for high priority transactions which need to "clear"/confirm next block, yet the end-of-days argument that the mempool would then infinitely accrue could be satisfied with the periodic unlimited size block.

[Hyena]

I simply do not understand why miners would be against the larger maximum block sizes. The argument that including more unconfirmed transactions in a block gives the miner a disadvantage is a pseudo argument because miners can still choose what number of TXs to include in a block.

Let's say I'm a whiny little bitch miner with very shitty bandwidth. Even though the maximum block size is 8MiB I deliberately only include no more than 1MiB of TXs in a block that I'm mining. How does the bigger block size impact me negatively then?

The blocks that others have found may be bigger than 1MiB so downloading them could cost me some time. However, do I really have to download the full 8MiB block in order to start mining the next one? I am sure it is technically possible to only download the hash and the proof of work of the latest block (block header?) and I can already start mining the next block. So, what's the big problem? Until I don't know which exact TXs from my mempool were included in the latest block I can mine on an empty block (being a selfish little bitch that I am) and still get my profit.

So fuck you miners and fuck you chinise exchanges who want to harm bitcoin by opposing every improvement to the protocol no matter what. I am absolutely sure that those people are against improvements because they have released their own pathetic shitcoin and now they see bitcoin as a rival.

By the way, I have another idea of improving Bitcoin in the context of blocks getting full and backlog building up: TRANSACTION FEE AUCTIONS.

How does it work? The network must allow double spends with a small exception: it must be possible for the user to override their old transaction with a higher TX fee. That way the client can be shown real time mempool ordered by the TX fees. The user will see their TX in that ordered list and the rank of their TX. The list should separate TXs that fit into the maximum block size and the TXs that are probably going to be left out from the next block. The user must have a possibility to override their old transaction by making a new one with a higher TX fee, so that their TX will move up in the list. This situation will then look like an auction.

Technically, it would be rather simple improvement. When a bitcoin node receives a double spend, it checks whether the outputs and the output amounts of that double spend are exactly the same. The node then checks which TX has a higher TX fee and forgets the other TX. In case the previous TX had a smaller TX fee than the new one, the node will propagate the newly received TX as an update to the TX fee auction.

[bitnanigans]

Better to not have any hard limit at all, and allow a configurable soft limit for miners.

[Hyena]

Better to not have any hard limit at all, and allow a configurable soft limit for miners.

That's a good idea. Miners protect the network so let miners decide how big blocks to allow.

edit:
the max size was implemented because of paranoia and not because of any real reason

[Muhammed Zakir]

Better to not have any hard limit at all, and allow a configurable soft limit for miners.

That's a good idea. Miners protect the network so let miners decide how big blocks to allow.

edit:
the max size was implemented because of paranoia and not because of any real reason

Not true. It was added because of excessive spam transactions. Also see http://bitcoin.stackexchange.com/a/37303.

[Klestin]

Better to not have any hard limit at all, and allow a configurable soft limit for miners.

They already have direct control over the size of the blocks they mine, up to the hard limit of 1MB.  Increasing the limit to 20MB does not remove their ability to set whatever size they want, from 0 to 20MB.

[Hyena]

Better to not have any hard limit at all, and allow a configurable soft limit for miners.

That's a good idea. Miners protect the network so let miners decide how big blocks to allow.

edit:
the max size was implemented because of paranoia and not because of any real reason

Not true. It was added because of excessive spam transactions. Also see http://bitcoin.stackexchange.com/a/37303.

False. Miners could have chosen not to include spam tx-s in the blocks. Your argument is invalid. It was paranoia and hardcoding a max size was a kludgy hack that could have been solved on a different level by the means of prevention. Hardcoding a max block size is fighting with the symptoms and that is just a pathetic means to solve a problem.

[Muhammed Zakir]

Better to not have any hard limit at all, and allow a configurable soft limit for miners.

That's a good idea. Miners protect the network so let miners decide how big blocks to allow.

edit:
the max size was implemented because of paranoia and not because of any real reason

Not true. It was added because of excessive spam transactions. Also see http://bitcoin.stackexchange.com/a/37303.

False. Miners could have chosen not to include spam tx-s in the blocks. Your argument is invalid. It was paranoia and hardcoding a max size was a kludgy hack that could have been solved on a different level by the means of prevention. Hardcoding a max block size is fighting with the symptoms and that is just a pathetic means to solve a problem.

It is hard to predict who mines next block and we can't enforce miners to include or exclude certain transactions. OP_RETURN was also used to spam blockchain and your argument of miners choosing is invalid IMHO.

[Hyena]

It is hard to predict who mines next block and we can't enforce miners to include or exclude certain transactions. OP_RETURN was also used to spam blockchain and your argument of miners choosing is invalid IMHO.

Oh and now we have much better situation, right? I'd say that miners choosing the block size is the lesser evil. Miners could also combine their power and make a 51% attack, think of that. Miners have the ultimate power either way. They can mine zero tx blocks if they want to, they can decide what TXs to include and what not even though we have the max block size limit. Right now bitcoin is heading towards slow and painful death due to Satoshi's paranoia and distrust for miners. HOW ON EARTH CAN YOU DISTRUST MINERS IF THEY SECURE THE NETWORK?!

There's also a possibility to vote with your bitcoins what the block size limit should be and that voting can be included in the block chain itself. Take a look at NuShares and how shareholders pass motions in their network. The votes are stored in the block chain and the protocol counts the votes and decides what the maximum block size limit should be. Miners can vote with their coins that they mine. Bitcoin holders can vote with theirs. We have the technical capabilities to solve this problem democratically and yet  I see people only throwing trash at any improvement suggestions. From this I deduce that you are the traitors of the bitcoin network and should be banished from bitcoinland forever.

[Muhammed Zakir]

It is hard to predict who mines next block and we can't enforce miners to include or exclude certain transactions. OP_RETURN was also used to spam blockchain and your argument of miners choosing is invalid IMHO.

Oh and now we have much better situation, right? I'd say that miners choosing the block size is the lesser evil. Miners could also combine their power and make a 51% attack, think of that. Miners have the ultimate power either way. They can mine zero tx blocks if they want to, they can decide what TXs to include and what not even though we have the max block size limit. Right now bitcoin is heading towards slow and painful death due to Satoshi's paranoia and distrust for miners. HOW ON EARTH CAN YOU DISTRUST MINERS IF THEY SECURE THE NETWORK?!

Out of curiosity, have you at least took the time to read old discussions to know why a limit was set? I am not distrusting miners, instead, I am telling it is a security measure. Bitcoin is still vulnerable to DOS. FYI I am not telling we should not raise block size limit. I am only falsifying your statement "limit was set without any reason".

There's also a possibility to vote with your bitcoins what the block size limit should be and that voting can be included in the block chain itself. Take a look at NuShares and how shareholders pass motions in their network. The votes are stored in the block chain and the protocol counts the votes and decides what the maximum block size limit should be. Miners can vote with their coins that they mine. Bitcoin holders can vote with theirs. We have the technical capabilities to solve this problem democratically and yet  I see people only throwing trash at any improvement suggestions. From this I deduce that you are the traitors of the bitcoin network and should be banished from bitcoinland forever.

I don't that would be a secure way. People owning big amounts could easily alter it. CMIIW.

[Hyena]

I am only falsifying your statement "limit was set without any reason".

That was not my statement. Bitcoin has always been and will always be vulnerable to some kinds of theoretical attacks. If miners wanted to, they can do all sorts of nasty things to the network. Satoshi's decision was fighting with the symptoms and was never a good solution for the long term. I agree that when the network was young it was sort of a safety measure similarly to having block chain check points hardcoded into the protocol. These days are over now, it's time to grow up and ditch those safety wheels.

I don't that would be a secure way. People owning big amounts could easily alter it. CMIIW.

Holy shit, people owning big amounts of shares in any company are also in advantage when voting for change. That's how it's supposed to be. You have more coins, that means you're a bigger stakeholder and your vote must count more.

[Muhammed Zakir]

I am only falsifying your statement "limit was set without any reason".

That was not my statement. Bitcoin has always been and will always be vulnerable to some kinds of theoretical attacks. If miners wanted to, they can do all sorts of nasty things to the network. Satoshi's decision was fighting with the symptoms and was never a good solution for the long term. I agree that when the network was young it was sort of a safety measure similarly to having block chain check points hardcoded into the protocol. These days are over now, it's time to grow up and ditch those safety wheels.

DOS attack is a practical one. Like I said, I am not against increasing block size limit but I am against removing block size limit. You didn't answer this:

Out of curiosity, have you at least took the time to read old discussions to know why a limit was set?
 -snip-

I don't that would be a secure way. People owning big amounts could easily alter it. CMIIW.

Holy shit, people owning big amounts of shares in any company are also in advantage when voting for change. That's how it's supposed to be. You have more coins, that means you're a bigger stakeholder and your vote must count more.

Not for Bitcoin. With this, an organization or a person can easily control Bitcoin and do in their way without consensus. This must not be for Bitcoin.

[Hyena]

DOS attack is a practical one. Like I said, I am not against increasing block size limit but I am against removing block size limit.

You are probably right.

You didn't answer this:

Out of curiosity, have you at least took the time to read old discussions to know why a limit was set?
 -snip-

I wonder why, I wonder why

Not for Bitcoin. With this, an organization or a person can easily control Bitcoin and do in their way without consensus. This must not be for Bitcoin.

But at what cost?!! Do you have any idea how much would it cost to buy more than 50% of all bitcoins? I guess not.