After having just noticed and read the
"Measuring Decentralization" article by Paul Sztorc (thanks to RoadTrain's signature), I must admit that there are more (hidden) variables to Bitcoin's success equation than what's available on the surface.
One of those is the ability to run a node over the Tor network, which I largely disregarded (as not being a Tor user myself) in my previous considerations. Although, it's unclear whether the ability to validate blockchain anonymously would continue to play an important role in Bitcoin's future, it definitely has been a measurable part of Bitcoin's successful past.
Second, my main argument for block size increase was related to not letting the competition get ahead while maintaining similar properties to Bitcoin. However, considering the
current state of affairs and some
reasonable arguments of why this would be hard (though not impossible) to achieve in principle, I'm concluding that there is no sense of urgency in dealing with the issue.
Third and probably the most important of all, as we are considering the idea of rising but keeping the limit (and I'm definitely a pro-limit guy), we must let the current one do its job! What I'm saying is that if the original 1MB limit put there by the founder himself doesn't hold any water if pushed ever so slightly, then what can be expected from any other limitation we agree upon down the road. And Bitcoin without the limit on block size would begin sliding in the direction from where it would become impossible to pull back.
Now, with that in mind, I'm still very positive about increasing the block size limit to 8MB. The only uncertainty that remained unaddressed up until now was "when" and it seems that we can still play a waiting game, while working out a solid plan to scale Bitcoin with all things considered.
What happens if we (small bitcoiners) refuse to accept the change within a year, for example? Are large miners, exchanges and payment processors going to come together and overthrow the current rules? Can they do that? What are our options then? We can come here and shout at each other and show how pissed we are, of course, but it turns out that the only action that matters in the situations like these would be to download the software, setup and run a full node at home with the rules that allow you to continue to do that. And, I guess, the current rules are the only ones which satisfy that condition.
What else can happen? Businesses can divert their attention to competing alts with similar properties and begin pumping them instead. However, the network effect and the first mover advantage of Bitcoin would likely play some tricks there and the gravity of the original invention would eventually pull them back. In addition to that, SHA256 miners cannot easily switch to any other PoW coin in the TOP10 list, as those use different hashing algos, so they will stay as well.
Though the miners are the only ones who can decide whether to mine on the original chain or the one with bigger blocks, it's the majority of users and large holders who can make the new chain nearly worthless if they
coherently decide to reject it, but as recent debates show people aren't in agreement and often hold potential profit considerations over network's fundamental properties.
Now, having laid that out, I'm still positive (though not certain) that 8MB blocks should be possible by 2020 over home networks in the most developed countries around the world and we can keep that as a good scaling target going forward. Whether we jump straight to 8MB at some point in time or insist on a smoother 2-4-8 approach depends on how much risk we are willing to take in the dimension of "keeping the majority of full nodes at home <-> keeping the network attractive to large businesses <-> keeping the network attractive for internal competition".
As the closest PoW competitor to Bitcoin allows to push 4x the transactions (in theory) there is no point in increasing the limit to anything that is at least twice that (to justify the risk of a hard fork), because (in my view) it's the competition from similar systems that is the real driving factor for a change. If it's shown that altcoins cannot increase their effective volumes, while Bitcoin maintains the current limit, then they present no real threat to Bitcoin at all. If they do begin gaining momentum as transactional mediums and as a result increase their overall capitalizations, then Bitcoin might need to react accordingly and derive the timing for its transition from the speed at which competitors are closing the gap.
All in all, the question still remains.
Will Bitcoin stay at home or move out into the unknown, face the uncertainty, survive and redefine itself?
We all know where "Gr8ness Awaits", but we don't know "When".
Take your time, gentlemen!
