This matter has not been settled at all. Core has made its position rather clear, it is diverting from the original vision of Satoshi. If Core got its way they would block the stream of transactions in favor of off chain solutions. There is presently massive opposition to this move by Core and I suspect that we will see an industry or user led fork rectifying this situation soon.
This is a test of the governance mechanism within Bitcoin. Core should not decide on the future of Bitcoin for all of us. Bitcoin should not rely on a centralized authority in the form of Core to make decisions for us, the market or the economic majority should rule Bitcoin instead, this is best reflected through having multiple alternative implementations to choose from. Since an election with only one choice would be the equivalent to totalitarianism after all. Fortunately we do now have three alternative implementations which will increase the blocksize. BitcoinXT, Btcd and Bitcoin Unlimited.
There is no governance mechanism, everyone is free to start their own implementations like BitcoinXT and then turn it into the official Bitcoin with enough support, but people don't care about it and that's why it's got no nodes running, people is free run nodes for that or not.
What you are describing is the governance mechanism of Bitcoin, that you do not recognize this does not change the fact that there is a governance mechanism in Bitcoin, after all important decisions do still need to be made, and I would not consider all decision making power being concentrated in Core to be a good governance model.
You are arguing a straw man in regards to BitcoinXT, most people in the developed world will still be able to run full nodes in their homes under the schedule outlined in BIP101. Furthermore in regards to the vision of Satoshi, he was a greater big blocks proponent compared to most of us.
Im from the developed world and running a node is a pain in the ass already. Luckily the new version will make it boot faster. In any case, the number of nodes now is already low enough, you don't want to worsen it. More nodes run by different people = more decentralized Bitcoin, I don't need to read a million Satoshi quotes to realize this fact.
You are oversimplifying this issue, node count is not the only important metric in Bitcoin, node count is also effected by adoption and allowing the blocks to fill up rendering transactions unreliable and much more expensive will not be good for adoption over the long run.
I also question the idea of people running full nodes for the banks, payment processors and other large institutions when they can not effectively use Bitcoin themselves because they will have been priced out of the network by these larger institutions that normal people can not compete with. I do not believe we would even reach that point in the first place however since for these large institutions to use Bitcoin there will need to be mass adoption first otherwise it would make more sense for them to build their own systems or just make use of a cheaper, faster and better alternatives that will exist. Essentially what I am saying is that Bitcoin can not become a world reserve currency or a global settlement network without mass adoption from the people first, and that this can not happen with a limited blocksize, since Bitcoin will simply just be out competed, this is basic economics.
Again, a fee market does not fix this, a fee market simply priorities who is able to use Bitcoin and who is not able to use Bitcoin. There are losers in a fee market that become priced out.
Bitcoin users might get increasingly tyrannical about limiting the size of the chain so it's easy for lots of users and small devices.
The full quote sounds like he is saying the opposite
Piling every proof-of-work quorum system in the world into one dataset doesn't scale. Bitcoin and BitDNS can be used separately. Users shouldn't have to download all of both to use one or the other. BitDNS users may not want to download everything the next several unrelated networks decide to pile in either.
The networks need to have separate fates. BitDNS users might be completely liberal about adding any large data features since relatively few domain registrars are needed, while Bitcoin users might get increasingly tyrannical about limiting the size of the chain so it's easy for lots of users and small devices.
He is basically saying that putting everything into the blockchain doesn't scale.. so we need LN. You dont need to be very smart to know that without LN and by raising block size only we will never scale to global levels doing it all on the blockchain, not without node farms which is a no-no.
He is not saying this at all and you are cherry picking this statement in order to falsely imply that Satoshi did not support big blocks when clearly he does. I even agree with his statement here, we can not put all data into the Bitcoin blockchain, this is why we have projects like SJCX and Maidsafe. This is very different compared to blocking the stream of transactions in Bitcoin however because some people believe that Bitcoin is not money and have a radically different vision for Bitcoin. Satoshi did however think that Bitcoin is money and that therefore transactions should be cheap, at least for the first few decades at least.
Bitcoin can scale, this false meme that Bitcoin can not scale is perpetuated by engineers who seem to be stuck in the nirvana fallacy that Bitcoin can not scale because it does not scale efficiently, this is wrong and even a modest blocksize increase can make a huge difference in terms of adoption and the throughput of the Bitcoin blockchain.
Do not be lead astray by the people attempting to convince us that Bitcoin is broken and that they need to fix it. Bitcoin works just fine and we should continue with this experiment and let it run its course.
Disagreements appear rooted more in differing opinions on economics, a specialized field entirely distinct from engineering, programming, and network design.
The block size limit has for the most part not ever been, and should not now be, used to determine the actual size of average blocks under normal network operating conditions. Real average block size ought to emerge from factors of supply and demand for what I will term “transaction-inclusion services.” Beginning to use the protocol block size limit to restrict the provision of transaction-inclusion services would be a radical change to Bitcoin. The burden of proof is therefore on persons advocating using the protocol limit in this novel way.
The idea of using the limit in this new way—not the idea of raising it now by some degree to keep it from beginning to interfere with normal operations—is what constitutes an attempt to change something important about the Bitcoin protocol. And there rests the burden of proof.
Transaction-fee levels are not in any general need of being artificially pushed upward. A 130-year transition phase was planned into Bitcoin during which the full transition from block reward revenue to transaction-fee revenue was to take place.
The protocol block size limit was added as a temporary anti-spam measure, not a technocratic market-manipulation measure.
