Analysis and list of top big blocks shills (XT #REKT ignorers)

[Quantus]

The example represents a severe performance bug in the bitcoin core software and should be fixed by software changes that make an inefficient operation efficient or restrict very large transactions if this proves too difficult. There is no reason to limit blocksize because of this.

This guy gets it. Unbounded memory use, as well as poorly designed propagation methods are  issues that should be addressed by code review, not by adding layers of complexity.

When you look at it from this perspective, you see how the whole 'scaling debate' is being jury rigged to deliver a fundamentally altered version of Bitcoin that suits one particular commercial interest.

You can put away your tin foil hat there is no conspiracy to gimp Bitcoin. These are hard problems facing the community and will not be solved by a few lines of code.
Hubris is needed to take on these challenges but it will not help us in solving them. 

[bargainbin]

^^^

>no conspiracy to gimp Bitcoin
No one's talking about a conspiracy to gimp Bitcoin. On the other hand, if the devs work for a company that makes hot dog rolls, and there's a tossup between what to serve for lunch -- burgers or hot dogs, which do you suppose they'll chose?

>hard problems ... will not be solved by a few lines of code
Why not? Increasing the blocksize is how many lines of code?

[johnyj]

My fear is that people who want the settlement layer to be more like a payment layer are like people who want to build computer games out of an assembly language. We need payment layers, not to turn the settlement layer into something that it is not.

I suppose it is good PR to say that this is all a debate over whether we should make Bitcoin usable or not, but let's be honest, this debate is about how we think we should make bitcoin usable. Do we try to make bitcoin itself super-usable at the potential expense of its reliability and trustworthiness? Or do we try to create layers on top of bitcoin that preserve bitcoin's trustworthiness and yet also provide usability via those layers? (A common analogy, do we try to improve the internet to the point where everyone suddenly gets that it is useful, or do we develop layers on top of the internet, like the Web, that make its usefulness obvious?)

My argument is this: Money systems depend on trust and usability, one cannot exist without the other, just as the OP said. However, if we try to merge trust and usability into one system, we risk a situation where the system lacks both. It will still be difficult to use, and yet people won't feel it is a safe place to put their money either. In other words, it will remain exactly as it is today. Modern money systems don't work that way and neither should bitcoin.

Layered tiers of a monetary system is foundational to how modern money works. The "M"s designation of different types of money --m0, m1, m2, etc -- is meant to represent these layers. The further up you go in layers, the faster the money becomes, but also the less dependable and trustworthy the money becomes. Likewise, base money, like cash, is slow and cumbersome, yet it is the most trustworthy form of money in an economy. In the modern economy, cash is considered real money and more real and dependable than bank credit. If the banking system experiences a crisis, bank credit could become worthless overnight, whereas cash will only rise in value. So there is an intrinsic tradeoff to having fast money and that is that it becomes less reliable money. Same was true back in the days when banknotes were backed by gold. The physical note was a faster, more liquid form of money. Gold was cumbersome and slow but more trusted and dependable.

"Settlement layer" is just another way of saying "base money." They are really the same thing. The reason a layer is the settlement layer is precisely because it is made out of base money, i.e., real money. If I went to you and said, "look, I promise I'll swing buy and pay you $100 in cash tomorrow" that would be the payment layer. It is fast, but it lacks trust because ultimately real money hasn't been transferred until I actually pay you in hard cash. When I do pay you in hard cash, that is called settlement. Settlement layer simply refers to people or institutions concluding all promises to pay with actual payment. So the settlement layer is actually just base money. In the modern financial system, when you pay someone with cash, you are using the settlement layer.

A settlement layer is the fundamental monetary force behind the economy. In the modern system, the settlement layer is institutionally controlled by the central bank. They are the ones who have the sole right to create cash, and as such money held in the central bank is considered as good as having cash. Only commercial banks are allowed to hold accounts with the central banks and all settlements between commercial banks are mostly concluded by transferring money held in accounts at the central bank. That is to say, for all intents and purposes, the central bank is the settlement layer in the modern system.

Bitcoin functions as a central bank. It could, in theory, replace central banks. It prints base money, called 'bitcoins,' which is then hands out to the miners who are the equivalents of the commercial banks. In the Bitcoin system, miners are bankers. The central bank, Bitcoin, then is ultimately controlled by the collection of those miners who can decide to set Bitcoin policy. This is exactly how the modern banking system works, the bankers collectively decide on how the central bank should set policy.
Many people think of banks as a place people store their money for safe keeping, and then the bank uses that money to make more money and spark growth in the economy through lending. However, what people forget is that the power of banks comes not from the fact that people give them money, but from the fact that they hold base currency. Today, most base currency held by banks comes from the central bank printing it and handing it to them, not from people depositing it. In fact, most people don't deposit cash into banks anymore, they just move bank credit around. By having large sums of base currency, banks can settle with other banks and neither bank needs to be concerned with the internal affairs of the other.

In other words, banks allow consumers and the larger economic system to use money off-chain, so to speak, that is their function, always has been. Then they settle accounts at the end of the day on-chain, that is to say at the settlement layer. It is precisely this power that allows them to lend (i.e., create broad money) and creates the varied payment networks. If all transactions had to be done through the central bank then that one bank would control everyone's money and decide who deserved loans and who didn't. It would be a centralized economy on steroids, the financial system wouldn't exist. By not trying to let the central banks do everything, the monetary system was allowed to become robust. (Obviously, it is corrosive and needs to be replaced by something better, but one can't deny that the modern financial system has been a huge success even if it is nearing the end of its days.)

Furthermore, a global central bank, Bitcoin, is simply not going to work unless it is trusted by everyone. And it won't be trusted by everyone unless it is considered fair. Trust in a global central bank is not going to be there if it is perceived as being controlled by someone untrustworthy. If someday the majority of miners work for the Chinese government, how much trust can there really be in bitcoin by people living in other countries? Decentralized control is the only way to achieve a global central bank. But my understanding is that increasing the block size can potentially lead to increased incentives for mining centralization, precisely the opposite of what we want. And once a high degree of centralization occurs, since the miners must approve future changes, what can get us to reverse course? This would weaken the inherent trust in the base currency that comes from the decentralization of control. Put simply, raising the block size limit threatens to undermine the foundation of the bitcoin system which is decentralization, resulting in a less trusted base currency. Since trust is the most important feature of base currency, this isn't something people should take lightly.

Off-chain transactions, payment layers, allow for the growth of a more decentralized ecosystem around the base layer as well as the emergence of cryptocurrency banking and lending, and more widespread use of 2.0 tokens and currencies built on top of bitcoin. By creating payment layers you will far outstrip what base bitcoin can ever achieve in terms of usability left to its own devices. This is because the whole role and purpose of payment layers is to increase usability, and if that is how they are financially incentivized, they will come up with the best solutions and thus open the doors for mass adoption. You get both a profoundly trusted base layer, and a decentralized, competitive market for payment layers and usability, all rooted in a non-state, non-institutionally controlled currency. By not constricting the system to ONLY base money, broad money creation can allow for an explosion in the bitcoin ecosystem and innovation around the use and control of that broad money.

On the other hand, raising the block size limit increases mining centralization, reducing trust in the base currency, but doesn't increase incentives for profiting from innovation around increased usability solutions, thus limiting banking and lending innovation. Essentially, it keeps bitcoin where it is today, stagnating under the weight of the fact that people don't really need it and it is not really a safe place to keep your money. The killer app for bitcoin hasn't been invented yet, raising the block limit helps to assure that it never will be. This is precisely because the future killer apps are the payment layers and all that comes with them. When Bitcoin achieves a profound level of usability from the payment layers, and a high degree of trust from its decentralized base settlement layer, it will be completely unstoppable. But if you water down the decentralization and think the current system, just with a larger block size limit, is good enough as a payment system ... we will never get past where we are today.

This is a quite bit of overview here

It is very attractive and simple that anyone can just download a software and start to use bitcoin. That part of user experience has to be maintained. Lightning network could be an approach since it still uses blockchain, not entirely offchain. But I'm afraid the level of complexity will preventing people from reaching consensus, besides that it still requires blockchain to handle 100MB blocks. If we go for offchain solutions then 1MB blocks will be more than enough

New users are all directed to hundreds of web wallet and exchanges, so they can have low fee and fast confirmation, what is the problem with that

[fisheater22]

[...] On the other hand, raising the block size limit increases mining centralization. [...]

So instead of 9 people controlling 99% of the hashrate, only how many?

There is no reason for bitcoin not to be an all in one package someday but right now there is not enough demand to support a low fee and high transaction network.

"Right now" the miners are subsidized by block rewards, not tx fees.
VVV

[Quantus]

There is no reason why bitcoin can't be the all in one package we all want it to be someday but right now there is not enough demand to support the network with low fees.
We should only raise the block size in minuscule increments to keep fees high enough to support a robust mining community.

[hdbuck]

I'm actually downloading the blockchain. #paininthears

[VeritasSapere]

There is no reason for bitcoin not to be an all in one package someday but right now there is not enough demand to support a low fee and high transaction network.

That is because Bitcoin was always meant to be bootstrapped by the block reward initially, there is no need for us to "force" Bitcoin into a settlement network in order to solve this issue now. If the adoption curve continues as it has so far, and we are able to increase the blocksize as adoption increases and technology does as well. Then we can continue along this course and within a few decades we will have a high volume low fee network, in the meantime we get the advantageous of low fees and the adoption and use that this promotes. While increasing decentralization, security and financial freedom more then the alternative paths would.

Higher Service prices can negatively impact system security. Bitcoin depends on a virtuous cycle of users boosting and maintaining bitcoin's network effect, incentivizing miners, increasing security. Higher prices that reduce bitcoin's user count and network effect can have the opposite impact.

It is a valid and rational economic choice to subsidize the system with lower fees in the beginning. Many miners, for example, openly state they prefer long term system growth over maximizing tiny amounts of current day income.

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.

[hdbuck]

There is no reason for bitcoin not to be an all in one package someday but right now there is not enough demand to support a low fee and high transaction network.  

No, currently the protocol would not allow lowfee spam transactions if it was not for adoption rate vs. fiatleakage.

People have been brainwashed with the antonopoulos #bitcoinfoundation(scammers) propaganda that bitcoin is somehow competing with paypal.

That was a funny move, getting attention, funding and all, but technically it is irrelevant.

It is simply not true with the actual and historical bitcoin protocol's parameters, that has been consensually adopted for more than 5 years now. (and whilst building trust and value around it).

Sorry for the noobs that only catch up now, but it is wake up time.

[Quantus]

I do not support the LN or any 3rd party settlement layers, I support a Bitcoin as a all in inclusive package, micro transactions with low fees, anonymity, decentralized mining and nodes, EVERYTHING AND MORE! What I'm saying is we can't afford all of that shit unless we have the demand to pay for it, demand more then 10k times greater then what we have today. YOU can't guarantee beyond a shadow of a doubt we'll ever get there before the money runs out and government agencies take over because our mining community's hardware becomes antiquated because they stop reinvesting in cutting edge hardware!

[Bergmann_Christoph]

I'm actually downloading the blockchain. #paininthears

Yes. I'm so happy I did that back in 2013 and my blockchain survived since than

Why is there no service that sends out the blockchain on an usb-stick? It would make things much easier and I'm thinking about offering this in germany.

[Quantus]

I'm actually downloading the blockchain. #paininthears

Yes. I'm so happy I did that back in 2013 and my blockchain survived since than

Why is there no service that sends out the blockchain on an usb-stick? It would make things much easier and I'm thinking about offering this in germany.

holly fuck balls that the worst idea ever. USB virus hello?

[Bergmann_Christoph]

There is no reason why bitcoin can't be the all in one package we all want it to be someday but right now there is not enough demand to support the network with low fees.
We should only raise the block size in minuscule increments to keep fees high enough to support a robust mining community.

I like your point.

Except that right now the network should not be supported by fees but by the block reward.

[Bergmann_Christoph]

I'm actually downloading the blockchain. #paininthears

Yes. I'm so happy I did that back in 2013 and my blockchain survived since than

Why is there no service that sends out the blockchain on an usb-stick? It would make things much easier and I'm thinking about offering this in germany.

holly fuck balls that the worst idea ever. USB virus hello?

ok ... it doesn't work commercially.

But I'm a trusted source and I'm in close contact to other very trusted sources.

That's the advantage of small markets.

[Quantus]

There is no reason why bitcoin can't be the all in one package we all want it to be someday but right now there is not enough demand to support the network with low fees.
We should only raise the block size in minuscule increments to keep fees high enough to support a robust mining community.

I like your point.

Except that right now the network should not be supported by fees but by the block reward.

Your missing my point completely transaction fees + block rewards are more or less = to the amount of money reinvested in hardware to mine bitcoins. As the block rewards drop in these massive chunks every 4 years so dose the amount we as a network spend on security. Let me be clear Block rewards account for the majority of this and with each halving day we lose more or less 50% of our network security. The fees the network gathers today are virtually worthless, some miners don't even bother processing transactions because its not worth their time.  This house of cards will collapse unless we can secure stable income for the miners now!

[Bergmann_Christoph]

There is no reason why bitcoin can't be the all in one package we all want it to be someday but right now there is not enough demand to support the network with low fees.
We should only raise the block size in minuscule increments to keep fees high enough to support a robust mining community.

I like your point.

Except that right now the network should not be supported by fees but by the block reward.

Your missing my point completely transaction fees + block rewards are more or less = to the amount of money reinvested in hardware to mine bitcoins. As the block rewards drop in these massive chunks every 4 years so dose the amount we as a network spend on security. Let me be clear Block rewards account for the majority of this and with each halving day we lose more or less 50% of our network security. The fees the network gathers today are virtually worthless some miners don't even bother processing transactions because its not worth their time.  

Was the network more secure in 2012 when block reward was 50 btc?

The network is growing, and with the network the price growth and with the price the reward growth. At the end of the second reward era with 25 BItcoin, every miner will earn in dollar about 40x as much as at the beginning in early 2013.

Mining is a zero-sum-game. Miners will never get enough.

I understand that the halving will have a negative effect on mining, since everyone mines at margin profit and when the reward drops, it will drive people out of mining. But at the moment, there is no chance that the fee will balance this out. We'll have to face it.

Edit: And I like your point that

right now there is not enough demand to support the network with low fees.

and

We should only raise the block size in minuscule

Both I think is true - which is no reason for me to have another oppinion on fee policy etc.

[VeritasSapere]

There is no reason why bitcoin can't be the all in one package we all want it to be someday but right now there is not enough demand to support the network with low fees.
We should only raise the block size in minuscule increments to keep fees high enough to support a robust mining community.

I like your point.

Except that right now the network should not be supported by fees but by the block reward.

Your missing my point completely transaction fees + block rewards are more or less = to the amount of money reinvested in hardware to mine bitcoins. As the block rewards drop in these massive chunks every 4 years so dose the amount we as a network spend on security. Let me be clear Block rewards account for the majority of this and with each halving day we lose more or less 50% of our network security. The fees the network gathers today are virtually worthless some miners don't even bother processing transactions because its not worth their time.

I already explained that we do not lose fifty percent of our security at the halving, since the exchange rate also effects this dynamic, after all security was not reduced after the last halving. It would only take sixty times the transaction volume we have today to match the block reward we have as well, this can take a longer period of time since we do still have a block reward subsidy in place to bootstrap Bitcoin for the next few decades, we do not need to sacrifice all of these use cases and characteristics of Bitcoin to pay for security, it is exactly these use cases and characteristics of Bitcoin that will pay for its security going into the future.

[Fatman3001]

There is no reason why bitcoin can't be the all in one package we all want it to be someday but right now there is not enough demand to support the network with low fees.
We should only raise the block size in minuscule increments to keep fees high enough to support a robust mining community.

I like your point.

Except that right now the network should not be supported by fees but by the block reward.

Case in point:

Latest block:
Block 392,882
926.84kB
Transactions 658
Block value 1294.14 BTC
Fees 0.1111 BTC

With block reward at 25BTC...

There's a long way to go, and blackmailing early adopters might be a bad move.

[BlindMayorBitcorn]

There is no reason why bitcoin can't be the all in one package we all want it to be someday but right now there is not enough demand to support the network with low fees.
We should only raise the block size in minuscule increments to keep fees high enough to support a robust mining community.

I like your point.

Except that right now the network should not be supported by fees but by the block reward.

Case in point:

Latest block:
Block 392,882
926.84kB
Transactions 658
Block value 1294.14 BTC
Fees 0.1111 BTC

With block reward at 25BTC...

There's a long way to go, and blackmailing early adopters might be a bad move.

So virtually no fees. Wowow. I had no idea.

[Quantus]

There is no reason why bitcoin can't be the all in one package we all want it to be someday but right now there is not enough demand to support the network with low fees.
We should only raise the block size in minuscule increments to keep fees high enough to support a robust mining community.

I like your point.

Except that right now the network should not be supported by fees but by the block reward.

Your missing my point completely transaction fees + block rewards are more or less = to the amount of money reinvested in hardware to mine bitcoins. As the block rewards drop in these massive chunks every 4 years so dose the amount we as a network spend on security. Let me be clear Block rewards account for the majority of this and with each halving day we lose more or less 50% of our network security. The fees the network gathers today are virtually worthless some miners don't even bother processing transactions because its not worth their time.

I already explained that we do not lose fifty percent of our security at the halving, since the exchange rate also effects this dynamic, after all security was not reduced after the last halving. It would only take sixty times the transaction volume we have today to match the block reward we have as well, this can take a longer period of time since we do still have a block reward subsidy in place to bootstrap Bitcoin for the next few decades, we do not need to sacrifice all of these use cases and characteristics of Bitcoin to pay for security, it is exactly these use cases and characteristics of Bitcoin that will pay for its security going into the future.

It costs less for an attacker today to conduct a 51% attack then it would have 4 years ago. You see hardware becomes cheaper and cheaper but as the block reward drops so dose reinvestment. Soon we well reach a plateau were miners invest less and less and at the same time hardware will continue to advance, hardware that's forever cheaper and cheaper.  Its under these conditions of low reinvestment and antiquated hardware making up the majority of the network that will allow for a governmental agency or disgruntled corporation to come in with a relatively small amount of money and blow this house of cards down. A irreversible block increase now would most likely devastate the network in 8 years.  Since we can't predict the price nor the demand for bitcoin in 8 years we should do the prudent thing and position the network for a very long and slow growth curve lasting decades.

[Mr Felt]

There is this idea that we must choose between settlement network or payment network, this is a false dichotomy, a false choice. Bitcoin can be both of these things and more, they actually reinforce each other in a synergistic fashion. By attempting to put one above the other you are actually breaking both.

Bitcoin is and can be many different things to different people, there are many coders and engineers who think that we can scale Bitcoin, therefore I think that we should, even if Core thinks that we should not, their reasons for not doing so remains ideological and I have a distinctly different vision for Bitcoin which also happens to align closer to the original vision of its founder as well. I am sure that there are many people that did originally sign up for this original vision and do not appreciate this bait and switch.

I appreciate most of the work done by Core but I do not want a technocratic group of engineers and coders to dictate to us what Bitcoin should become and what its economic policy should be, this should be determined by the market itself instead. I rather have the engineers remind us ideologues of what is possible so that we can then pursue our dreams to create a better world. It is not impossible to increase the blocksize limit, so I reject the notion that we must choose between settlement layer or payment network now.

I think we all want the same thing we deffer only on how to get to that promised land. For some the path is clear, larger blocks. For me and others the path we walk of larger and larger blocks with insufficient fees leads to network collapse.

If the blocks become larger it implies that there is increased adoption and use of Bitcoin. A high volume of low fee transactions over the long run would actually pay out more for the miners compared to a high volume of low fee transactions. The idea that if we increase the blocksize over time as the technology allows as it improves would lead to the network collapsing is not supported by the facts.

If we had a sixty four megabyte blocksize limit for instance with the same fees per transaction payed out today it would already exceed the present block reward. It is not impossible to have blocks this large, in a decade from now it might even seem trivial. It would even take BIP101 eight years to reach this point, and the newly proposed Bitcoin Classic more then twelve years. Most of the other blocksize limit increase proposals are even more conservative then this, which is fine. My point being is that a high volume of low value transactions can pay for the networks security and this would not lead to the network collapsing as you claim, especially as the limit is slowly increased as our technology improves.

Your post, which I tend to agree with, raises a related question I have. 

In a world where the block size is capped at X and demand for block space is greater than X, there are no guarantees a particular transaction broadcast to the network will settle/verify.  In that world, a transaction verifies I.F.F. its included in a block, which may be due in large part to the fee paid rather than the order of broadcasting. So, there is uncertainty with these transactions RE: settlement completition and time of settlement.  Now also imagine this capped block size world is one where folks think Bitcoin should be a settlement network for high-dollar transactions like houses, land, cars, etc. and not everyday purchases.  Consider that often times, these types of big-ticket purchases also involve a title transfer/registration with and of the property purchased, and that title transfers are often based in law going back centuries (just look at any jurisdiction's real property statutes - including statutes on conveyancing and  recording; common law; and the UCC on the perfection of security interests). Hint: Time of conveyance/recording is critical to perfecting a property right.  So, in this world, where timing is everything, what professional is going to recommend using bitcoin to facilitate the transaction with so much uncertainty?   I think everyone interested in the block size debate outcome, whatever position that is, would really benefit from taking a step back and thinking about who the end user is supposed to be and how the Bitcoin protocol is supposed to compliment and work with existing businesses, industries, customs, and laws (its not going to work to just burn everything and start over from nothing).