Bitcoin Centralization -> Whether Block Size Goes Up or Down !!!

[arcticlava]

I put this out as a serious question:

If the block size is pushed upward, then fewer individuals can afford to mine, and there are centralization risks with mining hardware ownership.

If the block size is kept the same, or pushed downward, then fees increase, and low cost transactions are forced to move off chain, and there are centralization risks. (Examples: BlockStream, Lightning Network service provider).

Assuming that Decentralized Consensus is required for Bitcoin to provide its unique value to the world, which form of centralization is better or worse than the other, and why? Is some “Centralized Consensus” with BTC now mathematically necessary?


Source: James D’Angelo
http://www.slideshare.net/jamesdangelo9883/a-pen-should-write-satoshis-fatal-mistake-wrt-decentralized-consensus

[AliceWonderMiscreations]

If the fees increase it is good for crypto-currencies.

Right now the only crypto-currency easy to get is bitcoin. And right now bitcoin is cheap to use.

That's why the alternative currencies just do not make it. They are harder to obtain than bitcoin (usually bought with bitcoin) and bitcoin is cheap to use.

Now imagine 10x the bitcoin users and the same block size. Demand for space in the blockchain goes up but the supply of space in the blockchain does not. The result obviously is an increase in TX fee to get your TX seen quickly.

That allows alternative coins to fill the need for cheap transactions. Or LN. My bet is that LN is a nice concept but won't be widely used, an altcoin or three will fill the need.

Viable altcoins are good for bitcoin because they will provide true market competition over decentralized currency.

[nikelad]

So that is the reasons why the debate is so hot in recent months. We really nee some extent of tradeoff, or some party need to compromise his ideas for the sake of the bitcoin's ecosystem.

[AliceWonderMiscreations]

Viable alt-coins however would crush the dream of those who bought at < $50 a coin and are holding each coin hoping that one day they will be worth hundreds of thousands.

[Kakmakr]

What James were insinuating is that Chinese miners or mining pools are already causing centralization, because they dominate the hashing power and can effectively do what they want, so no consensus can be reached, until they decide what they will do. He is concerned with the unstable political leader in that country, and the measures he might implement to stop capital flight. < Halting Bitcoin mining > The Chinese already have the advantage of cheap, subsidized electricity and also dominance in the Asic manufacturing. He is also saying other mining farms, outside of China cannot compete or stop the combined power of their Chinese counterparts.

[CoinOur]

What James were insinuating is that Chinese miners or mining pools are already causing centralization, because they dominate the hashing power and can effectively do what they want, so no consensus can be reached, until they decide what they will do. He is concerned with the unstable political leader in that country, and the measures he might implement to stop capital flight. < Halting Bitcoin mining > The Chinese already have the advantage of cheap, subsidized electricity and also dominance in the Asic manufacturing. He is also saying other mining farms, outside of China cannot compete or stop the combined power of their Chinese counterparts.

Any conspiracy theory. How could the Chinese gov subsidize the mining operation? Chinese gov has given warning about bitcoin activities and plan to create their own altcoins.

[arcticlava]

What James were insinuating is that Chinese miners or mining pools are already causing centralization, because they dominate the hashing power and can effectively do what they want, so no consensus can be reached, until they decide what they will do. He is concerned with the unstable political leader in that country, and the measures he might implement to stop capital flight. < Halting Bitcoin mining > The Chinese already have the advantage of cheap, subsidized electricity and also dominance in the Asic manufacturing. He is also saying other mining farms, outside of China cannot compete or stop the combined power of their Chinese counterparts.

If a hostile government halted bitcoin mining in any country, wouldn't this just make mining more profitable for miners everywhere else, and shift the consensus to them? It sounds to me like that would be a good thing.

[Lauda]

If a hostile government halted bitcoin mining in any country, wouldn't this just make mining more profitable for miners everywhere else, and shift the consensus to them? It sounds to me like that would be a good thing.

Technically yes. However, if they took down all the mining in China at once we would have to go through a somewhat difficult period until the difficulty adjusts. After this, the network would be fine.

If the block size is kept the same, or pushed downward, then fees increase, and low cost transactions are forced to move off chain, and there are centralization risks. (Examples: BlockStream, Lightning Network service provider).

This is better because people are still able to support the network themselves and agree to rules by running nodes. There is nothing wrong the second layer; besides LN should/can be decentralized.

We really nee some extent of tradeoff, or some party need to compromise his ideas for the sake of the bitcoin's ecosystem.

The capacity is being increased with Segwit. No compromise is needed at the moment. A block size increase might come after it though.

[franky1]

If the fees increase it is good for crypto-currencies.

Right now the only crypto-currency easy to get is bitcoin. And right now bitcoin is cheap to use.

That's why the alternative currencies just do not make it. They are harder to obtain than bitcoin (usually bought with bitcoin) and bitcoin is cheap to use.

Now imagine 10x the bitcoin users and the same block size. Demand for space in the blockchain goes up but the supply of space in the blockchain does not. The result obviously is an increase in TX fee to get your TX seen quickly.

That allows alternative coins to fill the need for cheap transactions. Or LN. My bet is that LN is a nice concept but won't be widely used, an altcoin or three will fill the need.

Viable altcoins are good for bitcoin because they will provide true market competition over decentralized currency.

10x in 16 months lol
be realistic. say 4x

so imagine it 8million people using bitcoin at 2mb+segwit and everything including the transaction fee does not need to rise.

yes thats right 2mb+segwit allows for an average of 4x the capacity for NATURAL SLOW GROWTH.
so please stop using doomsday images of 1mb needing to increase fee's to cope with 20million people in a few days. as thats not logical, natural or realistic.

bitcoin grew from 500k USABLE space from 2013-2016. it can grow from 1mb to 2mb+segwit for another 4-6 years. but.
by delaying the buffer for 15 months is just poking the bear and keeping people under the thumb of blockstream veto powers because a 15 month delay means a new debate will need to start again with just a 15month-2years 3month window of peace.

how do you think bitcoin would be if blockstream veto'd out the bugfix of 2013 and suggested that it needs 12months debate followed by 12 months grace period before the fix was made to allow more natural growth.

we do not need endless debate, followed by delays to even put code in followed by long grace periods..

get the 2mb+segwit code in by Aprils release. with a 6-9 month grace period for everyone to adjust and then we can have 3-4 years of peace.
then in 2020 if blocks are approaching 90% full again. then dont debate if for a year and then suggest a new 2 year roadmap plan. just add more buffer and a reasonable grace period.

the arguments about datacentres and crap.. is just that. crap. bitcoin can run on a raspberry Pi. and guess what theres a next gen raspbeery Pi thats faster.
and guess wat even a 10year old desktop is atleast 2x as fast as even the next gen raspberry pi of today. which means. a basic cheap desktop right now has more CPU speed, ram, data storage than bitcoin ever needs.

and the same will be true in 4 years.

[RodeoX]

You need to look into the definition of centralized. 

[franky1]

You need to look into the definition of centralized. 

nodes physical hardware and location is decentralized but with limited distribution... but
due to blockstreams veto powers and determination to stick to their agenda(roadmap) the code can become centralized.

yes there are different copies distributed, but if only one source (bitcoin github) can be edited. and only one group can edit it. and only one person has the ultimate veto right of all of it. then that is a big fail in regards to the pretense of being decentralized.

[franky1]

If the block size is pushed upward, then fewer individuals can afford to mine, and there are centralization risks with mining hardware ownership.

you do realise that its the pool owner that veryifies everything initially. right
you do realise that once verified the pool owner then sends out a jumble of data that the individual asics just have to do a simple hash to repeatedly.
this has nothing to do with bloat. and only related to difficulty.

even if it takes 60 seconds instead of 50 seconds for the pool owner to verify everything. the end result is still a clump of data that asics can hash the same way.

the clever stuff is not done by the asics. they are just handed some info and told to hash it. they do not do the individual checks.
thats for the full nodes (pools and users)

if you do not believe me. unscrew an ASIC and look for a hard drive.. storing all the data.. you wont find it

[Kprawn]

From what I picked up, his concerns was that a centralized Chinese miners pool, they could implement what they want and the remaining group is much too small to make any difference. If they submit

their own proposal to increase the total cap of Bitcoins tomorrow, and they have some sort of incentive to do that, they can do that, with the hashing power they own now. There are no financial benefit

for them to do that, but they can make changes and force consensus on anyone else, with their current combined hashing power. The unknown entities behind Bitcoin mining, will forever be a topic for

debate and speculation. 

[~Bitcoin~]

If the fees increase it is good for crypto-currencies.

Right now the only crypto-currency easy to get is bitcoin. And right now bitcoin is cheap to use.

That's why the alternative currencies just do not make it. They are harder to obtain than bitcoin (usually bought with bitcoin) and bitcoin is cheap to use.

Now imagine 10x the bitcoin users and the same block size. Demand for space in the blockchain goes up but the supply of space in the blockchain does not. The result obviously is an increase in TX fee to get your TX seen quickly.

That allows alternative coins to fill the need for cheap transactions. Or LN. My bet is that LN is a nice concept but won't be widely used, an altcoin or three will fill the need.

Viable altcoins are good for bitcoin because they will provide true market competition over decentralized currency.

haha this your answer make you more fond of altcoin or some shitcoins. Market competition will ruin the actual value of coin. Manipulation will be imminant. Altcoin are just copy of bitcoin where a large part of it can anytime kill the market in overnight.

[nickenburg]

Yes there are already big mining farms, and for the normal people it is way to hard to mine Bitcoins.
It was already a few years ago and now it is probably even harder.

But I don't think it will be centralized, someone would be needing so many pc power It is not worth it indeed.
Because with like the asics miners, there will probably be a new way of mining Bitcoins in the future.
Which I hope will cost way less electricity and maybe the cost of the equipment will be low to.

[ATguy]

If the block size is pushed upward, then fewer individuals can afford to mine, and there are centralization risks with mining hardware ownership.

If you push the block size upward, there is little change compared to today - individual miners still choose what pool they direct their ASICs to. It cant be any worse.

On the other side with artificially keeping small blocks, unable to use onchain Bitcoin transactions is definitively increased centralization, as users have to use centralized offchain solutions (similar how bank or paypal works).

[Lauda]

If you push the block size upward, there is little change compared to today - individual miners still choose what pool they direct their ASICs to. It cant be any worse.

Well, while I'm not sure what might happen with mining I'm certain that the number of nodes will shrink or the concentration in datacenters will increase. This is not good.

On the other side with artificially keeping small blocks, unable to use onchain Bitcoin transactions is definitively increased centralization, as users have to use centralized offchain solutions (similar how bank or paypal works).

Completely wrong:
1) On-chain remains decentralized (nodes are cheap to run).
2) Decentralized second layer solutions will exist (LN).

[ATguy]

If you push the block size upward, there is little change compared to today - individual miners still choose what pool they direct their ASICs to. It cant be any worse.

Well, while I'm not sure what might happen with mining I'm certain that the number of nodes will shrink or the concentration in datacenters will increase. This is not good.

Node numbers has nothing to do with individual miners directing their ASICs to pools, exactly the same way as today, nothing change for individual miners here. Also arguing change limit to 2MB (or 4MB) means number of nodes have to decrease considerably is wrong, there is scientistic study I saw recently it might decrease the node count by up to 10% - you will not notice such small change on decentralization (btw thanks to Bitcoin Classic we are already up by 30% in 1-2 months)

On the other side with artificially keeping small blocks, unable to use onchain Bitcoin transactions is definitively increased centralization, as users have to use centralized offchain solutions (similar how bank or paypal works).

Completely wrong:
1) On-chain remains decentralized (nodes are cheap to run).
2) Decentralized second layer solutions will exist (LN).

1) with 2MB (or 4MB), nothing changes much here
2) second layer (LN) does not even exist currently, so pointless to argue whether LN become decentralized or can be used only in centralized maner as seems today

[Lauda]

Also arguing change limit to 2MB (or 4MB) means number of nodes have to decrease considerably is wrong, there is scientistic study I saw recently it might decrease the node count by up to 10% - you will not notice such small change on decentralization (btw thanks to Bitcoin Classic we are already up by 30% in 1-2 months)

You just defeated your own argument. As far as Classic nodes are concerned, they are worthless and part of a Sybil attack. Read: A date with Sybil.

1) with 2MB (or 4MB), nothing changes much here
2) second layer (LN) does not even exist currently, so pointless to argue whether LN become decentralized or can be used only in centralized maner as seems today

It does actually. In a small amount of time you will have people asking for 6 or 8 MB, that's for sure. It is not pointless to argue about LN. LN is being designed so that it is decentralized, don't spread misinformation that it will be centralized when that is not the case.

[rizzlarolla]

1) with 2MB (or 4MB), nothing changes much here
2) second layer (LN) does not even exist currently, so pointless to argue whether LN become decentralized or can be used only in centralized maner as seems today

It does actually. In a small amount of time you will have people asking for 6 or 8 MB, that's for sure. It is not pointless to argue about LN. LN is being designed so that it is decentralized, don't spread misinformation that it will be centralized when that is not the case.

So going to 2mb, as planned by core and classic, changes much. It will make people ask for 6 or 8 mb!
I disagree. (but core are planning 2mb anyway?)
(will "users" generally ask?, if they can transact ok, or mainly classic/unlimited supporter, who have a right to an opinion after all, and will be somewhat appeased. i concede, there will come a time when larger blocks are asked for, but that is a different story in a dynamic situation)

I want 2mb because it is achievable, is in the roadmap of core and classic, is the most obvious option, could easily cope with continued growth for the foreseeable, is not divisive or partisan, and I want to know there is a buffer for emergencies or rapid growth.

I dont want segwit, sorry. (i seem to be on my own on this?)
Core want segwit and 2mb. Big blockers?
I just want 2mb, before anything else. Before segwit.