My thoughts about the blocksize thing

[Gabi]

Since everyone and his dog is openin thread about that, i'll hop on the bandwagon too 

But my doubt is another one, right now, with the 1MB limit, the blockchain at max can grow of like 55GB per year. If we have the necessity to increase the block size, this mean that every block is already 1MB and that in a year the blockchain will be like 60GB.
If we double the blocksize, it will be 110GB per year. In 4 years it will be like 440GB. With the current limit, 220GB, still a lot

I am not against increasing the blocksize, if we have lot of transactions, it must be done. Also more transactions per block means more fees for the miners, after all it is not expensive to make a 1mb or a 2mb block, but a 2mb block will have more transactions. Yes, the 1mb block would have less transactions but with higher fees but i think the 2mb block in total would have more fees.

And as i said, having a blockchain of 220 or 440gb is not a big difference, it is a huge chain anyway. The problem is that it is huge, even with the current limit. A bit too huge.

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[JackH]

Thing is new tech can solve this and we wont need to have the same debate: http://www.thinlinedata.com/dna-storage-harddrives/

But then again, Bitcoin is ahead of its time, unless some synthetic biologist moves his *** 

[prezbo]

Also don't forget that the majority of the blockchain can be pruned when it becomes too large.

[Gabi]

Wich is exactly what i was thinking. But so far there is no real work done about that. If we want to speak about increasing the blocksize, then pruning must be considered too.

[justusranvier]

But so far there is no real work done about that. If we want to speak about increasing the blocksize, then pruning must be considered too.

Depends on your definition of "work".

[kokojie]

For regular clients, we don't really have to store old transactions, who really care about a transaction happened 5 years ago? for those who care, you can have the option of storing the
full chain. For the rest of us, we'll just store recent transactions. So for example, on installation of the client, you can have the option of:

* store recent transactions
* store full chain

For those who want to look up a transaction 10 years ago, blockchain.info or blockexplorer.com etc... can provide that service by storing the full chain.

[markm]

One of the other threads started out with exactly the concern that increasing the block size before all the pruning and so on are even being used just makes less incentive to actually do the damn pruning and so on and so on.

Until all those other things are in use, the space and bandwidth we already have/use is not being efficiently used so throwing good space after bad is just silly.

When the size we already have is being used in the most efficient way, which by the way involves bandwidth stuff as well as disk space utilisation stuff, we can look then at whether, given all those miracle cures that the moar size moar size moar size crowd point to as solutions to the problem of moar size but still have not actually put into place are in place, moar size is actually even needed.

I wonder what the average block size, not counting free transactions, is for the last difficulty-adjustment period?

-MarkM-

[misterbigg]

i'll hop on the bandwagon too...more transactions per block means more fees for the miners

While you're hopping on the bandwagon you might to...actually read the posts in the Development & Technical Discussion forum regarding block size instead of merely regurgitating your view that "hard coded limits are bad." More transactions per block means less fees for miners. I'll leave it as an exercise for you to figure out why.

[prezbo]

Wich is exactly what i was thinking. But so far there is no real work done about that. If we want to speak about increasing the blocksize, then pruning must be considered too.

I absolutely agree.

[conv3rsion]

i'll hop on the bandwagon too...more transactions per block means more fees for the miners

While you're hopping on the bandwagon you might to...actually read the posts in the Development & Technical Discussion forum regarding block size instead of merely regurgitating your view that "hard coded limits are bad." More transactions per block means less fees for miners. I'll leave it as an exercise for you to figure out why.

If this is true, and miners have the option currently of including fewer (or 0) transactions in their blocks, why do current blocks not have minimal numbers of transactions?

It seems to me that to maximize transaction revenue, a miner would want to include the max number of paying transactions that he could, and a higher number per block would equal higher fees.

[conv3rsion]

I don't understand why some people want a hard limit to encourage fewer potential transactions. Fewer transactions equals higher fees per transactions and less useful technology (at least in the role of a payment network) which then equals a less valuable and used technology (in all other roles).

A raised max block limit that increases at a slower rate than corresponding increases in commodity hardware and bandwidth does not mean that the majority of people wishing to act as full nodes cannot do so. The original 1MB limit is completely arbitrary and should scale as all other resources scale. The only reason that 21,000,000 total coins is not considered a problem is because of divisibility. Blocks also need to be continually divisible for Bitcoin to be valuable. Taking that ability away is incredibly shortsighted.

[Technomage]

There are other ways to go around the fact that the blockchain becomes massive. Not everyone needs to have the whole blockchain of all Bitcoin existence. Why wouldn't the last 6 months be quite sufficient, for example, and maybe have the rest as SPV? Or something like that. We could have separate archive nodes that just store the whole thing.

It isn't needed that all full nodes store all transactions ever done. Only the ones done in recent history are critical.

[Gabi]

More transactions per block means less fees for miners

I do not agree.
More transactions with lower fee per transaction can give in total more fees than less transactions with higher fees.

[twolifeinexile]

I don't understand why some people want a hard limit to encourage fewer potential transactions. Fewer transactions equals higher fees per transactions and less useful technology (at least in the role of a payment network) which then equals a less valuable and used technology (in all other roles).

A raised max block limit that increases at a slower rate than corresponding increases in commodity hardware and bandwidth does not mean that the majority of people wishing to act as full nodes cannot do so. The original 1MB limit is completely arbitrary and should scale as all other resources scale. The only reason that 21,000,000 total coins is not considered a problem is because of divisibility. Blocks also need to be continually divisible for Bitcoin to be valuable. Taking that ability away is incredibly shortsighted.

I am not sure this is so much about the hard limit rather than the unintended consequences if hard limit is raised and removed all together.  These wide-spread discussion is very good in itself.

Also important is the stability of the protocol, if you can raise the block size today, then how about total bitcoin tommorrow? We all know they are different, how and where is the line? And who determine the change? Can people opt to resist the change easily?

All these should be well-thought and discussed.

[prezbo]

More transactions per block means less fees for miners

I do not agree.
More transactions with lower fee per transaction can give in total more fees than less transactions with higher fees.

And let's not forget that miners are the ones setting the required fees. If it's not profitable for them to include free transactions, they just won't.

[Akka]

And let's not forget that miners are the ones setting the required fees. If it's not profitable for them to include free transactions, they just won't.

Sorry, but I can't sai this often enough. Long term, Mining wont be providable. No matter how high the fees are. Simply due to the fact that as long as you can make money with mining there will always be new Hashpower added until it reaches a equilibrium, where it won't be providable any more to buy mining equipment.

As soon as direct buyable Mining equipment is available this will go very fast. The free marked dictates this.

The amount of money made by mining will only set how much money is invested to secure the network.

Mining is (soon) a near zero sum game.

[Jaw3bmasters]

There are other ways to go around the fact that the blockchain becomes massive. Not everyone needs to have the whole blockchain of all Bitcoin existence. Why wouldn't the last 6 months be quite sufficient, for example, and maybe have the rest as SPV? Or something like that. We could have separate archive nodes that just store the whole thing.

It isn't needed that all full nodes store all transactions ever done. Only the ones done in recent history are critical.

I thought a version was already available that doesn't download the entire chain, just recent transactions........

[markm]

Here is a thought I have not seen around yet:

Litecoin probably already provides four megabytes of block per ten minutes. Is it the lack of mention of that specific "improvement over bitcoin" in their marketing that accounts for the failure of the moar moar moar crowd to abandon the pathetically small megabytes of block per ten minutes bitcoin for the four times "better" (in this oh so very important we'd guess from the number of threads about it) "problem" of bitcoin's?



-MarkM-

P.S. Check out Liquidcoin too! Spew out as many blocks as you like as fast as you like!

[conv3rsion]

I don't understand why some people want a hard limit to encourage fewer potential transactions. Fewer transactions equals higher fees per transactions and less useful technology (at least in the role of a payment network) which then equals a less valuable and used technology (in all other roles).

A raised max block limit that increases at a slower rate than corresponding increases in commodity hardware and bandwidth does not mean that the majority of people wishing to act as full nodes cannot do so. The original 1MB limit is completely arbitrary and should scale as all other resources scale. The only reason that 21,000,000 total coins is not considered a problem is because of divisibility. Blocks also need to be continually divisible for Bitcoin to be valuable. Taking that ability away is incredibly shortsighted.

I am not sure this is so much about the hard limit rather than the unintended consequences if hard limit is raised and removed all together.  These wide-spread discussion is very good in itself.

Also important is the stability of the protocol, if you can raise the block size today, then how about total bitcoin tommorrow? We all know they are different, how and where is the line? And who determine the change? Can people opt to resist the change easily?

All these should be well-thought and discussed.

Nobody (that I have seen) is advocating for the limit to be removed all together, they are advocating for it to scale along with realistic resource availability and consumption. Why is the block limit 1MB and not 10KB? Because 1MB was seen as having realistic resource availability 4 years ago and it was anticipated to be easy to grow in the future. Too bad Satoshi's 1st version wasn't absolutely perfect from the beginning, I guess we are forever stuck with a shitty wire replacement system that will eventually lose value and be replaced since ideologues can't be bothered to give 2 fucks about actual adoption.  

Limiting the number of coins is not a problem because they are divisible. Limiting the number of "possible" transactions forever is a problem because it is counter the primary goal of any technology, which is to be used.

[prezbo]

Sorry, but I can't sai this often enough. Long term, Mining wont be providable.

I don't necessarily agree. It's obvious if the state of bitcoin remains like it is now, when the reward drops to zero security by mining will drop ridiculously low. There are only two ways to make it work (keeping the same security), either increase the fees or increase the number of transactions (with fees) per block. There are currently about 0.5 btc of transaction fees per block, so if the transaction rate would increase 40-fold that would take care of things.

[markm]

We are giving several fucks about actual adoption.

Actual adoption has been such that even $32 per bitcoin worth of adoption never came near to saturating the blocks, and a couple of years later as we approach a $32 per bitcoin level of adoption again now, we are still nowhere near saturating the blocks.

Thus, adoption is still nowhere near enough that we need larger block sizes yet.

When we reach a $64 per bitcoin level of adoption lets see how full our blocks are; maybe we can easily handle even a $100 per bitcoin level of adoption and still have oodles of space left in our blocks.

-MarkM-

[Akka]

Sorry, but I can't sai this often enough. Long term, Mining wont be providable.

I don't necessarily agree. It's obvious if the state of bitcoin remains like it is now, when the reward drops to zero security by mining will drop ridiculously low. There are only two ways to make it work, either increase the fees or increase the number of transactions (with fees) per block. There are currently about 0.5 btc of transaction fees per block, so if the transaction rate would increase 20-fold that would take care of things.

You probably didn't understand what I mean. Even if the reward on one Block would be 100 BTC (extreme example) thanks to fees.

As soon as you can buy plug and play mining equipment for low cost (jalapeño) is available to direct buy, people will buy this things until mining will barely be providable again.

[prezbo]

Sorry, but I can't sai this often enough. Long term, Mining wont be providable.

I don't necessarily agree. It's obvious if the state of bitcoin remains like it is now, when the reward drops to zero security by mining will drop ridiculously low. There are only two ways to make it work, either increase the fees or increase the number of transactions (with fees) per block. There are currently about 0.5 btc of transaction fees per block, so if the transaction rate would increase 20-fold that would take care of things.

You probably didn't understand what I mean. Even if the reward on one Block would be 100 BTC (extreme example) thanks to fees.

As soon as you can buy plug and play mining equipment for low cost (jalapeño) is available to direct buy, people will buy this things until mining will barely be providable again.

Ah I see, you were referencing the "if it won't be profitable for miners to include free transactions" part. The problem is, having larger blocks means validating more transactions, and that still costs cpu power/money, so in the end if it is a zero sum game, including free transactions definitely won't be worth it.

[markm]

s/providable/profitable/

It is providable just by plugging in those Jalapinos.

It won't be profitable for an individual if too many do it, but [blah blah etc etc, lots of buts].

-MarkM-

[Akka]

Ah I see, you were referencing the "if it won't be profitable for miners to include free transactions" part. The problem is, having larger blocks means validating more transactions, and that still costs cpu power/money, so in the end if it is a zero sum game, including free transactions definitely won't be worth it.

No, I only see miner provability not as an argument. For both sites.

More transaction fees mean a securer network, though.

[conv3rsion]

We are giving several fucks about actual adoption.

Actual adoption has been such that even $32 per bitcoin worth of adoption never came near to saturating the blocks, and a couple of years later as we approach a $32 per bitcoin level of adoption again now, we are still nowhere near saturating the blocks.

Thus, adoption is still nowhere near enough that we need larger block sizes yet.

When we reach a $64 per bitcoin level of adoption lets see how full our blocks are; maybe we can easily handle even a $100 per bitcoin level of adoption and still have oodles of space left in our blocks.

-MarkM-

Respectfully, I think you are conflating BTC price with adoption. Last time the price was $32 per bitcoin, the network was doing 10-12k transactions per day. It is now doing nearly 6x that number and at still not yet at that price level. We are approaching 25% of max block size. The price could drop and we could still end up saturating the blocks.

[markm]

Respectfully, I think you are conflating BTC price with adoption. Last time the price was $32 per bitcoin, the network was doing 10-12k transactions per day. It is now doing nearly 6x that number and at still not yet at that price level. We are approaching 25% of max block size. The price could drop and we could still end up saturating the blocks.

If it is not adopted by money, sucking in more penniless peasants will just invite them to lose what little money they have by putting into a system they do not have enough money to pay the costs of securing.

We need the people paying $15+ per wire to wire half their paycheque home to their family abroad much more than we need people who might as a novelty buy a coffee with it some day but don't even think about the fee they pay with their current electronic payment method (credit cards and such) when buying coffee currently with fiat because heck not only is bending over to pick up a penny a waste of calories but a handful of pennies in fees to buy a coffee is also not worth one's time to even think or worry about.

Our big fee-savings advantage is on the big-ticket transfers, not on puny sums.

We want the guy paying gosh knows what to pay for a shipload of automobiles to be delivered to his autopark to inspect and repair to send out to dealers across the province, heck we don't even want the guy selling individual grams of weed as much as the guy ordering another container of it to supply to the guys out on the street selling grams. Etc.

-MarkM-

[Draino]

Why is this even a thing?
So we're going to solve a deficit issue by jumping right to inflation?

Great way to show off your principle, Bitcoin.

Full retard mode engage

[conv3rsion]

Respectfully, I think you are conflating BTC price with adoption. Last time the price was $32 per bitcoin, the network was doing 10-12k transactions per day. It is now doing nearly 6x that number and at still not yet at that price level. We are approaching 25% of max block size. The price could drop and we could still end up saturating the blocks.

If it is not adopted by money, sucking in more penniless peasants will just invite them to lose what little money they have by putting into a system they do not have enough money to pay the costs of securing.

We need the people paying $15+ per wire to wire half their paycheque home to their family abroad much more than we need people who might as a novelty buy a coffee with it some day but don't even think about the fee they pay with their current electronic payment method (credit cards and such) when buying coffee currently with fiat because heck not only is bending over to pick up a penny a waste of calories but a handful of pennies in fees to buy a coffee is also not worth one's time to even think or worry about.

Our big fee-savings advantage is on the big-ticket transfers, not on puny sums.

-MarkM-

I disagree. More usage is more trust. More trust is more value in a crypto-currency.

But to your point about big fee-savings advantage, fewer transactions = higher cost per transaction. Higher cost per transaction = less advantage over existing methods, which equals less value at all. It also means, fewer use cases. Why, on earth, do we want fewer use cases?

[conv3rsion]

Why is this even a thing?
So we're going to solve a deficit issue by jumping right to inflation?

Great way to show off your principle, Bitcoin.

Full retard mode engage

In no way will raising the number of transactions per block  (not the number of blocks, the number of coins, or the reward per block) increase inflation.

[twolifeinexile]

Why is this even a thing?
So we're going to solve a deficit issue by jumping right to inflation?

Great way to show off your principle, Bitcoin.

Full retard mode engage

Nothing here involves any inflation of deficit of sorts...where did your idea come from?

[Draino]

isn't this about facing a deficit of transaction numbers vs. block size?  and hacking a solution that involves making the rules arbitrarily larger?

i must be confused.

[conv3rsion]

isn't this about facing a deficit of transaction numbers vs. block size?  and hacking a solution that involves making the rules arbitrarily larger?

i must be confused.

It has nothing to do with the money supply (inflation). Its about not being able to perform enough transactions to keep up with usage. The current hard limit of 1MB block size coupled with the fixed number of blocks means about 7 transactions per second. To put that into perspective about 220 million people could do 1 transaction per year. That's less than 2/3 of the United States  (ignoring the rest of the world). ONE PER YEAR!

There are people here who seriously think this is acceptable. 220 million transactions per year for the whole world, total. Those people have a very very different vision of Bitcoin then the one that I do.

[Draino]

It has nothing to do with the money supply (inflation).

that's not the type of inflation i was talking about..

parallels, metaphor, subtlety

that sort of thing.

[markm]

isn't this about facing a deficit of transaction numbers vs. block size?  and hacking a solution that involves making the rules arbitrarily larger?

i must be confused.

The opposite. Really.

We face a deficit of paying transactions as compared to our ever-since-we-started huge oversupply of block size.

There have never been anywhere near enough paying transactions to fill our blocks, thus some of us are maybe doubting we can afford to increase the size of our blocks, because the capital cost of equipment to accommodate larger blocks is not being paid for because blocks have always been far far from full.

Our blocks are too large compared to the number of paying transactions in them, and people are claiming that no one is going to provide us enough paying transactions per block to come anywhere close to filling our blocks unless we increase the size of our blocks, that is, start leaving them far more empty, far less well supplied with paying transactions, than they have always so far been.

It seems to amount to "no one is going to pay you for a cup of water while you only have a lake full available, you need to have ten lakes full first then maybe people might consider buying a cup".

-MarkM-

[conv3rsion]

isn't this about facing a deficit of transaction numbers vs. block size?  and hacking a solution that involves making the rules arbitrarily larger?

i must be confused.

The opposite. Really.

We face a deficit of paying transactions as compared to our ever-since-we-started huge oversupply of block size.

There have never been anywhere near enough paying transactions to fill our blocks, thus some of us are maybe doubting we can afford to increase the size of our blocks, because the capital cost of equipment to accommodate larger blocks is not being paid for because blocks have always been far far from full.

Our blocks are too large compared to the number of paying transactions in them, and people are claiming that no one is going to provide us enough paying transactions per block to come anywhere close to filling our blocks unless we increase the size of our blocks, that is, start leaving them far more empty, far less well supplied with paying transactions, than they have always so far been.

It seems to amount to "no one is going to pay you for a cup of water while you only have a lake full available, you need to have ten lakes full first then maybe people might consider buying a cup".

-MarkM-

Ahh we get to the crux of it. You want to be paid more to mine blocks, period. You are hoping that with a hard block size that each block you mine will be worth more and require less work to mine and store. You don't care if fewer people use Bitcoin, or if Bitcoin is less useful to the world. And you ignore that as a niche with higher transaction fees more closely resembling those of its competitors, Bitcoin will remain less valuable as either a technology or a payment system.

I'm sorry if mining isn't currently as profitable as you want it to be. The network is already the worlds largest distributed computing platform and very secure. I care more about the average person using the technology easily and cheaply, and the industry that will ultimately enable (impossible at this point to even imagine), then making mining more profitable.

[tvbcof]

...
Our big fee-savings advantage is on the big-ticket transfers, not on puny sums.

-MarkM-

I disagree. More usage is more trust. More trust is more value in a crypto-currency.

More use of Bitcoin means significantly less trust to me.  The crypto-currency world is rife with participants who have difficulty running a reliable forum (and I like it just fine this way.)  The suggestion that the class of ordinary citizenry who currently move Bitcoin are going to be able to run a reliable economic solution at scale (with load-balanced processing clusters, high quality provisioned bandwidth, etc, etc) is absurd to me.  Throw in the potential to need to deal with coordinated state level attacks and the trust I would have in the solution is next to nill.

The alternative is that if the infrastructure required to operate the Bitcoin network shifts to well capitalized corporate entities.  My 'trust' in this solution is nearly nill as well.  And it is much less palatable from a philosophical level besides.

But to your point about big fee-savings advantage, fewer transactions = higher cost per transaction. Higher cost per transaction = less advantage over existing methods, which equals less value at all. It also means, fewer use cases. Why, on earth, do we want fewer use cases?

Almost certainly wrong.  The transaction cost at current scale is so close to zero that it is not worth thinking about.  The cost of performing a transaction is not related to the BTC size of the transaction.  Even at the current block size the Bitcoin solution could handle a fair part of the worlds need for high value transactions (I suspect.)  It's probably about perfect for balancing between other crypto-currency systems...accident???

The dream that my skittles purchase, your penny-ante Satoshi Dice bet, and someone's goat cheese sale in outer Mongolia coexist in a common block chain is nice and cool and all that, and I like it, but it is something I would trade for a robust solution which looks vaguely like what we see today.

[conv3rsion]

More use of Bitcoin means significantly less trust to me.  The crypto-currency world is rife with participants who have difficulty running a reliable forum (and I like it just fine this way.)  The suggestion that the class of ordinary citizenry who currently move Bitcoin are going to be able to run a reliable economic solution at scale (with load-balanced processing clusters, high quality provisioned bandwidth, etc, etc) is absurd to me.  Throw in the potential to need to deal with coordinated state level attacks and the trust I would have in the solution is next to nill.

The alternative is that if the infrastructure required to operate the Bitcoin network shifts to well capitalized corporate entities.  My 'trust' in this solution is nearly nill as well.  And it is much less palatable from a philosophical level besides.

You like it fine that people using the currency have a hard time with it? I don't even understand what you are saying. You don't want it to be run by "ordinary citizens" or "mega corps", you want it run by a select few with specialized skills. That's the definition of centralized.

But to your point about big fee-savings advantage, fewer transactions = higher cost per transaction. Higher cost per transaction = less advantage over existing methods, which equals less value at all. It also means, fewer use cases. Why, on earth, do we want fewer use cases?

Almost certainly wrong.  The transaction cost at current scale is so close to zero that it is not worth thinking about.  The cost of performing a transaction is not related to the BTC size of the transaction.  Even at the current block size the Bitcoin solution could handle a fair part of the worlds need for high value transactions (I suspect.)  It's probably about perfect for balancing between other crypto-currency systems...accident???

The dream that my skittles purchase, your penny-ante Satoshi Dice bet, and someone's goat cheese sale in outer Mongolia coexist in a common block chain is nice and cool and all that, and I like it, but it is something I would trade for a robust solution which looks vaguely like what we see today.

Its not wrong, its very simple math. A hard limit of 7 transactions per second means that once we hit our transaction bandwidth (already 25% there!), the price of individual transactions will go up. Free transactions will disappear and paid transactions will enter into an increasingly expensive auction.  If you think this is wrong, explain why.

I said nothing about the BTC size of the transaction. Also total value from transactions may end up going down because even with higher individual transaction prices, so many previously possible cheaper transactions will become impossible to perform, and total value (all fees paid on all transactions) may decrease by removing the ability for those other transactions to exist at all.

And with the individual transaction price going up, many use cases (micro transactions, retail transactions) will disappear. Huge numbers of individuals will not be able to participate as users at all (except perhaps to validate transactions that they themselves cannot take part in, but at least it works a 56.6k modem.... give me a fucking break). Centralization of ACTUAL USE will increase and total usage stops growing by the network limiting to 7 transactions per second. The remaining advantage over expensive wire transfers will be diminished as the price difference decreases. And ultimately the value of Bitcoin as a payment network and currency of the people will disappear.

The dream that my penny-ante dice bet, your skittles purchase, and someone's cheese sale in mongolia coexists in a common block chain IS THE REALITY TODAY. It needs to be the reality tomorrow as well. Anything less than that is total failure.

[tvbcof]

More use of Bitcoin means significantly less trust to me.  The crypto-currency world is rife with participants who have difficulty running a reliable forum (and I like it just fine this way.)  The suggestion that the class of ordinary citizenry who currently move Bitcoin are going to be able to run a reliable economic solution at scale (with load-balanced processing clusters, high quality provisioned bandwidth, etc, etc) is absurd to me.  Throw in the potential to need to deal with coordinated state level attacks and the trust I would have in the solution is next to nill.

The alternative is that if the infrastructure required to operate the Bitcoin network shifts to well capitalized corporate entities.  My 'trust' in this solution is nearly nill as well.  And it is much less palatable from a philosophical level besides.

You like it fine that people using the currency have a hard time with it? I don't even understand what you are saying. You don't want it to be run by "ordinary citizens" or "mega corps", you want it run by a select few with specialized skills. That's the definition of centralized.

I could have said it more clearly.

I favor a situation where the network is perfectly stable running on people's hardware who can barely afford a low-end car and can barely have the technical skills needed to keep a forum operational on the Internet.  That is what we have today and I don't want to lose it.

But to your point about big fee-savings advantage, fewer transactions = higher cost per transaction. Higher cost per transaction = less advantage over existing methods, which equals less value at all. It also means, fewer use cases. Why, on earth, do we want fewer use cases?

Almost certainly wrong.  The transaction cost at current scale is so close to zero that it is not worth thinking about.  The cost of performing a transaction is not related to the BTC size of the transaction.  Even at the current block size the Bitcoin solution could handle a fair part of the worlds need for high value transactions (I suspect.)  It's probably about perfect for balancing between other crypto-currency systems...accident???

The dream that my skittles purchase, your penny-ante Satoshi Dice bet, and someone's goat cheese sale in outer Mongolia coexist in a common block chain is nice and cool and all that, and I like it, but it is something I would trade for a robust solution which looks vaguely like what we see today.

Its not wrong, its very simple math. A hard limit of 7 transactions per second means that once we hit our transaction bandwidth (already 25% there!), the price of individual transactions will go up. Free transactions will disappear and paid transactions will enter into an increasingly expensive auction.  If you think this is wrong, explain why.

I think you are wrong for the following reasons.  The actual cost on a per-transaction basis is so low currently that the fees required to  operate profitably are not all that high.  Severe gouging by miners would destroy the system and/or draw out competition who wish to see the system survive.  In fact it might be the case that some people will fund mining simply to preserve the system for their own use rather than trying to make a huge profit on it.

But as the developers say, it is kind of hard to know exactly what will happen.  I'm all for finding out empirically.

I said nothing about the BTC size of the transaction. Also total value from transactions may end up going down because even with higher individual transaction prices, so many previously possible cheaper transactions will become impossible to perform, and total value (all fees paid on all transactions) may decrease by removing the ability for those other transactions to exist at all.

And with the individual transaction price going up, many use cases (micro transactions, retail transactions) will disappear. Huge numbers of individuals will not be able to participate as users at all (except perhaps to validate transactions that they themselves cannot take part in, but at least it works a 56.6k modem.... give me a fucking break). Centralization of ACTUAL USE will increase and total usage stops growing by the network limiting to 7 transactions per second. The remaining advantage over expensive wire transfers will be diminished as the price difference decreases. And ultimately the value of Bitcoin as a payment network and currency of the people will disappear.

The dream that my penny-ante dice bet, your skittles purchase, and someone's cheese sale in mongolia coexists in a common block chain IS THE REALITY TODAY. It needs to be the reality tomorrow as well. Anything less than that is total failure.

Going forward you will be able to live your dream and I will be able to live mine.  Which of us, if either, finds ourselves on the Bitcoin block-chain will be an interesting thing to find out.

As far as I am concerned Satoshi's main work is done;  peer-2-peer crypto-currencies are proven to be a workable concept and nobody can deny this.  I'm personally attached to Bitcoin because I have a lot of respect for certain parts of the community and separately because I have a significant 'speculative bet' on it.  But I'm not glued to Bitcoin specifically, and I will dump it if it turns sour.  Probably I am not alone.

[mpfrank]

Sorry, but I can't sai this often enough. Long term, Mining wont be providable.

I don't necessarily agree. It's obvious if the state of bitcoin remains like it is now, when the reward drops to zero security by mining will drop ridiculously low. There are only two ways to make it work (keeping the same security), either increase the fees or increase the number of transactions (with fees) per block. There are currently about 0.5 btc of transaction fees per block, so if the transaction rate would increase 40-fold that would take care of things.

I don't see any problem to begin with.  Just like any other business, the amount of competition in the mining business automatically increases to the point where it is just barely profitable enough to keep the most efficient operators in business.  It reaches an equilibrium, yes, but at that equilibrium point, the work still gets done and the surviving miners still make a living.

[bg002h]

i'll hop on the bandwagon too...more transactions per block means more fees for the miners

While you're hopping on the bandwagon you might to...actually read the posts in the Development & Technical Discussion forum regarding block size instead of merely regurgitating your view that "hard coded limits are bad." More transactions per block means less fees for miners. I'll leave it as an exercise for you to figure out why.

I wouldn't take it as a given that more transactions per block would mean fewer fees. If the network could've been processing 2000 transactions per second instead of seven, I bet the miners would make more In fees.

[bg002h]

Sorry, but I can't sai this often enough. Long term, Mining wont be providable.

I don't necessarily agree. It's obvious if the state of bitcoin remains like it is now, when the reward drops to zero security by mining will drop ridiculously low. There are only two ways to make it work (keeping the same security), either increase the fees or increase the number of transactions (with fees) per block. There are currently about 0.5 btc of transaction fees per block, so if the transaction rate would increase 40-fold that would take care of things.

I don't see any problem to begin with.  Just like any other business, the amount of competition in the mining business automatically increases to the point where it is just barely profitable enough to keep the most efficient operators in business.  It reaches an equilibrium, yes, but at that equilibrium point, the work still gets done and the surviving miners still make a living.

I think the price of Bitcoin will drop like a hot potato as soon as people can't spend them Due to the low transaction limit. There's absolutely no question that the transaction limit will go up , because Bitcoin will become practically worthless If people can never spend them At a reasonable cost and miners will Miss out on getting Small fees from many many many many more transactions.

[johnyj]

I think the price of Bitcoin will drop like a hot potato as soon as people can't spend them Due to the low transaction limit. There's absolutely no question that the transaction limit will go up , because Bitcoin will become practically worthless If people can never spend them At a reasonable cost and miners will Miss out on getting Small fees from many many many many more transactions.

If a lot of people is rushing to sell, due to transaction limit, they won't be able to sell, only one person per hour can sell his coin, so the price will stay stable

And, if price dropped, the people's interest (and thus transaction volume) will decrease, then the system will become good again

So the block size limit will function like a valve to stop the mass volume sell off and constantly lock the bitcoin price higher and higher. It is the most genius design in human history to stable the exchange price 

[Maged]

And, if price dropped, the people's interest (and thus transaction volume) will decrease, then the system will become good again

...and doomed to stagnation. No more innovation would occur, no more moderately sized and up businesses would start accepting bitcoins, and the businesses that do accept it would phase it out over time. Interest in bitcoin would drop, and it would be declared a failure. Because of that stigma, businesses would become even more hesitant about accepting crypocurrency in general than they already are, and it would stay that way until either something radically different from bitcoin was created or several generations passed. Later on, people would look back in awe about how Bitcoin was far ahead of its time and wonder what happened. That is our worst-case scenario, and it's more likely than you might think.

[Akka]

And, if price dropped, the people's interest (and thus transaction volume) will decrease, then the system will become good again

...and doomed to stagnation. No more innovation would occur, no more moderately sized and up businesses would start accepting bitcoins, and the businesses that do accept it would phase it out over time. Interest in bitcoin would drop, and it would be declared a failure. Because of that stigma, businesses would become even more hesitant about accepting crypocurrency in general than they already are, and it would stay that way until either something radically different from bitcoin was created or several generations passed. Later on, people would look back in awe about how Bitcoin was far ahead of its time and wonder what happened. That is our worst-case scenario, and it's more likely than you might think.

+1

Exactly this is what I'm (and I think most are) worrying about.

It's not about having free transactions (as some seem to think).

[Mageant]

I think Bitcoin's distant future is more of taking the role of gold (i.e. the value underlying a currency) than actually replacing a large currency such as US$.

Small transactions would be handled by processors such as Ripple or Coinbase and actual changes in the blockchain would be only worthwhile for large transactions.

[bg002h]

I think the price of Bitcoin will drop like a hot potato as soon as people can't spend them Due to the low transaction limit. There's absolutely no question that the transaction limit will go up , because Bitcoin will become practically worthless If people can never spend them At a reasonable cost and miners will Miss out on getting Small fees from many many many many more transactions.

If a lot of people is rushing to sell, due to transaction limit, they won't be able to sell, only one person per hour can sell his coin, so the price will stay stable

And, if price dropped, the people's interest (and thus transaction volume) will decrease, then the system will become good again

So the block size limit will function like a valve to stop the mass volume sell off and constantly lock the bitcoin price higher and higher. It is the most genius design in human history to stable the exchange price 

The actual trading occurs at the exchange...not on the block chain. People might have trouble getting Bitcoin into their accounts, but, that's about it. I'm not in favor of an unspendable Bitcoin. Why not set the limit to 1 transaction per second? Or 1/10 that? Will that make Bitcoin better or stabilize the price?

[Littleshop]

Why is this even a thing?
So we're going to solve a deficit issue by jumping right to inflation?

Great way to show off your principle, Bitcoin.

Full retard mode engage

You really do not understand what you are talking about.  Block size increases do not cause bitcoin inflation.  This allows more transactions to be processed per block.  If we reach block size limit we could slow the adoption of bitcoin which would limit economic activity.

You seem to be confusing increasing block size with increasing block reward.

[johnyj]

And, if price dropped, the people's interest (and thus transaction volume) will decrease, then the system will become good again

...and doomed to stagnation. No more innovation would occur, no more moderately sized and up businesses would start accepting bitcoins, and the businesses that do accept it would phase it out over time. Interest in bitcoin would drop, and it would be declared a failure. Because of that stigma, businesses would become even more hesitant about accepting crypocurrency in general than they already are, and it would stay that way until either something radically different from bitcoin was created or several generations passed. Later on, people would look back in awe about how Bitcoin was far ahead of its time and wonder what happened. That is our worst-case scenario, and it's more likely than you might think.

As long as price stay strong, I don't worry any of this. Businesses will have much higher incentive to receive a high valued but difficult to transfer coin vs low valued but easy to transfer coin. If the price is enough strong, there will be commercial solution to overcome the transaction problem, if the price do not stay strong, they will abandon it, no matter how fast the transaction is

Bitcoin gained mainstream acceptance is because it's value get stable increase, despite the fact that now people have to download 7G blockchain

[johnyj]

Why is this even a thing?
So we're going to solve a deficit issue by jumping right to inflation?

Great way to show off your principle, Bitcoin.

Full retard mode engage

You really do not understand what you are talking about.  Block size increases do not cause bitcoin inflation.  This allows more transactions to be processed per block.  If we reach block size limit we could slow the adoption of bitcoin which would limit economic activity.

You seem to be confusing increasing block size with increasing block reward.

No, block size increase will cause a hard fork, and that is a 100% inflation immediately, and once it started, it could happen again, so the promise of limited supply is forever broken, bitcoin will be no more different than any fiat currency

[Akka]

Why is this even a thing?
So we're going to solve a deficit issue by jumping right to inflation?

Great way to show off your principle, Bitcoin.

Full retard mode engage

You really do not understand what you are talking about.  Block size increases do not cause bitcoin inflation.  This allows more transactions to be processed per block.  If we reach block size limit we could slow the adoption of bitcoin which would limit economic activity.

You seem to be confusing increasing block size with increasing block reward.

No, block size increase will cause a hard fork, and that is a 100% inflation immediately, and once it started, it could happen again, so the promise of limited supply is forever broken, bitcoin will be no more different than any fiat currency

That's not the first hardfork. Not even in recent times. Remember the reward halving. There was a fork made by some where the reward didn't halve.

So this was a 100% inflation immediately, too? OMG!

[twolifeinexile]

Why is this even a thing?
So we're going to solve a deficit issue by jumping right to inflation?

Great way to show off your principle, Bitcoin.

Full retard mode engage

You really do not understand what you are talking about.  Block size increases do not cause bitcoin inflation.  This allows more transactions to be processed per block.  If we reach block size limit we could slow the adoption of bitcoin which would limit economic activity.

You seem to be confusing increasing block size with increasing block reward.

No, block size increase will cause a hard fork, and that is a 100% inflation immediately, and once it started, it could happen again, so the promise of limited supply is forever broken, bitcoin will be no more different than any fiat currency

Why hard fork in your opinion is a inflation, hard fork essentailly make two versions of bitcoin, and in the end, only one could win or both lose.

[johnyj]

That's not the first hardfork. Not even in recent times. Remember the reward halving. There was made a fork by some where the reward didn't halve.

So this was a 100% inflation immediately, too? OMG!

1. Tell me where is that fork, I'm interested to mine some coin on that fork, I just don't know it even existed
2. That fork is not driven by core developers
3. It diviate from the bitcoin protocol that much so it not even can be called bitcoin, it has unlimited suppply

[Akka]

1. Tell me where is that fork, I'm interested to mine some coin on that fork, I just don't know it even existed

https://bitcointalk.org/index.php?topic=128370.0;topicseen
   
https://github.com/treazant/treazant

- don't know if this is still alive, though.

[johnyj]

Why hard fork in your opinion is a inflation, hard fork essentailly make two versions of bitcoin, and in the end, only one could win or both lose.

Same money, now you can spend them twice in two different network, isn't that inflation?

After the fork, it is very difficult to explain to people why they need to know which version of bitcoin they are using, and since old coin can be used on both network, they will worth more than the new coin... and business owner have to give two price for their product: one for old coin and one for new coin... All of these will create confusion and the normal business owner will regard this as a result of failed experiment by computer geeks, and they just drop it

At least the adoption rate will drop for several years until people forget about this fork

[twolifeinexile]

Why hard fork in your opinion is a inflation, hard fork essentailly make two versions of bitcoin, and in the end, only one could win or both lose.

Same money, now you can spend them twice in two different network, isn't that inflation?

After the fork, it is very difficult to explain to people why they need to know which version of bitcoin they are using, and since old coin can be used on both network, they will worth more than the new coin... and business owner have to give two price for their product: one for old coin and one for new coin... All of these will create confusion and the normal business owner will regard this as a result of failed experiment by computer geeks, and they just drop it

At least the adoption rate will drop for several years until people forget about this fork

More than half of bitcoins have been mined, so if I were the business, simple, only accept old coin, same amount in both chain, using the highest exchange rate of the two, the guy having old coin is not paying me twice, since ultimately only fork become longer than the other and miners would jump to and hash for it so it gains more hashing power and dominate again later.

[jgarzik]

That's not the first hardfork. Not even in recent times. Remember the reward halving. There was a fork made by some where the reward didn't halve.

Wrong.  Mining a side chain for a small amount of time is not a hard fork.

A hard fork is where it is impossible for older clients to continue with the new bitcoin, without a software upgrade, because they would find some post-fork detail invalid (when it should be considered valid).

We still have many older clients on the network, verifying the chain.

[Akka]

That's not the first hardfork. Not even in recent times. Remember the reward halving. There was a fork made by some where the reward didn't halve.

Wrong.  Mining a side chain for a small amount of time is not a hard fork.

A hard fork is where it is impossible for older clients to continue with the new bitcoin, without a software upgrade, because they would find some post-fork detail invalid (when it should be considered valid).

We still have many older clients on the network, verifying the chain.

Sure, I didn't say any different. But you are wrong here. The example was a fork. It is build on the Blockchain until the point of the halving. In was impossible for older clients to continue with the new bitcoin, without a software upgrade, because they would find some post-fork detail invalid (when it should be considered valid).

It just wasn't successful.

Or is it only a hard fork if the core developers change something on the protocol?
Did you even read my post?

[johnyj]

Why hard fork in your opinion is a inflation, hard fork essentailly make two versions of bitcoin, and in the end, only one could win or both lose.

Same money, now you can spend them twice in two different network, isn't that inflation?

After the fork, it is very difficult to explain to people why they need to know which version of bitcoin they are using, and since old coin can be used on both network, they will worth more than the new coin... and business owner have to give two price for their product: one for old coin and one for new coin... All of these will create confusion and the normal business owner will regard this as a result of failed experiment by computer geeks, and they just drop it

At least the adoption rate will drop for several years until people forget about this fork

More than half of bitcoins have been mined, so if I were the business, simple, only accept old coin, same amount in both chain, using the highest exchange rate of the two, the guy having old coin is not paying me twice, since ultimately only fork become longer than the other and miners would jump to and hash for it so it gains more hashing power and dominate again later.

How do you identify which coin is old and which coin is new?

BTW, there will be two chain, the length will be the same

[johnyj]

1. Tell me where is that fork, I'm interested to mine some coin on that fork, I just don't know it even existed

https://bitcointalk.org/index.php?topic=128370.0;topicseen
   
https://github.com/treazant/treazant

- don't know if this is still alive, though.

Based on author it failed after the split (technically), if he spend bitcoin on one chain, it will be broadcasted to another chain thus invalidate the coin's spendability on another chain, maybe his code is not enough good to run a seperate chain

I can imagine, if it really worked, there will be many people hashing on that chain by now, since it doesn't hurt to be able to double spend the old bitcoin on another chain, no matter how little value that chain has

[SimonL]

i'll hop on the bandwagon too...more transactions per block means more fees for the miners

While you're hopping on the bandwagon you might to...actually read the posts in the Development & Technical Discussion forum regarding block size instead of merely regurgitating your view that "hard coded limits are bad." More transactions per block means less fees for miners. I'll leave it as an exercise for you to figure out why.

If this is true, and miners have the option currently of including fewer (or 0) transactions in their blocks, why do current blocks not have minimal numbers of transactions?

It seems to me that to maximize transaction revenue, a miner would want to include the max number of paying transactions that he could, and a higher number per block would equal higher fees.

A free market regulating what is, and isn't an acceptable transaction fee seems totally appropriate, rather than pandering to miners to beg inclusion into the chain. I'm still fuzzy on why miners should be not only be beholden to blocksize limits but also be forced into a position to refuse transactions, even though the network and nodes may be fully capable of accommodating such transactions. It is blatantly arbitrary and never does the max blocksize limit ever take into consideration, nor even measure what the network is capable of handling.

[jgarzik]

I read your post sufficiently to note that you do not understand the concept of a hard fork, if you think we've already had one.

Even the combined output overflow bug fix, which lead to the longest chain fork in bitcoin history, cannot be considered a hard fork.  Vulnerable clients were able to remain on the network, after the bug was "healed."  This would not be the case in a hard fork.

[Akka]

I read your post sufficiently to note that you do not understand the concept of a hard fork, if you think we've already had one.

Even the combined output overflow bug fix, which lead to the longest chain fork in bitcoin history, cannot be considered a hard fork.  Vulnerable clients were able to remain on the network, after the bug was "healed."  This would not be the case in a hard fork.

The only difference to an actual hard fork and the example I gave was that the client in my example was not called Bitcoin-QT.

Nodes using this client where able using the Bitcoin Blockchain until the point where the first 25 BTC Reward was found. That's the point where they where not able to accept Bicoin Blockchain Blocks anymore and a spilt occured.

Also I only wanted to show that that doesn't mean a 100% infaltion. For this the example was sufficient:

That's not the first hardfork. Not even in recent times. Remember the reward halving. There was made a fork by some where the reward didn't halve.

So this was a 100% inflation immediately, too? OMG!

I'm sure you misunderstood me here. / Read more in my post than what I was trying to say.

But I thought that the combined output overflow Fix was one. I wasn't around at this time and from post referring to this issue I gained the Impression that old version would indeed not accept Blocks after this fix. So I was wrong there.

[twolifeinexile]

Why hard fork in your opinion is a inflation, hard fork essentailly make two versions of bitcoin, and in the end, only one could win or both lose.

Same money, now you can spend them twice in two different network, isn't that inflation?

After the fork, it is very difficult to explain to people why they need to know which version of bitcoin they are using, and since old coin can be used on both network, they will worth more than the new coin... and business owner have to give two price for their product: one for old coin and one for new coin... All of these will create confusion and the normal business owner will regard this as a result of failed experiment by computer geeks, and they just drop it

At least the adoption rate will drop for several years until people forget about this fork

More than half of bitcoins have been mined, so if I were the business, simple, only accept old coin, same amount in both chain, using the highest exchange rate of the two, the guy having old coin is not paying me twice, since ultimately only fork become longer than the other and miners would jump to and hash for it so it gains more hashing power and dominate again later.

How do you identify which coin is old and which coin is new?

BTW, there will be two chain, the length will be the same

The 'length' of the entire block chain refers to the chain with the most combined difficulty, not the one with the most blocks.

[Littleshop]

More than half of bitcoins have been mined, so if I were the business, simple, only accept old coin, same amount in both chain, using the highest exchange rate of the two, the guy having old coin is not paying me twice, since ultimately only fork become longer than the other and miners would jump to and hash for it so it gains more hashing power and dominate again later.

How do you identify which coin is old and which coin is new?

BTW, there will be two chain, the length will be the same

The 'length' of the entire block chain refers to the chain with the most combined difficulty, not the one with the most blocks.

Isn't amazing what Satoshi thought of in advance?

[tvbcof]

The 'length' of the entire block chain refers to the chain with the most combined difficulty, not the one with the most blocks.

Isn't amazing what Satoshi thought of in advance?

Yes.  It blows me away.

[twolifeinexile]

More than half of bitcoins have been mined, so if I were the business, simple, only accept old coin, same amount in both chain, using the highest exchange rate of the two, the guy having old coin is not paying me twice, since ultimately only fork become longer than the other and miners would jump to and hash for it so it gains more hashing power and dominate again later.

How do you identify which coin is old and which coin is new?

BTW, there will be two chain, the length will be the same

The 'length' of the entire block chain refers to the chain with the most combined difficulty, not the one with the most blocks.

Isn't amazing what Satoshi thought of in advance?

One of the key innovation of Satoshi, core security/trust model of bitcoin

[markm]

i'll hop on the bandwagon too...more transactions per block means more fees for the miners

While you're hopping on the bandwagon you might to...actually read the posts in the Development & Technical Discussion forum regarding block size instead of merely regurgitating your view that "hard coded limits are bad." More transactions per block means less fees for miners. I'll leave it as an exercise for you to figure out why.

If this is true, and miners have the option currently of including fewer (or 0) transactions in their blocks, why do current blocks not have minimal numbers of transactions?

It seems to me that to maximize transaction revenue, a miner would want to include the max number of paying transactions that he could, and a higher number per block would equal higher fees.

A free market regulating what is, and isn't an acceptable transaction fee seems totally appropriate, rather than pandering to miners to beg inclusion into the chain. I'm still fuzzy on why miners should be not only be beholden to blocksize limits but also be forced into a position to refuse transactions, even though the network and nodes may be fully capable of accommodating such transactions. It is blatantly arbitrary and never does the max blocksize limit ever take into consideration, nor even measure what the network is capable of handling.

Sheesh, stop moaning then and simply send so many paying transactions day in and day out that you saturate the current block size limit.

Miners will be making so much money they will all eagerly upgrade their equipment and start lobbying for maybe even a far far larger max block size than you even imagine, simply because you provided enough fees to cover the upgrade and they are eager to attract more users like you - users who have a steady day in day out need for X megabytes per block, every block, just for their own transactions.

Isn't the whole point of the free market supposed to be the more money you bring to market the more merchants are going to clamour to come get some of that money? Bring the money.

Also it is not blatantly arbitrary it is what the network could handle, given the hardware and bandwith already paid for and installed. If you want more hardware and bandwidth paid for and installed, pay for it and either install it or let others take care of installing if you only want to pay the bill not do the actual work and deal with the nitty gritty details first-hand.

-MarkM-

[mp420]

And, if price dropped, the people's interest (and thus transaction volume) will decrease, then the system will become good again

...and doomed to stagnation. No more innovation would occur, no more moderately sized and up businesses would start accepting bitcoins, and the businesses that do accept it would phase it out over time. Interest in bitcoin would drop, and it would be declared a failure. Because of that stigma, businesses would become even more hesitant about accepting crypocurrency in general than they already are, and it would stay that way until either something radically different from bitcoin was created or several generations passed. Later on, people would look back in awe about how Bitcoin was far ahead of its time and wonder what happened. That is our worst-case scenario, and it's more likely than you might think.

This is exactly what I expect to happen. Not necessarily because of the block size limit thing, but because of some other technical, protocol-level oversight that is politically impossible to correct.

The only reason why I have any bitcoins is that I want to hedge against the possibility that I am wrong about this.

[markm]

You want to arbitrarily make a not-yet-needed change that could break the network just so you will feel confident that it is politically easy to make not-needed changes???

-MarkM-

[mp420]

You want to arbitrarily make a not-yet-needed change that could break the network just so you will feel confident that it is politically easy to make not-needed changes???

-MarkM-

The change is a necessary one IF Bitcoin becomes even a couple of orders of magnitude more widely adopted. Which would still mean it'd be a niche currency.

But I want it decided ASAP because I think hard forks such as this need to be done with a huge lead time. I support misterbigg's miner-voting proposal, or some variation of it. I do not support just raising the max block size to 10M (and creating another necessary hard fork in the hypothetical far future).

I do not think this is any kind of pressing issue at the moment, but hard forks can't be done just like that. Even if the actual fork happens ten years from now it would be very good to have the new protocol ready now.

[markm]

Well I think "we" are "doing is ASAP" in the sense that until "we" have figured out exactly what hard-forking changes will be bundled together into the next hard-fork no hard-fork should be attempted.

Who the "we" is might be part of what is being discussed, of course.

-MarkM-