Soft block size limit reached, action required by YOU

[matakaonew]

I really think that if bitcoin can't adapt to a very broad spectrum of events, like the mini crash of yesterday, another cryptocurrency will win the race. It's not that we have to win, by no mean, but we must continue to make bitcoin the best, with all we got witch is strongly related to winning the crypto-currency race.

So, the block size limit should be raised and should even adapt itself to the needs of the network. The only concern i can credit is if there is no limit, witch may brings centralization pretty fast.

The limits should be a function of the number of transaction pending in order that they get in the block chain with an expected waiting time of around 10 minutes.

i'm still new to bitcoin logic but something as simple as that could evaluate real time transaction size limit.

(Nb of transaction pending * mean transaction size (kb))/C

or if it is more usefull

(Size of all transaction pending)/C

Where C is a fine tune constant near 1 or exactly 1. if it is exactly one, someone will eventually confirm a block containing all the transaction (pending at time = some time) witch may not be what we want tough.

the idea is to accept a confirmed block only if, at time=t, the size limit chosen by the pool was under or equal to this hard limit. This way no miner can choose to work on a very large block and work out all the transaction by himself)

[niko]

I actually want to see the block size limit removed, Bitcoin to scale up, and after that sort of thing is done SatoshiDice type sites won't be as much of an issue anymore. I think Gavin feels the same way, as does sipa. Not sure how Matt feels.

@Mike: for the sake of informed discussion here, would you please briefly explain the economics of fees in the scenario you are proposing? What is the incentive for payers to include fees, and for miners to keep mining?

[muyuu]

Satoshidice just rushed us into this situation. But let's be clear: we'd eventually get here if adoption rises to somewhere remotely close to mainstream.

Luke's patch is fine, but either enforcing some fees or reducing block size sound like the way things will eventually have to go.

[VinceSamios]

Frankly - blaming satoshi dice is fucking retarded.

What is the point of bitcoin afterall? It's buying stuff, it's sending money, it's gambling, it's everything a currency is used for. That includes Satoshi Dice.

Solve the problem, don't go blaming a site which has arguably done more for bitcoin than any other.

Bitcoin needs to be able to handle 5000 transactions per second, eventually.

[CIYAM]

Bitcoin needs to be able to handle 5000 transactions per second, eventually.

Why?

[bitplane]

Bitcoin needs to be able to handle 5000 transactions per second, eventually.

Why?

Because:

VisaNet Peak Message Rate: 8,442 transaction messages per second sustained average over a one hour period

[muyuu]

Bitcoin needs to be able to handle 5000 transactions per second, eventually.

Why?

Because in real life it doesn't take that many people making purchases and other transactions to reach 5000 t/s. I do as many as 30 per day easily.

5000 t/s makes up 432 million/day. It would only take some 14.4 million people (with a usage pattern similar to mine) evenly distributed across the world to reach that limit. (Much fewer people if they are in the same time zone or close).

Bitcoin must scale to more than 10 million odd people.

[CIYAM]

Bitcoin must to scale to more than 10 million odd people.

Again why?

If # of tx's was the #1 priority then why would you even have a 10 minute confirmation time?

And why bother with even having a 21M limit if all that mattered was the # of tx's?

[os2sam]

Two questions:

How was this soft block size limit derived?  And why?

What is the Hard block size limit?

Sam

well. the hard limit is 1 megabyte, and this is 1/4th that. i think the answer to your second question  answers your first, yes?

Well no, not really.  The block size should be regulated by fee's not an artificial cap.

I actually want to see the block size limit removed, Bitcoin to scale up

Let me be clear, I'm not suggesting that block size limit should be lifted completely, at least not yet.

I would like to know the reasoning behind 1MB hard limit and the 250KB soft limit?  It seems to me that the soft limit is artificial, but maybe not?!?

Sam

[niko]

Bitcoin needs to be able to handle 5000 transactions per second, eventually.

Was that "eventually" intentional? Do you think the limit should be set now to accommodate the anticipated future volume?  If so, are you not concerned with the incentive structure you are imposing between now and then?  Or did you think that the limit should be dynamically adjusted as we go, to (almost) accommodate the growth?

[muyuu]

Bitcoin must to scale to more than 10 million odd people.

Again why?

If # of tx's was the #1 priority then why would you even have a 10 minute confirmation time?

And why bother with even having a 21M limit if all that mattered was the # of tx's?

Who said it was all that mattered?

They matter. They are not the only thing that matters but they do matter. To have 0 transactions you don't need any system. Problem solved! You see? it's just as ridiculous to say that it's ALL that matters as it is to say they don't matter at all.

[CIYAM]

They matter. They are not the only thing that matters but they do matter. To have 0 transactions you don't need any system. Problem solved! You see? it's just as ridiculous to say that it's ALL that matters as it is to say they don't matter at all.

I never said tx's don't matter and if tx's fell to 0 then Bitcoin would die - the question is whether it really has been designed to compete with Paypal/Visa for that purpose.

(it's not an argument of extremes I am trying to make at all)

[drawingthesun]

Bitcoin needs to be able to handle 5000 transactions per second, eventually.

Why?

Its simple, because a currency needs to be spendable. If the network can't handle this many transactions then its not scalable for the world. A lot of people here believe in Bitcoin becoming a global currency, and this is why people are paying a lot of money for a Bitcoin.

I get this feeling some people against the blocksize increase think that 7 transactions a second is fine and Bitcoin will be like gold and it'll be this massive store of wealth. Well if millions of people can't move their wealth around your Bitcoins will be worthless, no matter how many thousands you have.

Bitcoins only have value because people think (incorrectly) that Bitcoin can scale up as a payment network and store of wealth, If you told CNN/BBC and every new adopter that the network is actually capped at a max of 7 transactions a second* and that a decent amount of the main developers think this is fine, and that no one will ever need a transaction volume higher than 1000 transactions a second. Then you will see that $45 drop and it will not recover. It won't recover because another system will take its place.

Remember VISA/MasterCard/PayPal only represent a fraction of money moved in the world. Everyday hundreds of millions of people are paid into their bank accounts from work, billions are moving cash to one another. If bitcoin sticks to 7 transactions a second and another crypto-currency that can handle 10,000 transactions a second comes about, one that allows users to download part of the blockchain and allows users to connect into a node instead of being a entire node themselves, that currency will win.

*I heard from a forum member a while back the max transactions per second is 7 before the 1MB is no longer sufficient.

[muyuu]

Bitcoin needs to be able to handle 5000 transactions per second, eventually.

Was that "eventually" intentional? Do you think the limit should be set now to accommodate the anticipated future volume?  If so, are you not concerned with the incentive structure you are imposing between now and then?  Or did you think that the limit should be dynamically adjusted as we go, to (almost) accommodate the growth?

It's just a judgement call.

If you think the problem will go away before getting there, for some external development - say, Ripple integration or some other hybrid solution becoming common - then yeah, you can opt for Luke's patch and the problem is delayed for likely several years.

If you think this moment is as good as any other to press the community into looking for a solution, then you don't touch the block soft limit and you keep accepting all transactions.

Honestly, I think having people pay fees for the right to bloat the blockchain is something we should do sooner rather than later.

Bitcoin simply doesn't compete with paypal at this point. Only marginally if at all.

[CIYAM]

I get this feeling some people against the blocksize increase think that 7 transactions a second is fine and Bitcoin will be like gold and it'll be this massive store of wealth. Well if millions of people can't move their wealth around your Bitcoins will be worthless, no matter how many thousands you have.

Do people trading Gold need more than 7 tx's per second?

(i.e. do you think Bitcoin would really *die* if that was the limit?)

[Mike Hearn]

I actually want to see the block size limit removed, Bitcoin to scale up, and after that sort of thing is done SatoshiDice type sites won't be as much of an issue anymore. I think Gavin feels the same way, as does sipa. Not sure how Matt feels.

@Mike: for the sake of informed discussion here, would you please briefly explain the economics of fees in the scenario you are proposing? What is the incentive for payers to include fees, and for miners to keep mining?

Payers have no incentive to ever include any fees, including today, because they are not the ones who actually care about double spending risk. After all, you know you're trustworthy, right?

It's actually the recipient that cares about confirmation. And recipients have many ways to incentivize mining. For example, via network assurance contracts, which I have proposed many times in various other discussions. If you see mining as a public good then assurance contracts are a method that's been both widely theoretically studied and implemented in practice (most obviously kickstarter, other examples are around too).

There is also the rather obvious and oft-overlooked fact that mining generates waste heat, and there are lots of people/places that actually need heat. Because mining hardware is small, portable and scalable, if you're already heating something with electrical resistance it may make sense to use mining ASICs instead and at that point you don't really care about the cost. You still need a full node or a pool to take part but I think that'll be easy to run even at high traffic levels.

[deepceleron]

The reduction of Satoshi's 0.01 minimum fee to 0.0005 was an error. A divine design was altered by whims and perceived exponential growth of Bitcoin value, without considering future impact on the network. Whims like those seen all over this forum in the past few weeks.

The transaction volume currently being experienced, which pays an average of 0.5 bitcoin per block, would instead be paying 10 bitcoin per block, on track to replace the mining reward on schedule. Bitcoin would be used for transferring currency between individuals in exchange for goods and services, instead of for frivolous applications.

Instead we have this thread.

The solution is to pay more for your transactions instead of demanding more for less. The current block size and new higher fee prioritization code allows us to crowd out the spammy with only nominal fees, even though it is still not necessary to include more than the default fee for next-block service. Economics will regulate the applications of Bitcoin to those uses that are worth paying a reasonable fee for reasonably fast processing. Unfortunately version 0.3.23 broke proper economics.

[michaelmclees]

SatoshiDice does not follow the rules:
The blockchain is a system for transferring value, of which the final total is specified in advance. Those are the terms of the social contract every Bitcoin holder has adopted understanding. Those are the terms every node has agreed to voluntarily participate in the network.
Nodes and miners have not unanimously agreed to have their resources/time spent inefficently processing informational messages like "you lose", "you win", or even "I bet on <this> game with <this> much". This was never part of the agreement.
Nor is the system supposed to hold up to flooding. If you go back to even the original paper by Satoshi, miners are expected to filter out flooding attacks like this. The proposed transaction fee solution works in most cases, but not SatoshiDice because they have social-engineered gamblers into covering the fees for them, and to make it worse the gamblers are willing to pay a higher fee than real users. If Bitcoin had achieved critical mass already, we might have been able to just say "too bad, deal with higher fees", but at this pre-adoption stage the response to that would almost certainly be "screw you, I'll stick with VISA".

Couldn't disagree more.  There is no social contract with Bitcoin, and to the extent any contract at all exists, Satoshidice follows it.  That nodes and miners have agreed to process SD transactions is self evident, despite your protests and claims to the contrary; unanimity was never a requirement.

[Luke-Jr]

If the Devs really think SD is a problem, they haven't seen anything yet. Bitcoin can't handle more than 1000 transactions a second? There is no way a Bitcoin will have value in 20 years!

Handling 1000 transactions per second for 10 active users (SatoshiDice) and handling 1000 tx/sec for 100000 active users are two totally different things.
The latter grows the infrastructure, the former overloads it.

Filtering out satoshidice transactions would make it trivial to double spend a losing bet.

If it takes double-spending to stop SD's abuse, then it's good that it's easier to do.
If SD is going to take the "tough, we don't care about the problems we cause" road while they abuse the network, I don't see one reason why the network should give a care if miners exercising their by-design choices makes SD more vulnerable because they don't even follow common best practices in accepting transactions.


While I agree that eventually the block size limit may need to be raised somehow, that day is far far in the future. With miners doing their job filtering out flooding attacks (the only major one currently being SatoshiDice), we are nowhere near even the soft limit being a concern.

Bitcoin's scaling problems are mostly limited to using the blockchain. There are many ways to avoid using the blockchain. Already, the vast majority of Bitcoin transactions (yes, even more than the SD flood!) occur within MtGox's system never touching the blockchain! The new payment protocol should help with some use cases as well. There are various possibilities for transparent trust-chain type transactions as well.

But all these different improvements require time to develop, understand, and implement in clients. With the current situation of active developers, it will probably take years before Bitcoin can scale nearly as well as competitors. Bitcoin Foundation is helping improve this situation by paying at least Gavin to work on things full time. Real adoption among rational people (ie, not gamblers or druggies) also brings with it an equivalent percentage of potential open source volunteer developers to join in the efforts.

SatoshiDice flooding the network does not. Anarchist nuts daring the government(s) to ban Bitcoin does not. These are counter-productive, and only harm the probability that Bitcoin will be able to achieve the adoption it needs to get to the point that it's truly viable.

[VinceSamios]

The reduction of Satoshi's 0.01 minimum fee to 0.0005 was an error.

The reduction was too great, but a reduction was necessary. It needs to be somewhat proportional to fiat currency exchange rates otherwise bitcoin doesn't do what it says on the tin (low transaction fees)

Maybe the solution is in more blocks with lower reward (ie. 5x more blocks, with 5btc reward each)

Either way, if bitcoin can never handle 5000+ transactions per second, why are we even bothering?