Funding of network security with infinite block sizes

[Peter Todd]

What is Plan B if just trusting miners/merchants/users to do the right thing doesn't work?

Big-picture it is easy:  Schedule a soft-fork that imposes some network-rule-upper-limit, with whatever formula seems right to correct whatever problem crops up.
Small-picture: hard to see what the "right" formula would be, but I think it will be much easier to define after we run into some actual practical problem rather than guessing where problems might crop up.

Your "plan" reminds me of an old joke about the difference between programmers and engineers:

A mechanical engineer, an electrical engineer and a computer programmer were on their way to a meeting in Switzerland. They had just passed the crest of a high mountain pass when suddenly the brakes on their car failed. The car careened almost out of control down the road, bouncing off the crash barriers, until it miraculously ground to a halt scraping along the guardrail.

The car's occupants, shaken but unhurt, now had a problem: they were still stuck at the top of a mountain in a car with no brakes. What were they to do?

"I know," said the mechanical manager, "Let's check under the car for leaks - chances are a hydraulic line burst."

"No, no," said the electrical engineer, "This is a new car with sensors everywhere  - let me hook up my multimeter to the hydraulic line pressure sensor output and see if it reads low first."

"Well," said the programmer, "Before we do anything, I think we should push the car back up the road and see if it happens again."

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[Gavin Andresen]

Your "plan" reminds me of an old joke...

Okey dokey.

If you want to be helpful, please write up a list of pros and cons for the various plans that have been proposed, including your own (last time I asked you, you waffled and didn't have any plan).

I've been pretty busy dealing with the avalanche of press and working on the payment protocol.

[fornit]

Your "plan" reminds me of an old joke...

Okey dokey.

If you want to be helpful, please write up a list of pros and cons for the various plans that have been proposed, including your own (last time I asked you, you waffled and didn't have any plan).

I've been pretty busy dealing with the avalanche of press and working on the payment protocol.

the short list:

1) no incease:

pro

- takes no time at all
- predictable consequences
- allows the biggest amount of people to run a full node

con

- pretty much limits bitcoin to store of value. if it fails as store of value (possibly for an off-chain transaction system) it will be dead or a total niche product very soon.

-----------------------------------------------

2) fixed increase:

pro

- very simple implementation
- easy to predict consequences
- no major worst case scenarios

con

- short term solution
- discrete jump in block size with no regard to current amount of transactions

-----------------------------------------------

3) floating block size:

pro

- most likely the best option to successfully balance low transaction fees and small block size
- no more pros, but thats a really big one

con

- most complex implementation (might still not be very complex though)
- hard to predict exact behavior
- has to undergo more scrutiny and fine tuning to avoid an exploitable algorithm

-----------------------------------------------

4) remove limit entirely:

pro

- takes no time at all
- might allow for a natural balance without artificial rules
- allows for a plan b

con

- needs a plan b  
- relies on people to do the right thing in a situation when
 - a) its very hard to say what the right thing actually is
 - b) money is involved. people are evil, stupid and completely unable to be objective when money is involved.
- bonus con: with a constant need for consent, it actually allows for even more discussions...


honestly, i have no hope for 4). its the least likely option to get a majority behind it. plus its too optimistic. my money is on 2) with an eventual 3).

[justusranvier]

honestly, i have no hope for 4). its the least likely option to get a majority behind it. plus its too optimistic. my money is on 2) with an eventual 3).

This forum is not representative of bitcoin users as a whole. The majority of bitcoin users don't realize there is a fixed limit on the transaction rate and would be appalled if they knew. Move outside the circle of people who have some kind of vested interest in limiting the capabilities of the blockchain and the response would be, "Of course there shouldn't be an arbitrary limit on the transaction rate."

Bitcoin with a fixed protocol limit of 1 MB blocks is like building a long distance telephone network that had a global limit of 10 calls in progress at once, and refusing to ever increase this limit no matter how much demand there was to make long distance phone calls, or how much the technology improved.

[Realpra]

Your "plan" reminds me of an old joke...

Okey dokey.

If you want to be helpful, please write up a list of pros and cons for the various plans that have been proposed, including your own (last time I asked you, you waffled and didn't have any plan).

I've been pretty busy dealing with the avalanche of press and working on the payment protocol.

the short list:

....

4) remove limit entirely:

pro

- takes no time at all
- might allow for a natural balance without artificial rules
- allows for a plan b

con

- needs a plan b  
- relies on people to do the right thing in a situation when
 - a) its very hard to say what the right thing actually is
 - b) money is involved. people are evil, stupid and completely unable to be objective when money is involved.
- bonus con: with a constant need for consent, it actually allows for even more discussions...


honestly, i have no hope for 4). its the least likely option to get a majority behind it. plus its too optimistic. my money is on 2) with an eventual 3).

4 is the correct option because your con list is flawed:

1. In the case of a very large block being artificially being created to destroy Bitcoin most of the network would simply automatically end up rejecting it because by the time they downloaded it there would be a longer chain/fork without that block.

2. In the case of increasing block sizes squeezing out smaller nodes the solution is to create "swarm clients" that do collaborative validation.
This would allow the network to scale to any size for "infinite" time when combined with the "ledger solution".
(This is not up to choice or opinion, Bitcoin presently does not scale and if you don't fix this some other crypto currency will. Forum searching both quotation marked concepts should be easy enough)


The vision of Bitcoin believers is to take over the world, you won't do that with a 1mb block limit, its pathetic.

[conv3rsion]

honestly, i have no hope for 4). its the least likely option to get a majority behind it. plus its too optimistic. my money is on 2) with an eventual 3).

This forum is not representative of bitcoin users as a whole. The majority of bitcoin users don't realize there is a fixed limit on the transaction rate and would be appalled if they knew. Move outside the circle of people who have some kind of vested interest in limiting the capabilities of the blockchain and the response would be, "Of course there shouldn't be an arbitrary limit on the transaction rate."

Bitcoin with a fixed protocol limit of 1 MB blocks is like building a long distance telephone network that had a global limit of 10 calls in progress at once, and refusing to ever increase this limit no matter how much demand there was to make long distance phone calls, or how much the technology improved.

I am 100% sure that a bitcoin would not be worth $144.00 USD right now if the majority of people purchasing at that price (or even half that price) had knowledge or belief that in the very short future, it would cost more than a few cents to use Bitcoin or that the network would permit a maximum of 7-20 transactions per second forever. That is not what people using, adopting, investing, or proselytizing are selling to others in their elevator speeches, because if they were aware of it they would be disgusted.

Any alt chain that chooses to scale will quickly replace Bitcoin in terms of both usage and fiat exchange rate, because as should be quite obvious to anyone without ulterior motives, the two are correlated. Without usage that presents a superior alternative to existing systems, which in this case is the ability to instantly and cheaply send money anywhere without a 3rd party risk, Bitcoin is irrelevant, worthless, and soon to be obsolete.

[Nubarius]

I fully support Gavin Andresen on this.

It is the best solution possible: no risk of overengineering, no kicking the can down the road and no half-baked attempts to solve a would-be problem that hasn't been proved to be there.

I think it is a mistake to apply the scarcity-as-economic-incentive logic to physical resources like storage or bandwidth. How scarce those resources are can only be determined by technology and the free market, not by a whimsical hard-coded little number. It is utterly wrong to draw any analogies with the 21-million-bitcoin limit, which simply affects the unit of account and doesn't relate to any physical resource. Bitcoins are neither scarce nor abundant; there's simply a predictable number of them. Extending the logic of the unit of account to actual physical resources is simply muddled economic thinking, in my opinion.

[...]
honestly, i have no hope for 4). its the least likely option to get a majority behind it. plus its too optimistic. my money is on 2) with an eventual 3).

Your list is a very good summary, but I think you're exaggerating the cons of option 4. Besides what justusranvier and RealPra have said above, the need for a plan B applies to the other options too. Also, it is the other options that will keep a constant need for consent as the block size limit will be a recurring issue as long as there is an arbitrary cap that we're about to hit at any moment. With option 4 the debate will fizzle out and will only reappear if and when we come across an actual problem (and then discussion will be based on facts and not on speculation about human behaviour).

This forum is not representative of bitcoin users as a whole. The majority of bitcoin users don't realize there is a fixed limit on the transaction rate and would be appalled if they knew. Move outside the circle of people who have some kind of vested interest in limiting the capabilities of the blockchain and the response would be, "Of course there shouldn't be an arbitrary limit on the transaction rate."

An unlimited number of times this^.

[fornit]

honestly, i have no hope for 4). its the least likely option to get a majority behind it. plus its too optimistic. my money is on 2) with an eventual 3).

This forum is not representative of bitcoin users as a whole. The majority of bitcoin users don't realize there is a fixed limit on the transaction rate and would be appalled if they knew. Move outside the circle of people who have some kind of vested interest in limiting the capabilities of the blockchain and the response would be, "Of course there shouldn't be an arbitrary limit on the transaction rate."

maybe next time you make up an argument that doesnt entirely rely on speculation about me and every other bitcoin user and i might consider thinking about it 

@realpra
i cant find anything in your post that relates to mine. i think you interpreted a lot more into my post than i actually said.

@nubarius
there is very little upside to having no scarcity at all and a very concrete worst case scenario: the blockchain growth might be too quick for the current state of the technology. people dont want one piece of software to occupy whole harddisks and lightweight clients are still in an rather early development stage. just imagine some sort of major microtransaction or gambling service started using bitcoin and it grew by a factor of 100. its legitimate use alright. still, bitcoin cant possibly handle it at this point. the technology needs to be further developed before it can handle any amount of transactions. i wish the free-market enthusiasts would at least see that right now there are limits, regardless of what we want or decide.

i think its very unfortunate that both the the "full node for everyone!" and the free market advocates basically act like fanatics, with very little concern about real issues (including finding a solution a majority can agree on) and a strong tendecy for black-or-white thinking.

[justusranvier]

there is very little upside to having no scarcity at all

That word does not mean what you think it means.

Blocks do not need a protocol limit on their maximum size in order for the space in them to be scarce.

Until computers start shipping that contain an infinite amount of RAM, and are equipped with CPUs that can process an infinite amount of data in zero time, and have internet connections which can transfer an unlimited amount of data in zero time, then space in the blockchain is scarce.

If you think an artificial limit on the size of a block is necessary to make the space scarce you either don't understand physics, or economics, or both.

[fornit]

how is any of those limitations relevant to the current situation?

[mp420]

I like the floating (miner-voted) block size idea. This is because I think:

1) Transactions require real resources (bandwidth, cpu time, storage), hence transactions must be expensive. They require these things from every full node, not just miners, so there's necessarily a kind of tragedy of commons situation in play. I cannot think of a solution that wouldn't discourage non-miners to run a full node. After trust-free lite nodes are implemented I can't think of a reason why a non-miner would run a full node.
2) Bitcoin ceases to be useful if transactions are TOO expensive. I think the upper limit for the minimum mandatory fee (currently zero) is around $5. Above that, people just migrate to cheaper ways to transfer value. This is why keeping the 1M limit won't work.

Of course, I have never considered Bitcoin to be particularily useful for e-commerce.

[justusranvier]

how is any of those limitations relevant to the current situation?

I don't even know where to begin. Maybe you could find an entry level textbook on economic and start with the definition of scarcity, then read up on price.

You've already identified the solution, except that you erroneously identified it as the problem.

people dont want one piece of software to occupy whole harddisks

Users have neither the ability nor desire for the blockchain to grow without bound. That's why no hard-coded limit on the block size is necessary.

[TierNolan]

That's easy!  Eliminate the block size limit as a network rule entirely, and trust that miners and merchants and users will reject blocks that are "obviously too big." Where what is "obviously too big" will change over time as technology changes.

That effectively sets the block size at 32MB, since that is the max message size.  Would your intention be to include splitting blocks over multiple messages?

One option would be to change the "full" block message so that it only includes the hashes of the included transactions.

Transactions would then have to be sent separately. 

This allows the 32MB to be used entirely for transaction hashes, but still is a limit to 1 million transactions, which (famous last words) should be enough.

What is Plan B if just trusting miners/merchants/users to do the right thing doesn't work?

Big-picture it is easy:  Schedule a soft-fork that imposes some network-rule-upper-limit, with whatever formula seems right to correct whatever problem crops up.
Small-picture: hard to see what the "right" formula would be, but I think it will be much easier to define after we run into some actual practical problem rather than guessing where problems might crop up.

Ideally, there would be miner rules and user rules.  For example, normal uses might accept any size blocks.  However, when working out which block to add to, miners might reject certain blocks.  Once they are buried deeply enough, the miner might accept them then.  This would help to heal forks.

This means that only 1 hard fork is required to take the limit to infinite.  However, then the majority of the hashing power gets to pick the max block size.

[Mike Hearn]

One option would be to change the "full" block message so that it only includes the hashes of the included transactions.

Transactions would then have to be sent separately.

Bloom filtering support already provides most of what's needed here. Matt checked in an optimization for full-match filters a short while ago, it makes sense to continue on that vein.

[ShadowOfHarbringer]

So the longer I think about the block size issue, the more I'm reminded of this Hayek quote:

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

F.A. Hayek, The Fatal Conceit

We can speculate all we want about what is going to happen in the future, but we don't really know.

So, what should we do if we don't know? My default answer is "do the simplest thing that could possibly work, but make sure there is a Plan B just in case it doesn't work."

In the case of the block size debate, what is the simplest thing that just might possibly work?

That's easy!  Eliminate the block size limit as a network rule entirely, and trust that miners and merchants and users will reject blocks that are "obviously too big." Where what is "obviously too big" will change over time as technology changes.

I support this.

Let's try the simple solution and if it doesn't work, we can try something else.
Bitcoin is all about free market, right ? So let's allow the market to decide for us.

Configuration setting can be made for both client and miner applications, so users will be able to choose.

[conv3rsion]

So the longer I think about the block size issue, the more I'm reminded of this Hayek quote:

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

F.A. Hayek, The Fatal Conceit

We can speculate all we want about what is going to happen in the future, but we don't really know.

So, what should we do if we don't know? My default answer is "do the simplest thing that could possibly work, but make sure there is a Plan B just in case it doesn't work."

In the case of the block size debate, what is the simplest thing that just might possibly work?

That's easy!  Eliminate the block size limit as a network rule entirely, and trust that miners and merchants and users will reject blocks that are "obviously too big." Where what is "obviously too big" will change over time as technology changes.

I support this.

Let's try the simple solution and if it doesn't work, we can try something else.
Bitcoin is all about free market, right ? So let's allow the market to decide for us.

Configuration setting can be made for both client and miner applications, so users will be able to choose.

I support it too. Letting the market decide the fees and the maximum blocksize is the right answer.

I happen to believe that a limited blocksize will lead to centralization, but for those that think the opposite (that larger blocksizes lead to centralization), I truly wish they would put their time and effort into helping BITCOIN scale. If you are concerned about computing requirements going up for the average user, you can certainly work towards optimizations that will lighten that load, without trying to replace Bitcoin for the majority of what constitutes its present day usage. I think thats probably why Gavin is working on the payment protocol, so that dead puppy "communication" isn't needed.  

All the effort and time spent discussing this issue... imagine if it was actually used productively.

[solex]

All the effort and time spent discussing this issue... imagine if it was actually used productively.

I know people are tired of the 20+ threads on block size and thousands of posts in them, but this exhaustive debate is very good.

The minutiae of every point of view is being thrashed out in the open, smart ideas and not so smart ideas are put forward and critiqued. What is the alternative? Important decisions taken behind closed doors. Isn't that the default model of existing CBs?

I think that this debate has been productive because a lot of information has been shared between people who care about Bitcoin and want to contribute to help it become successful.

[zebedee]

I support it too. Letting the market decide the fees and the maximum blocksize is the right answer.

I happen to believe that a limited blocksize will lead to centralization, but for those that think the opposite (that larger blocksizes lead to centralization), I truly wish they would put their time and effort into helping BITCOIN scale. If you are concerned about computing requirements going up for the average user, you can certainly work towards optimizations that will lighten that load, without trying to replace Bitcoin for the majority of what constitutes its present day usage. I think thats probably why Gavin is working on the payment protocol, so that dead puppy "communication" isn't needed.  

All the effort and time spent discussing this issue... imagine if it was actually used productively.

Add my vote too.  Other stances have the premise that block space is valuable and can't be allowed to get too big too fast, but with the contradictory fear that it would be given away for free. And that miners would allow such large blocks to be created that miners wouldn't be able to handle it, which is also a self-correcting "problem".

Block space will always come with a price, it has for 2 years now despite 1MB not being a limiting number. Miners worry about their block propagation and always will have the incentive to be conservative and get their blocks known. See Eligius for example with 32 transactions limit for a long time.

Let the miners determine what works in the free market through trial and error.  This will change with time elastically as computing power and resources change. And that's the way it should be.

[jgarzik]

Satoshi also intended the subsidy-free, fee-only future to support bitcoin.  He did not describe fancy assurance contracts and infinite block sizes; he cleared indicated that fees would be driven in part by competition for space in the next block.

Unlimited block sizes are also a radical position quite outside whatever was envisioned by the system's creator -- who cleared did think that far ahead.

Appeal to authority: Satoshi didn't mention assurance contracts therefore they can not be part of the economics of the network
Strawman argument: The absence of a specific protocol-defined limit implies infinite block sizes.
False premise: A specific protocol-defined block size limit is required to generate fee revenue.

Gathering data does not imply blindly following the data's source.

Fully understanding the intent of the system's designer WRT fees is a very valuable data point in making a decision on block size limits.

[Zeilap]

people dont want one piece of software to occupy whole harddisks

Users have neither the ability nor desire for the blockchain to grow without bound. That's why no hard-coded limit on the block size is necessary.

People tend not to want to murder others or be murdered themselves, yet it still happens and we have laws to prevent / discourage it.

Add my vote too.  Other stances have the premise that block space is valuable and can't be allowed to get too big too fast, but with the contradictory fear that it would be given away for free. And that miners would allow such large blocks to be created that miners wouldn't be able to handle it, which is also a self-correcting "problem".

You're working under the assumptions that everyone mining coins want what's best for Bitcoin / care about Bitcoin's future, and all miners are equal - they are not, some will realize that producing large blocks that others can't handle is very much in their interest. Others may have the aim of just causing as many problems as possible because Bitcoin is a threat to them in some way, who knows? All you're doing is creating a vulnerability and expecting no-one to take advantage.

We aren't all hippies living on a fucking rainbow - problems don't just fix themselves because in your one-dimensional view of the world you can't imagine anyone not acting rationally and for the greater good.