Block Size Debate, finally an ideal solution: Bitcoin Unlimited

[Hyena]

If it only were that simple. I have also been in the Bitcoin business since 2011. The fundamental failure of applying Monero type scaling models, where the miners are penalized a percentage of the blockreward if they mine bigger blocks, to Bitcoin is what happens when the block reward runs out. If the block reward runs out there is no penalty and no incentive for the miners to secure the coin. If one reads Peter R. Rizun's paper https://www.bitcoinunlimited.info/resources/feemarket.pdf, one will understand that the effective miner penalty for increasing the blocksize due to orphan blocks is proportional to the block reward.

The only reason miner penalties that are proportional to the block reward work in Monero is that Monero has a perpetual block reward (tail emission). Bitcoin does not.

There is a reason why there are many in Bitcoin that are opposed to increasing the blocksize. They understand that without a a minimum perpetual block reward (tail emission), Bitcoin has to rely on fees to provide an incentive to the miners. This means one has to limit the blocksize in order to force the fees to go up.
 
Edit 1; Dogecoin unlimited may work but not Bitcoin unlimited.
Edit 2: I have listened to the video and yes I see how Blockstream when combined with a very small blocksize does become a tool for the existing banking system. This however does not change the reality that there is currently no viable solution for decentralized blocksize scaling without a tail emission. If someone has such a solution I would like to see it.

Although your reasoning is plausible I would still argue that a free market solution would fix everything. Miners that are not satisfied with the rewards gained from the fees can feel free to quit mining. I will gladly be amongst the ones filling their place.

[ArticMine]

...

Although your reasoning is plausible I would still argue that a free market solution would fix everything. Miners that are not satisfied with the rewards gained from the fees can feel free to quit mining. I will gladly be amongst the ones filling their place.

A free market implies payment. How are the miners supposed to be paid without a block reward?

[Hyena]

...

Although your reasoning is plausible I would still argue that a free market solution would fix everything. Miners that are not satisfied with the rewards gained from the fees can feel free to quit mining. I will gladly be amongst the ones filling their place.

A free market implies payment. How are the miners supposed to be paid without a block reward?

TX fees.

[franky1]

we should not implement monero's version..
by that i mean
NOTHING should ever even come close to messing with the block reward mechanism. no way to higher it or reduce it.. apart from the built in halving mechanism that should continue doing what its doing.
again nothing else should mess with the reward mechanism now or in the future.


however over the next few DECADES the fee's become more important so miners will want to slowly have more transactions so that the fee's dont have to become expensive to subsidize the drop in reward per 4 years..

its better to have 9000 transactions at 1cent rather than 1 transaction at 9000cents.

and yes that might only be $90 but like i said the reward:fee switch over is not a problem today. but in DECADES so in DECADES we would hopefully be at more than 9000 transactions a block.
even if the doomsday agenda crew keep putting capacity of DECADES into rhetoric of this or last year. not understanding things grow.
after all.. 2 years ago core was saying 2mb bloat would kill chinese miners. but now saying 4mb bloat is ok.. funny that.
afterall.. 16 years ago the largest hard drive you could get was 4GB..
things grow and change given time

[Hyena]

we should not implement monero's version..
by that i mean
NOTHING should ever even come close to messing with the block reward mechanism. no way to higher it or reduce it.. apart from the built in halving mechanism that should continue doing what its doing.
again nothing else should mess with the reward mechanism now or in the future.


however over the next few DECADES the fee's become more important so miners will want to slowly have more transactions so that the fee's dont have to become expensive to subsidize the drop in reward per 4 years..

its better to have 9000 transactions at 1cent rather than 1 transaction at 9000cents.

and yes that might only be $90 but like i said the reward:fee switch over is not a problem today. but in DECADES so in DECADES we would hopefully be at more than 9000 transactions a block.
even if the doomsday agenda crew keep putting capacity of DECADES into rhetoric of this or last year. not understanding things grow.
after all.. 2 years ago core was saying 2mb bloat would kill chinese miners. but now saying 4mb bloat is ok.. funny that.
afterall.. 16 years ago the largest hard drive you could get was 4GB..
things grow and change given time

+1

I have spread the Bitcoin Unlimited propaganda on the bitcoin's own block chain now.


Interestingly, Bitcoin Unlimited is a featured wallet at bitcoin.com. This just made me trust Bitcoin Unlimited even more.

[franky1]

we should not implement monero's version..
by that i mean
NOTHING should ever even come close to messing with the block reward mechanism. no way to higher it or reduce it.. apart from the built in halving mechanism that should continue doing what its doing.
again nothing else should mess with the reward mechanism now or in the future.


however over the next few DECADES the fee's become more important so miners will want to slowly have more transactions so that the fee's dont have to become expensive to subsidize the drop in reward per 4 years..

its better to have 9000 transactions at 1cent rather than 1 transaction at 9000cents.

and yes that might only be $90 but like i said the reward:fee switch over is not a problem today. but in DECADES so in DECADES we would hopefully be at more than 9000 transactions a block.
even if the doomsday agenda crew keep putting capacity of DECADES into rhetoric of this or last year. not understanding things grow.
after all.. 2 years ago core was saying 2mb bloat would kill chinese miners. but now saying 4mb bloat is ok.. funny that.
afterall.. 16 years ago the largest hard drive you could get was 4GB..
things grow and change given time

+1

I have spread the Bitcoin Unlimited propaganda on the bitcoin's own block chain now.
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Interestingly, Bitcoin Unlimited is a featured wallet at bitcoin.com. This just made me trust Bitcoin Unlimited even more.

personally everyone switching to bitcoin unlimited is just as bad as everyone switching over to core.. it removes diversity.. however core should have its own user defined blocksize option instead of node users needing to cry to core for more and having devs say yes or no. like some oliver twist food scene.
'please sir can i have some more'

no one should have sole power over change. it should remain decentralized and diverse. but allow the freedom of growth by not stifling growth for corporate greed/ego/profit agenda

[Hyena]

personally everyone switching to bitcoin unlimited is just as bad as everyone switching over to core.. it removes diversity.. however core should have its own user defined blocksize option instead of node users needing to cry to core for more and having devs say yes or no. like some oliver twist food scene.

no one should have sole power over change. it should remain decentralized and diverse. but allow the freedom of growth by not stifling growth for corporate greed/ego/profit agenda

Yeah I would stay at core but have a custom block size limit for my node and reject SegWit. I think I could compile my own custom build from core's src code having block size increased and segwit disabled.

[ArticMine]

...

TX fees.

I was actually expecting this response. What then prevents TX fees from going to zero if there is an unlimited blocksize? Keep in mind that if all TX fees do is overcome the orphan block penalty the net fee paid to the miner would still be zero.

[jbreher]

If one reads Peter R. Rizun's paper https://www.bitcoinunlimited.info/resources/feemarket.pdf, one will understand that the effective miner penalty for increasing the blocksize due to orphan blocks is proportional to the block reward.

The only reason miner penalties that are proportional to the block reward work in Monero is that Monero has a perpetual block reward (tail emission). Bitcoin does not.

Fundamental misunderstanding. The orphan cost is indeed proportional to the block reward. But the block reward includes both the block subsidy, and the collective transaction fees.

[jbreher]

personally everyone switching to bitcoin unlimited is just as bad as everyone switching over to core.. it removes diversity..

Sure - _everyone_ switching over to BU reduces diversity - of implementation. However, in the current environment, almost half switching over would increase diversity of implementation.

[jbreher]

...

TX fees.

I was actually expecting this response. What then prevents TX fees from going to zero if there is an unlimited blocksize? Keep in mind that if all TX fees do is overcome the orphan block penalty the net fee paid to the miner would still be zero.

Your reply to expected statement is weaksauce. Obviously, what prevents TX fees from going to zero is that miners will not mine if there is no incentive. This is the same situation whether blocks are unlimited by the protocol, or limited to 1MB.

[ArticMine]

...

Fundamental misunderstanding. The orphan cost is indeed proportional to the block reward. But the block reward includes both the block subsidy, and the collective transaction fees.

block reward (presently 25 Ƀ)

This is from page 2 of the paper. So no the block reward does not include the fees. The point of the paper is to use orphan blocks to set a fee. Otherwise one ends up going in circles.

[ArticMine]

...

Your reply to expected statement is weaksauce. Obviously, what prevents TX fees from going to zero is that miners will not mine if there is no incentive. This is the same situation whether blocks are unlimited by the protocol, or limited to 1MB.

Competition among the miners will drive the fees to zero, unless what is proposed here is a mining cartel.

Edit: ... and yes when the TX fees do reach zero the miners will stop mining and the coin becomes insecure.

[jbreher]

The point of the paper is to use orphan blocks to set a fee. 

No. The point of the paper is to quantify the incentive for miners to mine. It shows that rational block size choice by miners is limited by the fact that larger blocks are orphaned more often than smaller blocks. Accordingly, blocks will be no larger than the point where marginal transaction fee equals marginal orphan probability cost.

[jbreher]

Competition among the miners will drive the fees to zero, unless what is proposed here is a mining cartel.

Which of course explains why we can choose between a new iPhone or a new Galaxy at a cost of zero.

Really?

[ArticMine]

The point of the paper is to use orphan blocks to set a fee. 

No. The point of the paper is to quantify the incentive for miners to mine. It shows that rational block size choice by miners is limited by the fact that larger blocks are orphaned more often than smaller blocks. Accordingly, blocks will be no larger than the point where marginal transaction fee equals marginal orphan probability cost.

How do you prevent a a 51% attack on Christmas Day when the blocksize is falling sharply, and there are hardly any TXs? This would be the optimal time for a 51% attack on Bitcoin unlimited if the statistics from VISA regarding peak transaction volumes on  December 23, and December 24 are any indication.

As for "free" cellphones, I'll stick with my rooted Nexus 4 and save over 20 CAD per month by avoiding a contract. The only "free lunch" in cellphone contracts is for the service provider.

[jbreher]

How do you prevent a a 51% attack ...

You don't. A 51% attack is a 51% attack, no matter the block size. What are you trying to get at? Are you trying to assert that your absurd hypothetical is somehow unique to the large block case?

As for "free" cellphones...

Way to completely avoid the point. No rational producer produces for no profit. Another (even more) absurd hypothetical.

[Hyena]

...

TX fees.

I was actually expecting this response. What then prevents TX fees from going to zero if there is an unlimited blocksize? Keep in mind that if all TX fees do is overcome the orphan block penalty the net fee paid to the miner would still be zero.

There are 2 kinds of maximum block sizes. The theoretical/logical one currently is 1 MiB. The practical one is much higher and is dependent on the network speed of most miners. It is impossible to exceed the practical block size limit because when exceeded your block will simply be orphaned. Even 95% consensus would not allow us to have blocks larger than the practical maximum block size. It is very possible to exceed the logical block size limit on the other hand but it requires consensus. That said, in both cases we do have a maximum block size limit which means TX fees won't go to zero. Even if they did go to zero due to altruistic miners there are block rewards which are essentially equivalent to TX fees paid by all Bitcoin stakeholders collectively.

In the hypothetical situation where Bitcoin price is too damn low and block reward is worth nothing miners will start dropping out. Those with cheaper electricity or simply altruistic miners will remain. Tor nodes don't get no block reward but they still exist! Sure the network is slow but it is wrong of you to assume that every person on Earth is egoistic. Also, stakeholders are definitely willing to protect their investment by providing additional security to Bitcoin network. Finally, 51% attack is not as destructive as you think it is. If it's executed by ASICs then the community will simply change the mining algorithm. The true value of Bitcoin is not held in its protocol but in its block chain. The block chain is distributed and cannot be attacked in any way. 51% attack does nothing to the old blocks. That's why Bitcoin Unlimited is not an altcoin! Ethereum Classic is a good example of how a fork will turn out. Stakeholders will lose nothing. We don't need consensus. Both parties can have their own fork of Bitcoin and go on their own way. Eventually the most effective one will prevail.

Now we obviously have a bunch of egoistic manboys on both sides who think their fork should be THE BITCOIN and the other fork should be something else. I don't have an answer to this, it's just stupid. But as I have said before this situation will be solved by itself. No party is stupid enough to fork right now without having a consensus. As demand for blocks goes up TX fees will gradually rise. The backlog of TXs will also rise. Eventually miners will start noticing that they are missing out a lot of profits because they are not mining for larger blocks. At that point they will switch to Bitcoin Unlimited. With Bitcoin-core miners actually are the losers because Bitcoin gets more centralized around the Core Maffia which will impose their will over the miners even more. Smart miners are going to choose Bitcoin Unlimited.

[franky1]

personally everyone switching to bitcoin unlimited is just as bad as everyone switching over to core.. it removes diversity..

Sure - _everyone_ switching over to BU reduces diversity - of implementation. However, in the current environment, almost half switching over would increase diversity of implementation.

agreed.

id rather see 5 different implementations. each with ~20% popularity.. thus avoid a devteam 51% takeover

[franky1]

Ethereum Classic is a good example of how a fork will turn out. Stakeholders will lose nothing. We don't need consensus. Both parties can have their own fork of Bitcoin and go on their own way. Eventually the most effective one will prevail.

Now we obviously have a bunch of egoistic manboys on both sides who think their fork should be THE BITCOIN and the other fork should be something else. I don't have an answer to this, it's just stupid. But as I have said before this situation will be solved by itself. No party is stupid enough to fork right now without having a consensus.

i think its best you highlight ethereums "fork" was an intentional split. otherwise it confuses the issue of what a fork is

soft fork= no permanent split, no consensus needed by user level nodes, only consensus needed by pools to activate
hard consensual fork= no permanent split, consensus needed by user level  nodes first then pools second to activate
hard controversial fork = no permanent split, consensus isn't set, lots of orphaning occurs because no one can agree
hard intentional split fork=  permanent split, nodes 'ban IP' the opposition nodes to avoid them orphaning own desires, altcoin is created