Block issue SOLVED!? Extension Blocks

[arklan]

the OPTION of so called witness nodes, as i understand them, sounds good. similar to SPV wallets, like what i use on my phone (android bitcoin wallet) that doesn't the full blockchain on hand, right? please correct me if i'm wrong.

but forcing that, making it such that running a full node is unmanageable for the average techy geek... that worries me.

and yea, the average techy geek would have the best home user internet they could get, and and excess of computing power and storage space. i do, and i'm not even employed right now.

ok, except the internet part... stupid middle of no where... but hey, my phone doesn't have a data limit. it mostly works.

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[Killerpotleaf]

the OPTION of so called witness nodes, as i understand them, sounds good. similar to SPV wallets, like what i use on my phone (android bitcoin wallet) that doesn't the full blockchain on hand, right? please correct me if i'm wrong.

but forcing that, making it such that running a full node is unmanageable for the average techy geek... that worries me.

and yea, the average techy geek would have the best home user internet they could get, and and excess of computing power and storage space. i do, and i'm not even employed right now.

ok, except the internet part... stupid middle of no where... but hey, my phone doesn't have a data limit. it mostly works.

there are FAR better ways to allow full-nodes to run on home PC without losing witness data
nodes can limit number of connections.
or go as far as enable blocks only mode.

if you're going to loss the witness data, you might as well go full SPV

[arklan]

well, yea. but people are dumb and lazy and...

ok, i got nothing.

[dinofelis]

i made a few edits to the stock graph to better illustrate what i'm saying

as block size goes up fees go down, but fee revenue is at its highest at 2MB, because science.

The error in this plot is that you think that fees are elastic.  Fees are VERY INELASTIC, meaning your blue curve goes to the sky on the left.  If only 10 transactions are possible, people will be paying HUGE fees in order to obtain one of the 10 places.  The guy wanting to transact 10000 BTC for a huge cocaine deal will need to get the transaction through, no matter what, or they'll get him, so he'll pay 200 BTC of fee.
10 of these transactions, and you earn 2000 BTC per block in fees.  From the moment that you relax, fees will drop drastically per transaction, much more so than your straight line suggests.

And then you see that the optimum is on the left side of the plot, because fees rise much faster than 1/block size, and drop much faster with block size.  

i think its hard to incress fee pressure without increasing TX demand and simply limiting blocksize.

Demand comes from people "locked into" bitcoin, and NEEDING to transact (the only thing bitcoin is good at).  If you HOLD bitcoin, the only reasonable thing you can do with it, is transact, sooner or later.  That's the demand.

at one point fees are so high a lot of potential TX can't happen anymore, and this removes some fee pressure,

Uh, no, that is exactly the pressure.  All TX have to happen.  If they can't happen, or aren't needed to happen, then the bitcoins involved in them are useless. 

If you mean, however, this will limit bitcoin's usage to only big transactions, you're perfectly right.  Bitcoin with small blocks is not a payment system that can be used for small transactions, only for big ones, at low transaction rates. 

In as much as this has an incidence on the bitcoin market value, this will probably not even matter.  If the fees increase 10-fold, the market cap must fall 10-fold before this starts to be negative for the miners.  So squeezing fees out of users, even if this crashes the market price, is still interesting for miners if the inelastic wall of "I absolutely need to get my big transaction through" is steeper than the price crash.

[Killerpotleaf]

i made a few edits to the stock graph to better illustrate what i'm saying

as block size goes up fees go down, but fee revenue is at its highest at 2MB, because science.

The error in this plot is that you think that fees are elastic.  Fees are VERY INELASTIC, meaning your blue curve goes to the sky on the left.  If only 10 transactions are possible, people will be paying HUGE fees in order to obtain one of the 10 places.  The guy wanting to transact 10000 BTC for a huge cocaine deal will need to get the transaction through, no matter what, or they'll get him, so he'll pay 200 BTC of fee.
10 of these transactions, and you earn 2000 BTC per block in fees.  From the moment that you relax, fees will drop drastically per transaction, much more so than your straight line suggests.

And then you see that the optimum is on the left side of the plot, because fees rise much faster than 1/block size, and drop much faster with block size.  

i think its hard to incress fee pressure without increasing TX demand and simply limiting blocksize.

Demand comes from people "locked into" bitcoin, and NEEDING to transact (the only thing bitcoin is good at).  If you HOLD bitcoin, the only reasonable thing you can do with it, is transact, sooner or later.  That's the demand.

at one point fees are so high a lot of potential TX can't happen anymore, and this removes some fee pressure,

Uh, no, that is exactly the pressure.  All TX have to happen.  If they can't happen, or aren't needed to happen, then the bitcoins involved in them are useless. 

If you mean, however, this will limit bitcoin's usage to only big transactions, you're perfectly right.  Bitcoin with small blocks is not a payment system that can be used for small transactions, only for big ones, at low transaction rates. 

In as much as this has an incidence on the bitcoin market value, this will probably not even matter.  If the fees increase 10-fold, the market cap must fall 10-fold before this starts to be negative for the miners.  So squeezing fees out of users, even if this crashes the market price, is still interesting for miners if the inelastic wall of "I absolutely need to get my big transaction through" is steeper than the price crash.

you have to be shitting me....
most poeple think 90% of the bitcoin TX are spam
they complain that "spam" is creating fee pressure.
remove the "spam" and you think we'll fill block with nothing but Big TX willing to TX at anycost?
ya right,at that point poeple are sending there hoards to poloniex so they can buy the digital cash they were promised.

[dinofelis]

you have to be shitting me....
most poeple think 90% of the bitcoin TX are spam
they complain that "spam" is creating fee pressure.
remove the "spam" and you think we'll fill block with nothing but Big TX willing to TX at anycost?
ya right,at that point poeple are sending there hoards to poloniex so they can buy the digital cash they were promised.

Spam is nothing else but a covert way of the miners to lower the effective block size.  It costs them, on average, nothing, if they spam according to their own hash rate (they pay the fees to themselves).  If miners spam, it means that they are of the opinion that the blocks are already too big for their optimum profit, and need to lower the available user block room.  Note that miners are the only entities that can spam without a cost.  All others that would spam, have a cost, the fees of the spam.  Miners don't, because they get them back.

Note that spam is a self-regulating block size limiter that settles dynamically between miners.  A miner that spams more than his fellows will pay net fees to his fellows ; one that spams less will receive fees from his fellows.  So spam is only interesting as a "common good" for miners if they can settle on the right amount of spam to squeeze the maximum of fees out of the users.

This is BU, but on the low side.  

Bitcoin's game theory is one big hell of a clusterfuck.

[Sr.Urbanist]

Spam is nothing else but a covert way of the miners to lower the effective block size.  

You mean, miners send many transactions and it clogs up the network?  Is this what people mean by spam?  

It costs them, on average, nothing, if they spam according to their own hash rate (they pay the fees to themselves).

Not really.  I have sent one transaction with a higher fee that was picked up by a miner on the pool I point towards.  I don't think I really got much of it back on a PPLNS payout and 0.04% share.

If miners spam, it means that they are of the opinion that the blocks are already too big for their optimum profit, and need to lower the available user block room.  

This could be true for some.  However, I received daily payouts and would put them into four different wallets at payout.  Two different ones for electricity (home, hosted - not cloud), one as a "hot" wallet and another to cold storage.

Note that miners are the only entities that can spam without a cost.  

If you use the same origin and destination address, anybody can send 20 transaction without a fee and one with a large fee.  If they are to and from the same addresses it picks up all the transactions.  However, most aren't using bitcoin as frequently as miners to and from the same addresses as frequently as miners.
 

... the right amount of spam to squeeze the maximum of fees out of the users.

How do you make a 'junk' or useless transaction with Bitcoin?  I don't understand this concept of spam.  Perhaps there is either a change in the quantity demanded - or we are entering a totally new demand curve.  I think as we move from innovators to early adopters using BTC, it's going to move out the demand curve and not just change the quantity demanded.

[Sr.Urbanist]

Just sharing, I know its been thrown around before but seems to beginning to get praise, Extension Blocks!

New name, same thing. 

[South Park]

Why not just implement segwit?
Many solutions are arising and still none of it is being implemented. Why?
Because  it got stuck in the debate stage.
In many years to come many solutions will once again arise then it will be forgotten again like the others.

They have not because they think they are going to lose money with it, it is that simple, but what they don’t realize is they could earn a lot more by allowing bitcoin to scale and get a lot more users, maybe they will suffer in the short term but in the long term they will be better off.

[Thatstinks]

So where are Extension Blocks now? Are they looking to use extension blocks with segwit?