New video: Why the blocksize limit keeps Bitcoin free and decentralized

[tvbcof]

Now we have exponentially growing bandwidth capacity that WE CAN'T USE. nice! Tell me, how many locales in the americas can you get 1 Gb/s fiber?

I'm in the rural Western US.  The only hard-line I have is POTS which on a good day gets 19,200 bps.

Since mid-2012 I've been able to have a surprisingly usable satellite connection (Exede) but it goes down for long-ish periods quite regularly and for $80/mo I am capped at 15GB per month.  It also has typical satellite latency which impact certain software architectures.

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I'm not suggesting that Bitcoin be designed around allowing me to be a peer (though it would be nice if I could be.)  The main reasons for this are that it would be to limiting to be realistic, and it would not offer the protection against system level attack to make it worthwhile.

  edit: bps, not kbps.

[edmundedgar]

Now we have exponentially growing bandwidth capacity that WE CAN'T USE. nice! Tell me, how many locales in the americas can you get 1 Gb/s fiber?

I'm in the rural Western US.  The only hard-line I have is POTS which on a good day gets 19,200 kbps.

Since mid-2012 I've been able to have a surprisingly usable satellite connection (Exede) but it goes down for long-ish periods quite regularly and for $80/mo I am capped at 15GB per month.  It also has typical satellite latency which impact certain software architectures.

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I'm not suggesting that Bitcoin be designed around allowing me to be a peer (though it would be nice if I could be.)  The main reasons for this are that it would be to limiting to be realistic, and it would not offer the protection against system level attack to make it worthwhile.

Right, I wouldn't be surprised if Grue's ADSL connection was hurting the ability to mine profitably even with the current block sizes. If you have to pay the same as your competitors for hardware and electricity, a competitive market should punish even a fairly small persistent disadvantage that your urban competitors don't have. In the same way, there will be large parts of the world (including here in Tokyo) where you can't mine profitably long-term in a seriously competitive market because electricity costs too much.

If we're thinking about system-level attacks, the relevant people to think about are the people who actually will be doing the mining, and we should assume that in a competitive market, everything about their setup will be reasonably well optimized. That makes high-end connections the relevant factor here, and they may even be growing _faster_ than Moore' Law.
http://www.sqw.co.uk/sqw-commentary/the-urban-rural-digital-dividewider-and-wider

(Overall bandwidth seems to be growing a bit slower than Moore's Law, presumably because the connections of unlucky people like tvbcof and grue in rural areas of countries with disfunctional telecom markets pull down the average...)

[tvbcof]

...
If we're thinking about system-level attacks, the relevant people to think about are the people who actually will be doing the mining,
...

We are probably not.

The attacks which concern me the most have to do with deep packet inspection, near real-time network mesh analysis, and targeted packet filtering.  And relatedly, discrimination of encrypted traffic that was not encrypted in an 'authorized' manner.

I don't believe that "Moore's Law" is really very applicable to Bitcoin since Bitcoin is very much in it's infancy (among other reasons) but I won't overload this note with that topic other than to say that "Moore's Law" almost certainly helps the likely attackers of Bitcoin more than it helps the defenders.

[amincd]

If I, as a plain-jane user like someone's micro-blog and wishes to give a micro-transaction in appreciation, I would be happy to see a known entity like 'bittip' or one which I could easily verify as an entity who uses best-practice technology which precludes fraud/theft and produces some reasonable level of transparency.  Happy enough to vastly increase my deployment of 'tips'.

That's tangential and not an explanation for how I would run my site as it is now.

My site doesn't have professional security measures/best-practices in places. It's an experimental site I run on the side so users do not trust it with more than $20 worth of BTC deposits per week cumalatively. With a 1 MB block size limit and $20 transaction fees, my site would not be possible.

I anticipate that what will develop will be a selection of turn-key engines which will gaurentee to people like me that people like you are running a service which is highly likely to be legitimate and will achieve the result I want.

Are you kidding me? You're anticipating turn-key engines that solve internet security once and for all and allow anyone to build a BTC-accepting site with minimal cost like that and have everyone trust it?

You also evaded my point about BTC-credit not being fungible:

To explain further, let's say one of my users has BTC deposited with MtGox. He wants to deposit some BTC in my site, but doesn't want to pay a $20 transaction fee, so provides a "reference" to some of the BTC he has stored at MtGox.

I therefore receive some of the BTC-credit (promissory-notes), as opposed to actual BTC, that is backed by the full faith and credit of MtGox.

Overtime, the BTC-credit deposited at btctip would become an assortment of promissory notes from various BTC-banks, each with a different value depending on how much the backing bank is trusted.

If one of my users 'tips' another user, my site would have to try to determine which type of BTC-credit to transfer. Remember: I don't have any actual BTC deposited at my site, just promissory notes, issued by different BTC-banks. There would be no obvious way to do this. My site would not be possible.

My friend, your solution would not work. We cannot have a 1 MB block size limit and $20 transaction fees and see a successful Bitcoin. If you can't use Bitcoin transactions, then it's not Bitcoin. All of the innovation and flexibility that one sees with BTC e-wallets springs from the low cost to deposit and withdraw BTC to/from those e-wallets. Take that away, and you have the modern financial system and all of its inefficiencies and limitations.

[tvbcof]

I anticipate that what will develop will be a selection of turn-key engines which will gaurentee to people like me that people like you are running a service which is highly likely to be legitimate and will achieve the result I want.

Are you kidding me? You're anticipating turn-key engines that solve internet security once and for all and allow anyone to build a BTC-accepting site with minimal cost like that and have everyone trust it?

'satoshi' did it.  It's much easier when standing on the shoulders of giants.

You also evaded my point about BTC-credit not being fungible:

Ya.  I explained/apologized in advance.

[Stampbit]

indeed.

[halfawake]

I'm inclined to agree.  I like hosting a full node on my computer, but I've only had it for a couple months and I'm already seeing exponential growth in the size of the blockchain.  If the growth of the blockchain continues at the current rate, it'll be too big to host on most people's computers in a few years.

[Seth Otterstad]

I'm inclined to agree.  I like hosting a full node on my computer, but I've only had it for a couple months and I'm already seeing exponential growth in the size of the blockchain.  If the growth of the blockchain continues at the current rate, it'll be too big to host on most people's computers in a few years.

The blockchain will never be too big to store on desktop computers.  Moore's law applies to hard drives.  3tb drives are now under $100, and in two years, it will be 6tb.  The blockchain will only continue an exponential path while bitcoin is adding new users.  Once we reach target market size or a blocksize cap, the blockchain will increase in size linearly.  In 20 years, people will be able to store the blockchain on their phone and download the whole thing in a few hours.

[halfawake]

I'm inclined to agree.  I like hosting a full node on my computer, but I've only had it for a couple months and I'm already seeing exponential growth in the size of the blockchain.  If the growth of the blockchain continues at the current rate, it'll be too big to host on most people's computers in a few years.

The blockchain will never be too big to store on desktop computers.  Moore's law applies to hard drives.  3tb drives are now under $100, and in two years, it will be 6tb.  The blockchain will only continue an exponential path while bitcoin is adding new users.  Once we reach target market size or a blocksize cap, the blockchain will increase in size linearly.  In 20 years, people will be able to store the blockchain on their phone and download the whole thing in a few hours.

Ultimately, I think there are two different issues with the blockchain.  I agree with you about Moore's law - I have a 250 GB hard drive and I'm not too concerned about the blockchain outgrowing my hard drive during the time while I'm still using this computer.  Although I'd be curious to see where you found an under $100 price for 3 TB hard drives, I looked on Amazon recently for hard drives in the 3 -4 TB range, and they were all $150 - $180.

The bigger issue isn't storing the blockchain but the initial download & verification process.  It took me three days to do this back when it was a 7 GB blockchain, it was in the 9 GB range last I checked.  People usually have much smaller bandwidth than they do hard drive space.

[hdbuck]

Very nice video, helped me grasp the matter quite fairly.
Funny that it was done prior Gavin's current testing and pushing such fork.