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

[Technomage]

Excellent post ArticMine. That is exactly what I'm talking about. In Finland there is most certainly no issue for mining or running a full node even at much higher blocksize limits. It will get tough for individuals after a certain point, but the point is nowhere near 1MB. When we need a number that's nowhere near 1MB, it's likely that the specs of our computers and network connections are nowhere near where we are now either.

So what we are talking about here is likely a complete non-issue. Mining incentive on the other hand is another issue but I think we'll get adequate hashing power with the current tx fees alone. Add assurance contracts or something like that in the future if it isn't secure enough.

[tvbcof]

Excellent post ArticMine. That is exactly what I'm talking about. In Finland there is most certainly no issue for mining or running a full node even at much higher blocksize limits. It will get tough for individuals after a certain point, but the point is nowhere near 1MB. When we need a number that's nowhere near 1MB, it's likely that the specs of our computers and network connections are nowhere near where we are now either.

So what we are talking about here is likely a complete non-issue. Mining incentive on the other hand is another issue but I think we'll get adequate hashing power with the current tx fees alone. Add assurance contracts or something like that in the future if it isn't secure enough.

Nobody is arguing that going much higher than 1MB is not possible as things stand today.

Some people are arguing that it is patently absurd that governments, when they feel threatened, will induce network carriers to attack solutions which threaten them.  I think these people are short sighted, and very probably fatally wrong.

It is also worth note that anyone who mentions HDD size either misses the danger issue, or expects that their audience will.

Bitcoin adoption is likely to be driven mostly by failures of alternate solutions.  It won't be at all associated with Moore's law (or Gate's law.)  So it is probable that adoption rates will be very spiky and not correlated with the steady (and imho unimpressive) increases in computer/network capabilities available to consumers.

Lastly, nobody in their right mind thinks that home users(*) are going to be running VISA+ scale systems.  So the use of native Bitcoin will increase until it stops increasing where-upon use will be off-chain in some form of another.  The only real question is do we stop when an ordinary geek could still operate the infrastructure?  When 'a few thousand enterprises' can?  When '6 large entities' own the blockchain?

I argue that the end result will always be off-chain transactions (hopefully of the variety ~retep talks about where the possibility of counter-party fraud is minimized) so we might as well stop growth when the actual core blockchain is as nearly universally accessible as possible.  Because, again, in that state the core system is nearly impossible to successfully attack.

Edit: (*) home users other than ~ArticMine.  See following post.

[ArticMine]

...
Lastly, nobody in their right mind thinks that home users are going to be running VISA+ scale systems.  So the use of native Bitcoin will increase until it stops increasing where-upon use will be off-chain in some form of another.  The only real question is do we stop when an ordinary geek could still operate the infrastructure?  When 'a few thousand enterprises' can?  When '6 large entities' own the blockchain?
...

Actually some of us actually believe that this will happen in the near future. https://en.bitcoin.it/wiki/Scalability. Take for example bandwidth. It would take 2.2TB a month for Bitcoin to handle the transaction load of VISA with a block size of say 0.5 GB. Well I can now purchase a consumer internet connection with 1TB of bandwith a month. So it is very reasonable to assume that in a few years 2.2TB of bandwith a month will be readily available to consumers. As for storage and CPU power this is even less of a concern.
 
By the way the amount of computing power available to consumers has been growing at an exponential rate. What has also happened is that the typical consumer computer running Windows comes with so much marketing bloatware and DRM that the perception is that there is no increase in computing power. Replace Windows with GNU/Linux and watch some really old hardware shine. By the way I currently run a full Bitcoin node on a laptop that is over 10 years old and has a Windows 2000 logo. The OS is GNU/Linux.

[solex]

I argue that the end result will always be off-chain transactions (hopefully of the variety ~retep talks about where the possibility of counter-party fraud is minimized) so we might as well stop growth when the actual core blockchain is as nearly universally accessible as possible.  Because, again, in that state the core system is nearly impossible to successfully attack.

And this is where your hitherto reasonable arguments depart from reality.

Yes, you can stop Bitcoin growth, but you can't stop cryptocurrency growth in the worldwide market which is now well aware of the exciting potential future of currency and payments.

Leaving a 1MB concrete block on the track may derail the Bitcoin train, but what about Litecoin and others? As soon as Bitcoin fails to scale, another alt-coin will embrace a flexible or unlimited block size and probably seize all the momentum from Bitcoin's first-mover status which it will have just thrown away.

3rd-party, off-chain solutions MUST take loading off the Bitcoin blockchain organically, on their own merits, not because Bitcoin has been derailed in a high-stakes gamble that the market can be forced to behave a centrally-planned way.

[tvbcof]

I argue that the end result will always be off-chain transactions (hopefully of the variety ~retep talks about where the possibility of counter-party fraud is minimized) so we might as well stop growth when the actual core blockchain is as nearly universally accessible as possible.  Because, again, in that state the core system is nearly impossible to successfully attack.

And this is where your hitherto reasonable arguments depart from reality.

Yes, you can stop Bitcoin growth, but you can't stop cryptocurrency growth in the worldwide market which is now well aware of the exciting potential future of currency and payments.

Leaving a 1MB concrete block on the track may derail the Bitcoin train, but what about Litecoin and others? As soon as Bitcoin fails to scale, another alt-coin will embrace a flexible or unlimited block size and probably seize all the momentum from Bitcoin's first-mover status which it will have just thrown away.

3rd-party, off-chain solutions MUST take loading off the Bitcoin blockchain organically, on their own merits, not because Bitcoin has been derailed in a high-stakes gamble that the market can be forced to behave a centrally-planned way.

I'd call it a much more high-stakes gamble to design around an assumption of a friendly and compliment operating environment and prostrate oneself to the tender mercies of the regulatory authorities and network carriers.  I'm doubtful that Bitcoiners will be getting the 'seven strikes' or whatever afforded to media pirates.

And if that is the path chosen, I hope that the stakeholders have saved up some significant lobbying funds.  Enough to get close to matching those of the financial industry.  I'll likely not be around to chip in.

[solex]

I argue that the end result will always be off-chain transactions (hopefully of the variety ~retep talks about where the possibility of counter-party fraud is minimized) so we might as well stop growth when the actual core blockchain is as nearly universally accessible as possible.  Because, again, in that state the core system is nearly impossible to successfully attack.

And this is where your hitherto reasonable arguments depart from reality.

Yes, you can stop Bitcoin growth, but you can't stop cryptocurrency growth in the worldwide market which is now well aware of the exciting potential future of currency and payments.

Leaving a 1MB concrete block on the track may derail the Bitcoin train, but what about Litecoin and others? As soon as Bitcoin fails to scale, another alt-coin will embrace a flexible or unlimited block size and probably seize all the momentum from Bitcoin's first-mover status which it will have just thrown away.

3rd-party, off-chain solutions MUST take loading off the Bitcoin blockchain organically, on their own merits, not because Bitcoin has been derailed in a high-stakes gamble that the market can be forced to behave a centrally-planned way.

I'd call it a much more high-stakes gamble to design around an assumption of a friendly and compliment operating environment and prostrate oneself to the tender mercies of the regulatory authorities and network carriers.  I'm doubtful that Bitcoiners will be getting the 'seven strikes' or whatever afforded to media pirates.

And if that is the path chosen, I hope that the stakeholders have saved up some significant lobbying funds.  Enough to get close to matching those of the financial industry.  I'll likely not be around to chip in.

I understand what you are saying, and agree with your response. Decentralization is the best protection against the risk of prostration before authorities which would have Bitcoin as subservient as Paypal/Mastercard.

It is just that inflexibility about the 1MB also introduces major risks. I really don't understand why some flexibility on this is impossible when one likely scenario is that block sizes may not even be 3MB when fidelity-bonded banks are up and running, and decentralization still healthy, enabling a smooth transition.

[tvbcof]

I understand what you are saying, and agree with your response. Decentralization is the best protection against the risk of prostration before authorities which would have Bitcoin as subservient as Paypal/Mastercard.

Glad to hear it.  I actually hold a fair amount of BTC (and no other crypto-currencies currently) so, in addition to believing that it is the right thing for humanity, I also believe that my argument is the right thing for my own pocketbook.  It is defiantly not BS that Bitcoin is valuable to me in direct proportion to it's resistance to regulatory pressures and other like attacks.

It is just that inflexibility about the 1MB also introduces major risks. I really don't understand why some flexibility on this is impossible when one likely scenario is that block sizes may not even be 3MB when fidelity-bonded banks are up and running, and decentralization still healthy, enabling a smooth transition.

I think you will find that most people who think along the lines that I do are not glued to the 1MB number.  We simply want to be very careful about this aspect of the system as it is one of the more critical avenues of attack and points of failure.  Opening up the data rate it is what pilots might refer to as a 'box canyon' meaning one won't be able to turn around once it is entered.

I think that even some of those who are not as adamant on the point as I (and to be honest, not many people are) still wish to push into the limit a little to find out empirically what the economics are.  That will give more input into how to structure the engineering tradeoffs.

I would like to think that we have some time, but I do fear the potential for a external factor (such as the Cypress thing) to produce a flood of traffic.  I hope that people working both on the core Bitcoin and possible off-chain solutions of one form or another are at least considering this as a possibility.

For my part I mostly hope that as many people as possible are considering as many of the issues as possible once this thing comes to a point where it absolutely must be addressed.  We are yet in the almost embryonic stages of Bitcoin's lifecycle, and my confidence in this assertion waxes and wanes but tends to grow stronger by the month.

[ArticMine]

There are legitimate concerns with an unlimited blocksize limit that does not address the incentives for miners once the new coin subsidy is eliminated in a ballpark time frame of 100 years. This is the reason why a dynamically changing maximum blocksize must take into account the impact on difficulty. The other important consideration is that an increase in the blocksize must be driven by genuine transaction demand and not be the result of artificial manipulation. This is critical to ensure a decentralized network. While I do not believe that genuine transaction demand will lead to centralized control of the blockchain, for the reasons I have stated above, artificial manipulation can. For example if one were to allow the artificial expansion of the maxblock size to say that needed to accommodate 10x the current VISA transaction volume over say a 6 month period one will drive the little guy out, on the other hand a similar expansion over say a 10 - 20 year period will not.

I do not see transactions outside of the blockchain as the solution here simply because such transactions become replacing Bitcoin with either a regulated PayPal, bank transfer, Western Union, Credit Card etc option or an unregulated and illegal e-gold, Liberty Reserve etc., option. If one reads the Fincen guidance carefully one can understand why. Blockchain transactions can be unregulated and legal like fiat cash transactions, while outside of the blockchain transactions must be either be regulated and subject to centralized control or illegal.

One another note what exactly is the advantage of using Bitcoin with say a 40 USD transaction fee when I can send a bank wire transfer for less?

[amincd]

snip - we are going around in circles on the likely look and feel of BTC-backed second tier processors.  We're not likley to reach a useful conclusion on this so we'll just have to wait and see.

The only way to find out is to wait and see, but I think if you are going to promote maintaining an artificial limit on the number of on-network transactions, in opposition to the plans that had been in place since the 1 MB limit was first created as a temporary solution, you owe people a response to the points they raise, so that we can get to the nitty gritty of it.

We might not be able to convince each other, but at least others who are following along can examine our rationale in more detail.

There is very little to attack if there's a 1 MB block size limit. BTC won't be a major player. It'll be centralized banks that handle credit redeemable in BTC that dominate the BTC economy, if indeed BTC becomes widely accepted, which I don't believe it will if transaction fees need to reach $20 to handle global scale traffic.

I'll grant that in the unlikely event that bitcoin succeeded under a 1 MB block cap, and this kind of economy came to be, at least the currency wouldn't be inflated by governments, but everything else will be like the modern financial system, as far as I can see.

There is no limit to the amount of value which could be moved around at 7 transactions per second.

I understand that, but my point is that a large part of the BTC transaction activity will be taking place in traditional credit networks if there's a 1 MB block limit and BTC becomes a global success, so while there will be a secure decentralized kernel/backbone, it won't be able to keep most BTC activity secure.

It's giving up decentralized payments as a solution for everyday transactions, to guarantee that decentralized large value transactions are secure from theoretical government attacks.

If one could have the same confidence in Bitcoin as they have in gold, it seems likely to me that Bitcoin would end up acting a lot like gold does today on a global level.

I think low-cost decentralized transactions > theoretical security advantages from having smaller blocks.

3rd-party, off-chain solutions MUST take loading off the Bitcoin blockchain organically, on their own merits, not because Bitcoin has been derailed in a high-stakes gamble that the market can be forced to behave a centrally-planned way.

I do not see transactions outside of the blockchain as the solution here simply because such transactions become replacing Bitcoin with either a regulated PayPal, bank transfer, Western Union, Credit Card etc option or an unregulated and illegal e-gold, Liberty Reserve etc., option. If one reads the Fincen guidance carefully one can understand why. Blockchain transactions can be unregulated and legal like fiat cash transactions, while outside of the blockchain transactions must be either be regulated and subject to centralized control or illegal.

+1

[tvbcof]

snip - we are going around in circles on the likely look and feel of BTC-backed second tier processors.  We're not likley to reach a useful conclusion on this so we'll just have to wait and see.

The only way to find out is to wait and see, but I think if you are going to promote maintaining an artificial limit on the number of on-network transactions, in opposition to the plans that had been in place since the 1 MB limit was first created as a temporary solution, you owe people a response to the points they raise, so that we can get to the nitty gritty of it.

We might not be able to convince each other, but at least others who are following along can examine our rationale in more detail.

I have.  Many times.  I believe I am more right than wrong about the nature of the off-chain solutions which are likely to appear under a truly free Bitcoin, and that you are more wrong than right.

There is very little to attack if there's a 1 MB block size limit. BTC won't be a major player. It'll be centralized banks that handle credit redeemable in BTC that dominate the BTC economy, if indeed BTC becomes widely accepted, which I don't believe it will if transaction fees need to reach $20 to handle global scale traffic.

I'll grant that in the unlikely event that bitcoin succeeded under a 1 MB block cap, and this kind of economy came to be, at least the currency wouldn't be inflated by governments, but everything else will be like the modern financial system, as far as I can see.

There is no limit to the amount of value which could be moved around at 7 transactions per second.

I understand that, but my point is that a large part of the BTC transaction activity will be taking place in traditional credit networks if there's a 1 MB block limit and BTC becomes a global success, so while there will be a secure decentralized kernel/backbone, it won't be able to keep most BTC activity secure.

It's giving up decentralized payments as a solution for everyday transactions, to guarantee that decentralized large value transactions are secure from theoretical government attacks.

Again, the point is that a second tier player is dispensable.  It will not be game-over if they fail, and they may fail for one of any number of reasons.

This is very much like the Bitcoin vs. Instalwallet issue.  I had a small fraction of my BTC with Instawallet and they lost them.  Bummer, but it was nothing at all like loss of access to the Bitcoin network would be.

If one could have the same confidence in Bitcoin as they have in gold, it seems likely to me that Bitcoin would end up acting a lot like gold does today on a global level.

I think low-cost decentralized transactions > theoretical security advantages from having smaller blocks.

And I thing that at some point there will need to be a choice between 'low cost' and 'decentralization'.  It is not right this moment, but neither are we even hitting the 1MB limit, and certainly not hitting it hard enough to understand the economics.

3rd-party, off-chain solutions MUST take loading off the Bitcoin blockchain organically, on their own merits, not because Bitcoin has been derailed in a high-stakes gamble that the market can be forced to behave a centrally-planned way.

+1

While you bring up the subject of risk again, let me point out one other thing.

Bitcoin used in it's native form has some severe dis-advantages.

 1)  It has proven rather difficult for individuals to secure their BTC value against loss or theft.  You can hand-wave about how this could be addressed, but ultimately you are betting that it will be, and given the state of computer systems and user mentality, I'm dubious.

 2) Bitcoin in it's native form has a fair amount of latency which introduces a huge inconvenience for purchases of things which are to big to walk away from.  Other current and theoretical systems lack this.

 3) Bitcoin in it's native form has some half-baked anonymity features which don't really work well (except for marketing the system to newbies.)

So, if you throw all of your (our) eggs into the 'best exchange solution ever' basket, you risk being overtaken by systems which are so demonstrably better that you fail.  You might have the fasted camel in the Gobi, but if you show up at the Kentucky Derby you are going to get slaughtered.  Even with a head start.

The funny thing is that a solution to all of the three, and probably the solution which will be chosen (by you), is, in fact...wait for it...off-chain transactions (and/or third-party assisted ones.)

[amincd]

I believe I am more right than wrong about the nature of the off-chain solutions which are likely to appear under a truly free Bitcoin, and that you are more wrong than right.

Right, but I've given reasons for why I think you're wrong. You've responded to some of them, but for quite a few, you've simply said "I don't think that's how it will be" without giving reasons for why you think my reasoning is wrong, which doesn't showcase your rationale.

I understand that, but my point is that a large part of the BTC transaction activity will be taking place in traditional credit networks if there's a 1 MB block limit and BTC becomes a global success, so while there will be a secure decentralized kernel/backbone, it won't be able to keep most BTC activity secure.

It's giving up decentralized payments as a solution for everyday transactions, to guarantee that decentralized large value transactions are secure from theoretical government attacks.

Again, the point is that a second tier player is dispensable.  It will not be game-over if they fail, and they may fail for one of any number of reasons.

I understand, and this part is solely my opinion: I think it's better to swing for 95% (having a decentralized/low-cost option for everyday payments as an alternative to centralized payment processors) than guarantee 10% (decentralized large value transfers). The 95%/10% I'm just pulling out of the air to underscore the difference in the extent of success I see these two states as representing.

If one could have the same confidence in Bitcoin as they have in gold, it seems likely to me that Bitcoin would end up acting a lot like gold does today on a global level.

I think low-cost decentralized transactions > theoretical security advantages from having smaller blocks.

And I thing that at some point there will need to be a choice between 'low cost' and 'decentralization'.  It is not right this moment, but neither are we even hitting the 1MB limit, and certainly not hitting it hard enough to understand the economics.

It's possible that you're wrong about larger blocks leading to the end of Bitcoin's decentralization/its-shutdown. I'd rather gamble on it, and risk Bitcoin failure, than guarantee a future where low-cost decentralized transactions on the Bitcoin network are not possible.

This is because I perceive the risk as much lower, and the benefit of low-cost decentralized transactions as much larger, than you do.

1)  It has proven rather difficult for individuals to secure their BTC value against loss or theft.  You can hand-wave about how this could be addressed, but ultimately you are betting that it will be, and given the state of computer systems and user mentality, I'm dubious.

 2) Bitcoin in it's native form has a fair amount of latency which introduces a huge inconvenience for purchases of things which are to big to walk away from.  Other current and theoretical systems lack this.

 3) Bitcoin in it's native form has some half-baked anonymity features which don't really work well (except for marketing the system to newbies.)

Having a financially viable option of using Bitcoin for your everyday transactions, instead of centralized solutions, I think has HUGE value. Even if most people end up using payment processors and transferring BTC-credit around on private networks, I think just having the alternative is useful.

Also, with low cost network transactions, a person can easily move their BTC from one private credit network to another. With $20 transaction fees, you're quite locked in once you've committed to trusting one private network with your currency.

[tvbcof]

1)  It has proven rather difficult for individuals to secure their BTC value against loss or theft.  You can hand-wave about how this could be addressed, but ultimately you are betting that it will be, and given the state of computer systems and user mentality, I'm dubious.

 2) Bitcoin in it's native form has a fair amount of latency which introduces a huge inconvenience for purchases of things which are to big to walk away from.  Other current and theoretical systems lack this.

 3) Bitcoin in it's native form has some half-baked anonymity features which don't really work well (except for marketing the system to newbies.)

Having a financially viable option of using Bitcoin for your everyday transactions, instead of centralized solutions, I think has HUGE value. Even if most people end up using payment processors and transferring BTC-credit around on private networks, I think just having the alternative is useful.

You've conveniently ignored (and snipped) the salient part.  By focusing on the the 'buying your morning coffee' role for Bitcoin, you are betting that Bitcoin's head-start will be a sufficient advantage to compete with systems which do all of these things much better.  And compete in perpetuity.  That is, to me, a huge gamble (and almost a certain loser.)

Bitcoin has the realistic potential to shine as a trusted reserve currency if it retains a highly distributed profile and the security which comes along with it.  And it is a very high value (and much needed) role to fill.  I don't wish to seen that tossed out the window in pursuit of an untenable pipe-dream of the one-world currency for everyone.

Also, with low cost network transactions, a person can easily move their BTC from one private credit network to another. With $20 transaction fees, you're quite locked in once you've committed to trusting one private network with your currency.

As I've said, moving between different off-chain solutions should be frictionless and nearly cost free.  This is because the aggregate their transactions and perform them periodically.   If it's costing you something more than a trivial amount then stop using the ones which are screwing you and choose one of the many which are not.

The easy and free Bitcoin transactions did not save me from Instawallet folding because I would have had to have a time machine also.

Anyway, it would not be impossible to create obstacles to off-chain processors absconding with funds or using opaque and covert fractional schemes.  This was much less the case several years ago when Instawallet was developed.  Off-chain processors who do not erect barriers to fraud in this day and age probably plan on being fraudulent.  So, just choose a different one.

[amincd]

By focusing on the the 'buying your morning coffee' role for Bitcoin, you are betting that Bitcoin's head-start will be a sufficient advantage to compete with systems which do all of these things much better.  And compete in perpetuity.  That is, to me, a huge gamble (and almost a certain loser.)

There are many low-value transaction types other than point of sale, and Bitcoin will always be at least an option in these. There's even a possibility that Bitcoin transactions will be an option in point of sale, if merchants are willing to risk double spend attacks like they risk credit card chargebacks and counterfeit cash today. There are also certain ways to use third parties to mitigate the risk of 0-conf double spends while still not having the transaction go through an intermediary.

I'm suggesting that maintaining the option of making decentralized low-cost transactions is healthy for Bitcoin, even if centralized payment processors end up being better in general and most transactions end up going through them.

Bitcoin has the realistic potential to shine as a trusted reserve currency if it retains a highly distributed profile and the security which comes along with it.  And it is a very high value (and much needed) role to fill.  I don't wish to seen that tossed out the window in pursuit of an untenable pipe-dream of the one-world currency for everyone.

Fair enough. I won't respond any more to this, as I'd just be repeating myself.

Quote from: amincd on Today at 11:03:12 AM
Also, with low cost network transactions, a person can easily move their BTC from one private credit network to another. With $20 transaction fees, you're quite locked in once you've committed to trusting one private network with your currency.


As I've said, moving between different off-chain solutions should be frictionless and nearly cost free.

Even if you/someone invents a method that allows this, there will still be private credit networks that are incompatible with each other, and can only have BTC moved between them through the network. That's not something you can control.

[tvbcof]

As I've said, moving between different off-chain solutions should be frictionless and nearly cost free.

Even if you/someone invents a method that allows this, there will still there will be private credit networks that are incompatible with each other, and can only have BTC moved between them through the network. That's not something you can control.

Bringing back up the explanation:

  This is because the aggregate their transactions and perform them periodically.

I fully expect off-chain processors will both denominate in BTC and be able to prove non-fractional operations.  If that is the customer base they cater to at least.

For certain of my spending money stash,  I'll be looking forward to using off-chain processors who ARE using fractional methods.  This because they can pass some of the benefits that they realize down to me.  Of course I'll be demanding visibility into their books or they'll not count me as a customer.

You see, a world with choices is a much more fertile field to play in.  If there is transparency in the core reserve solution, there can be transparency in the second tier.  If there is not, there cannot be.  That is a giant void in our current mainstream monetary solutions and one of the reasons Bitcoin appeals to me.  It offers the potential to remedy this problem.

[Gabi]

Sure, a blocksize limit is needed, we can't have blocks 10GB big, but the current limit of 1MB is definitely too low.

Anyway, i am checking the latest blocks, they are nowhere near the limit, why? most are 100/200kb big. But there are 19813kb of unconfirmed transactions.

[amincd]

This is because the aggregate their transactions and perform them periodically.

Using an aggregator is not always possible and will not always happen. There could be two networks that have few transactions occurring between them. How are you going to transfer your currency from one network to another without a $20 network transaction in that case? Use Ripple?

[tvbcof]

This is because the aggregate their transactions and perform them periodically.

Using an aggregator is not always possible and will not always happen. There could be two networks that have few transactions occurring between them. How are you going to transfer your currency from one network to another without a $20 network transaction in that case? Use Ripple?

Ignoring the fact that $20 was pulled right out of someone's ass at some point (and is doubled when it does not sound like enough to make a point...)

I mean they aggregate their internal transactions and square periodically with other entities when they need to.  If at the end of the day they have only a $100 imbalance, they don't even bother to square that day.  They'll just cover something like that with their own buffer of working capital.  In any event, the user see's a UI and can drag-n-drop funds as they please.  Again, with minimal fees.

[tvbcof]

Sure, a blocksize limit is needed, we can't have blocks 10GB big, but the current limit of 1MB is definitely too low.

Anyway, i am checking the latest blocks, they are nowhere near the limit, why? most are 100/200kb big. But there are 19813kb of unconfirmed transactions.

Nobody really knows why Satoshi set things at 1MB.  He didn't leave a comment.

But an interesting thing happened on the IRC channel a few days ago.  The high priests got to scratching their heads about things and noticed that 1MB just happens to put things right near the edge of what is practical to competitively mine off of Tor.  That's how I read the conversation.  Coincidence?  Who can say...

[amincd]

What if the two private networks have no credit relationship and aren't willing to extend credit to each other until the BTC network payment clears?

How are you going to avoid a $10/20/30/whatever fee in that case?

[Gabi]

Sure, a blocksize limit is needed, we can't have blocks 10GB big, but the current limit of 1MB is definitely too low.

Anyway, i am checking the latest blocks, they are nowhere near the limit, why? most are 100/200kb big. But there are 19813kb of unconfirmed transactions.

Nobody really knows why Satoshi set things at 1MB.  He didn't leave a comment.

But an interesting thing happened on the IRC channel a few days ago.  The high priests got to scratching their heads about things and noticed that 1MB just happens to put things right near the edge of what is practical to competitively mine off of Tor.  That's how I read the conversation.  Coincidence?  Who can say...

Probably that number was chosen considering the current technology level. As internet connections get faster, it can be happily increased.