Please do not change MAX_BLOCK_SIZE

[piotr_n]

So at it has been show here, if we just make the block size unlimited, and let the miners decide, it will only encourage the mining arm race - the only thing that the chain may be afraid of.
At the very moment when a set of nodes decide that they wont accept block with a valid difficulty, just because it is too big for "their standards" - that's the moment of the disaster.
So we won't just stick to the traditional 1MB? That's the best way, IMHO.

[piotr_n]

You could think of P2P client systems, to the bitcoin network that would take care of small transactions and even make them faster, also using some sort of blockchains, though sort of compressing them in the actual chain, for a fee.
Hell, if you think about it, you can even involve mining there, as long as it gets cheaper than the bitcoin chain fees.
Just leave the 1MB block limit and you will see it bloomig (good for everyone), while the actual bitcoin network will be able to breath out.

Besides, IMO it's also too dangerous to change anything in this protocol.

[jgarzik]

This puppy ain't gonna fly with a 7 Transactions per second limit, even if it was only reserved for large transactions.

There is no 7 tps limit, even with 1MB blocksize.

Off-chain transactions offer unlimited tps.

[etotheipi]

This puppy ain't gonna fly with a 7 Transactions per second limit, even if it was only reserved for large transactions.

There is no 7 tps limit, even with 1MB blocksize.

Off-chain transactions offer unlimited tps.

For reference, when talking about "off-chain transactions" are we talking about Rapidly-adjust (micro)payments?  I would guess so, but just making sure.

Sure, off-chain transactions can replace a lot of the bulk of the blockchain, but there will still clearly be more than 7 tps between previously-unrelated parties if Bitcoin is going to scale to the levels it needs to.  Not to mention, that the RA(M)P referenced above does require two transactions per pair of parties, and needs to be renewed at some regular interval. 

[kjj]

This puppy ain't gonna fly with a 7 Transactions per second limit, even if it was only reserved for large transactions.

There is no 7 tps limit, even with 1MB blocksize.

Off-chain transactions offer unlimited tps.

I think this is the most useful direction to take the discussion.

Being able to send 0.00982 BTC to the coke machine is a cool trick, but really should be seen as the sort of stuff that doesn't belong in the global network.

[Peter Todd]

For reference, when talking about "off-chain transactions" are we talking about Rapidly-adjust (micro)payments?  I would guess so, but just making sure.

Sure, off-chain transactions can replace a lot of the bulk of the blockchain, but there will still clearly be more than 7 tps between previously-unrelated parties if Bitcoin is going to scale to the levels it needs to.  Not to mention, that the RA(M)P referenced above does require two transactions per pair of parties, and needs to be renewed at some regular interval. 

Micro-payment channels and their distant cousin probabilistic coinbase txout payments are useful, but they are really just a particularly efficient form of on-chain transaction.

Off-chain really refers to systems where the transaction never has to see the blockchain at all, ranging from really simple stuff like Easywallet account-to-account transfers (and SilkRoad for that matter) to advanced solutions like fidelity-bonded payment systems and trusted computing hardware where the trust in any third party is minimal.

Speaking of scale, we know that at some level Bitcoin just can't be decentralized and still have every transaction on the blockchain - you just have to read the wiki page on Scalability to see how VISA-level volumes require a system that's hardly decentralized, let alone resistant to government control. We've already had to ban sub-cent microtransactions from P2P network in the 0.8.2 client due to scaling concerns - I'd rather see Bitcoin develop into a system where we don't have to make ugly decisions like that again.

[justusranvier]

Off-chain transactions offer unlimited tps.

Off-chain transactions aren't Bitcoin.

[tvbcof]

This puppy ain't gonna fly with a 7 Transactions per second limit, even if it was only reserved for large transactions.

There is no 7 tps limit, even with 1MB blocksize.

Off-chain transactions offer unlimited tps.

I think this is the most useful direction to take the discussion.

Being able to send 0.00982 BTC to the coke machine is a cool trick, but really should be seen as the sort of stuff that doesn't belong in the global network.

Here's an interesting thing I just conjured up:  From a doc 'UnitedStatesComp.pdf'

Fedwire processed an average of nearly 430,000 payments per day in 2000. The total value of
transfers originated during 2000 was USD 380 trillion. The distribution of the value of these payments
is not uniform. The median Fedwire payment during 2000 was approximately USD 25,000, and the
average payment was approximately USD 3.5 million.

To save one the math, I get about 5 tps.

Seems to me truly a no-brainer to consider various forms of off-chain transactions vs. trying to shove everything onto the blockchain.  Even with 'ultra-prune'.  The only real question is when.  A median of $25k and average of $3.5M is pretty alarming...though we are talking about $380T here...  It cannot be said that I am not a 'USD user' by virtue of the fact that I've never performed a Fedwire transaction.  The same would stand for Bitcoin.

If the 'source of truth' for values is stored on 1,000,000 power-users computers distributed around the world (and processed by the same) vs. in some computer system owned by the federal reserve (or BIS or whatever) that is a pretty revolutionary thing.  If the same basic solution consists of Google and Facebook, or even a few thousand DWolla-sized entities, that is a much less compelling to me.

Ultimately, I think the appropriate factor to weigh most heavily in a decision about data rate is what, exactly, is required to protect against which particular threats.  Various economic factors will certainly play important roles in this equation, but I truly believe that they should be secondary.  This because resistance to attack will ultimately define the value of the solution in my opinion.

[ArticMine]

Off-chain transactions aren't Bitcoin.

+1048576

[johnyj]

It just feels stupid that you send some one a coin and he send you a coin back and you need two transactions broadcasted just for nothing happened in reality

The book keeping method is a common practice in accounting, it reduce the real transaction in financial system. If you have lots of bitcoin nodes that transfer bitcoins between each other, the real amount of transaction on the blockchain will be very small and the nodes just need to broadcast the net incoming or outgoing transactions

BTW, I think today most of the transactions are just pools paying miners, that can be dramatically reduced by reduce the pay out frequency  

[jgarzik]

Off-chain transactions offer unlimited tps.

Off-chain transactions aren't Bitcoin.

Not true at all.  You may send a digitally signed message to anyone, by any means of digital transmission.  Any number of economic incentives may exist to maintain exclusivity.

[grue]

Off-chain transactions offer unlimited tps.

Off-chain transactions aren't Bitcoin.

Reason being... oh wait there is none.

[maaku]

Off-chain transactions offer unlimited tps.

Off-chain transactions aren't Bitcoin.

Not true at all.  You may send a digitally signed message to anyone, by any means of digital transmission.  Any number of economic incentives may exist to maintain exclusivity.

Jeff, this is the development & technical subforum. Can you provide an examples of the types of off-chain transactions you are talking about which "are bitcoin"? I know about rapidly-adjust payments, which does solve a certain specific type of micropayment problem in a compact way. However what general solution exists? How do you handle 10k tps between unique party pairs, within the bitcoin protocol and with a 1mb block size limit?

I know about, say, Fellow-Traveler's proposal to "lock" bitcoins for use on an Open-Transactions server in a trust-free way. You can then scale the centralized Open-Transactions server with beefy hardware to handle whatever load you need. But I wouldn't call that bitcoin.

[Anon136]

Fighting over so few transactions per second as are possible right now is in my opinion too limiting. I would agree to not having 1 TB as MAX_BLOCK_SIZE, but 10-100 MB should be still possible.

A 56k modem can still keep up with ~30 MB blocks.

its not just about 56k modems. its also about people being able to mine through tor. you could not mine 30mb blocks throug tor.

[justusranvier]

Not true at all.  You may send a digitally signed message to anyone, by any means of digital transmission.  Any number of economic incentives may exist to maintain exclusivity.

Any solution which requires a trusted authority isn't Bitcoin. Any means of transacting in which payments may be blocked, censored, or reversed with less effort than what is required to orphan a block isn't Bitcoin.

Saying that we should use off-chain transactions is a bait-and-switch scam. It means convincing people to adopt Bitcoin by offering them a trustless, decentralized, censorship-resistant payment method and then turning around and telling them they can't actually have any of those things. They'll have to route all their transactions through regulated gatekeepers and thereby negate absolutely every advantage Bitcoin offers.

[kjj]

Virtually every bitcoin user already uses third parties, and trusts them to some extent.  Doing so is a trade, cost for risk.  In the future, I expect it to be even more complicated.  Imagine a credit card denominated in bitcoin.  With that, you'd be paying for them to assume transaction risk for you, while right now the model is mostly the opposite with you getting a discount for assuming the risk that the third party may bail with your bitcoins.

Every bitcoin transaction has a cost associated with it, and we don't have a very good idea at all what that cost really is.  The mad scientist in me thinks that we should wait until the 1 MB limit is met and sustained for a while before we raise it.  That way we'd get some real world experience with how the system (including the people!) react.  Hopefully, that would lead to a better understanding of the forces that will eventually drive the equilibrium.

[piotr_n]

Every bitcoin transaction has a cost associated with it, and we don't have a very good idea at all what that cost really is.  The mad scientist in me thinks that we should wait until the 1 MB limit is met and sustained for a while before we raise it.  That way we'd get some real world experience with how the system (including the people!) react.  Hopefully, that would lead to a better understanding of the forces that will eventually drive the equilibrium.

I couldn't agree more.

[gglon]

Bitcoin by design is meant to be decentralized, p2p e-cash solution for as much people as technologically possible^{satoshi paper}. As DeathAndTaxes noted, keeping 1MB is not good for decentralization, let alone accessibility.  IMHO peter's video claiming that increasing size from 1 to 10MB will lead to centralization and allow microtx's, is misleading.

Bitcoin is not meant to be for early adopters (like me) who are now shitting in their pants, worrying about any change. Change that can make it potentially more difficult to e.g. hide the traffic. Though there is a potential market for something like torcoin (paracoin), it's not what >90% bitcoin users (miners) would want to have; at least under present circumstances.

All in all, I believe that blocksize should be adjusted such that if it is < 100MB, tx fee should be <=$1.

[piotr_n]

IMHO peter's video claiming that increasing size from 1 to 10MB will lead to centralization and allow microtx's, is misleading.

Thanks - first time I'm seeing this video, its nice.

You cannot argue with one thing from it; by increasing the blocks size, just to keep up with the growing number of txs, you will eventually end up with a system where a bitcoin node can by run only by rich people and only in data centers.
Set the limit to 10+MB and its almost certain that 5 years from now nobody will be able to run a bitcoin node at his home PC, through a DLS connection, not to mention via Tor.

[fornit]

You cannot argue with one thing from it; by increasing the blocks size, just to keep up with the growing number of txs, you will eventually end up with a system where a bitcoin node can by run only by rich people and only in data centers.
Set the limit to 10+MB and its almost certain that 5 years from now nobody will be able to run a bitcoin node at his home PC, through a DLS connection, not to mention via Tor.

thats not true. 10mb can likely be sustained virtually forever. both bandwidth and storage space grow fast enough to handle this.