Please do not change MAX_BLOCK_SIZE

[piotr_n]

Making the 1 MB block size limit permanent to push transaction fees to $30 would put Bitcoin in the hands of banks.

I disagree.
IMO, making the 100 MB block size limit - this would put Bitcoin in the hands of banks.

Satoshi believed running a node would eventually require a lot of bandwidth and hard disk space, and would only be done by specialists.

Did he tell you that during a dinner?
It doesn't matter what he believed 4 years ago.
The only thing that matters now, is: what should we do to keep this experiment successful?
And I'm saying: the right thing to do is do not touch MAX_BLOCK_SIZE

In fact, I would not touch the protocol at all - ever again.
I understand that there are many talented developers who would like to use their talents to improve the bitcoin protocol, but I surely hope that they can channel their skills into developing block-chain client apps, so the chain itself could just stay as it has been invented and tested for the last 2-4 years. Whether it was Satoshi himself, of whoever else that set the A variable to the X value, N years ago - it shouldn't matter, the bitcoin core should just stick to it.

It is the chain's client apps that should be changing/developing, from now on, and there is a lot of room for such.
Just freeze the code and let it go - you will see.

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[amincd]

IMO, making the 100 MB block size limit - this would put Bitcoin in the hands of banks.

A node isn't a bank. Having to store your Bitcoins at an e-wallet, and use the e-wallet to perform internal transactions, would put your Bitcoins in the hands of a bank.

Quote
Satoshi believed running a node would eventually require a lot of bandwidth and hard disk space, and would only be done by specialists.

Did he tell you that during a dinner?

He wrote that in the mailing list. I posted the link for you, but didn't even take the time to read it.

It doesn't matter what he believed 4 years ago.

It matters because that's the agreement, and you can't change the agreement without a consensus.

And I'm saying: the right thing to do is do not touch MAX_BLOCK_SIZE

Nodes don't control your private keys, a bank does. I don't want Bitcoin to be controlled by banks. Making the 1 MB block limit permanent and pushing transaction fees to $30 would result in banks controlling it.

[Anon136]

Making the 1 MB block size limit permanent to push transaction fees to $30 would put Bitcoin in the hands of banks.

I disagree.
IMO, making the 100 MB block size limit - this would put Bitcoin in the hands of banks.

Satoshi believed running a node would eventually require a lot of bandwidth and hard disk space, and would only be done by specialists.

Did he tell you that during a dinner?
It doesn't matter what he believed 4 years ago.
The only thing that matters now, is: what should we do to keep this experiment successful?
And I'm saying: the right thing to do is do not touch MAX_BLOCK_SIZE

as soon as it becomes a problem entrepreneurs and innovators will go nuts trying to figure out the best way to solve it and they will succeed.

[piotr_n]

And even if you are a developer who wants to develop bitcoin further.
Wouldn't you just enjoy it more, knowing that from now on, you are only developing a client app, and not the core? So whatever you screw up is not going to affect the chain, nor the economy..
I think it's much more pleasant to develop a code without such a burden.
So once again: please do not touch the core! Otherwise, if you break it, your grandchildren might never forgive you

[Anon136]

blind signatures should protect from this. as an analogy, the banks wont be moving your money around directly but rather moving around a locked box full of money that you have given them that only you know the combination to. This way the money that you give to the bank will only be valuable to you and can never be used by the bank.

It's not the best analogy, a Chaumian token is more similar a a banknote.

That's correct.  The bitcoin-denominated tokens issued on OT servers are promises issued by the aforementioned voting pool to redeem for real bitcoins at par.  OT deals with the issue of trust by spreading it out across multiple parties via a multisignature transaction on the blockchain.  What makes me uneasy is there are technical, logistical, and cognitive limits on the total number of parties able to participate in the voting pool, and so the issue of trust ultimately still remains.

Edit: Furthermore, once trust enters the equation, anonymity usually leaves, since most people aren't willing to trust their money to strangers.  Thus, we likely haven't actually attained censorship resistance.

you could establish a relationship of trust with your chaum bank with out either party revealing its identity by creating a risk fund utilizing multisignature transactions on the bitoin blockchain. The idea is both parties risk bitcoins in a transaction on the blockchain that requires both parties to sign off on the transaction at some point in the future otherwise both parties coins will be destroyed. If you and i are trusting each other with a $5 transaction and we have both risked 20 dollars and neither party knows who the other party is it becomes in neither parties interest to behave dishonestly.

the only big draw back is you have to have some resources to invest before you are capable of participating in the system, but of course that's even the case with money in general now isn't it. Oh also super wealthy trolls who get off to the idea of destroying money that is worth more to other people than themselves. I dont think this would be epidemic though.

[amincd]

The plan has already been set for Bitcoin. Almost everyone who invested in Bitcoin did so with the assumption that the block limit would be raised because that was the understanding when the 1 MB block limit was first created, and what almost everyone assumed would happen until recently. It would be a betrayal if the Bitcoin community changed the plan for no good reason.

[Anon136]

The plan has already been set for Bitcoin. Almost everyone who invested in Bitcoin did so with the assumption that the block limit would be raised because that was the understanding when the 1 MB block limit was first created, and what almost everyone assumed would happen until recently. It would be a betrayal if the Bitcoin community changed the plan for no good reason.

some of us just hate the idea of central planning ><

[piotr_n]

you could establish a relationship of trust with your chaum bank with out either party revealing its identity by creating a risk fund utilizing multisignature transactions on the bitoin blockchain. The idea is both parties risk bitcoins in a transaction on the blockchain that requires both parties to sign off on the transaction at some point in the future otherwise both parties coins will be destroyed. If you and i are trusting each other with a $5 transaction and we have both risked 20 dollars and neither party knows who the other party is it becomes in neither parties interest to behave dishonestly.

with the scripting language that bitcoin has, you can think of all kind of decentralized P2P payment systems that would utilize the thin chain to do thousands of sub-transactions in one go, without even requiring more time to mine it out.
end even more, if you add those that we have not though of yet...
leave the incentive there, and they will bloom, and you will be no less of a creator in this process.
anyone can change a value of a constant - but it's not an invention, so most likely it just wont improve anything, though has a potential to make things worse.

[Gavin Andresen]

The block size will be raised, that is the overwhelming consensus among the people who are actually writing code and using Bitcoin for products and services that it needs to happen.

And there is a tiny minority of people who will loudly proclaim that isn't true and that the core developer are going to destroy Bitcoin if the block size is raised.

If you want to be helpful, please organize a list of objections to raising the block size limit and responses to those objections.

I believe the last objection raised was that a higher block size limit would make it impossible to mine anonymously, but I think that has been debunked with the notion of "read the firehose of transactions non-anonymously, then broadcast just new block header + coinbase + listof(truncated transaction hashes) anonymously."

I'll soon be writing up a plan for how we can safely raise the block size limit.


RE: central planning:

No central planning is why I would like to eliminate the hard, upper blocksize limit entirely, and let the network decide "how big is too big."

RE: "the plan"  :   The plan from the beginning was to support huge blocks.  The 1MB hard limit was always a temporary denial-of-service prevention measure.

[piotr_n]

Gavin, with all the respect, but you just said: the limit will be raised.

So the problem is not anymore, whether you guys (whoever you are) will decide to raise the limit - the problem is now: what will happen next?

I personally find it offensive, and a bit awkward, that developers of this project could make some decision with an argument like: "we are the people who are actually writing code and using Bitcoin for products and services, so it needs to happen"
Seriously?

You know that all the mining pools have actual incentive in keeping it at 1MB - don't you?
At least the current mining pools - after you increase the limit the balance might change.
So first of all, I don't think a developers voice counts more than a non-developers voice. Or a merchant's..
And second, even if it did, there are bigger powers out there that you need to convince - how are you planing to do that, when obviously there already are people who are convincing them otherwise?
So once again with a respect, I admire your self confidence, but just cannot wait to see it happen. I will surely follow the flow, though I hope that the wold of bitcoin is not going to like a system where developers along with corporations setup the protocol, without even asking anyone else.

[Anon136]

No central planning is why I would like to eliminate the hard, upper blocksize limit entirely."

So than the end-game has to be miners who build their own infrastructure connecting them to each other? This would work pretty well i think if it was an option.

But what if it isnt an option. dont we have to assume that governments will be hostile? if they are than we will have to rely on miners relaying over the internet. If this is the case and demand for transactions outweighs the supply of transaction space even for miners who happen to live in the part of the world that has THE fastest internet than we should expect that almost every miner in the world would clump up in the same area, or the same couple of areas.

anyway i might not have any idea what im talking about. economics is more of my interest than computer science.

[ShadowOfHarbringer]

That is also compatibile with definition of freedom.
People are free to buy more powerful hardware and internet connections.

But freedom does not mean that everybody has to afford it. You are free to work hard & earn money to buy a more powerful computer and more bandwidth.

I don't care about your freedom, man, neither about your definition of it.

OK, whatever.

I am not a religious person and as you said yourself, you are not even my friend.

What ? We are talking about RELIGION now ?

All I care about is for Bitcoin to succeed in a long term - you put USD requirements over running a node and you are giving the power back, to the very same people that Satoshi was trying to escape from with his great invention.

Do you actually understand that PEOPLE, not only banks will be able to run full nodes in their basements even if block size is 50MB, right ? So what the hell are you talking about ?

As for mining, it is already unfeasible to mine if you are not a specialist with resources anyway and the situation will only get worse - no matter if block limit is 1MB or 100MB.

[piotr_n]

Do you actually understand that PEOPLE, not only banks will be able to run full nodes in their basements even if block size is 50MB, right ? So what the hell are you talking about ?

Yeah, I got that part.
5 years from now you will have cluster of i7 something machines, with very performing A/C and everything, just to be so cool.
But I'd rather prefer to be able to verify this fine chain on my laptop

EDIT: And about the religion, when you said "freedom", it sounded like a religion, thus my answer.

[tvbcof]

No central planning is why I would like to eliminate the hard, upper blocksize limit entirely."

So than the end-game has to be miners who build their own infrastructure connecting them to each other? This would work pretty well i think if it was an option.

But what if it isnt an option. dont we have to assume that governments will be hostile? if they are than we will have to rely on miners relaying over the internet. If this is the case and demand for transactions outweighs the supply of transaction space even for miners who happen to live in the part of the world that has THE fastest internet than we should expect that almost every miner in the world would clump up in the same area, or the same couple of areas.

anyway i might not have any idea what im talking about. economics is more of my interest than computer science.

Some people consider the possibility of governments being hostile to Bitcoin as conspiracy theories on par with the moon landing being fake.  Other people, I suppose, feel that the best strategy to avoid hostility is to comply with any demands that corp/gov may make and architect the solution such that it is capable of doing so.  Frankly, I see the Bitcoin Foundation as being fairly strongly in the latter camp and I think it is a mistake for the strength of the Bitcoin solution.

---

On the topic of infrastructure scaling, it is noteworthy that to be reliable it is necessary to run well in excess of average capacity.  This to account for diurnal and seasonal spikes.  5/1 is an oft used industry guide line and I found it necessary in my work, except that since I had no control over the demand side, I at times realize a spike in the first few seconds of the hour which vastly exceeded even the 5x margin.  This because of end-user automation which was not properly designed.

Off-chain solutions can give users the ability to reliably and safely perform financial operations which are locked to the Bitcoin 'source of truth' when it is practically and economically feasible to do so.  Actively embracing them would be, from a system design point of view, a wise thing to do.  It would act as a much needed buffer for the native protocol and go a long ways toward allowing it to be widely distributed.  At least if wide distribution is actually seen as a positive thing.

[kjj]

The brick wall thing seems like a particularly silly analogy.  People are already competing for block space with fees.  Why are people doing that when block space is effectively infinite?  Why are miners encouraging that when the fees are so meaningless in comparison to the subsidy?  It seems like the car hit a wall of jello a couple of miles before hitting the brick wall.

The brick wall is analogy is accurate because It's the difference between being able to send transactions and not being able to send transactions. Right now all the users who want to send Bitcoins can do so because the total demand is lower than the protocol limit.

Once the blocks fill up we'll get to a situation that changes.  If more than 5000 people want to send a transaction in the same 10 minute interval they won't all be allowed to do so, no matter how much they are all willing to pay in fees. The ability to use Bitcoin will be rationed to a fixed number of entities.

What I want to know is, how much cheaper?  How well will people innovate?  Are people willing to pay enough in fees to keep mining going as the subsidy declines?  What is the actual marginal cost of including a transaction?  How will that change over time?

There are a lot of question marks between where we are and where we want to be.  It seems imprudent to assume that they will all be resolved to our liking.

It's complete economic and historical ignorance to assume the best way to answer any of those questions is with central planning in the form of transaction rationing.

Miners will mine if they can obtain a market price for their services that is acceptable to them. Users will initiate transactions if the price if sending transactions is acceptable to them. Not only is there no need to second guess price discovery by trying to calculate the marginal cost of handling a transactions and using that as the basis of a magic number in the protocol but also succeeding at such a strategy is probably impossible.

I'm not sure why you think that there is some sort of free market for bitcoin transactions.  I have a lot of confidence that someday there will be such a thing, but for the next couple of decades (and possibly for the rest of my life) there is not and will not be.

Right now, every single transaction (with a couple of exceptions caused mostly by programming errors) is mined as a charity.  There is also some indirect benefit to the miners, in that the network actually working makes their holdings more valuable, but there is nothing even slightly resembling a balance between cost and reward.

To recap, we have no idea what it costs to process a transaction.  Even without the block size limit, there is a limit to how many transactions can be processed by the network in a given time.  There is a much smaller limit to how many can be processed economically.  And there is a vastly smaller limit to the number that could be processed economically without the subsidy.  We have no idea where these limits are, and they are all moving targets.

If we were starting at 100% adoption, Moore's law would let computing power keep ahead of the game, and probably even pull out far ahead.  But we aren't at the top of the adoption curve, we are at the bottom.  In the short run, the vertical slope looming is going to kick all of our asses.  There will be a period when the system won't be able to keep up with demand for reasons other than an artificial block size limit.  God help us all if we've evicted all of the small miners (less than, say, 100 million readily available capital) from the network before that happens.

I'm really not sure why I bothered to write this reply.  Your want the network (people other than you, at least mostly) to have to provide a scarce resource in unlimited quantity, while you accuse me of advocating central planning for pointing out that the market that you need doesn't actually exist.

[piotr_n]

exactly. you cannot really say what is a cost of a transaction until you let the fee system to work and set it at some level.
then you can try to optimize it, with the block size and current house technology.
but not before.
it's just crazy - mad scientist is less crazy than it

[justusranvier]

I'm not sure why you think that there is some sort of free market for bitcoin transactions.  I have a lot of confidence that someday there will be such a thing, but for the next couple of decades (and possibly for the rest of my life) there is not and will not be.

Right now, every single transaction (with a couple of exceptions caused mostly by programming errors) is mined as a charity.  There is also some indirect benefit to the miners, in that the network actually working makes their holdings more valuable, but there is nothing even slightly resembling a balance between cost and reward.

To recap, we have no idea what it costs to process a transaction.  Even without the block size limit, there is a limit to how many transactions can be processed by the network in a given time.  There is a much smaller limit to how many can be processed economically.  And there is a vastly smaller limit to the number that could be processed economically without the subsidy.  We have no idea where these limits are, and they are all moving targets.

If we were starting at 100% adoption, Moore's law would let computing power keep ahead of the game, and probably even pull out far ahead.  But we aren't at the top of the adoption curve, we are at the bottom.  In the short run, the vertical slope looming is going to kick all of our asses.  There will be a period when the system won't be able to keep up with demand for reasons other than an artificial block size limit.  God help us all if we've evicted all of the small miners (less than, say, 100 million readily available capital) from the network before that happens.

I'm really not sure why I bothered to write this reply.  Your want the network (people other than you, at least mostly) to have to provide a scarce resource in unlimited quantity, while you accuse me of advocating central planning for pointing out that the market that you need doesn't actually exist.

You win the Orwellian of the day award for having successfully used every term you included in that rant as if it meant the opposite of its meaning.

What I want is for the network to be allowed to provide a service at a quantity and price that they and their customers find acceptable. You want to ration the amount of transaction processing miners are allowed to provide to their customers.

The fact that we don't know how much it costs to process a transaction is expected and irrelevant.  Miners won't continue to mine if the benefit the receive does not exceed the costs involved, and users will not send transactions if the cost of doing so exceeds the benefit they derive. That's that that matters. If you don't believe this process works in the real world then you should really contemplate how it's possible for the providers of the products and services you consume every day to figure out the correct amount to produce and the correct price to offer it at.

[Gavin Andresen]

And second, even if it did, there are bigger powers out there that you need to convince - how are you planing to do that, when obviously there already are people who are convincing them otherwise?

Which "bigger powers" and which "people" ?

Is there some secret cabal out there I don't know about?

If you mean "Peter Todd has convinced some big mining pool operators not to increase the size of the blocks they create" -- then great!  That's the free market at work, big mining pools should be free to create blocks that are as large or as small as they like, and to accept or reject other's blocks for whatever reason they like.

[johnyj]

Bitcoin is really getting old, when some political decisions have to be made

[DeathAndTaxes]

If you mean "Peter Todd has convinced some big mining pool operators not to increase the size of the blocks they create" -- then great!  That's the free market at work, big mining pools should be free to create blocks that are as large or as small as they like, and to accept or reject other's blocks for whatever reason they like.

This + 1000.  It would be wonderful if developers raised the hard cap and miners at least initially didn't make larger blocks.  The cap should only be a security mechanism.  I disagree that no cap is necessary but the cap should be high enough that the economic decisions of rational miners are setting a "defacto" cap lower than the hard security limit cap.