Please do not change MAX_BLOCK_SIZE

[piotr_n]

No, I don't.
Though when I put his name into Google a wiki article appears on top, so I guess he must be somehow important

[1715033543]

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[kjj]

That's debatable.  But he certainly isn't important here.

I nearly shot beer out my nose when you called him "elite of bitcoin".

[piotr_n]

Well, if you watch the video, he even said that he already discussed changing of the POW function with others, during a "great meeting", though he did not want to give their names.
So either he was lying, or he indeed did not want to disclose a conspiracy. Or maybe he was just fantasizing...

Either way it happened at the very same conference where Gaving was working out a consensus among the people who know better than anyone else why we must push to increase the block size.

I nearly shot beer out my nose when you called him "elite of bitcoin".

Hehe. I'm willing to call "elite of bitcoin" anyone who considers himself as such..
And he surely does, if you listen to him. And he even got an applause.

[kjj]

I nearly shot beer out my nose when you called him "elite of bitcoin".

Hehe. I'm willing to call "elite of bitcoin" anyone who considers himself as such..

Then you rage against figments of your imagination.  You should stop doing that.  It is a very clear sign that your tinfoil hat is on too tight.

P.S.   Barring some catastrophic break in SHA, something that advances our knowledge of cryptography by a couple of decades overnight, there is no chance of a change in the POW system this year.  Anyone that tells you otherwise is a deluded attention whore (Hi Dan!), or doesn't really understand how bitcoin works.

[piotr_n]

Then you rage against figments of your imagination.  You should stop doing that.  It is a very clear sign that your tinfoil hat is on too tight.

Sorry I don't speak English that well - I have to guess what it means and hope that it wasn't too insulting

So you believe that there is an actual bitcoin elite, and I am deprecating their titles by giving it to any freak who thinks that he can just change the protocol without asking the miners?

In such case: can I get the list, please? Otherwise how am I supposed to know who I can call the elite of bitcoin, and who I cannot..

P.S.   Barring some catastrophic break in SHA, something that advances our knowledge of cryptography by a couple of decades overnight, there is no chance of a change in the POW system this year.  Anyone that tells you otherwise is a deluded attention whore (Hi Dan!), or doesn't really understand how bitcoin works.

Yeah, I said that, only using different words. But it wont change not because nobody will try - it wont change because the network won't let it.
Surely some people will try - the only question is 'is it only Dan?'

[tvbcof]

...
P.S.   Barring some catastrophic break in SHA, something that advances our knowledge of cryptography by a couple of decades overnight, there is no chance of a change in the POW system this year.  Anyone that tells you otherwise is a deluded attention whore (Hi Dan!), or doesn't really understand how bitcoin works.

My best hypothesis is that Dan said that for 'attention whore' reason, but also to light a fire under those who need to be thinking about this stuff.  And it has had that effect...or something has.

The primitive proof-of-work based on sha256 has had the effect of lending enough credibility to the system to allow it to get big enough to make some people some money.  But it's weaknesses are becoming apparent to a segment of the community.  Whether a more well thought out scheme to keep Bitcoin credible into the future can be transplanted in at this point will be an interesting thing to observe.

OTOH, there may be other reasons why it is not worth the bother.  That is to say, if there is no real hope of Bitcoin remaining de-centralized then who cares what the proof-of-work scheme happens to be?  If a battle between Titans decides who's property it becomes, I personally could not care less which one happens to win it.

[piotr_n]

IMHO, if the SHA gets broken (so when you can do the reverse function using limited resources), then we can as well assume that bitcoin got broken, because from that moment on, you will be able to replace any existing transaction inside the chain. So then, instead of changing the POW function, it would probably be just more efficient and more fair to start a new currency.

But if it only gets broken in a meaning that it will suddenly be i.e. 1e10 times easier to calc the hash - then it isn't really broken, but rather optimized.
New mining h/w will appear, smashing the old one, the difficulty will adjust, and you can as well continue with SHA...

And as far as I understand SHA, it is quite proven that the function cannot be reversed. From a popular science point of view, reversing SHA is much less possible than time travels

[xavier]

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.

We are entering bitcoin 2.0

The next evolution of bitcoin will be moving away from its decentralized nature towards centralized nodes.

Firstly, as blockchain grows, mining will become more expensive because of increased bandwidth and storage requirements.

It will become more expensive to make decentralized bitcoin transactions because the supply/demand dynamic will change - there will be more transactions, with less miners to store them.

Therefore there will be a new market for 'off-chain' transactions. A centralized network of off-chain transactions will evolve for transactions such as, pay 0.003 BTC to buy a coke from a vending machine. People will prefer to use off-chain transactions because it will be cheaper than using the blockchain.

This will all be driven by a change in the transaction supply/demand dynamic and an increase in transaction fees.

I believe the bitcoin network will evolve to accommodate this.

As far as blocksize limit goes, I think it needs to be raised, clearly.

I'm sure as bitcoin grows and changes, the developers will have to modify the protocol more. The modifications will be chosen by the politics of bitcoin and the demands of the userbase.

In short, its my opinion that much evolution will happen naturally with bitcoin to accommodate a larger userbase.

This will all happen with a background of collapsing FIAT currencies and broader government recognition/adoption of bitcoin. Governments will eventually recognize it is in their interest to support bitcoin and they will not prevent its evolution. If they try to stop it, they will not succeed.

[piotr_n]

We are entering bitcoin 2.0

The next evolution of bitcoin will be moving away from its decentralized nature towards centralized nodes.

Firstly, as blockchain grows, mining will become more expensive because of increased bandwidth and storage requirements.

It will become more expensive to make decentralized bitcoin transactions because the supply/demand dynamic will change - there will be more transactions, with less miners to store them.

Therefore there will be a new market for 'off-chain' transactions. A centralized network of off-chain transactions will evolve for transactions such as, pay 0.003 BTC to buy a coke from a vending machine. People will prefer to use off-chain transactions because it will be cheaper than using the blockchain.

This will all be driven by a change in the transaction supply/demand dynamic and an increase in transaction fees.

I believe the bitcoin network will evolve to accommodate this.

As far as blocksize limit goes, I think it needs to be raised, clearly.

I'm sure as bitcoin grows and changes, the developers will have to modify the protocol more. The modifications will be chosen by the politics of bitcoin and the demands of the userbase.

In short, its my opinion that much evolution will happen naturally with bitcoin to accommodate a larger userbase.

This will all happen with a background of collapsing FIAT currencies and broader government recognition/adoption of bitcoin. Governments will eventually recognize it is in their interest to support bitcoin and they will not prevent its evolution. If they try to stop it, they will not succeed.

Sounds like a business plan.

But do you really think that you can predict what the network will decide to do? Or are you still one of those who belive that it won't be the network to decide?
Or maybe, abstracting from a religion of network: how much would you be willing to bet that what you think will happen, will actually happen?
Because I, for instance, I don't know. Though, I do know that the network does not seem to be having any incentive to increase MAX_BLOCK_SIZE. At least not now.
I'm glad to be silently assured by some people that it wont happen without asking miners for a conscious vote, but I still think that making sure that miners vote consciously should be the main target of a real bitcoin foundation. Instead of making fun of people, who are actually doing their job, though in a kind of an underground. If the main principle of the project becomes an underground - where are we?

[xavier]

We are entering bitcoin 2.0

The next evolution of bitcoin will be moving away from its decentralized nature towards centralized nodes.

Firstly, as blockchain grows, mining will become more expensive because of increased bandwidth and storage requirements.

It will become more expensive to make decentralized bitcoin transactions because the supply/demand dynamic will change - there will be more transactions, with less miners to store them.

Therefore there will be a new market for 'off-chain' transactions. A centralized network of off-chain transactions will evolve for transactions such as, pay 0.003 BTC to buy a coke from a vending machine. People will prefer to use off-chain transactions because it will be cheaper than using the blockchain.

This will all be driven by a change in the transaction supply/demand dynamic and an increase in transaction fees.

I believe the bitcoin network will evolve to accommodate this.

As far as blocksize limit goes, I think it needs to be raised, clearly.

I'm sure as bitcoin grows and changes, the developers will have to modify the protocol more. The modifications will be chosen by the politics of bitcoin and the demands of the userbase.

In short, its my opinion that much evolution will happen naturally with bitcoin to accommodate a larger userbase.

This will all happen with a background of collapsing FIAT currencies and broader government recognition/adoption of bitcoin. Governments will eventually recognize it is in their interest to support bitcoin and they will not prevent its evolution. If they try to stop it, they will not succeed.

Sounds like a business plan.

But do you really think that you can predict what the network will decide to do? Or are you still one of those who belive that it won't be the network to decide?
Or maybe, abstracting from a religion of network: how much would you be willing to bet that what you think will happen, will actually happen?
Because I, for instance, I don't know. Though, I do know that the network does not seem to be having any incentive to increase MAX_BLOCK_SIZE. At least not now.
I'm glad to be silently assured by some people that it wont happen without asking miners for a conscious vote, but I still think that making sure that miners vote consciously should be the main target of a real bitcoin foundation. Instead of making fun of people, who are actually doing their job, though in a kind of an underground. If the main principle of the project becomes an underground - where are we?

Look, let's be clear about this. Bitcoin did not come about in a vacuum. This technology was not invented on its own. It was invented with a background of collapsing fiat currencies, in an era where fiat currencies have failed.

Right now, technology is not there to allow the bitcoin system to be completely decentralized. Because a P2P system cannot scale to accommodate all the tiniest mBTC transactions at current VISA bandwidth.

So the market will innovate to get round this. I believe the system I've described is what will happen, of course it could go another way. But in any case all the people who are predicting bitcoin will die due to scaling issues, will be proved wrong.

Eventually at some point in the future, perhaps technology will evolve so that more transactions can be shared on the blockchain (ie. transaction costs will come down). However I have already posted about how bitcoin is not scalable (storage & bandwidth are not unlimited, Moore's law is not a law).

The key thing to realize here? The world will soon need a currency like bitcoin. Bitcoin was not invented in a vacuum. We are heading for a serious collapse in the dollar and all other fiat currencies. Global governments have been proved incapable of managing their currencies and money supply. The end is near.

[Luckybit]

I watched Gavin's presentation from the San Jose conference and I learned that it is actually being planed to increase the MAX_BLOCK_SIZE withing new next 10 or 20 months.

Please don't do it.

As I have read it many times before, and I completely agree with it: Bitcoin is not designed for micro-transactions.

The network does not scale, we have a worldwide economic crisis and the Moore's law does not seem to be any longer applicable; our internet connections got stuck at what a DLS's copper can do, and the CPU's also don't seem to be getting the speed as much, as they were 10 years ago.

As an average bitcoin user, but also a developer who understand all the pros and cons behind increasing MAX_BLOCK_SIZE, I beg you: don't do it! Instead, do the other thing that Gavin mentioned in his presentation; implement a proper fee discovery mechanism into the client, so anyone would be able to decide how much fee he needs to pay to have his tx mined withing the next N hours...

Please let the fee market to work. The fees behind the transaction is a great feature invented by Satoshi - don't break it, but get advantage of it instead. They will take the load off the net and the net needs it.

If max block size isn't made larger then how will Bitcoin handle the flood of transactions  it may take to reach $1000 or $10,000 a coin? Changes have to be made and 10 months is a good timespan to expect to have to make them.

Let me quote the poster who originated this idea:

Current Bitcoin can't be sustainably much over $400.

Justification: the 1MB block size limit and the fact that the price has pretty much grown hand in hand with the number of transactions per block (in the long time trend). We have free transactions now (for old enough coins). Eventually a minimum transaction fee for ANY transaction will be several dollars, when the block space scarcity really starts to constrict usage. If BTC adoption grows at the current rate, in a couple of years this scenario is going to be real. This will mean, by the way, that the block subsidy will be insignificant far sooner than most people think. At 20,000 tx/block and $1 fee per tx, assuming $400/BTC and current reward level, fees will be two thirds of total miner revenue.

I do not expect doing away with the block size limit until we've seen its economic consequences. Many influential people have gotten stuck in early 2011 and the "everyone must be able to run a full node in their cell phone" mindset.

Microtransactions are a necessity. Without facilitating microtransactions Bitcoin cannot grow to it's full potential. $1000 a coin, $5000 a coin, $10,000 a coin, or more, are all possible only through large amounts of microtransactions.

[Luckybit]

Anyone here seem to agree that sooner or later we will get to that point when we will have to say 'enough is enough'.

So why not to just keep this point at the 1MB, as Satoshi originally designed?

If you don't increase MAX_BLOCK_SIZE people will naturally start using BTC payment processors, which will take the load off the net, and which has to eventually happen anyway.

Because math says you can't. If Bitcoin cannot do microtransactions it wont scale. If Bitcoin cannot do many tps it wont scale. Some guy here said 10MB, why not? Another said 10-100MB, I can agree with that as well but I think 10MB is more conservative. 1MB just doesn't make any sense.

[Luckybit]

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.

So how are we supposed to buy stuff?  Sure you can somehow pool them into bulk transactions but I fail to understand your alternative.

[tvbcof]

If max block size isn't made larger then how will Bitcoin handle the flood of transactions  it may take to reach $1000 or $10,000 a coin? Changes have to be made and 10 months is a good timespan to expect to have to make them.
...
Microtransactions are a necessity. Without facilitating microtransactions Bitcoin cannot grow to it's full potential. $1000 a coin, $5000 a coin, $10,000 a coin, or more, are all possible only through large amounts of microtransactions.

I think that it is just the opposite.  If Bitcoin continues to lose nodes and become increasingly centralized as the capitalization required to run at these capacities increases, the value proposition as a robust solution which is able to withstand attack will be severely damaged.

OTOH, if Bitcoin remains highly decentralized and becomes the value base for second tier or 'off chain' providers, I have no trouble at all seeing stunningly high valuations.

Remember, it is perfectly possible to for second tier processors to both prove their reserve, and to lock it such that they need their customers need approval in order to use it.  This contrasts sharply with the murky and inflationary nature of our mainstream economic solutions of today.

 edit: grammatical fix

[Luckybit]

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.

Use a VPN and now you can. Use a paid VPN.

If max block size isn't made larger then how will Bitcoin handle the flood of transactions  it may take to reach $1000 or $10,000 a coin? Changes have to be made and 10 months is a good timespan to expect to have to make them.
...
Microtransactions are a necessity. Without facilitating microtransactions Bitcoin cannot grow to it's full potential. $1000 a coin, $5000 a coin, $10,000 a coin, or more, are all possible only through large amounts of microtransactions.

I think that it is just the opposite.  If Bitcoin continues to lose nodes and become increasingly centralized as the capitalization required to run at these capacities increases, the value proposition as a robust solution which is able to withstand attack will be severely damaged.

OTOH, if Bitcoin remains highly decentralized and becomes the value base for second tier or 'off chain' providers, I have no trouble at all seeing stunningly high valuations.

Remember, it is perfectly possible to for second tier processors to both prove their reserve, and to lock it such that they need their customers need approval in order to use it.  This contrasts sharply with the murky and inflationary nature of our mainstream economic solutions of today.

 edit: grammatical fix

Even the Internet has a backbone and couldn't be completely decentralized. I think even in the best case there will be supernodes. I don't have a problem with the idea if the supernodes can be spread out across many nations and it's international. No government will control it. But I don't think it's going to be a completely flat evenly distributed thing because that seems impossible.

[tvbcof]

Even the Internet has a backbone and couldn't be completely decentralized. I think even in the best case there will be supernodes. I don't have a problem with the idea if the supernodes can be spread out across many nations and it's international. No government will control it. But I don't think it's going to be a completely flat evenly distributed thing because that seems impossible.

The Internet is anything but decentralized and it is no trouble whatsoever for the authorities to shut down centralized services.  Nor is it required that there is a low threshold for collateral damage.  Witness Megauploads as an example.  In that case the service threatened mainly the dominant political player (the US) yet it was still possible to completely kill it and do so overnight.

It would also be fairly trivial, I believe, for a great deal of grief to be heaped upon those end-users attempting to use Bitcoin natively, and do so at the ISP and even the backbone level.  Do you really want to fire up a VPN to make a micro-transaction?  ...even if it remains completely trivial to use you favorite VPN which is far from certain and, I believe, even unlikely...

The internet will not go away absent a Mad-max scenario.  It is to critical.  But it would not be very hard to make it much less free.  Something like Bitcoin has the potential to threaten pretty much all central governments (who are pretty universally cronies of the modern economic systems which have developed) so I think that counting on jurisdiction hoping is a risky gamble.

A low data-rate solution operated by low capitalized independent specialists is possible under almost any realistic regime of increased network control.  And second-tier providers have a lot more flexibility to adapt to on-the-ground and evolving threats.  This is why I see such a structure as having a realistic possibility of enduring in most possible future scenario.  A solution where a set of highly capitalized entities operating Bitcoin natively is, to me, a very ginger solution which relies on the kindness of it's adversaries for survival.

 edit: characterize specialists, end-users, and spelling.

[piotr_n]

Retrospecting the thread, I'd like to bring in some numbers.
At the moment we have 6353442 unspent outputs with 11287864 BTC in them, from which 4799281 (75%) outputs are below 0.01 BTC, and they carry 1515 BTC (0.01%) of the money.
The average block size, for the last 24 h, has been 125.0 KB.

So it makes me wonder, again; why do we actually need to increase the 1MB block limit, within the next year or so?
What numbers do he have to support even worrying about it?

As for my measurement, if we do the dust filtering right, and allow the fee system to work out some fair tx fees, we wont need to touch MAX_BLOCK_SIZE at least for the next 3 years. And if there will be a war (which I hope not) the 1MB limit might easily survive for 10 more years...

Keep bitcoin node lightweight - please.

[paraipan]

...
Keep bitcoin node lightweight - please.

+1

[zvs]

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.

Anyone that is still using a modem probably won't have a digital connection, so they won't get 56kbps, it's more like 3.5-4KB/s, 35kbps or so.

Not that it really matters, since even at 56kbps it wouldn't come close to keeping up.  At the "real" optimal speed you'd get, about 4KB/s, it'd take over 2 hours.

Well, I forgot that the block chain can be compressed... so if you were downloading with zmodem or something instead of the bitcoin client, it'd probably be a bit faster

[tvbcof]

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.

Anyone that is still using a modem probably won't have a digital connection, so they won't get 56kbps, it's more like 3.5-4KB/s, 35kbps or so.

Not that it really matters, since even at 56kbps it wouldn't come close to keeping up.  At the "real" optimal speed you'd get, about 4KB/s, it'd take over 2 hours.

Well, I forgot that the block chain can be compressed... so if you were downloading with zmodem or something instead of the bitcoin client, it'd probably be a bit faster

Breaking away from POTS modems which are, unfortunately, probably not sufficient for anything but a solution designed to target them which Bitcoin never was...

Anyone who has much experience with system design at the network level will also understand that in order to have a smooth functioning system, one needs significantly in excess of a simplistic number resulting from a division operation and two gross numbers.

I've already described seasonal and diurnal traffic patterns which are certain to impact a currency system significantly. 

More generally, if one is running almost any system near capacity, it is an arduous and frusterating task to catch up after inevitable failures of one sort of another.  I've seen poorly spec'd systems and/or systems which have grown unexpectedly which are *never* able to catch up.  If one is lucky (or skilled) the system can perform in a degraded capacity while catching up, but this is not likely to be the case for Bitcoin due to it's design.

Mix in a determined attacker with significant resource who can deploy, at least, denial of service attacks (and likely much more), and we have a solution which is very subject to outage.  My opinion for a long time has been to deploy some 'marketing' resources to making it broadly understood to the end-user public that even in the event of a long duration outage, Bitcoin is not 'dead' and the value held is still as safe as an individual's ability to retain their secret keys as sole property.