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Author Topic: On Chain Scaling  (Read 270 times)
nullius
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December 19, 2017, 07:29:44 PM
 #21

It'a all about how fast block chain size approaches infinity with number of transactions/time approaches infinity and the ratio between those two derivatives.

I see coins aging could be a viable on-chain scaling solution (scenario where coins that was not been moved for full halving period will automatically return to coinbase). If this will be the case - full nodes will only require to store blockchain for the past halving period since anything that remained unspent will transfer to the coinbase. This is drastic and, perhaps, cruel measure to take but that will also solve satoshi't billions, burned and lost coins problem.

This idea has a name, demurrage.  It’s not by any means your original invention; it is regularly proposed and shot down in various places.  It’s a horrible idea, which will never be implemented in Bitcoin, period; and the reasons you give are the worst possible reasons for it.  (Some people make economic arguments for demurrage, which I ignore here as irrelevant.)

Since this will never happen in Bitcoin, I suggest that you should go put all your money in Freicoin (FRC), a coin created by people who make economic arguments for demurrage.  Freicoin is currently ranked #675 on coinmarketcap.com, with a current market cap of $485,681 (27 BTC).  (Current Bitcoin market cap: $307,305,229,550.)  The idea that you should need to spend your money to not lose it—well, that idea is exactly as popular as it should be.

Please be advised:

  • As explained earlier on this thread, the accumulated size of the blockchain is the least problem for scaling.  Solving that would solve nothing.  No, it’s not “all about how fast block chain size approaches infinity with number of transactions/time approaches infinity and the ratio between those two derivatives.”  No, that’s not how Bitcoin works.  For starters, go read up on the UTXO set—for starters.
  • There is no “problem” with “[Satoshi’s] billions, burned and lost coins”.  First of all, it is a total non-problem—even for coins which seem to be really lost, such as those sent to 1BitcoinEaterAddressDontSendf59kuE, 1111111111111111111114oLvT2, or 1QLbz7JHiBTspS962RLKV8GndWFwi5j6Qr.  Consider by analogy the scenario of a shipload of gold which gets sunk in waters too deep for retrieval, effectually reducing the world’s gold supply.  Does that hurt the value or usefulness of gold as money?  Of course not!  But that’s not even the most important point:  Absent any evidence, who the hell are you to peremptorily decree that a coin is lost?

    Do you know what happened to Satoshi and his private keys?  I hate it when I see people salivating over Satoshi’s coins, declaring them a “problem”.  What if he laser-engraved the private keys in corrosion-resistant nickel alloy plates and secreted them in a treasure cave for the benefit of his posterity, the future Nakamoto Royal Line?  What if he’s still around, lurking in the forum or posting under another nym?

    More generally, who the hell are you to find a “problem” in the unknown numbers of people who have simply made long-term plans?  As opposed to children, adults measure “long-term” starting in decades.  There are people out there who have moved a portion of their assets into a Bitcoin cold wallet, and written the BIP39 seed phrase therefor into a sealed Last Will and Testament.  What makes you think you can steal their children’s inheritance?

If you think the foregoing comes off as harsh, stop and consider that Bitcoin’s value derives from its promise of safe, secure, stable currency in which everybody can participate without anybody’s permission, according to a set of rules declared in advance and known fairly to all.  Any change to those fundamental rules which seized away people’s coins would instantly destroy Bitcoin altogether—which is why it will never happen.  No, I haven’t been harsh; not by half.

Firstly, not everyone sees that as a problem and I think you would struggle to find consensus for stealing peoples' property just because you believe they aren't using it when it's been there for a while.  And secondly, the very act of moving idle coins around and reintroducing them into circulation would result in more transactions, which places more burden on the network.  I have coins I haven't moved in four years and they're not going anywhere, thank you.  This sounds very much like altcoin territory as it likely decimates Bitcoin's predictable supply ethos when "new" money would come flooding back into the economy every halving. 

Not to mention the miners that grabbed the first block after that got approved could completely fuck the economy if the coinbase reward included Satoshi's stash along with all the other coins presumed lost.  It would literally be the biggest block reward since crypto was invented.  Potentially worth trillions of dollars depending on what the price is at the time.  Those miners would be newly anointed Gods on Earth and everyone would lose confidence as it all comes crashing down.  Think it through to conclusion, please.   

The less-unreasonable demurrage proposals don’t throw giant lumps back into the coinbase, for this obvious reason.  Anyway, it’s irrelevant to Bitcoin.

Aside:  To find a private key associated with a public key Hash160 of all zeroes would be worth the current exchange equivalent of about $1.2 million.  It is highly probable that such a key exists—that many such keys exist!—though I myself would not try searching therefor in the public directory of all private keys.  Are those coins “burned”?  This is a philosophical question, though not a very deep one.  The same applies as for the infamous BitcoinEater:  There is an overwhelming probability that many, many private keys exist for that; though it’s worth less than the all-zeroes case.

For backup and protection of your long-term assets, among other use cases, I’ve been toying on the mental whiteboard with a little idea involving secret sharing and similar magic.  Ping me if curious.

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nullius
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December 20, 2017, 10:24:47 PM
 #22

Addendum, with apologies for the double-post:

I see coins aging could be a viable on-chain scaling solution (scenario where coins that was not been moved for full halving period will automatically return to coinbase). If this will be the case - full nodes will only require to store blockchain for the past halving period since anything that remained unspent will transfer to the coinbase. This is drastic and, perhaps, cruel measure to take but that will also solve satoshi't billions, burned and lost coins problem.

I like how gmaxwell addresses this (bold/large text in the original) (permalink):

Quote from: gmaxwell
Here are a few of the ideas which I think would be most interesting to see in an altcoin. A few of these things may be possible as hardforking changes in Bitcoin too but some represent different security and economic tradeoffs and I don't think those could be ethically imposed on Bitcoin even if a simple majority of users wanted them (as they'd be forced onto the people who don't want them).

(Some of these ideas are mine, some are from other people, some are old and obvious)

[...]

  • UTXO aging
    • Abandoned UTXO should be forgotten and become unspendable.
    • Demurrage is one possible construction for this, but its economically and educationally complicated. Simpler would just be having a long but finite maximum. Unspendable coins could vanish forever, or be returned to mining— but returning the coins to mining is economically distorting and risks creating weird incentives ("I won't mine your txn because I want to collect its inputs as fees once you've been successfully denied")
    • ATTENTION MORONS: THIS CANNOT BE DONE WITH BITCOIN. SEE THE LARGE BOLD TEXT AT THE TOP.

Good point about the “weird incentives”.  Also, the “ATTENTION” part.

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December 21, 2017, 05:07:28 AM
 #23

Thank you to those who have contributed their time responding.  I am still reading and absorbing what I can regarding the off-chain solutions.

What is bugging me now is the question of why.

  Why is segwit not being adopted en masse?

  Why will people open channels and start hubs on the LN?

When I started mining the incentives were simple. Distrust of the financial system/federal reserve, and need for additional income.  I am a firm believer that parties generally will act in the manner that directly benefits them most.

The direct short term incentives for segwit seem to be a reduction in fees? Yet it seems like adoption is slow? And from what I am seeing there are arguments about LN adoption due to incentivization issues.

The incentive for retaining 1mb block size seems to be keeping the barrier to full node operation as low as possible.  The more I research the more I understand the importance of this.  So it seems that the issue is now a combination of the technical implementation of layer 2 solutions, but more importantly, the incentivization of their adoption.  For the same reason you don't want to just hardfork a 2mb increase and rule out the raspberry pi folks, you can't just FORCE people to start transacting on layer 2.   

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December 21, 2017, 07:18:52 AM
 #24

Preface:  You will be interested to read this old mailing list post.  The same issues have been rehashed for years, in a thousand different forms.

https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-June/008844.html

Thank you to those who have contributed their time responding.  I am still reading and absorbing what I can regarding the off-chain solutions.

What is bugging me now is the question of why.

  Why is segwit not being adopted en masse?

  Why will people open channels and start hubs on the LN?

When I started mining the incentives were simple. Distrust of the financial system/federal reserve, and need for additional income.  I am a firm believer that parties generally will act in the manner that directly benefits them most.

The direct short term incentives for segwit seem to be a reduction in fees? Yet it seems like adoption is slow? And from what I am seeing there are arguments about LN adoption due to incentivization issues.

The incentive for retaining 1mb block size seems to be keeping the barrier to full node operation as low as possible.  The more I research the more I understand the importance of this.  So it seems that the issue is now a combination of the technical implementation of layer 2 solutions, but more importantly, the incentivization of their adoption.  For the same reason you don't want to just hardfork a 2mb increase and rule out the raspberry pi folks, you can't just FORCE people to start transacting on layer 2.   



I think Segwit adoption has been slow because (0) client software support has been slow in developing, (1) there are organized anti-Segwit FUD campaigns on forums and social media (did you notice?), and (2) several major players desire forking and centralization of Bitcoin (“divide-and-conquer”/“unite and rule”).  Those last will play politics and apply extra fee pressure to their own users, for as long as they themselves can afford to continue doing so.  As the rest of the market adopts Segwit, that can’t be terribly long—competition being what it is.

As for incentives to adopt Lightning:

Hey, I heard that some people have been complaining just a wee little bit about on-chain fees.  That will be an incentive for people to use Lightning instead, for the transactions for which Lightning is more appropriate.  (Ironically, the offloading of transactions from the blockchain will then apply downward pressure on fees—albeit, as increased total Bitcoin usage and LN channel opening/closing transactions apply upward pressure, until fees reach some sort of new equilibrium.)

And people really do want to buy cups of coffee.  Speaking for myself, I love coffee.  I, too, want to efficiently buy cups of coffee with Bitcoin.  Coffee may be the best Lightning incentive of all!

As for incentivizing hubs, Lightning will also have fees, albeit drastically smaller fees.  You know the Bitcoin motto, “Be your own bank.”  My own observation:  On Lightning, anybody with the capital to provide liquidity for a busy hub can take up the motto, “Be your own mini-Visa.”  Visa takes a small cut every time somebody buys a cup of coffee with it; and most people still deem it fit for buying cups of coffee.

Now imagine if instead of a few centralized payment networks (Visa, Mastercard, and a few others), you could open payment channels of your choosing into a decentralized constellation of cooperating/competing Lightning payment hubs for your small-value consumer purchases.  I see plenty of incentives on all sides, there:  For consumers, for merchants, for hub providers.

By the way, one technical correction:

The incentive for retaining 1mb block size seems to be keeping the barrier to full node operation as low as possible.  The more I research the more I understand the importance of this.

You are absolutely right about that importance.  But please be advised, there is no longer a 1MB block size limit.  Indeed, there is no more block size limit at all!  Segwit replaces the block size limit with a block weight limit, set to 4000000 bytes:

Code:
/** The maximum allowed weight for a block, see BIP 141 (network rule) */
static const unsigned int MAX_BLOCK_WEIGHT = 4000000;

The total “weight” of transactions is limited as specified by BIP 141:

Quote from: BIP 141
Blocks are currently limited to 1,000,000 bytes (1MB) total size. We change this restriction as follows:

Block weight is defined as Base size * 3 + Total size. (rationale[3])

Base size is the block size in bytes with the original transaction serialization without any witness-related data, as seen by a non-upgraded node.

Total size is the block size in bytes with transactions serialized as described in BIP144, including base data and witness data.

The new rule is block weight ≤ 4,000,000.

It sounds complicated; but this is actually designed to avoid making transaction selection more difficult for miners.

The way bytes are weighted, best estimates are that with full Segwit adoption, we will see blocks a bit over 2MB in actual size.  That’s just fine for the network, including nodes run on modest hardware and residential Internet connections.

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December 21, 2017, 07:57:13 AM
 #25

  Why is segwit not being adopted en masse?

  Why will people open channels and start hubs on the LN?

The direct short term incentives for segwit seem to be a reduction in fees? Yet it seems like adoption is slow?

In my opinion, since most transactions involve exchanges. They have economical incentives to have high network fees. High fees discourage  users to withdraw bitcoins from exchanges and this is direct profit for owners of these services.
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December 21, 2017, 05:40:45 PM
 #26

Preface:  You will be interested to read this old mailing list post.  The same issues have been rehashed for years, in a thousand different forms.

https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-June/008844.html
Great read, thanks for sharing, going to start digging through that archive, seems like a treasure trove.

Regarding the adoption issues, the FUD is certainly strong.  It's unfortunate that there is a mathematically prohibitive roadblock to on chain scaling, as "adopt this technology if you want Bitcoin to survive" is a bit of a user rights snag.  Although I guess it is the "right" of a legacy user to remain on legacy technology and pay a fee.  Free market economics at its finest.


As for the block weight vs block size, it's just an en-grained habit from trying to explain Bitcoin to others over the years, definitely need to be cognizant of using the correct form in technical discussions.  For a layman that is a very subtle/abstract distinction to absorb.
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