Why didn't bitcoin scale using both proposed solutions?

[LtMotioN]

Thanks guys, you have given me some insight about this unnecessary war that began before I really got into crypto. I was always under the impression BTC was 1 MB blocks and using segwit made it pseudo 2MB. If we are on pseudo 4MB already then yea, it makes sense why they didn't increase it "just a little bit more for now".

I hope we can start using segwit more soon, the exchanges and major wallet providers need to up their game and start supporting this.

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[Carlton Banks]

I was always under the impression BTC was 1 MB blocks and using segwit made it pseudo 2MB. If we are on pseudo 4MB already then yea, it makes sense why they didn't increase it "just a little bit more for now".

"Pseudo" means what exactly?

There's been around five or six 2 MB blocks mined recently. All Segwit compatible Bitcoin nodes (which is over 90% of the network) added every byte of those 2 MB blocks to their copy of the blockchain. This will be no different for 4 MB blocks either, if you're not downloading the full blocks, you're not running a full Bitcoin node.

[amishmanish]

Sorry for that post above.
As you know the bitcoin code has been constantly updated with several improvements over the years as an open source project. There was a general agreement that scaling had to be achieved somehow. One side wanted a simple solution by increasing the block size. The other side was in opposition because the block size increase has a direct effect on the requirements to run a full-node. A full-node can validate the block-chain and accept or reject transactions depending on their validity. THIS "VALIDITY" is determined by the set of rules that transactions are following.

When you do a fork (Soft or Hard), you are making changes to these rules. The difference is subtle but very important.
In a soft-fork, Its not mandatory for EVERYONE to upgrade immediately. Because blocks produced under new rules will still be valid on old systems.
In a Hard-fork, It is mandatory for all systems to upgrade, otherwise the blocks produced under new rules will be invalid on old systems. This essentially creates two chains and opens up several possibilities discussed here.

That I think is reason enough for the core developers to not want a block size and a hard fork.
You are right, in a perfect world, everybody would have agreed that a hard-fork is risky and that solutions like SegWit and LN should be implemented first. The block size increase could wait until the ecosystem was mature enough to form consensus. (On what is the safe limit for block size to keep the network decentralised enough and whether everyone is ready for a hard fork). When such a consensus would be available, a size increase could've been incorporated.

What has happened now instead is that a few powerful individuals (2 i think) have colluded to co-opt the bitcoin and scream to the whole world that they are the original. What Roger Ver is as a person is quite clear from his "Ï am a self made millionaire", "Whats your gross annual revenue" outbursts.. He is a egoist with a lot of money and one talented but disgruntled developer to support him.
He just decided to benefit from the disgruntlement amongst the bitcoin developers and launch his own coin. That was really sad.

If SegWit and LN in general is more to "like a bank system" why do we have it even? These new addresses that starts with "3" and "bc1" what about them?? Are they not "on chain" and everything with them is done off chain??

SegWit is a soft-fork that solved many issues so that future improvements can be implemented. SegWit solves transaction malleability by segregating the signatures and implementing an increased blocksize limit of 4 MB. But remember that this is a soft-fork and it has to continue supporting old nodes. The old nodes will effectively not see the signature data leaving more space for transactions. This results in an effective increase in capacity depending on adoption.
This is where the distibuted nature of the bitcoin project as a project of the people comes to fore. If people agree that it is worth succeeding, they will adopt SegWit. Unfortunately, the biggest exchanges and merchants have seen that there is still money to be made from the blocksize debate. If they all adopt SegWit, the fees and transaction speeds will improve drastically but seeing the divide in the community, they know there is space for other things to get pumped. Thats a net positive for them. So they have been slow to adopt it.

Raising blocksize or making blocks faster+decreasing reward should be okay solution I guess. Look at ethereum it holds much harder load in terms of speed of blockchain growth and faster blcoks etc. and I don't particulary see that theres not any problem, of course ether has some problems regarding transactions here and there.

Well, we all are divided on this. Big blockers will say things like "Hard disks and memories are cheap enough now", "Users don't need to run full nodes, only miners can do that". This second assumption is dangerous. If normal users, small businesses become unable to run nodes, we no longer have the power to stop a miner consensus from becoming a natural consensus.
Its full nodes that implement the rules. If all the users use are SPV and full nodes are run only by the miners, then there won't be any more hard forks. The miners decide to upgrade to new rules and those become the new rules because you no longer have independent, full-nodes running to invalidate those changes.
This is centralization and big-business interests.

Could you explain why is LN like urgently needed? To my understanding people saw that scaling debate was going nowhere , you had litecoin activating SegWit??? which may pushed people towards LN even more, and said enough and they opted for SegWit while other rich dudes went for BCH. But why is LN that much advanced.

The bitcoin fees and transaction speeds are suffering because the blocks are full. LN is attempting to spread the need for on-chain transactions over multiple off-chain transactions between parties. A payment channel is just a multisig, time-locked contract between two parties that keep updating the ledger amongst them. Finally, they can settle transactions on-chain when they mutually agree or when the time expires.
Its urgently needed to ensure that micro transactions can move to LN so that there is decongestion.

Again, people are saying things like LN will result in banking hubs. What nobody wants to accept is that LN is the best way possible with very low effect on centralization in the short term and no effect on the long term. Its centralizing tendency, if any, will be much lower than that of increased block sizes that will neutralize independent user-run nodes.
There is no centralization because users are free to choose nodes with which they want to establish channels. These nodes don't hold your funds hostage and they cannot lose them like normal banks. This will evolve as more and more people connect to the network and honest, secure nodes are rewarded.

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[Samplex]

@amishmanish thanks for clearing some things, I have more questions 

Okay I get it I have to open a payment chanel to transact. But what if I don't open a chanell? How are others going to send me via segwit? Will others need to open a chanell with them puting their money and me putting 0btc?

One thing, by using these addresses that begins with "3" am I automatically using SegWit? And If I am automatically using SegWit how is channel even being opened when I can simply generate paper wallets with these "3" and receive lots of coins without even going online and contacting any node to open a channel for me or to open one myself. Or I should look at them as ordinary btc addresses that start with "1"?





Could you comment on this? https://www.youtube.com/watch?v=UYHFrf5ci_g and read first comment there if you have time

[Anti-Cen]

Thanks guys, you have given me some insight about this unnecessary war that began before I really got into crypto.

Double Agent S-M started CPU-Wars to mine new coins so in that respect Intel, AMD and big oil are
very happy and the other debate about having to take everything off block to use Lightning Network
is going to get much hotter yet.

Bigger blocks and playing with the timing on Bitcoin may help a little bit but they need Distributed Network Architecture (DNA)
and not replication or banker hubs on the main block chain

[OriginTrain]

I only understand minor details of the proposed solutions.. such as BTC not wanting to increase blocksize since doing so would result in a hard fork.. but I'm having trouble understanding the reasoning.

At some stage, Bitcoin will need to hard fork or do some form of radical change that isn't solvable off-chain. If they don't, it will become obsolete and a true "storage of value" rather than "Internet money". And it's a damn shame that these two ideologies are currently separated into two projects (BTC and BCH) and not kept together in the one project.

As newer and more efficient blockchains are created that are designed to hard fork with better tech upgrades, the technology on the original Bitcoin core code will fall into obsolescence. What is wrong with doing a hard fork and just abandoning the old chain frequently, even making hard forks an expected regular occurrence like some of the new blockchains are? Everyone should still be able to access their old wallets with their private keys, so what is missing exactly?

[Carlton Banks]

I only understand minor details of the proposed solutions.. such as BTC not wanting to increase blocksize since doing so would result in a hard fork.. but I'm having trouble understanding the reasoning.

Bitcoin blocks are now increased in size. In a soft fork 5 months ago.

As newer and more efficient blockchains are created that are designed to hard fork with better tech upgrades, the technology on the original Bitcoin core code will fall into obsolescence. What is wrong with doing a hard fork and just abandoning the old chain frequently, even making hard forks an expected regular occurrence like some of the new blockchains are? Everyone should still be able to access their old wallets with their private keys, so what is missing exactly?

Lots of planning is required. All the good candidates of changes for a hard fork should be weighed up, and packaged together.

Then, a gradual roll-out needs to devised to minimise the risks of disruption to the Bitcoin network. It's easy to say "let's hardfork", that's 2 words in less than 2 seconds. The reality is months of planning, and months of transition. There is an entire separate project dedicated to devising a hard fork. Because it's such a large undertaking, hard fork's should be done very infrequently.

In the meantime, soft-forks are still very useful and much less disruptive. A very important tech improvement (Schnorr signatures) will do a great deal to improve the transaction rate & privacy, and is set to be introduced as a soft fork soon.


Hard forks are not magic, they come with risks as well as rewards. The same is true of changes to block capacity, it's a trade-off. What we really need is a capacity increase, and it's best to get that increase using ways that don't compromise Bitcoin in other ways. Block capacity increases are a bad idea, especially when we've only just increased block capacity, the impact of that needs to be checked before it's considered again.

With Lightning already working on the main chain (albeit prematurely), and the Segwit blocksize increase already in place, increases to block capacity aren't really so important any more.

[amishmanish]

@amishmanish thanks for clearing some things, I have more questions  

Okay I get it I have to open a payment chanel to transact. But what if I don't open a chanell? How are others going to send me via segwit? Will others need to open a chanell with them puting their money and me putting 0btc?

One thing, by using these addresses that begins with "3" am I automatically using SegWit? And If I am automatically using SegWit how is channel even being opened when I can simply generate paper wallets with these "3" and receive lots of coins without even going online and contacting any node to open a channel for me or to open one myself. Or I should look at them as ordinary btc addresses that start with "1"?





Could you comment on this? https://www.youtube.com/watch?v=UYHFrf5ci_g and read first comment there if you have time

I think you are getting confusied between SegWit and LN. SegWit was a soft fork that was needed for further improvements. Lightning Network being one of them.

You open a channel once with another node and as the network becomes connected enough you can use the funds in the channel to make microtransactions and other people can find you on that network.
There is a cool visualization of the LN on mainnet. (its down right now for some reason). Keep in mind that its in testing mode now and only the experts are involved in it. Though, its a golden opportunity to learn for anybody with enough time, computer hardware and a desire to get their hands dirty.

For your answers to the new address forma, you can check this reply from Carlton Banks.

[Samplex]

@amishmanish thanks for clearing some things, I have more questions 

Okay I get it I have to open a payment chanel to transact. But what if I don't open a chanell? How are others going to send me via segwit? Will others need to open a chanell with them puting their money and me putting 0btc?

One thing, by using these addresses that begins with "3" am I automatically using SegWit? And If I am automatically using SegWit how is channel even being opened when I can simply generate paper wallets with these "3" and receive lots of coins without even going online and contacting any node to open a channel for me or to open one myself. Or I should look at them as ordinary btc addresses that start with "1"?





Could you comment on this? https://www.youtube.com/watch?v=UYHFrf5ci_g and read first comment there if you have time

I think you are getting confusied between SegWit and LN. SegWit was a soft fork that was needed for further improvements. Lightning Network being one of them.

You open a channel once with another node and as the network becomes connected enough you can use the funds in the channel to make microtransactions and other people can find you on that network.
There is a cool visualization of the LN on mainnet. (its down right now for some reason). Keep in mind that its in testing mode now and only the experts are involved in it. Though, its a golden opportunity to learn for anybody with enough time, computer hardware and a desire to get their hands dirty.

For your answers to the new address forma, you can check this reply from Carlton Banks.

Thank you fro taking your time to explain things! This graph doesn't look like network being centralized.

Anyway so I can't send more money from which I have currently in a channel via LN? Is it limited to that amount that I have put aside in a multisig?

I guess I will have to try to read a bit more what is SegWit and what is Lighting Network if they are separated, thought they are similar things like SegWit is just some sort of tweak of Lighting.

[Colorblind]

Hi Forum
Hoping you can educate me a bit here. I wasn't heavily into crypto at the time this all took place.
When the whole scaling debates began basically two solutions were proposed, which as we know lead to the creation of BCH.
Why did we not move BTC to 2MB blocks while work on the layer 2 scaling was being finalized? As I understand LN right now when a channel is closed the transactions in it get processed by the main chain, thus a bit of extra blocksize would help scale LN even more.

To me, I personally like the idea of layer 2 scaling more because of all the features it would add to BTC and new things it would make possible. I see some merit in both solutions though.

Is there a good reason apart from politics that we couldn't have just done both? It would have carried us for now until new scaling solutions are done and fully tested.

The BTC vs BCH has really split the community, yea there's some funny memes around this and all, but its not good that we are all fighting each other and getting super opinionated around this. I hope we don't see more separation in the community in the future.

P.S. lets not turn this into a BTC vs BCH argument here, make love not war

I wonder why people are panicking so much, because you actually right - bitcoin should (and I believe it will eventually will) scale in both direction. Blocksize increase is almost inevitable (this is just my oppinion), however even with significant (2x, 4x) increase it won't be able to serve nearly as much as mature payment processor capable to serve while allowing normal people to host full nodes and preserving true decentralization so off-chain solutions won't go anywhere, so Lightning network will find it's use as well. The thing is network should not be upgraded in all directions at once. First Segwit should be adopted (as for now only fraction of nodes support Segwit transactions), then LN should be thoroughly tested and only after that, assertion of required block size increase should be done. People just don't have that much needed patience to wait and hodl, too fixed on the price charts and this is what truly hurts the tech.

[SHOP_]

The original Segwith2x agreement was exactly that.

[monkeydominicorobin]

Hi Forum
Hoping you can educate me a bit here. I wasn't heavily into crypto at the time this all took place.
When the whole scaling debates began basically two solutions were proposed, which as we know lead to the creation of BCH.
Why did we not move BTC to 2MB blocks while work on the layer 2 scaling was being finalized? As I understand LN right now when a channel is closed the transactions in it get processed by the main chain, thus a bit of extra blocksize would help scale LN even more.

To me, I personally like the idea of layer 2 scaling more because of all the features it would add to BTC and new things it would make possible. I see some merit in both solutions though.

Is there a good reason apart from politics that we couldn't have just done both? It would have carried us for now until new scaling solutions are done and fully tested.

The BTC vs BCH has really split the community, yea there's some funny memes around this and all, but its not good that we are all fighting each other and getting super opinionated around this. I hope we don't see more separation in the community in the future.

P.S. lets not turn this into a BTC vs BCH argument here, make love not war

The scaling itself is about politics. Making laymen believe in scaling itself is politics. Increasing the block size unnecessarily will only clog the whole system. No one should care about scaling since it is the job of the developers. If you are not into programming you might as well shut up.

[LtMotioN]

Hi Forum
Hoping you can educate me a bit here. I wasn't heavily into crypto at the time this all took place.
When the whole scaling debates began basically two solutions were proposed, which as we know lead to the creation of BCH.
Why did we not move BTC to 2MB blocks while work on the layer 2 scaling was being finalized? As I understand LN right now when a channel is closed the transactions in it get processed by the main chain, thus a bit of extra blocksize would help scale LN even more.

To me, I personally like the idea of layer 2 scaling more because of all the features it would add to BTC and new things it would make possible. I see some merit in both solutions though.

Is there a good reason apart from politics that we couldn't have just done both? It would have carried us for now until new scaling solutions are done and fully tested.

The BTC vs BCH has really split the community, yea there's some funny memes around this and all, but its not good that we are all fighting each other and getting super opinionated around this. I hope we don't see more separation in the community in the future.

P.S. lets not turn this into a BTC vs BCH argument here, make love not war

The scaling itself is about politics. Making laymen believe in scaling itself is politics. Increasing the block size unnecessarily will only clog the whole system. No one should care about scaling since it is the job of the developers. If you are not into programming you might as well shut up.

I would argue with that on an ideology standpoint. Bitcoin has no leader so that means everyone who is part of the network from a miner to a node to just a guy holding some BTC should be involved in the environment and cast their vote by buying or selling or moving hashing power.  

Since writing this I found that with segwitt we already have 2Mb blocks, Coinbase will be implementing it soon. I think we are going to do well on scaling once that happens.
It is still a pity that this whole separation came to be in the community.

[Sonellion]

The scaling itself is about politics. Making laymen believe in scaling itself is politics. Increasing the block size unnecessarily will only clog the whole system. No one should care about scaling since it is the job of the developers. If you are not into programming you might as well shut up.

Like "leave politics to the politicians". No way 

[Carlton Banks]

Like "leave politics to the politicians". No way 

You're right, scaling debates are for the qualified professionals, really. Not for politicians (or salesmen)

[madhavanmalolan]

I don't think there was any disagreement in the fact that 2MB block sizes are good for scaling immediately.

It does introduce some amount of centralization in the sense that it will require more compute/storage to process and maintain the blockchain. But, i feel the tradeoffs at this point were not as significant as it has been shown in media.

However, the block size is best at which the network agrees. If everyone agrees on 2 MB or 4MB, is really just a small battle.
That said, the people who were against the 2MB upgrade had the following argument.

If we do a 2MB upgrade right now, we will point to this upgrade to say 'hey, the last upgrade worked fine, we can double the block size again'.
And if we keep increasing the block size, then the centralization becomes a real issue.

The reason why the 2MB upgrade was not done was to fix this problem in a future proof way - the layer 2 solution.

[Carlton Banks]

The reason why the 2MB upgrade was not done was to fix this problem in a future proof way - the layer 2 solution.

The limit on the size of blocks was changed to 4MB as a part of that.

You make it sound like the limit wasn't changed, it was. Over 6 months ago.

[Anti-Cen]

The reason why the 2MB upgrade was not done was to fix this problem in a future proof way - the layer 2 solution.

The limit on the size of blocks was changed to 4MB as a part of that.

You make it sound like the limit wasn't changed, it was. Over 6 months ago.

But that's really just like using coal instead of wood to feed a steam engine and sure it will go faster but
it never will be a racing car and walking down to the train station just cannot compete with jumping into a
car.

"On-Block" can be made to scale but not how Bitcoin implemented the design but it would involve a rebuild and
a major data import so I guess it will never happen if the result was to put most miners out of work.

[Sonellion]

The reason why the 2MB upgrade was not done was to fix this problem in a future proof way - the layer 2 solution.

10 years from now a billion people want to open a new LN channel once per month, or perhaps once every 2 or 3 month.
Bitcoin need both off-chain and on-chain scaling, or it can never become the dominant payment system on this planet.
1-MB-BTC with LN plus BCH is not a replacement for this.

[madhavanmalolan]

open a new LN channel once per month, or perhaps once every 2 or 3 month.

What makes you say that the opening/closing will be that frequent?
If all payments move to LN, we might as well see these channels to be open for much longer (years?). People would close channels regularly today, but once LN is proven to be robust, i think the channels TTLs will increase in magnitudes.