BlockReduce: Scaling Blockchain to human commerce

[mechanikalk]

Then I would debate that the statement, "allowing it to scale to handle tens of thousands of transactions per second without impacting fault tolerance or decentralization", is u true.

The actual effect on fault tolerance and decentralization has to be put into context that currently over 50% of Bitcoin's hashpower comes from only 4 pools.  As BlockReduce scales the node requirements to have a node which does partial state validation would be much less then a if Bitcoin scaled in its current state.  That would mean that although there may be fewer people validating full state, there will be more people, and fewer pools validating partial state. I would argue that having partially validating mining nodes is advantageous over having a deminimis number of pools.  Having smaller economic entities decide on the fate of the protocol rather than a few large pools would be positive for the ecosystem.

You don't believe that that will centralize Bitcoin toward the miners? Or you don't believe that users/economic majority should have the ability to run their own full nodes?

I think that people often times fall into tired narratives about majority of users, and fairness, et cetera without fully considering what any of it really means, or why it might be good or bad.  I would argue that if Bitcoin is meant to be censorship resistant and decentralized, that it must allow the greatest number of people to use it with the fewest intermediaries possible. Making low resource validation the primary focus of decentralization misses the point.  If even 20% of a population self custodianed Bitcoin which they regularly used for transactions it would be effectively impossible to censor or outlaw. When we discuss decentralization taking into account the power of the network which scales should also be a consideration, not just how easily it is validated.

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[Wind_FURY]

Then I would debate that the statement, "allowing it to scale to handle tens of thousands of transactions per second without impacting fault tolerance or decentralization", is u true.

The actual effect on fault tolerance and decentralization has to be put into context that currently over 50% of Bitcoin's hashpower comes from only 4 pools.  As BlockReduce scales the node requirements to have a node which does partial state validation would be much less then a if Bitcoin scaled in its current state.  That would mean that although there may be fewer people validating full state, there will be more people, and fewer pools validating partial state. I would argue that having partially validating mining nodes is advantageous over having a deminimis number of pools.  Having smaller economic entities decide on the fate of the protocol rather than a few large pools would be positive for the ecosystem.

Is to REALLY scale out the network is = more partially validating nodes, but fewer fully validating nodes?

You don't believe that that will centralize Bitcoin toward the miners? Or you don't believe that users/economic majority should have the ability to run their own full nodes?

I think that people often times fall into tired narratives about majority of users, and fairness, et cetera without fully considering what any of it really means, or why it might be good or bad.  I would argue that if Bitcoin is meant to be censorship resistant and decentralized, that it must allow the greatest number of people to use it with the fewest intermediaries possible. Making low resource validation the primary focus of decentralization misses the point.  If even 20% of a population self custodianed Bitcoin which they regularly used for transactions it would be effectively impossible to censor or outlaw. When we discuss decentralization taking into account the power of the network which scales should also be a consideration, not just how easily it is validated.

That goes the opposite path of what you said below. Or might I have misunderstood?

https://bitcointalk.org/index.php?topic=5060909.msg53240986#msg53240986

Tromp, I appreciate the time that you have taken to look at BlockReduce.  One thing that I would debate is the use of the word sharding.  Although, a miner can depend upon a zone blocks work as an attestation to the correctness of the included transactions, they are not required to.  Much like an SPV node doesn't have to keep the entire chainstate but rather just looks at a block header.  This is not sharding per say, but rather a mode of operation that a node can work within to use less resources.  I would anticipate that serious miners or pools will run and validate full state because they have an economic incentive to do so, while merchants will likely run partial state much like SPV.  

[mechanikalk]

Then I would debate that the statement, "allowing it to scale to handle tens of thousands of transactions per second without impacting fault tolerance or decentralization", is u true.

The actual effect on fault tolerance and decentralization has to be put into context that currently over 50% of Bitcoin's hashpower comes from only 4 pools.  As BlockReduce scales the node requirements to have a node which does partial state validation would be much less then a if Bitcoin scaled in its current state.  That would mean that although there may be fewer people validating full state, there will be more people, and fewer pools validating partial state. I would argue that having partially validating mining nodes is advantageous over having a deminimis number of pools.  Having smaller economic entities decide on the fate of the protocol rather than a few large pools would be positive for the ecosystem.

Is to REALLY scale out the network is = more partially validating nodes, but fewer fully validating nodes?

That goes the opposite path of what you said below. Or might I have misunderstood?

https://bitcointalk.org/index.php?topic=5060909.msg53240986#msg53240986

Yes, scaling the network is adding more network participants, this is accomplished through scaling.  The requirement that all market participants be fully validating nodes is a flaw not a virtue.  BlockReduce allows a larger number of incrementally more expensive ways of participating in the network while also scaling.  I think this is better than an all or nothing approach.  Additionally, when calculating market participants you should consider Bitcoin users in addition to nodes and miners as a metric of success.

[mda]

Here is another idea along these lines for you

https://bitcointalk.org/index.php?topic=5109561.

It's basically a big package of altcoins with a built-in swapping mechanism where linear grow of block size leads to exponential grow of throughput.

[Wind_FURY]

Then I would debate that the statement, "allowing it to scale to handle tens of thousands of transactions per second without impacting fault tolerance or decentralization", is u true.

The actual effect on fault tolerance and decentralization has to be put into context that currently over 50% of Bitcoin's hashpower comes from only 4 pools.  As BlockReduce scales the node requirements to have a node which does partial state validation would be much less then a if Bitcoin scaled in its current state.  That would mean that although there may be fewer people validating full state, there will be more people, and fewer pools validating partial state. I would argue that having partially validating mining nodes is advantageous over having a deminimis number of pools.  Having smaller economic entities decide on the fate of the protocol rather than a few large pools would be positive for the ecosystem.

Is to REALLY scale out the network is = more partially validating nodes, but fewer fully validating nodes?

That goes the opposite path of what you said below. Or might I have misunderstood?

https://bitcointalk.org/index.php?topic=5060909.msg53240986#msg53240986

Yes, scaling the network is adding more network participants, this is accomplished through scaling.

More participants partially validating, which won't be part of the whole network, and less participants fully validating is centralizing, making the network smaller. It is anti-scaling.

The requirement that all market participants be fully validating nodes is a flaw not a virtue.  BlockReduce allows a larger number of incrementally more expensive ways of participating in the network while also scaling.

?

Growing node requirements/costs would only make node count go down, not up. Block Reduce might increase transaction throughput, but it's centralizing.

[mechanikalk]

Then I would debate that the statement, "allowing it to scale to handle tens of thousands of transactions per second without impacting fault tolerance or decentralization", is u true.

The actual effect on fault tolerance and decentralization has to be put into context that currently over 50% of Bitcoin's hashpower comes from only 4 pools.  As BlockReduce scales the node requirements to have a node which does partial state validation would be much less then a if Bitcoin scaled in its current state.  That would mean that although there may be fewer people validating full state, there will be more people, and fewer pools validating partial state. I would argue that having partially validating mining nodes is advantageous over having a deminimis number of pools.  Having smaller economic entities decide on the fate of the protocol rather than a few large pools would be positive for the ecosystem.

Is to REALLY scale out the network is = more partially validating nodes, but fewer fully validating nodes?

That goes the opposite path of what you said below. Or might I have misunderstood?

https://bitcointalk.org/index.php?topic=5060909.msg53240986#msg53240986

Yes, scaling the network is adding more network participants, this is accomplished through scaling.

More participants partially validating, which won't be part of the whole network, and less participants fully validating is centralizing, making the network smaller. It is anti-scaling.

I think you should more holistically consider the meaning of centralization.  If I can't go to 7-11 and buy a coke with Bitcoin it is not fully decentralized.  If I need to have 3rd parties involved in a transaction it is not fully decentralized.  If I need to use centralized exchanges to trade with good liquidity it is not fully decentralized.  If it costs $200 to make a transaction it is pricing out network participants and small transactions which is not fully decentralized.

The more people that use Bitcoin, not just the number of people running nodes, is critical in answering the question of is it is decentralized.  Additionally, to have the largest network with the most particpants (most decentralized...?), I would argue that Bitcoin needs to scale on-chain.

Growing node requirements/costs would only make node count go down, not up. Block Reduce might increase transaction throughput, but it's centralizing.

If there are benefits such as a greater number of users, and increased utility at a lower cost, the marginal degree of centralization (fewer fully validating nodes) may very well be worth it.  However, I would contend that with larger user base even if the cost of running a fully validating node increases, the absolute number of full nodes would likely go up not down even if the relative number shrinks.

[Wind_FURY]

Then I would debate that the statement, "allowing it to scale to handle tens of thousands of transactions per second without impacting fault tolerance or decentralization", is u true.

The actual effect on fault tolerance and decentralization has to be put into context that currently over 50% of Bitcoin's hashpower comes from only 4 pools.  As BlockReduce scales the node requirements to have a node which does partial state validation would be much less then a if Bitcoin scaled in its current state.  That would mean that although there may be fewer people validating full state, there will be more people, and fewer pools validating partial state. I would argue that having partially validating mining nodes is advantageous over having a deminimis number of pools.  Having smaller economic entities decide on the fate of the protocol rather than a few large pools would be positive for the ecosystem.

Is to REALLY scale out the network is = more partially validating nodes, but fewer fully validating nodes?

That goes the opposite path of what you said below. Or might I have misunderstood?

https://bitcointalk.org/index.php?topic=5060909.msg53240986#msg53240986

Yes, scaling the network is adding more network participants, this is accomplished through scaling.

More participants partially validating, which won't be part of the whole network, and less participants fully validating is centralizing, making the network smaller. It is anti-scaling.

I think you should more holistically consider the meaning of centralization.  If I can't go to 7-11 and buy a coke with Bitcoin it is not fully decentralized.  If I need to have 3rd parties involved in a transaction it is not fully decentralized.  If I need to use centralized exchanges to trade with good liquidity it is not fully decentralized.  If it costs $200 to make a transaction it is pricing out network participants and small transactions which is not fully decentralized.

The more people that use Bitcoin, not just the number of people running nodes, is critical in answering the question of is it is decentralized.  Additionally, to have the largest network with the most particpants (most decentralized...?), I would argue that Bitcoin needs to scale on-chain.

But if you're willing to decrease the number nodes that are actually part of the network, that would be centralizing the protocol despite the number of users. That's scalng the network in, not out.

Then what are we here for? What's the point?

Growing node requirements/costs would only make node count go down, not up. Block Reduce might increase transaction throughput, but it's centralizing.

If there are benefits such as a greater number of users, and increased utility at a lower cost, the marginal degree of centralization (fewer fully validating nodes) may very well be worth it.  

More decentralized = more secure. It's better to over-shoot security than under-shoot it.

However, I would contend that with larger user base even if the cost of running a fully validating node increases, the absolute number of full nodes would likely go up not down even if the relative number shrinks.

That does not make sense.

[coopex]

However, I would contend that with larger user base even if the cost of running a fully validating node increases, the absolute number of full nodes would likely go up not down even if the relative number shrinks.

That does not make sense.

I think what he means is that with more people using the network, the number of full nodes that run on the network will go up, but the ratio of full node to user will not increase. But I don't see this as such a big issue if users are allowed to run whichever part of the network that they wish or interact with economically speaking. For example, if I am geographically located in Region 1 Zone 2, I will run a node in Prime, Region 1, and Zone 2 as I do most of my commerce in those networks. Because data from a Zone is compressed when it moves into a Region (and Region data is compressed when it moves into Prime) the resources required for running the three nodes would not be that much higher than running a Bitcoin node. Now if you are a merchant I'm guessing you would want to run nodes in multiple zones (to accept payment in those zones), so the hardware requirement there would be greater, but you have an economic incentive to do so.

I have another question OP. When a transaction moves from zone to zone, there is a 'state transition' that takes place, correct? The transaction would go from zone to region to prime and then to zone (assuming the two zones are not in the same region) so the zone that the transaction enters would need to have some state transition that is not necessarily in a block but is also reversible (I suppose this could show up in a block in the other zone). What happens if the transaction is reversed in Prime due to an orphan or re-org? Does the other zone chain need to re-org its UTXO set?

Looking forward to hearing more, thanks.