Won't Bitcoin block size be resolved through simple market economics?

[Wind_FURY]

It has not caught up enough that the “obsolete hardware” you can pick up from a swap meet is more than the recommended specification to run Bitcoin Core, and the cheapest bandwidth can do the IBD in mere hours.

Can you give example of "obsolete hardware"? Raspberry Pi is cheap, even compared with used 10 years old PC. IBD problem won't be solved anytime soon as long as many internet provider have strict cap/limit.

“Obsolete” for the people of the future’s standards. Probably people of the 2nd-Generation-Bitcoiners. I would believe those people who would be a 40 year old Bitcoiner of today’s grand children. Simple estimate, 20 to 30 years from now.

It's very vague answer, but you basically mean retro computer?

It’s not vague. Simply imagine what specifications do computers in the future are, 20 to 30 years from now. The most powerful desktop computer today might be someone’s junk in the future.

Shower thought, the Bitcoin network might have also gone through its own “upgrade”, organically, in hardware in 20 - 30 years, and ready for a block size increase.

Miners want high fees , Users want low fees.
High Capacity blockchains allow miners to offer lower fees while earning more.
In the end, the Users will choose based on their personal situations and the miners must capitulate or be left behind.

Please at least try to understand what I write. This is my last post on the issue (at least if there are no new on-topic arguments), we're derailing the thread otherwise.

"High capacity blockchains" will always have low fees, and thus low tx fee earnings for the miners, because miners can't force anybody to pay high fees. To achieve a high security level, they would have to offer high (and constant) block rewards - which leads to more supply inflation and a lower usability as "store of value".

Bitcoin has already decided that the block reward will be decreased every ~4 years. So the profit for miners will come, in a few years, increasingly from transaction fees (like the OP correctly wrote).

The OP has reasoned, thus, that miners would like to increase their fee earnings. But his conclusion, that they could do this lobbying for increased block capacity, is partly wrong because more transaction capacity does not necessarily mean more fees, and both indicators can be even negatively correlated.

Miners could lobby for a very slow increase of block capacity, in a way scarcity is not lowered (for example, an increase of 1% per year or so), but this would become rational only when the fees really threat to lead into a mass exodus to other coins, in the distant future when situations like in late 2017 (with 10$+ fees even at weekends) become normal. I think this point is still far ahead, we have LN now which can be used for lots of scenarios where you wouldn't want to pay high fees.

IMO,
BTC could easily offer a normal non-segwit 10MB block every 10 minutes with no real problems , right now.
And let's be clear when you increase the blocksize capacity to 10 MB per block, if there are not enough transactions,
then it only creates a 1 MB block, as blocksize is adaptive not static.
So the fears of massive blockchain size increases are misplaced.

It can “easily”, but not without centralizing the network, reducing security, and lowering its value proposition. The network is simply not ready for what the big blockers want.

[1714780554]

1714780554

[Wind_FURY]

It's very vague answer, but you basically mean retro computer?

It’s not vague. Simply imagine what specifications do computers in the future are, 20 to 30 years from now. The most powerful desktop computer today might be someone’s junk in the future.

Shower thought, the Bitcoin network might have also gone through its own “upgrade”, organically, in hardware in 20 - 30 years, and ready for a block size increase.

Still vague to me, you can't predict how fast computer will be in future. One of the reason is Moore's law might no longer be true in few years due to limit of silicon.

IMO the barrier shouldn't be how old the computer should be, but the cost of the computer itself.

That’s a good point. Then from that point, my point is the cost of powerful, high-end gaming computers of today might cost 70% less 30 years from now. Bitcoin’s next generations will be running nodes with more powerful hardware.

Surely you don't expect Bitcoin Core to run on computer which uses Pentium I (which released on early 90s)?

Why go to the past?

[d5000]

But in normal economics , higher prices always decreases usage , while lower prices might not increase usage it never decreases it.

Ok, that argument is on-topic, I admit. But I don't agree with your conclusions.

The "low capacity" would be a problem if Bitcoin's capacity was so low that it would severely restrict the "normal functioning". But as we've seeing this is not really the case. Not only is there still normally enough space in the blocks, we also have second layers like LN.

Forcing an artificial scarcity to drive transaction prices higher , is more fraud than function.

I think we have a different meaning of the word "fraud" Bitcoin's rules are transparent. Everybody who doesn't agree with them can change to LTC, Doge, or whatever. I'm doing that too, for some transactions, as I'm not a maximalist (even if I consider Doge currently grossly overvalued, but Doge has always pumped and dumped in a funny way).

But we're talking about the incentives for miners here, to lobby for driving the blocksize up or not. This is why I wrote in my previous post that there would have to be a significant movement of users changing from Bitcoin to altcoins, to the way the Bitcoin miners' business model is threatened. Only in this case it is rational for them to lobby for a higher block size.

As we can see with the famous "Bitcoin dominance" chart, and Bitcoin price evolution in general, this exodus hasn't happened at all. I predict there will be a higher market share for altcoins like LTC in the future but they won't threaten Bitcoin's leadership, because Bitcoin systemically offers a higher security.

You're going off-topic again with the argument about the 10 MB blocks.

It will only grow to match the transactions made.

is not taking into account the likely increased spam and inefficient transactions. But again, that's not what the OP asked (there are attempts to derail the thread into the usual tiring bigblocker/smallblocker discussion, but I won't participate here).

To be fair you're returning later back on topic:

Miners did lobby for a higher blocksize during the segwit arguments, they were ignored and threatened by Core Devs with an algorithm change that would brick their ASICs. Which is why, you don't hear a peep from them anymore about increasing BTC blocksize.

Oh, the evil Core devs. But they haven't the power to decide who uses which Bitcoin client. They have a voice and they are heard by lots of users, that's true. But everybody can publish his own fork and make it popular. No non-Core fork has got enough power to be able to change the rules.

I think a part of the miners were lobbying for a higher transaction capacity in 2016/17 because of unfounded fears about LN, and because they miscalculated the incentive structure. But LN requires lots of on-chain transactions, too; only not as many as if everything was on-chain.

I think the miners are pretty happy with the situation now: Segwit has increased the capacity a bit to prevent bottlenecks (as I wrote, a slow/small increase could be still attractive for them) but the block space scarcity is still there, so they can still achieve high fees in the "rush hours" in EMEA and the Americas.

[TangentC]

@d5000

We'll just have to agree that we disagree.

One last thought, will you still feel everything is ok with the bitcoin system, when the average transaction fee is
$200
or
$2000?

Have a Great Day.  

[Wind_FURY]

IMO the barrier shouldn't be how old the computer should be, but the cost of the computer itself.

That’s a good point. Then from that point, my point is the cost of powerful, high-end gaming computers of today might cost 70% less 30 years from now. Bitcoin’s next generations will be running nodes with more powerful hardware.

Or just set lowest accepted cost of computer to run full node. 30 years computer can't run full node software anyway due to OS, CPU architecture (e.g. arm and x86), CPU instruction (e.g. SSE and SSE4.2) and many other things.

Surely you don't expect Bitcoin Core to run on computer which uses Pentium I (which released on early 90s)?

Why go to the past?

Just illustrating your idea of 30 years old computer running full node.

I believe you misunderstood. What I was pointing out was, a cheap, low-end computer 20 to 30 years FROM NOW, would be today’s high-end gaming computer. Like today’s low-end smartphone has more processing power than a high-end computer 30 years ago. The next generation of Bitcoiners will own more powerful hardware.

[d5000]

We'll just have to agree that we disagree.

I think so, yes.

One last thought, will you still feel everything is ok with the bitcoin system, when the average transaction fee is
$200 or $2000?

As long as there is a way to transact, for example via LN, or hypothetical other second layer mechanisms (I personally like drivechains and SHOM) and users are not massively leaving the coin, I would consider it while not exactly good, but still not a catastrophe.

LN is already working, so it's not a fairy tale. You can always create a LN node in low fee times. I think if in the coming years it keeps growing then transaction fees will stay stable even if Bitcoin's userbase multiplies.