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unsigned_long_long
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June 19, 2020, 04:40:19 PM
 #1

I recently made a post about an idea I had for standardising OP_RETURN outputs such that data may more easily be stored on the blockchain, and I received a lot of resistance and opposition, For me this makes no sense and data storage is one of the killer apps of blockchain.

I get that BTC core people want to protect their precious 1Mb of block space and use it as efficiently as possible, and right now, that probably is the somewhat right approach (like, we don't want the price to tank, right?) I totally get why they don't want tons of data going on to the BTC blockchain and inflating transaction fees, possibly causing the price to tank as it did in the 2018 crash. I strongly believe that this crash was mainly due to the fees, as it coincided perfectly with the upper TPS limit.

Interested in hearing people's take on this.
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June 19, 2020, 04:53:16 PM
 #2

The minimum fee is currently around $93 per MB, and can easily go up to $10,000 or more. It doesn't matter if many people are against if or not, anyone who wants to use OP_RETURN can do it already.

Proposing changes to Bitcoin Core needs community support, and if most people already don't need the changes you're proposing, it doesn't make sense to add it.
It makes perfect sense to store a hash to proof certain data existed at a certain moment.
Let me ask a counter question: Why would you want to store more? And what kind of data would you want to store in the blockchain that can't be stored any other (better!) way?

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June 19, 2020, 04:57:38 PM
 #3

Let me ask a counter question: Why would you want to store more? And what kind of data would you want to store in the blockchain that can't be stored any other (better!) way?

In addition to the above:

Why would you want to store that data on the bitcoin blockchain instead of a different one?
BTC is a currency. The blockchain is the public ledger to store all verified transactions. Why would you want to store unrelated data there?

Despite the fact that a blockchain in most cases isn't even the best solution.. why should it be the BTC blockchain?

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June 19, 2020, 05:00:23 PM
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why should it be the BTC blockchain?
That's easy: Bitcoin is the most secure chain, and also the most likely to still be there 30 years from now.

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June 19, 2020, 05:04:45 PM
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That's easy: Bitcoin is the most secure chain, and also the most likely to still be there 30 years from now.

Well.. i'd claim that the security of a digital currency and payment network is "slightly" more important than data storage.
Especially since the integrity of the data shouldn't be protected by the blockchain anyways.

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June 19, 2020, 05:12:54 PM
 #6

Bitcoin is money. Why would you want to mix database and money? Do you want to add random pictures to your PayPal transactions?

I totally get why they don't want tons of data going on to the BTC blockchain and inflating transaction fees, possibly causing the price to tank as it did in the 2018 crash. I strongly believe that this crash was mainly due to the fees, as it coincided perfectly with the upper TPS limit.

Wrong. Bitcoin crashed because it was a speculative bubble. The $20,000 price mark existed for some minutes, and above $13k existed for only days. There's nothing strange with it crashing the way it did. The fees started getting high long before the price reached it's peak, so fees were definitely not the factor. No one was thinking "wait a second, with such high fees Bitcoin is not suitable to be a currency, sell, sell, sell", it was all pure speculation - buy low, sell high, get out.





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June 19, 2020, 05:23:23 PM
 #7

I recently made a post about an idea I had for standardising OP_RETURN outputs such that data may more easily be stored on the blockchain, and I received a lot of resistance and opposition, For me this makes no sense and data storage is one of the killer apps of blockchain.

People are always looking for killer apps or other things to utilize the blockchain, but do these same people realize that it's often useless to include such "feature" since there already exist tons and tons of viable and better ways to do just that one thing? We don't need to cram the blockchain with different features, we need to improve what's already in it.

I totally get why they don't want tons of data going on to the BTC blockchain and inflating transaction fees, possibly causing the price to tank as it did in the 2018 crash. I strongly believe that this crash was mainly due to the fees, as it coincided perfectly with the upper TPS limit.

The crash happened because the momentum was lost and people can't buy more bitcoin due to its high asking price and not because of high fees and reaching tps limit.

Let me ask a counter question: Why would you want to store more? And what kind of data would you want to store in the blockchain that can't be stored any other (better!) way?

Some people are looking at the blockchain as a huge advertisement wall so I guess that's one of the reasons why they are pushing for such???

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June 19, 2020, 06:36:10 PM
 #8

Bitcoin is money. Why would you want to mix database and money? Do you want to add random pictures to your PayPal transactions?

I totally get why they don't want tons of data going on to the BTC blockchain and inflating transaction fees, possibly causing the price to tank as it did in the 2018 crash. I strongly believe that this crash was mainly due to the fees, as it coincided perfectly with the upper TPS limit.

Wrong. Bitcoin crashed because it was a speculative bubble. The $20,000 price mark existed for some minutes, and above $13k existed for only days. There's nothing strange with it crashing the way it did. The fees started getting high long before the price reached it's peak, so fees were definitely not the factor. No one was thinking "wait a second, with such high fees Bitcoin is not suitable to be a currency, sell, sell, sell", it was all pure speculation - buy low, sell high, get out.

Nobody disagrees with you that it was a speculative bubble. I think even my dog knows it was a speculative bubble. But there's a lot of data to suggest the pin which burst that speculative bubble was the fact that once the 1Mb limit was hit, the fees just went fucking crazy and people were like "fuck this, I'm out". If the 1Mb limit was not there, the bubble could have gone a lot higher. 30k, 50k, maybe even 100k.

Take a look at these charts:

Block size
GDAX BTC/USD market
Media transaction fee
Pending Tx fee chart (denominated in sats/byte

If you look at the block size chart, from October to November 2017 it was getting close to the 1Mb limit, then for virtually all of November it was consistently at ~960k (and never below 940k) and in December it was almost always above 960k. It was running very hot at this stage. In late November the median fees were ~$5 (0.0007). At this time BTC was trading at around $5k (VERY conservative estimate), and the fees actually weren't too bad, they were a median of around $3. so 3/5k = 0.0006 BTC / Tx. In early December there was a massive pop in the price where it rose from about $10k to about $17k, and there's a corresponding jump in dollar fees from $3 to about $15 = 0.0009 BTC / Tx. 50% increase in fees.

But then look what happens. On 16 Dec (a Saturday) the price shoots up to $19,500 and during the following week (close to Christmas), the money starts rolling in and the blockchain gets very busy, and the median price per tx shoots up to $33 (Dec 22), by this time the price had started to crash a bit, but nobody knows it's already peaked. So on Dec 22 thee price was down to around $14k, but the median tx price was $33, $33/$14k = 0.002 BTC / Tx =a 2X increase in dollar terms and more like 2.2X BTC terms.

So the fees were basically doubling every few days - not just in dollar terms due to the rising price of BTC. But in satoshis too. It's pretty damning evidence and hard to argue with. The 1Mb cap was hit.

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June 19, 2020, 07:21:52 PM
 #9

But there's a lot of data to suggest the pin which burst that speculative bubble was the fact that once the 1Mb limit was hit

There were periods when blocks were full throughout the whole year, not just at the peak of the bubble.


The charts only show that the fees follow the price, which is logical because higher price -> more people sending coins to exchanges to sell.

the fees just went fucking crazy and people were like "fuck this, I'm out".

Why would people dump Bitcoin just because the fees are high? Most of the complaining came from bounty hunters and microinvestors who usually deal with double digit amounts. These people don't have any big influence on the market. People who held multiple coins didn't mind paying a $30 fee to cash out their 10000% profits.

If the 1Mb limit was not there, the bubble could have gone a lot higher. 30k, 50k, maybe even 100k.

Going from $200 to $20k is already a miracle, higher numbers were just impossible with all the selling pressure that we had.





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June 19, 2020, 07:58:43 PM
 #10

There were periods when blocks were full throughout the whole year, not just at the peak of the bubble.

True. and the fees got mighty high at those times too, for example there was a period from Apr '17 to May '17 when the blocks were nearly all full. During this period the mempool size peaked at about 150Mb, but in the December spike it doubled to 300Mb.

Quote
The charts only show that the fees follow the price, which is logical because higher price -> more people sending coins to exchanges to sell.
There's a non linear relationship between $ fee and BTC price. The fee in satoshis increased too. when the price went to $17k - $18k we saw this. Fees totally de-coupled from the price.

Quote
Why would people dump Bitcoin just because the fees are high? Most of the complaining came from bounty hunters and microinvestors who usually deal with double digit amounts. These people don't have any big influence on the market. People who held multiple coins didn't mind paying a $30 fee to cash out their 10000% profits.
I think a lot of investors around this time did not understand the technical limitations, and this was the first bubble where the 1Mb limit actually came into play. And the $30 fee would not have remained $30. It would have gone up had the bubble kept going. Who knows how high?

I think there was a large contingent of smart money who saw the crash coming and sold once the fees started going mental, but it's hard to argue that there was a strong correlation between hitting the 1Mb limit being hit... I mean just look here, take a look at "Pending transaction fee in BTC". It's clear to see that the fees (in BTC, not $), went mental just after Dec 16th.

It's hard to argue that the fees didn't play a role, and the fees are dependant on the block size.
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June 20, 2020, 06:45:47 AM
 #11

Some people are looking at the blockchain as a huge advertisement wall so I guess that's one of the reasons why they are pushing for such???
I've see "blockchain" used as a buzz-word, but nobody is going to actually read "the blockchain", so nobody is going to see your advertising. Unless you make it prominent to show up in all blocks so that block explorers show it, but it's probably easier and cheaper to advertise on those sites directly.

It's hard to argue that the fees didn't play a role, and the fees are dependant on the block size.
I'm not sure what you're getting at, do you want larger blocks so that you can store data on the blockchain? The BCH-guys tried that already.
I didn't like the high fees around December 2017, especially since it made it impossible to make small transactions. Long-term, I hope LN (or something else) will provide a solution for this, but none of that is going to help you store data on the blockchain.
Can you answer these questions?
Why would you want to store more? And what kind of data would you want to store in the blockchain that can't be stored any other (better!) way?

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June 20, 2020, 06:56:07 AM
 #12

why should it be the BTC blockchain?
That's easy: Bitcoin is the most secure chain, and also the most likely to still be there 30 years from now.

Yes, but we are talking here about blockchain and Bitcoin is so secure because of blockchain technology that mskes that security available. If Bitcoin will be here in 30 years that is about to see. So far it doesn't have serious competition but with rapid development of technology who knows what might happen in 30 years from now.
Also, blockchain itself guarantees integrity, availability and confidentiality of data. However, with quantum computing this might change also.

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June 20, 2020, 07:03:04 AM
 #13

In the case of quantum computers the risk is higher The demand for blockchain is huge Blockchain supports us in many ways when it comes to crypto. Blockchain is not only protected against data retrieval it is also very helpful in protecting the privacy of transactions and every site That is why blockchain technology is slowly trying to keep pace with the current situation.
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June 20, 2020, 07:43:33 AM
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 #14

you are trying to connect two very unrelated matters together. storing data in bitcoin's blockchain has absolutely nothing to do with its block size. it is all about the purpose of bitcoin. bitcoin is created to be a currency (A Peer-to-Peer Electronic Cash System), in such a system the blockchain is defined as chain of blocks that contain transactions. transactions that are only used to transfer money. it is not even supposed to store random data.

it is like complaining why people aren't using their monitors as cutting boards in their kitchen to chop carrots for instance and then claim that the cost of a monitor is high to discourage people from using it as a kitchen appliance.

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December 20, 2020, 06:32:03 AM
 #15

inflating transaction fees, possibly causing the price to tank as it did in the 2018 crash. I strongly believe that this crash was mainly due to the fees, as it coincided perfectly with the upper TPS limit.
You don't know anything about bitcoin history, the fees went up when price was still $900 and it continued rising and reached ATH when price was around $3k back in 2017 and price kept rising while fees were high to $10k and then $20k.
The only reason why price dropped back in 2018 was because the price reached at the end of 2017 (ie. a little less than $20k) was a bubble meaning price was way higher than bitcoin's intrinsic value.

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