Adjustable Blocksize Cap: Why not?

[GGUL]

The bitcoin system does not have enough information.
1)It doesn't know the value of bitcoin in the real world.
2) It does not know about the level of technology development.

Therefore, theoretically, it is impossible to come up with an algorithm only within the system that would successfully regulate fees and block size.

[tromp]

The user is talking about preventing miners from filling the blocks with cheap fee transactions. You cannot prevent that by anything that is not consensus rules such as a simple configuration that already exists called minrelaytxfee.

You can prevent it by creating a backlog of high-fee paying transaction, which Bitcoin has achieved by constraining the block size.

[topcoin360]

Hi folks,

I just wanna tell you a little tale.. Once upon a time, the square tv was invented. It was a miraculous invention allowing people to watch movies, series, news, porn, anything you can imagine but in black and white. And then came the plasma tv, the lcd I don't know if you can remember that time... Now I can't find any square tv in any nearby store and even if I could I wouldn't buy it. For those who believed that the 16:9 format wouldn't replace the 4:3 format you turned out to be wrong.

All I'm trying to say is btc could go from one of the greatest success to one of the biggest failure if NOTHING is done to make it serve its purpose, which is to be a medium of exchange. So speculators please shut up and let the smart people talk.

Ty everyone, have a good one!

[amishmanish]

Hi folks,

I just wanna tell you a little tale.. Once upon a time, the square tv was invented. It was a miraculous invention allowing people to watch movies, series, news, porn, anything you can imagine but in black and white. And then came the plasma tv, the lcd I don't know if you can remember that time... Now I can't find any square tv in any nearby store and even if I could I wouldn't buy it. For those who believed that the 16:9 format wouldn't replace the 4:3 format you turned out to be wrong.

All I'm trying to say is btc could go from one of the greatest success to one of the biggest failure if NOTHING is done to make it serve its purpose, which is to be a medium of exchange. So speculators please shut up and let the smart people talk.

Ty everyone, have a good one!

Thanks for proving what you really are. Can't expect more commitment or brainstorming from a BCH shiller except the typical "I am right, BTC should change because TV changed" argument.

When will you boneheads realize that there is a huge difference between all the kind of consumer technologies you guys quote and Bitcoin. Bitcoin is the secure, permissionless and foundational network layer for a new kind of money. People are ascribing value to all the other decentralized digital assets because Bitcoin enables that confidence. It is not a software plaything with low barrier of understanding so that it can be a hobbyist dev's plaything. That is the case with stuff like ETH, DeFi, ICOs, Solidity and all the others that people like you get inspired by and then turn to ask "Why can't Bitcoin do this?"

That does not mean that Bitcoin isn't moving fast enough in terms of innovation. It is. Its just not as glamorous as declaring 10000 TPS like a PoS shitcoin.

[GGUL]

As far as I understand your principle, you propose to regulate the transaction fee through changing the block size.
I suggest another option: adjust the block size by changing the transaction fee.

Let's say we have a sample computer of the lower segment, and we focus on it when setting constraints.

We can count the parameter:
1. The maximum block size that our sample computer can process in the time we need.

Additionally, we can evaluate one more parameter:
2. We estimate the maximum level of growth of bitcoin, based on the level of technology development that we can afford.
    Based on it, we calculate the parameter: average block size.

I don't know why, but everyone decided that the 2nd parameter must be adjusted through the 1st.
Suppose we have a parameter 1: 10 MB.
And parameter 2 : 100gb per year. - >the average block size should be ~2mb.
These parameters can be very different.

Algorithm diagram:
1. When switching to a new scheme, the values of parameters 1-2 are set, and the minimum transaction fee is assigned.
2. After 2016 blocks (this value may be different), the recalculation takes place.
If the average size of the resulting blocks is higher than the parameter 2, the minimum fee increases.
If the average size of the resulting blocks is lower than the parameter 2, the minimum fee is reduced.

The calculation of the average block can be done for the last period, you can calculate for the last few periods.

3. The fee can be changed with a certain step, for example, 10-20%. That is, if the average block has not changed much, then it is better not to change the fee .
4 You can always calculate the maximum fee amount for the next period. Towards the end of the period, it becomes more accurate.
And if you make a transaction at the very end of the period, you can make a fee =maximum (the current fee , the maximum possible for the next period). This should save you from possible problems at the junction of periods.

Advantages:
1. Excellent system response to peak loads. Since there is a margin due to the large size of the maximum block.
2. The percentage of non-occurrence of transactions in the nearest block is sharply reduced and is close to zero.
3. There is no need for dynamic fee calculation. It is enough to get the set amount of fee from the system.
4. the overall growth of the blockchain should not be very different from what we wanted.
5. You will not have spam.

Disadvantages:
?

[aliashraf]

Hi folks,

I just wanna tell you a little tale.. Once upon a time, the square tv was invented. It was a miraculous invention allowing people to watch movies, series, news, porn, anything you can imagine but in black and white. And then came the plasma tv, the lcd I don't know if you can remember that time... Now I can't find any square tv in any nearby store and even if I could I wouldn't buy it. For those who believed that the 16:9 format wouldn't replace the 4:3 format you turned out to be wrong.

All I'm trying to say is btc could go from one of the greatest success to one of the biggest failure if NOTHING is done to make it serve its purpose, which is to be a medium of exchange. So speculators please shut up and let the smart people talk.

Ty everyone, have a good one!

Thanks for proving what you really are. Can't expect more commitment or brainstorming from a BCH shiller except the typical "I am right, BTC should change because TV changed" argument.

When will you boneheads realize that there is a huge difference between all the kind of consumer technologies you guys quote and Bitcoin. Bitcoin is the secure, permissionless and foundational network layer for a new kind of money. People are ascribing value to all the other decentralized digital assets because Bitcoin enables that confidence. It is not a software plaything with low barrier of understanding so that it can be a hobbyist dev's plaything. That is the case with stuff like ETH, DeFi, ICOs, Solidity and all the others that people like you get inspired by and then turn to ask "Why can't Bitcoin do this?"

That does not mean that Bitcoin isn't moving fast enough in terms of innovation. It is. Its just not as glamorous as declaring 10000 TPS like a PoS shitcoin.

Bitcoin is not a sect or a cult! Please don't put yourself in such a stupid position, lecturing others about how "special" is your cult, it is just disgusting and has pretty reached and surpassed its expiration date, update yourself.

@topcoin360 is not a BCH shill or a POS enthusiast, all this user wants, rightfully, is remembering the cause, the original philosophy behind bitcoin innovation, and he has every right to ask for more active and ambitious research and discussion, don't make this sub-forum a scene for showing your royalty to the myths and gods of your cult.

[topcoin360]

As far as I understand your principle, you propose to regulate the transaction fee through changing the block size.
I suggest another option: adjust the block size by changing the transaction fee.

Let's say we have a sample computer of the lower segment, and we focus on it when setting constraints.

We can count the parameter:
1. The maximum block size that our sample computer can process in the time we need.

Additionally, we can evaluate one more parameter:
2. We estimate the maximum level of growth of bitcoin, based on the level of technology development that we can afford.
    Based on it, we calculate the parameter: average block size.

The main idea is really not bad but I think we'd have a hard time to get everyone to agree on those terms... As you suggested, there would be a strong correlation between the min fee and the amount of transactions that is being processed by the network. We could consider the variation in the amount of transactions from one block to another one to calculate the min fee on the next one. The min fees would then determine the size of the blockchain on the long term so we could rise the block size limit 10x (or even more) and it shouldn't cause any problem. For now we would just need to all agree on the same formula to calculate those min fees...

[GGUL]

Disadvantages:
1. Need to change Bitcoin protocol to explicitly disallow transaction low fees. Currently minimum fees is only set with parameter minrelayfee, but miner could include transaction with 0 fees on mined block.

My suggestion was to introduce a minimum fee in the Bitcoin system. And it is better to introduce such changes at the protocol level. You claim that the disadvantage is that "Need to change Bitcoin protocol to explicitly disallow transaction low fees".

Although this is not entirely true. The minimum fee can be entered at the level of miners, without changing the protocol. If, for example, 95% of miners vote for this and activate this mode, then blocks with transactions with a fee less than the established one will be considered invalid by the rest of the miners. But I emphasize that it is better to introduce such changes at the protocol level.

2. Miners could manipulate minimum fee simply by including their own transaction when all transaction on mempool isn't enough to fill the block.

1. Miners can still fill blocks with their own transactions (spam from miners). But so far, there is no evidence that this happened in reality.

2. Such "spam from miners" is very easy to detect. And the entire Bitcoin community very quickly learns that some miner is engaged in malicious activity.

3. The community has the ability to react to such an event. Most miners should block the "malicious" miner.
If the majority of miners cannot overcome this phenomenon, then the bitcoin community can replace the miners.

4.The mining system is a billion-dollar business, and there is no reason for miners to engage in any malicious activity, because it will cause much more damage than the likely profit.

5.The probability of any malicious activity from miners is very low, practically zero. Therefore, I suggest that we stop discussing any arguments that start with the words "bad, malicious  miners". It's just a waste of time. The same as spending time discussing of the "Perpetuum mobile".

[PrimeNumber7]

and I haven't studied the data supporting it.

Does that mean you found data used for BIP 103? I skimmed https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-July/thread.html#9763, but couldn't find any link of data supporting it.

No. You can look at historical data regarding increases in processing power, and network capacity, both at specific price points. You can also look at near term projections of both of the above.

1. Need to change Bitcoin protocol to explicitly disallow transaction low fees. Currently minimum fees is only set with parameter minrelayfee, but miner could include transaction with 0 fees on mined block.

It is not possible to prohibit transaction fees under any threshold at the protocol level. A business could for example privately send a transaction that pays a transaction fee of 0.01 btc to a mining pool, and privately receive a refund of 0.005 btc separately when this transaction confirms. Miners will not do this unless there are insufficient transactions to fill blocks that pay the minimum protocol-required transaction fees.

[IShishkin]

Hi folks,

I just wanna tell you a little tale.. Once upon a time, the square tv was invented. It was a miraculous invention allowing people to watch movies, series, news, porn, anything you can imagine but in black and white. And then came the plasma tv, the lcd I don't know if you can remember that time... Now I can't find any square tv in any nearby store and even if I could I wouldn't buy it. For those who believed that the 16:9 format wouldn't replace the 4:3 format you turned out to be wrong.

All I'm trying to say is btc could go from one of the greatest success to one of the biggest failure if NOTHING is done to make it serve its purpose, which is to be a medium of exchange. So speculators please shut up and let the smart people talk.

Ty everyone, have a good one!

Sharp's the word.
What do you think about various ideas of sharding? Could they address this problem? What properties should have a sharding solution in order to be acceptable?

[GGUL]

My suggestion was to introduce a minimum fee in the Bitcoin system. And it is better to introduce such changes at the protocol level. You claim that the disadvantage is that "Need to change Bitcoin protocol to explicitly disallow transaction low fees".

Although this is not entirely true. The minimum fee can be entered at the level of miners, without changing the protocol. If, for example, 95% of miners vote for this and activate this mode, then blocks with transactions with a fee less than the established one will be considered invalid by the rest of the miners. But I emphasize that it is better to introduce such changes at the protocol level.

Bitcoin network isn't only about miner, but also node. If Bitcoin community don't agree to the change, it'll fail and we'll see 2 chain.

I think that in this topic we only consider those changes that will be added with the consent of the entire community.

1. Miners can still fill blocks with their own transactions (spam from miners). But so far, there is no evidence that this happened in reality.

I think transaction with 0-fee could serve as evidence, even though the goal isn't to attack Bitcoin, but to prevent fees on transaction they actually want to create.

Spam from miners is a lot, a lot of transactions. Therefore, single transactions with 0-fee  are unlikely to be evidence.

In fact, most miners can already set any transaction fee they want. If they want to. And you can't prevent it. The introduction of a minimum fee does not give them this opportunity. They already have this opportunity.

3. The community has the ability to react to such an event. Most miners should block the "malicious" miner.
If the majority of miners cannot overcome this phenomenon, then the bitcoin community can replace the miners.

Not realistic, i doubt miners would block malicious miners as long as the block itself follow Bitcoin protocol.

The second sentence already has an answer to this situation.

Consider the situations:
1. Most miners set a high transaction fee. And they stop taking transactions with a lower fee. Technically, they don't violate protocol. But at the same time they cause inconvenience to users.

2. The system has implemented a minimum fee with adjustment from the block size. Miners start filling blocks to the maximum with useless transactions in order to raise the fee level. Technically, they don't violate protocol. But at the same time they cause inconvenience to users. Increasing the size of the blockchain unnecessarily. Artificially increase the transaction fee.

What is the difference between these situations? Why don't miners do the same as in situation 1? And why would they do as described in situation 2? What is the Bitcoin community's response to the first situation, and what is the response to the second situation?

My answer is this. Miners have the ability to do malicious actions.The Bitcoin community can adequately respond to such actions of miners. Therefore, miners do not do malicious actions. And they won't.

Therefore, I once again suggest not to discuss the situation with "bad miners".

[topcoin360]

Sharp's the word.
What do you think about various ideas of sharding? Could they address this problem? What properties should have a sharding solution in order to be acceptable?

I think that fungibility is hard to obtain while sharding. For ex if one shard is more secure than another one then we can't consider the coins in those two shards as being the same. If not done properly, sharding could lead us in a situation where we end up with "different versions of the same cryptocurrency" (for that reason I'm still skeptical about this whole idea).

I think that in this topic we only consider those changes that will be added with the consent of the entire community.

You're right everyone will not agree on everything but now you have to convince a lot of people that using external data into the codes of btc is the best option. We know that it could cause some consensus problems (what if the predictions turned out to be so inaccurate that we had to rewrite the codes and how can we agree on the validity of the data in the first place?). Your idea is good but will be hard to realize. I tried to come up with a simple formula that would make sense for most people and I couldn't find one. Speaking of which what if the amount of block space provided by the network was proportional to the price that the users pay? I think that would make perfect sense...

N: new block size limit
n: old block size limit
T: total of the transaction fees in the most recent block
t: total of the transaction fees in the previous block

N = n * T / t

[vjudeu]

Speaking of which what if the amount of block space provided by the network was proportional to the price that the users pay?

But you don't know "the price that the users pay". You can only guess that transaction fees are related to "the price that the users pay". But still, it is possible to trick any algorithm based on that. You can pay more than mentioned in fees, just by sending some coins to some outputs owned by the miner, then you will indirectly and secretly pay more than you can read from fees. Or, you can receive some coins in exactly the same way, just the miner can send you some coins to your output in any transaction it can sign (or just in the coinbase).

More than that: remember about CPFP! If in some transaction some outputs are yours and some are owned by other people, then someone may want to spend some of the outputs in the near future. Then, you can even pay 1 satoshi per byte, but the other person will have to push your transaction to spend its own coins. And doing this on-chain transaction may sometimes be inevitable if someone wants to open or close some LN channels.

[IShishkin]

Yes, if the block size cap will be adjusted "on demand", that might have a negative impact on miners. Right now their daily workload, storage and bandwidth requirements are predictable. With adjustable block size system behavior will be unpredictable both for users and miners.

Somebody said that in 2013 tx fees were as low as 2 cents, median transaction was around 50$, market cap was 300 million $ and the grass was green. What if we surge Bitcoin market cap to 1 billion $? Would that solve the problem of high tx fees? What do you think?

[topcoin360]

Speaking of which what if the amount of block space provided by the network was proportional to the price that the users pay?

... Or, you can receive some coins in exactly the same way, just the miner can send you some coins to your output in any transaction it can sign (or just in the coinbase).

More than that: remember about CPFP! If in some transaction some outputs are yours and some are owned by other people, then someone may want to spend some of the outputs in the near future. Then, you can even pay 1 satoshi per byte, but the other person will have to push your transaction to spend its own coins. And doing this on-chain transaction may sometimes be inevitable if someone wants to open or close some LN channels.

The fees that the miners pay to themselves are irrelevant if you take into account all the transactions. All the other fees are paid by the users.
 

Yes, if the block size cap will be adjusted "on demand", that might have a negative impact on miners. Right now their daily workload, storage and bandwidth requirements are predictable. With adjustable block size system behavior will be unpredictable both for users and miners.

Somebody said that in 2013 tx fees were as low as 2 cents, median transaction was around 50$, market cap was 300 million $ and the grass was green. What if we surge Bitcoin market cap to 1 billion $? Would that solve the problem of high tx fees? What do you think?

The miners will plan on the long term, not the short term. The hard cap is all what matters. An adjustable blocksize cap could end the conflict of interest between the miners and the users. People would be willing to pay a higher price if their transactions were confirmed faster and less people would be mad because their payments didn't go through. With this solution everyone wins!  

That said, the Lightning Network is the only viable solution for low cost transactions...

[Khaos77]

That said, the Lightning Network is the only viable solution for low cost transactions...

Hardly,
You have to make One onchain bitcoin transaction to lock the funds in multisig, ie: fund LN channel.
That One onchain bitcoin transaction current average of $13.63 U$ Dollar .
source=https://bitinfocharts.com/comparison/bitcoin-transactionfees.html

Since Litecoin has plently of Onchain Transaction capacity (4X bitcoin capacity) ,
their transaction fee is only ~3 cents.
source=https://bitinfocharts.com/comparison/litecoin-transactionfees.html

No matter if the LN (Bankers Network) charged zero, the initial fee will still cause it to be unsuitable to a low cost transactions.

Fact of the matter is, you are better off buying a prepaid visa card than using LN. (Bankers run both anyway.)
Less fees and higher transaction capacity and definitely does not require a genius to constantly monitor channels to avoid loss of funds.

Or use a crypto such as litecoin with a decent average transaction fee, and plenty of onchain capacity and bypass the bankers networks.

That is the problem when onchain transaction capacity is artificially limited like bitcoin.
You're better off using a system that is not being limited.  

FYI:
If you ever close the LN channel, you have to pay a 2nd onchain transaction fee.
Note: Their are LN hubs funded with litecoin and litecoin activated segwit before bitcoin did.
Bitcoin Costs to fund & close LN channel = $27.26 in onchain fees alone not counting the fees charged in LN offchain bankers scam
Litecoin Costs to fund & close LN channel =  $0.06 cents in onchain fees alone not counting the fees charged in LN offchain bankers scam

[tromp]

Since Litecoin has plently of Onchain Transaction capacity (4X bitcoin capacity) ,
their transaction fee is only ~3 cents.

Thanks to these low fees, Litecoin will become quite insecure once their block subsidy dwindles down to insignificance.

[DooMAD]

Thanks to these low fees, Litecoin will become quite insecure once their block subsidy dwindles down to insignificance.

It's difficult to say with absolute certainty due to the scrypt algorithm it uses.  If people have specialist ASIC hardware for mining scrypt coins, there may only be a limited number of coins that are worth mining with that hardware (there are a boatload of scrypt coins, but I can't imagine all of them are profitable).  It's conceivable people might continue to mine as hobbyists if other coins with that algorithm fall out of use, purely because the hardware is optimised for that algo.

But, regardless of subsidy, in terms of raw hashrate, it's already far lower than Bitcoin.  I get the impression no other coin comes close to BTC.  I don't know if any other coin can even denote their hashpower in exahash as Bitcoin does (without resorting to sub-whole units). 

As always, it's a question of where users choose to strike the balance between convenience and security.

[tromp]

Thanks to these low fees, Litecoin will become quite insecure once their block subsidy dwindles down to insignificance.

It's difficult to say with absolute certainty due to the scrypt algorithm it uses.

It has not much to do with the choice of PoW. If the daily Litecoin issuance in dollars is not very significant, then
only a small fraction of whatever hardware is optimized for that PoW (e.g. scrypt ASICs) will be able to profitably mine on Litecoin, and it will be cheap to rent a bunch of the remaining hardware to mount a 51% attack on Litecoin.

But, regardless of subsidy, in terms of raw hashrate, it's already far lower than Bitcoin.  I get the impression no other coin comes close to BTC.  I don't know if any other coin can even denote their hashpower in exahash as Bitcoin does (without resorting to sub-whole units). 

Comparing hashrate of different PoW is generally meaningless.

[Khaos77]

Since Litecoin has plently of Onchain Transaction capacity (4X bitcoin capacity) ,
their transaction fee is only ~3 cents.

Thanks to these low fees, Litecoin will become quite insecure once their block subsidy dwindles down to insignificance.

Ha ,  No.

The Fact that Litecoin has 4X bitcoin transaction capacity ,
means the litecoin miner have the opportunity to make 4X the transaction fees.

LN (Bankers Network) does nothing to pay the miners, so it is irrevelant in the Miners profit margin.

Bitcoin has the bigger problem, because as rewards drop if the onchain artificially imposed block size limit continues.
Their ability to survive off transaction fees is 4X lower than litecoin.

Bitcoin current block reward is 6.25 bitcoins per block, with a price of ~$32000 ,
so a miner earns $200000 every block found.

Bitcoin average transactions ~2500 per block , meaning to achieve the current payout,
each transaction fee will need to be at least  $80 minimum.  
*FYI: If the price of bitcoin continues to increase as many of the btc supporters hope and pray,
this minimum transaction fee will continue to increase.*
* Litecoin minimum transaction fee would be $20 , 4X cheaper than bitcoin.*

At that price, it is cheaper to hand write checks and mail them off, over using bitcoin.  
As far as security, that check is federally insured, your bitcoin has no insurance if you send to the wrong address or lose your private key.
The number of hashes is just something to point the clueless at, so they don't realize how little it matters.
IE: The security is the exact same now as it was 6 years ago, top 4 mining pools secure the network (over 51%) then and do so now.
# of hashes are of little consequence.  
4 mining pool secure bitcoin, 4 mining pools secure litecoin, from a security standpoint they are exactly even.
Because at the end of the day, your security is trusting 4 pool operators not to collude and double spend.