Does Bitcoin become more decentralized over time?

[ABCbits]

Some people says raising Bitcoin block size hurt decentralization because it increases cost to run a full node. Bitcoin block size limit remains at 1MB 4 million weight units in past few years, while hardware and internet continue growing. The growth could be higher speed, higher efficiency or lower cost. With that in mind and ignoring other factor (such as blockchain size growth, hashrate distribution and total of full nodes), does Bitcoin become more decentralized over time?

P.S. This is just my shower thought, so obviously it has flaws.

[Charles-Tim]

In my opinion, bitcoin is decentralized, what makes some people do comment not to be decentralized is the issue that more miners are mining in China, but as 75% miners were mining in China in 2019, this reduced to 65% in 2020. And with recent news around the world, there is more chance that miners in percentage from China will still reduce this year. And that does not make bitcoin decentralized as some people thought.

About this topic, about the issue of scalability, before was only 1MB for block size, but the introduction of segwit make use of weight which is 4M weight units which is around 2.3MB in size of all trrasactions from segwit. This is a sign that there can be more approaches in the future that will enhance bitcoin transaction scaling that will get low fee transaction confirmed early.

Another is the lightning network, this is another alternative solution just to make the scaling issue solved. Developers will look for more ways to make bitcoin remain the possible best  decentralized coin existing.

Another approach is the taproot and the use of schnorr's signature that will significantly help in multisig transactions.

[pooya87]

The biggest contributor to decentralization is "more people joining in". That has been happening with price rise and they are not all 100% speculators wanting to make quick money. We get more of everything, more people running full nodes, more people buying ASICs and becoming miners, maybe even more mining pools (a more distributed hashrate), more developers/contributors to reference implementation and a lot more of other useful open source projects.
All of that makes bitcoin more decentralized over time.

As for block(chain) size, we already have a lot of options that make things easier for different type of users. For example pruning for those who want to run a full node but don't have enough storage to keep historical blocks. And the IBD which is the slowest step that people usually complain about should be performed only once, the daily network and hardware usage could go up but there is also options to reduce those too (smaller mempool size, higher fee/byte min relay fee, not relaying anything, ...).
Considering the fact that we have 70k to 80k full nodes with 10% listening for incoming connection I'd say things are looking good. With the price rising, I don't think node operators mind a slightly bigger cost of running a full node considering the benefits bitcoin and running a full node for it is providing them.

[dkbit98]

Real indicator for more decentralization should be growing number of full Bitcoin nodes, but I don't think we can have real accurate data for that.
Some say there are around 100,000 nodes, than there is Luke's script showing there are 75260 nodes at the moment, and bitnodes website is showing around 10380 nodes.

I don't think blockchain size should be such a big issue anymore as disc prices are going down and capacity is going up very fast, so we can expect more people will run full nodes and only this can make Bitcoin more decentralized over time.
Other issue is that I think most people don't even understand importance of running a full node so they never even tried running one, but we surely can't expect newbies running full nodes.

[aliashraf]

OP,
I read you as follows:
Given the argument about small blocks helping significantly with decentralization is correct, we expect a constant improvement in the hypothetical decentralization index of the network due to the constant hardware improvement trend that is expressed in the Moore's law. Is it actually happening?

Answer:
No, it is not. But it doesn't make the initial argument false, because it doesn't imply that it is enough to keep block size under control and everything goes well. Other measures should've been taken as well, decentralization of pools and support for light clients (not SPVs) being the most notable ones.

Unfortunately, we are facing an exaggerated "nobody is in charge" situation in bitcoin, where a strength is proving to be a weakness at the same time. I hate what is going on in the Ethereum camp, the stupid "road map", the "Foundation" and the "genius",  but the lack of any sign of responsibility in Bitcoin is concerning too.

[ranochigo]

The concept probably won't have any suitable metrics to be used as a gauge so I don't think there is any absolute answer to this.

With the growth of Bitcoin, you're going to inevitably eliminate the smaller scale miners who can't afford to keep their costs down. It would result in having miners probably being centralized around certain regions and farms. Mining would probably never be any more decentralized.

As for the full node count, I suspect that some nodes actively block Bitnodes crawlers as they publicly list their IPs and thus resulting in a much lower node count. Running a full node is obviously not so viable for most people; even in 2021 360GB+ is fairly significant if you consider that some laptops and/or desktops only ship with 1TB of storage. That, combined with the very few advantages over SPV (which I assume most actually wouldn't consider), will probably reduce the full node count over time. I can't see the point of most people running Bitcoin Core when using Electrum or Wasabi would suffice for their use case while wasting no time to synchronize whenever they're using it.

[aliashraf]

The concept probably won't have any suitable metrics to be used as a gauge so I don't think there is any absolute answer to this.

Oh, it is easy:
Let n be the cardinality of the smallest set of actors that are potentially able to collide for committing a successful adversarial behavior against any subset of users by somehow violating their rights for joining/continuing/exiting the network deliberately and safely. We can trivially define a decentralization index as:
DI = 1 - n^-1

[Oshosondy]

I don't think blockchain size should be such a big issue anymore as disc prices are going down and capacity is going up very fast, so we can expect more people will run full nodes and only this can make Bitcoin more decentralized over time.

But, if the blockchain size is not very large like almost 400 megabyte now, many more people will run it in a way there will be more nodes and decentralization.

[20kevin20]

This came through my mind so many times before, yet all I could think of was the factors you've mentioned. Besides the growing number of full nodes (which is probably going to keep lowering down in years until storage goes cheaper due to the quickly increasing blockchain size), hashrate etc.. do we have anything else that makes it more decentralized?

Something we may not be thinking about is development and products that could help with the decentralization. For example, doesn't goTenna help with it by taking the Bitcoin network into a mesh network rather than an internet service provided data? Does that count? To me, I think it does..

On the other hand though, we have exchanges and custodial wallets (or wallets that aren't even truly wallets such as PayPal or Revolut) that will likely have a growing mass of customers coming in and preferring custodial wallets over non-custodial ones for convenience. Doesn't that basically decrease decentralization since we put our trust into a single entity?

Bitcoin Core development-wise, I'm not sure we've truly had any improvement in the past few years at least. I think we've reached the current peak of decentralization as we know it, considering the current technology and knowledge we and experts have. The best thing we can do next is probably just moving on and trying to go even more off-grid by taking BTC off the centralized internet.

[DaveF]

You have 2 things decentralized in terms of nodes and decentralized in terms of mining.

For mining:
I thought it was gong to happen when the block rewards dropped down to 6.25 last year but I guess it's not going to happen till 3.125 or 1.5625 when a lot of the larger pools start to shut down. Unless the BTC price goes above $100k USD and stays there it's going to cost more to run big pools then they can generate. So I think a lot of smaller pools will start to pop up. I also think a lot of miners will drop out since it's going to be harder to make money. Once again that's if the price stays where it is, $100k or $200k BTC and all bets are off.

For nodes: Drive's are falling in price, 5g is coming online in a lot of places, starlink and Project Kuiper are going to bring high speed internet to a lot of places. I think once that happens, when you can get a RPi type box with 2 TB of storage you are going to see a lot more project nodes and things come online all over the place.

Just my opinions, I could be wrong :-)

-Dave

[PrimeNumber7]

Some people says raising Bitcoin block size hurt decentralization because it increases cost to run a full node. Bitcoin block size limit remains at 1MB 4 million weight units in past few years, while hardware and internet continue growing. The growth could be higher speed, higher efficiency or lower cost. With that in mind and ignoring other factor (such as blockchain size growth, hashrate distribution and total of full nodes), does Bitcoin become more decentralized over time?

After certain (unknown) limits are reached, decentralization will be negatively affected by increasing the block size limit. Assuming widespread consensus, raising the max block size to 4M +1 weights will not affect decentralization. The same is also probably true if the max block size was increased to 1.25MB/5M weights. If the max block size were to be increased to (again assuming widespread consensus) say 100MB, then decentralization would very much be negatively affected. I am not sure the point in which decentralization is affected after raising the max block size to a certain amount. There are of course costs associated with raising the maximum block size, so I would not necessarily advocate for raising the max block size merely because doing so would not harm decentralization.

In terms of the number of full nodes, I think new technology, especially privacy technology is having a greater impact on the number of nodes. Users can more reliably use light wallets, including those that have privacy features, so there is not the same incentives to run a full node as there were in the past. I also get the feeling that bitcoin's user base has evolved over time, and the current user base it more concerned with utility and less with privacy, and less with maximizing security regardless of the cost, and this demographic favors light clients over full nodes.

[pooya87]

the growing number of full nodes (which is probably going to keep lowering down in years until storage goes cheaper due to the quickly increasing blockchain size)

Actually the number of bitcoin full nodes is more volatile than the price itself! It goes up and down with wild swings. Part of it is because of the price, as I explained above the incentive to run a full node is the more valuable bitcoin the users hold also the increasing number of users. For example back in 2013 we had lots of  full nodes which started going down after the bubble popped then started increasing in 2015. We also had the ATH (~200k) in Jan 2018 at roughly the same time with bitcoin price ATH. It started going back up in 2019 again.
This shows the history from 2017 only: https://luke.dashjr.org/programs/bitcoin/files/charts/historical.html

[Wind_FURY]

In my opinion, bitcoin is decentralized

--snip--

Most of us agree Bitcoin is decentralized, but how about my question? Do you think bitcoin become more decentralized over time or not?

By regulating the block size? Yes it can. And I believe, ask the Core developers to be sure, that’s the plan. Let the current hardware available overshoot the current maximum requirement to run a full node. BUT, there’s also a problem, the developers/community can’t demand everyone in a decentralized network to upgrade their hardware, it has to come naturally. Then better option, for this and other reasons, regulate the block size.

[dkbit98]

For nodes: Drive's are falling in price, 5g is coming online in a lot of places, starlink and Project Kuiper are going to bring high speed internet to a lot of places. I think once that happens, when you can get a RPi type box with 2 TB of storage you are going to see a lot more project nodes and things come online all over the place.

Few years ago I purchased 4TB HDD disc and that is now even cheaper, and SSD disc are now also affordable and much faster.
When I purchased my first SSD it was expensive and had limited storage, but now you can find 1TB or 2TB SSD M.2 like Samsung or Adata in reasonable prices with good five year warranty.
I think current size of Bitcoin blockchain is around 330 GB, and with current yearly growth of around 25% I think that having few TB disc will last for years without any issue.

[ranochigo]

I agree, however wallet such as Wasabi (which uses Tor, BIP 158 or both of them) usually took some minutes for first time sync.

They would still have lower requirements than Bitcoin Core; less bandwidth, less time taken, more privacy, etc. Definitely would outweigh any disadvantages.

Few years ago I purchased 4TB HDD disc and that is now even cheaper, and SSD disc are now also affordable and much faster.
When I purchased my first SSD it was expensive and had limited storage, but now you can find 1TB or 2TB SSD M.2 like Samsung or Adata in reasonable prices with good five year warranty.
I think current size of Bitcoin blockchain is around 330 GB, and with current yearly growth of around 25% I think that having few TB disc will last for years without any issue.

At current capacity, Bitcoin can't stay at that rate of growth if we want to accommodate more transactions. I'm not too sure about the rate of growth for HDDs, price might have gotten cheaper but the growth of Bitcoin could be faster than the growth of HDD capacity. I have doubts that most people can have enough space for a full node ontop of their own files and would probably just to forego that completely. Coupled with a fairly long initial synchronization as well as a catchup after not opening it for a while.

[aliashraf]

{snip} I have doubts that most people can have enough space for a full node ontop of their own files and would probably just to forego that completely. Coupled with a fairly long initial synchronization as well as a catchup after not opening it for a while.

I don't get it. 
Why People are so concerned about HDD capacity? We have pruning already, a pruned full node works just fine.

[ranochigo]

I don't get it. 
Why People are so concerned about HDD capacity? We have pruning already, a pruned full node works just fine.

Pruning works just fine. I think we have fundamentally different concepts of what true decentralization is; which is for everyone to have a copy of their blockchain for me as we're touching on the topic of decentralization. You may correct in your own right and I can't really dispute that either. I'd prefer having more nodes with the entire blockchain rather than nodes which only stores the last few GBs of the blockchain which really wouldn't benefit the network more than the others.

[aliashraf]

I don't get it.  
Why People are so concerned about HDD capacity? We have pruning already, a pruned full node works just fine.

Pruning works just fine. I think we have fundamentally different concepts of what true decentralization is; which is for everyone to have a copy of their blockchain for me as we're touching on the topic of decentralization. You may correct in your own right and I can't really dispute that either.

Decentralization is not an ideological belief nor a partisan talking point, it is about math and engineering. Your one-person-one-copy idea is not supported by science, it is just a slogan, a misleading one, to be specific.

I'd prefer having more nodes with the entire blockchain rather than nodes which only stores the last few GBs of the blockchain which really wouldn't benefit the network more than the others.

How is that? Pruned nodes "benefit the network" just like any other full node, with just one exception: they are not helpful with the stupid bootstrap process in the current (experimental) implementation of the protocol, nothing else, not a tiny bit of any sign of being inferior compared to a historian full node ... I just made it up  

[BrewMaster]

with the stupid bootstrap process in the current (experimental) implementation of the protocol,

it is not experimental. it is the well tested strong implementation of a peer to peer digital cash that works safely and is decentralized.
there are of course other protocols but none have been able to reach the same level of security and decentralization. they have bigger flaws.

[aliashraf]

with the stupid bootstrap process in the current (experimental) implementation of the protocol,

it is not experimental. it is the well tested strong implementation of a peer to peer digital cash that works safely and is decentralized.
there are of course other protocols but none have been able to reach the same level of security and decentralization. they have bigger flaws.

Bitcoin started as a pilot project, continued as a fun and became permanent because it is what blockchains do, they become permanent!

It is very inappropriate to brag with bitcoin, instead of contributing to it for fixing the problems and shortcomings, kinda sectarian.

[DaveF]

For nodes: Drive's are falling in price, 5g is coming online in a lot of places, starlink and Project Kuiper are going to bring high speed internet to a lot of places. I think once that happens, when you can get a RPi type box with 2 TB of storage you are going to see a lot more project nodes and things come online all over the place.

I partially disagree, you don't need very fast internet connection to run full node. Fast internet connection only needed to let your node download whole blockchain quickly.

Yes....but, you do waiting weeks to do the initial download will turn off a lot of people.
Also, add reliable internet.  If your connection keeps dropping and you have to keep waiting to get caught up to send your funds or to look for payments also sucks.

I think current size of Bitcoin blockchain is around 330 GB, and with current yearly growth of around 25% I think that having few TB disc will last for years without any issue.

If the only thing on your machine is Bitcoin and your OS, yes. I was thinking about some poorer locations where you only have one PC so it's for bitcoin, surfing the web, doing school work, downloading videos, running quickbooks, etc. That can eat up drive space quickly.

-Dave

[Khaos77]

Some people says raising Bitcoin block size hurt decentralization because it increases cost to run a full node. Bitcoin block size limit remains at 1MB 4 million weight units in past few years, while hardware and internet continue growing. The growth could be higher speed, higher efficiency or lower cost. With that in mind and ignoring other factor (such as blockchain size growth, hashrate distribution and total of full nodes), does Bitcoin become more decentralized over time?

P.S. This is just my shower thought, so obviously it has flaws.

You have to do nothing , but observe the past ~11 year history of bitcoin.
Blocksize is irrelevant in the discussion.

Centralization is and already has occurred , limited mining pools only 3 or 4 have over 51% and have had over 51% for years.

The second ASICS were invented and the little guy was pushed aside in mining, decentralization died.

[pooya87]

I'd prefer having more nodes with the entire blockchain rather than nodes which only stores the last few GBs of the blockchain which really wouldn't benefit the network more than the others.

We can only argue that more Archival Full Nodes are going to benefit the network only if there is a shortage of them that makes syncing hard for new nodes that come online or puts extra pressure on the existing Archival Full Nodes.
I don't think this is the case since we have enough of them to supply the historical blockchain.

The Pruned Full Nodes are benefiting the network and contributing to decentralization by doing what any full node would do: enforce consensus rules.

[ranochigo]

How is that? Pruned nodes "benefit the network" just like any other full node, with just one exception: they are not helpful with the stupid bootstrap process in the current (experimental) implementation of the protocol, nothing else, not a tiny bit of any sign of being inferior compared to a historian full node ... I just made it up  

And that is why I think we have fundamentally different ideas of how Bitcoin should function, based on your past response about how verification of block data is not necessary, etc. If your view is that blockchain data is not important, then I believe that you'll probably disagree with everything that I say.

We can only argue that more Archival Full Nodes are going to benefit the network only if there is a shortage of them that makes syncing hard for new nodes that come online or puts extra pressure on the existing Archival Full Nodes.
I don't think this is the case since we have enough of them to supply the historical blockchain.

I believe that there is nothing wrong with making it more available. Having more "archival" full nodes would be far more useful for initial synchronization both in terms of it's speed and availability. I'm aware that pruned nodes can almost function like an "archival" full node but I fail to see how it would be as beneficial than the other, given that the bulk of the benefits falls on the user using the full node. If the blockchain size grows even further, people that are hosting them on RPis and servers may not want to run it anymore.

[pooya87]

but I fail to see how it would be as beneficial than the other, given that the bulk of the benefits falls on the user using the full node.

Pruned nodes are obviously not as beneficial as archival nodes but they are still beneficial to the network and contribute to decentralization of the network.

If the blockchain size grows even further, people that are hosting them on RPis and servers may not want to run it anymore.

In my opinion people running a full node on RPis aren't really helping anyone. They are more of a hobby thing to use rather than a serious full node set out to make a contribution to the backbone of bitcoin.

[20kevin20]

Yes....but, you do waiting weeks to do the initial download will turn off a lot of people.
Also, add reliable internet.  If your connection keeps dropping and you have to keep waiting to get caught up to send your funds or to look for payments also sucks.

I have a low-to-mid range gaming laptop from ~2012 and I wanted to use it as a full node for my BTC activity. I thought old PCs were not going to be an issue in holding full nodes on them, but I recently gave up the idea.

Having to wait 2-3 weeks for the blockchain to fully sync is annoying, so is having to catch up with the latest blocks. I usually have to leave my laptop running overnight to catch up with all blocks if the laptop has been turned off for a few days.

The fact that you cannot simply take an older PC to use it with your Bitcoin activity (or a RPi) sucks tbh. Unless nodes become more portable and require less computing power and storage space, full nodes will slowly become less and less affordable for the average person.

When you get your first BTC, if you're in it for the tech, you're likely going to look for the safest way to store it.. but if the safest one is too expensive or takes awfully long, you're going to rather use an SPV wallet or a custodial one. The problem is that I'm not very sure that HDDs and SSDs will become cheaper fast enough. If the block size gets to 500-750GB before 1TB storage components become as cheap as 500GB ones are today, then running full nodes will become less and less affordable so it'll still be the richer who'll afford it..

[20kevin20]

Although it's hobby thing, i think they still help Bitcoin network if they allow incoming connection (with proper router configuration).

Do they help if the RPi is in a constant bottleneck though? There was a time when portable RPi Zero full nodes were being sold around, and these certainly don't meet the requirements for running a full node and incoming connections might only make things worse. The lowest possible version of it that could handle full nodes decently are probably from RPi 3 and up; otherwise, it's all just a struggle for both the RPi owner and those connecting to it

[Pmalek]

If you ask someone who mined bitcoin with his GPU/CPU in the beginning, the network has become quite centralized in the sense that you can no longer do that. It would be like a human competing against a calculator who will finish his multiplication faster. Bitcoin is decentralized for those who have the financial means to invest in expensive hardware and compete against huge mining firms, and this will become more and more difficult in the future. Ask a solo miner if it is.

[vjudeu]

If you ask someone who mined bitcoin with his GPU/CPU in the beginning, the network has become quite centralized in the sense that you can no longer do that.

You can mine altcoins and exchange them for Bitcoin as soon as possible, it is the simplest way that works for now. Mining single satoshis with a CPU and receiving them by LN would be awesome and would make things less centralized, but such ideas need more research to bring it into reality.

[aliashraf]

If your view is that blockchain data is not important, then I believe that you'll probably disagree with everything that I say.

No reasonable person would suggest such thing, blockchain data not being important  

A blockchain is a data structure that preserves data, a database. Any database goes through events/transactions continuously and as a consequence its state is subject to change through time. What matters from the perspective of most applications is the state and not the events/transactions.  They are valuable as far as they are relevant as a part of the state. In Bitcoin case, a transaction is not relevant anymore when all of its outputs are spent.

The naive "rewind" approach to bootstrapping fresh nodes which is employed in the current Bitcoin implementation is not the only technology available, there are more robust, trust-less, and secure approaches as well.

[dkbit98]

At current capacity, Bitcoin can't stay at that rate of growth if we want to accommodate more transactions. I'm not too sure about the rate of growth for HDDs, price might have gotten cheaper but the growth of Bitcoin could be faster than the growth of HDD capacity. I have doubts that most people can have enough space for a full node ontop of their own files and would probably just to forego that completely. Coupled with a fairly long initial synchronization as well as a catchup after not opening it for a while.

I have multiple discs and I am not even near the full capacity and having one dedicated drive or partition just for Bitcoin blockchain is not that hard for anyone today.
Let me give you few examples, I think anyone can afford to purchase 4TB (or less) Toshiba or Seagate HDD for under $100 or even cheaper with some deal.
If we want to choose faster Samsung SSD with 2TB we can find them for $250 or cheaper.

Now we can't exactly predict size of Bitcoin blockchain but looking at this Statista chart, I think we are not going to reach even 400GB or 500GB in next few years, and data from Ycharts is showing 142.6% Average Growth Rate.

[FatFork]

<cut>
Now we can't exactly predict size of Bitcoin blockchain but looking at this Statista chart, I think we are not going to reach even 400GB or 500GB in next few years, and data from Ycharts is showing 142.6% Average Growth Rate.

And since we've had an exponential growth in computer storage capacity so far, and there's no reason to expect something dramatic to change in the foreseeable future, I don't believe we're ever going to get into trouble storing blockchain data.

[NotATether]

Bitcoin block size limit remains at 1MB 4 million weight units in past few years, while hardware and internet continue growing.

As you might have noticed already, (residential) internet speed does not grow. It is forever fixated at some arbitrary value like 5mbps or 20mbps depending on how benevolent your provider is (*cough* Comcast *cough*).  

This presents a special problem where as the blockchain grows, nodes running from home starve out and everybody starts moving to cloud servers for hosting nodes. We've probably already optimized the peer discovery so much that it's easy to find multiple nodes to continue downloading blocks from, and I don't think further speed up of the initial sync is possible, especially on artificially crippled residential lines, even if the current ZMQ message channels (at least for block and tx messages) give you Bittorrent magnet links instead.

Some people would like to run Core but they have a crappy 500kbps D-Link instead of a proper router and using one is probably out of the question, so there should be some kind of "lite" sync where each of these nodes verifies only a fraction of those blocks (we're talking around 1% here) and they somehow signal the integrity of all the other blocks. Millions of these "lite" nodes each verifying different blocks should provide the same security strength while being fast to sync.

[DaveF]

Bitcoin block size limit remains at 1MB 4 million weight units in past few years, while hardware and internet continue growing.

As you might have noticed already, (residential) internet speed does not grow. It is forever fixated at some arbitrary value like 5mbps or 20mbps depending on how benevolent your provider is (*cough* Comcast *cough*).  
...

Which is why I mentioned starlink and Project Kuiper earlier.

Yes you have more latency then cable / fios but it's still going to be competition an that is going to force the local providers to step up their game or wonder where all they customers went.

Not to mention the ones they loose to residential 5g.

The days of the crap cable providers although not ending soon, are not going to be forever.

-Dave

[amishmanish]

I am in a fairly urban area in one of the fastest developing countries of the world where we have good enough internet data capacity and speed to watch a few episodes on Netflix every second day. Yet, it is nowhere near the almost 200 GB plus upload/ download that a Bitcoin full node needs right now.

Any talk of increasing blocksize should first consider the actual internet availability. Only the most affluent of cities have those kind of limits.

Even if better internet reaches everywhere, you still won't solve the issue of Bitcoin being resource intensive. Already, we have calculations about how Bitcoin electricity consumption is equivalent to some Scandinavian country's consumption. Next it'll be about data and how much of it is being consumed by Blockchain ledgers, especially Bitcoin.

[Wind_FURY]

I am in a fairly urban area in one of the fastest developing countries of the world where we have good enough internet data capacity and speed to watch a few episodes on Netflix every second day. Yet, it is nowhere near the almost 200 GB plus upload/ download that a Bitcoin full node needs right now.

Any talk of increasing blocksize should first consider the actual internet availability. Only the most affluent of cities have those kind of limits.

Even if better internet reaches everywhere, you still won't solve the issue of Bitcoin being resource intensive. Already, we have calculations about how Bitcoin electricity consumption is equivalent to some Scandinavian country's consumption. Next it'll be about data and how much of it is being consumed by Blockchain ledgers, especially Bitcoin.

From Bitcoin’s viewpoint, does it need to be “solved”? I believe the people who say that it’s “a problem”, don’t truly understand Bitcoin. Or try not to understand that there’s more to Bitcoin, and more to its implications on Banking and Finance’s current condition, than what we see. Maybe energy companies could become the new foundation from which sound, hard money is produced and issued.

[zeuner]

Some people says raising Bitcoin block size hurt decentralization because it increases cost to run a full node. Bitcoin block size limit remains at 1MB 4 million weight units in past few years, while hardware and internet continue growing. The growth could be higher speed, higher efficiency or lower cost. With that in mind and ignoring other factor (such as blockchain size growth, hashrate distribution and total of full nodes), does Bitcoin become more decentralized over time?

P.S. This is just my shower thought, so obviously it has flaws.

How would you plan to measure decentralization? Even if two participants of the Bitcoin protocol appear as different nodes, they might have an out-of-band connection and be ran by the same person.

[BlackHatCoiner]

Actually the number of bitcoin full nodes is more volatile than the price itself! It goes up and down with wild swings.

Since a full node connects with few nodes, I want to know how it is calculated that there were ~200k nodes running Bitcoin Core. Since there isn't a database that keeps every IP, the network is decentralized. The *only* thing I see as "database" is the connection count of vSeeds on chainparams.cpp:

Code:

vSeeds.emplace_back("seed.bitcoin.sipa.be"); // Pieter Wuille, only supports x1, x5, x9, and xd
vSeeds.emplace_back("dnsseed.bluematt.me"); // Matt Corallo, only supports x9
vSeeds.emplace_back("dnsseed.bitcoin.dashjr.org"); // Luke Dashjr
vSeeds.emplace_back("seed.bitcoinstats.com"); // Christian Decker, supports x1 - xf
vSeeds.emplace_back("seed.bitcoin.jonasschnelli.ch"); // Jonas Schnelli, only supports x1, x5, x9, and xd
vSeeds.emplace_back("seed.btc.petertodd.org"); // Peter Todd, only supports x1, x5, x9, and xd
vSeeds.emplace_back("seed.bitcoin.sprovoost.nl"); // Sjors Provoost
vSeeds.emplace_back("dnsseed.emzy.de"); // Stephan Oeste
vSeeds.emplace_back("seed.bitcoin.wiz.biz"); // Jason Maurice

If these vSeeds were added before v0.15.0, then they exist on almost every node of the network. Technically, they could count every different IP that connects with them with Bitcoin Core.

[pooya87]

Since a full node connects with few nodes, I want to know how it is calculated that there were ~200k nodes running Bitcoin Core.

That's the default behavior since there is no point in connecting to all nodes but we have customized code that connects to other nodes and gathers information. Like the node crawlers that infest the bitcoin network!
If you want the details of how such software works you'll have to look at their code or ask those who wrote and are running such things. But I suppose it is a combination of having a well connected node with a good latency and a large socket backlog to accept any incoming connection while also connecting to other nodes and getting their addr list to check and advertise its own IP.

Since there isn't a database that keeps every IP, the network is decentralized. The *only* thing I see as "database" is the connection count of vSeeds on chainparams.cpp:

If these vSeeds were added before v0.15.0, then they exist on almost every node of the network. Technically, they could count every different IP that connects with them with Bitcoin Core.

These servers only store the IP addresses of the most reliable nodes that are accepting incoming connections not all IPs. Even if they stored the IP addresses of those connecting to them it won't be reliable because just because someone is digging them doesn't mean they are running a bitcoin node such as bitcoin core. You can for example dig them like this: https://toolbox.googleapps.com/apps/dig/

[BlackHatCoiner]

If you want the details of how such software works you'll have to look at their code or ask those who wrote and are running such things. But I suppose it is a combination of having a well connected node with a good latency and a large socket backlog to accept any incoming connection while also connecting to other nodes and getting their addr list to check and advertise its own IP.

So they find nodes' IPs whether you have Bitcoin Core or not. Even if I remove those vSeeds and then build Bitcoin Core, sooner or later I'll be listed on their address list. Interesting, I wonder how their code works. So these IP addresses on vSeeds send and receive new IPs continually, but not blocks. I always thought that vSeeds are the "default" nodes of the network that were chosen by the Bitcoin Core developers.

[pooya87]

Even if I remove those vSeeds and then build Bitcoin Core, sooner or later I'll be listed on their address list.

Only if your node is listening for incoming connections and has port 8333 (or 18333 on testnet) open and is a reliable node.

I always thought that vSeeds are the "default" nodes of the network that were chosen by the Bitcoin Core developers.

In a P2P network we have to rely on a centralized server to start the connection. Unfortunately there is no other way. For example in Torrent network we use hard coded DHT servers or the trackers to find peers.

[BlackHatCoiner]

In a P2P network we have to rely on a centralized server to start the connection. Unfortunately there is no other way. For example in Torrent network we use hard coded DHT servers or the trackers to find peers.

But why? Can't there be some hundreds of default nodes that will inform the new nodes for other nodes? Why do you need a centralized server to start the connection?

[NotATether]

In a P2P network we have to rely on a centralized server to start the connection. Unfortunately there is no other way. For example in Torrent network we use hard coded DHT servers or the trackers to find peers.

But why? Can't there be some hundreds of default nodes that will inform the new nodes for other nodes? Why do you need a centralized server to start the connection?

In torrent lore that's actually how things work if there are no central trackers. There are a list of (ordinary) peers hardcoded in a particular software[1] chosen by the developer that a client tries to connect to in order to download a particular torrent.

In the bitcoin network the problem with doing this is that we don't know which nodes are trustworthy and which are malicious nodes that have a different chain for example. Also a difference between bitcoin and BitTorrent is that in bitcoin the trustworthiness of the initial nodes used for bootstrapping is extremely important since money is involved and where it appears to be distributed is totally reliant on what peers tell you, whereas BitTorrent is just about downloading stuff so it doesn't really matter who you choose as the initial peers (well, as long as you don't choose an RIAA or ISP honeypot disguised as a node).

[1]: https://stackoverflow.com/questions/3844502/how-do-bittorrent-magnet-links-work

[BlackHatCoiner]

In the bitcoin network the problem with doing this is that we don't know which nodes are trustworthy and which are malicious nodes that have a different chain for example.

This is a problem only if you are not running your own node. Right? This is a problem only if you use an SPV like electrum that would show false information. Your node will reject everything that is invalid.

(well, as long as you don't choose an RIAA or ISP honeypot disguised as a node).

ISP honeypot? Do you mean a police sting operation?

[BlackHatCoiner]

You forget about valid alternative chain (usually with far lower mining difficulty), such attack is still possible if ever single node you chose are malicious node and the client doesn't implement hard-coded checkpoint.

What would the hard-coded checkpoint change if every node I connected is malicious?

[NotATether]

(well, as long as you don't choose an RIAA or ISP honeypot disguised as a node).

ISP honeypot? Do you mean a police sting operation?

That too but I was referring to ISPs who run their own torrent clients to copyrighted data and scrape IP addresses of their peers, search for the IPs that belong to them and serve those customers cease and desist letters which threaten to terminate their internet access if they don't stop torrenting.

Back on-topic...

You forget about valid alternative chain (usually with far lower mining difficulty), such attack is still possible if ever single node you chose are malicious node and the client doesn't implement hard-coded checkpoint.

What would the hard-coded checkpoint change if every node I connected is malicious?

I think he means when the node is programmed to accept a particular chain up to a certain block, then it's not going to consult any of its peers for blocks up to that point, only beyond that particular block. I don't know if that's what's done in Core (besides the Genesis block of course).

[ABCbits]

What would the hard-coded checkpoint change if every node I connected is malicious?

I think he means when the node is programmed to accept a particular chain up to a certain block, then it's not going to consult any of its peers for blocks up to that point, only beyond that particular block. I don't know if that's what's done in Core (besides the Genesis block of course).

That's what i mean. Bitcoin Core used to have one, but AFAIK now it's disabled. The code isn't removed though and can be seen at https://github.com/bitcoin/bitcoin/blob/master/src/chainparams.cpp.

Electrum also have checkpoint, where it's checkpoint can be seen at https://github.com/spesmilo/electrum/blob/master/electrum/checkpoints.json.

[pooya87]

That's what i mean. Bitcoin Core used to have one, but AFAIK now it's disabled. The code isn't removed though and can be seen at https://github.com/bitcoin/bitcoin/blob/master/src/chainparams.cpp.

Electrum also have checkpoint, where it's checkpoint can be seen at https://github.com/spesmilo/electrum/blob/master/electrum/checkpoints.json.

Checkpoints exist in both client types (Full and SPV) but for different purposes.
A full node (ie. bitcoin core) uses checkpoints only for its header sync and it only is enforced for the initial sync to prevent a certain attack. AFAIK this is because ever since full nodes changed to header first sync, they don't download blocks as they go. Instead they first download all block headers and when they do that a malicious node could give them fake headers with low difficulties in early heights. By using checkpoints the node doesn't waste time. Then they start downloading the blocks for those headers. ContextualCheckBlockHeader() is still rejecting any block (header) that is not found among the checkpints (it doesn't seem disabled).

An SPV client (ie. Electrum) has to use checkpoints because from the point of view of the light client all headers of all chains are valid headers (unless they change the difficulty calculation method). For example your client could connect to a shitcoin's ElectrumX node and receive headers from that chain and essentially get stuck on an invalid chain. By using checkpoints the client makes sure that it is always on bitcoin chain not some altcoin's.

[Wind_FURY]

How would you plan to measure decentralization?

I don't. But when i show following hypothetical scenario

1. 6 years ago you moderate VPS or PC to run full node
2. Today you can run full node with Raspberry Pi 4

Some people would agree that cost of running full node (excluding storage size and IBD) is cheaper today and could improve decentralization.

Even if two participants of the Bitcoin protocol appear as different nodes, they might have an out-of-band connection and be ran by the same person.

I agree, but it's out of scope from my question.

What about bandwidth? I believe Bitcoin’s bandwidth needs, as a decentralized network, is very underestimated. Rate of growth for bandwidth is slow, and network latency slower, which means that block propagation speeds might not scale at the same rate if average bandwidth among nodes increases.

[ABCbits]

What about bandwidth? I believe Bitcoin’s bandwidth needs, as a decentralized network, is very underestimated. Rate of growth for bandwidth is slow, and network latency slower, which means that block propagation speeds might not scale at the same rate if average bandwidth among nodes increases.

If block size limit isn't changed, that means bandwidth/latency requirement won't changed much while bandwidth/latency is slowly growing, which means bandwidth/latency problem won't make Bitcoin less decentralized over time (excluding blockchain size and IBD time).