NFTs in the Bitcoin blockchain - Ordinal Theory

[larry_vw_1955]

Still haven't told me the major drawback of rising the block size to 4MB or 8 MB.
What element or property of Bitcoin would be in danger and what is the major threat?

well, that all depends on how fast technology progresses in the areas of storage sizes of SSDs/HDDs and how powerful CPUs get. And how fast internet connection speeds can get. Even with all of that new tech, if prices stay high and keep them out of reach of normal people I mean who is going to pay $700 to get a 30TB HDD? just so they can store the blockchain?

That's why they say with larger block sizes bitcoin becomes less decentralized because not as many full nodes...but on the other hand, there does seems to be a serious problem that bitcoin can't scale and needs layer 2 solutions. if they come up with a way to throw away all the X oldest blocks periodically then that could guarantee the blockchain never gets bigger than a certain size and then you could have block sizes as big as you wanted.

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[cryptosize]

if they come up with a way to throw away all the X oldest blocks periodically then that could guarantee the blockchain never gets bigger than a certain size and then you could have block sizes as big as you wanted.

That doesn't sound good, but you can have a look at MimbleWimble.

But still, there's no way BTC does a hard fork, unless something radical happens (SHA-256 collision, quantum computing etc.)

[larry_vw_1955]

if they come up with a way to throw away all the X oldest blocks periodically then that could guarantee the blockchain never gets bigger than a certain size and then you could have block sizes as big as you wanted.

That doesn't sound good,

the only people it wouldn't sound good to is someone that is trying to use bitcoin to store jpegs. trust me it sounds good. the utxo set is what needs to be stored, not all the old transactions necessarily that's what i think anyway...

but you can have a look at MimbleWimble.

what's Mimble Wimble got to do with blockchain size?

But still, there's no way BTC does a hard fork, unless something radical happens (SHA-256 collision, quantum computing etc.)

How about people get tired of a huge blockchain that's terabytes in size?

[cryptosize]

what's Mimble Wimble got to do with blockchain size?

It reduces the blockchain size a lot.

the only people it wouldn't sound good to is someone that is trying to use bitcoin to store jpegs. trust me it sounds good.

So are you going to erase old blocks? What about people who haven't moved their funds during the last 10+ years?

How about people get tired of a huge blockchain that's terabytes in size?

MimbleWimble solves that, but BTC won't do a hard fork.

Could you elaborate further?

https://cointelegraph.com/news/what-is-mimblewimble-and-how-does-it-work
https://www.coinspeaker.com/guides/what-is-mimblewimble-blockchain/

Again: there's no way BTC will adopt this.

[BlackHatCoiner]

what's Mimble Wimble got to do with blockchain size?

Not quite sure, but I think in MimbleWimble, full nodes eliminate most of transaction data overtime as they only store unspent outputs indefinitely. But I haven't read the potential disadvantages of this. By the way, it has already been implemented in Litecoin.

How about people get tired of a huge blockchain that's terabytes in size?

What does a hard fork have to do with that?

[larry_vw_1955]

So are you going to erase old blocks? What about people who haven't moved their funds during the last 10+ years?

obviously you propogate the utxo set forward. think of it like every 1000 blocks gets the entire utxo set put into it. what would you need older blocks for in that case? you'll probably say "for verification". verfication of what?

[vjudeu]

think of it like every 1000 blocks gets the entire utxo set put into it.

Probably it should be done in every block. Also, it should not be put directly into block data, but it should be just a commitment instead.

what would you need older blocks for in that case?

Because if the real commitment is:

Code:

Alice     1.00 BTC
Bob       2.00 BTC
Charlie   3.00 BTC

Then you can easily mine a block with fake commitment, for example:

Code:

Dave     4.00 BTC
Elaine   5.00 BTC
Frank    6.00 BTC

It is exactly the same problem as putting a fake sidechain commitment, and withdrawing coins from a sidechain to different addresses.

you'll probably say "for verification". verfication of what?

If you don't know the history, and you only know the UTXO set, then you don't know if "Dave 4.00 BTC" entry is fake or not. You have to locate that entry in some previous block, and validate it. Also, as you cannot trust the previous block either, you have to go to the previous block of the previous block. And by going recursively, you will end up in a situation, where to be 100% sure that all UTXOs are real, you have to verify everything from the Genesis Block.

[Wind_FURY]

I don't think everyone has the same definition, opinion or understanding of Bitcoin. Bitcoin for some people, and the way it's designed, is a kind of tool that can weaken and break down political strongholds, not a tool for personal finance like PayPal.

If i'm not mistaken the whitepaper mentions bitcoin as a peer to peer electronic cash .

But how the whole system is actually designed shows that it's not just a network for "peer to peer electronic cash" is it?

And how have you come up to the conclusion that bitcoin can weaken and breakdown political strongholds ? By buying senators like Max Keiser said ? That's what bitcoin has become ? A means to create another caste to rule the world ? https://www.youtube.com/watch?v=3Bh3ObPjcFE&t=52s
I think that you are the one that have a different definition and understanding of what bitcoin is . Try read the whitepaper to understand why bitcoin was invented .

I'd like you to point me to any post that satoshi makes such a political statement .

Have you truly tried to understand how the protocol works and what its implications are? It's not a decentralized PayPal, that I can tell you. It's much much more.

And technically, Bitcoin onchain transactions are not peer to peer. They propagate to the whole network. Lightning transactions, that's peer to peer.

[Medusah]

And technically, Bitcoin onchain transactions are not peer to peer. They propagate to the whole network.

That's utter nonsense.  Just because information is broadcasted instead of just sent to the peer, it doesn't mean it stops being peer-to-peer.  Neither technically, nor theoretically.  Bitcoin on-chain transactions are peer-to-peer because nobody can intervene in the transaction, simple as that.  Nobody but the two peers.

[ABCbits]

Could you elaborate further?

https://cointelegraph.com/news/what-is-mimblewimble-and-how-does-it-work
https://www.coinspeaker.com/guides/what-is-mimblewimble-blockchain/

Again: there's no way BTC will adopt this.

Yeah, i don't expect it'll be implemented on BTC. Although articles you mentioned doesn't mention how it reduce size of transaction which already confirmed (inside a block), unless i missed something.

And technically, Bitcoin onchain transactions are not peer to peer. They propagate to the whole network. Lightning transactions, that's peer to peer.

So you don't consider a node as a peer in P2P/Bitcoin network? And as reminder, LN have routing feature where you're not directly connected to another node to send/receive Bitcoin.

[Wind_FURY]

And technically, Bitcoin onchain transactions are not peer to peer. They propagate to the whole network. Lightning transactions, that's peer to peer.

So you don't consider a node as a peer in P2P/Bitcoin network?

I didn't say that. The network is peer to peer.

What I said was technically, in an onchain transaction, a transaction from a peer to the intended peer doesn't directly go from the peer to the intended peer. It is propagated to the network for all nodes to validate, and to the miners to include them in their blocks.

There are also some instances when a user chooses to ignore the network and relay the transaction directly to the miner to send to the intended receiver.

And as reminder, LN have routing feature where you're not directly connected to another node to send/receive Bitcoin.

OK, then in the Lightning Network, it's peer to peer to peer to peer, depending on how many routes.

[stompix]

That is the law of demand and supply of block capacity directly speaking.

And the same law will speak wonders when you're going to have to pay miners to keep mining when there will be only fees.
You pay 2000$ in fees per block you're going to have a 2000$ security!

The issue lies in the notion of breaking backwards compatibility to enjoy some short-term relaxation,

Short-term, lol!
You realize that things will only get only worse from here, right?
You will either have more demand and higher fees, or you will have lower fees cause nobody is interested in using it anymore.

By the way, I see you keep mentioning global adoption. You do know it can't work without second layers unless the chain weights a VISA data center, right?

And you know that in order for every American to open a channel on the second layer you will need everyone to stop making a tx for the next three years at the current capacity? Let's go global and assume everyone will also want to close a channel in their lifetime and the queue will be over by...the time almost everyone that right now types on this forum will be dead!

well, that all depends on how fast technology progresses in the areas of storage sizes of SSDs/HDDs and how powerful CPUs get. And how fast internet connection speeds can get. Even with all of that new tech, if prices stay high and keep them out of reach of normal people I mean who is going to pay $700 to get a 30TB HDD? just so they can store the blockchain?

2009.08  NewEgg.com   Hitachi   1TB 7,200 rpm, 16MB   3.5   SATA-2   87.99  0.0000880US$/MB
2023.17 NewEgg.com   Seagate   8TB, 7200rpm, 256MB   3.5   SATA-3   114.99  0.0000144US$/MB   

Prices have gone down 6 times since the first block, also, there were no consumer ssd at that time.
Not counting inflation $90 then was not considered a problem why should $115 be now?

[BlackHatCoiner]

You pay 2000$ in fees per block you're going to have a 2000$ security!

If $2,000 will be the reward per block, then there won't be a point on having Bitcoin in the first place. If ~$2,000 is the average block reward in a decade or two from now, then it'll already be dead. The $2,000 is the side effect. The cause is the fact that nobody uses it.

Short-term, lol!

Define me the ideal block size, and tell me the reasoning behind it.

You will either have more demand and higher fees, or you will have lower fees cause nobody is interested in using it anymore.

We're currently paying about 10x in fees, and I don't see lots of people being uninterested. Perhaps because not many use it as currency in the first place, but that's a topic for another day.

And you know that in order for every American to open a channel on the second layer you will need everyone to stop making a tx for the next three years at the current capacity?

Except that I never argued we can reach global adoption with solely lightning. It's you who's complaining and proposing to increase the block size. And I'm telling you the obvious: we either go full-VISA-data-center, or we figure out something smarter, with more respect to decentralization, security and privacy. And as the Bitcoin development and history are concerned, we're heading towards the latter.

[HmmMAA]

Then you can easily mine a block with fake commitment, for example:

Code:

Dave     4.00 BTC
Elaine   5.00 BTC
Frank    6.00 BTC

It is exactly the same problem as putting a fake sidechain commitment, and withdrawing coins from a sidechain to different addresses.

you'll probably say "for verification". verfication of what?

If you don't know the history, and you only know the UTXO set, then you don't know if "Dave 4.00 BTC" entry is fake or not. You have to locate that entry in some previous block, and validate it. Also, as you cannot trust the previous block either, you have to go to the previous block of the previous block. And by going recursively, you will end up in a situation, where to be 100% sure that all UTXOs are real, you have to verify everything from the Genesis Block.

Easily mine , how easy to say and how hard to do . Each pool can check the hash and find out that the fake entry is invalid , and these transactions will get rejected instantly . If what you say could happen , bitcoin was broken since the start . That's why the merkle tree exists , so that you can confirm if a transaction is valid even without having the entire blockchain .

But how the whole system is actually designed shows that it's not just a network for "peer to peer electronic cash" is it?

The system is designed to have electronic peer to peer cash into a visible ledger by using PoW consensus to prevent double spend . What other design do you think bitcoin has ? I'd really like to know what else do you see .

Have you truly tried to understand how the protocol works and what its implications are? It's not a decentralized PayPal, that I can tell you. It's much much more.

Maybe i haven't , can you point me of what the implications are ? I like socratic dialogues , but i have to warn you that to have such a dialogue we both need to have an open mind and a great understanding of how things work . Do you remember that ip to ip transactions were implemented in the original design that was later removed ?  Mike Hearn makes a point , that things could be reinstated at some later point https://bitcointalk.org/index.php?topic=9334.msg134801#msg134801 .

Define me the ideal block size, and tell me the reasoning behind it.

https://bitcointalk.org/index.php?topic=1347.msg15366#msg15366
"It can be phased in, like:

if (blocknumber > 115000)
    maxblocksize = largerlimit

It can start being in versions way ahead, so by the time it reaches that block number and goes into effect, the older versions that don't have it are already obsolete.

When we're near the cutoff block number, I can put an alert to old versions to make sure they know they have to upgrade."

Except that I never argued we can reach global adoption with solely lightning. It's you who's complaining and proposing to increase the block size. And I'm telling you the obvious: we either go full-VISA-data-center, or we figure out something smarter, with more respect to decentralization, security and privacy. And as the Bitcoin development and history are concerned, we're heading towards the latter.

You might have a wrong impression of what decentralisation is .
https://en.wikipedia.org/wiki/Decentralization
"Decentralization or decentralisation is the process by which the activities of an organization, particularly those regarding planning and decision-making, are distributed or delegated away from a central, authoritative location or group and given to smaller factions within it."

"Full nodes" have nothing to do with decision making . "Planning" in bitcoin is the dev team . "Decision making" is the mining nodes . So , not in any way your node plays a part in bitcoin decentralisation .

It's like saying that apple is a decentralised structure because shares are distributed amongst investors .

I see that the topic is derailed so i'll stop here .

[BlackHatCoiner]

Each pool can check the hash and find out that the fake entry is invalid

Wonderful. Only pools can get to tell if an entry is fake or not. Completely decentralized and trustless, as envisioned. 

That's why the merkle tree exists

You can't fully validate a transaction with merely the merkle trees. Related: https://bitcoin.stackexchange.com/a/32533/134811

https://bitcointalk.org/index.php?topic=1347.msg15366#msg15366

Quoting a Satoshi post doesn't make it ideal. You need arguments, like these: https://bitcoin.stackexchange.com/a/37303/134811

"Decision making" is the mining nodes .

Every participant of the Bitcoin network contributes to decision-making processes. Some with authority (miners), others with technical competence (developers) and the rest of the users through running software, doing governance proposals, expressing their preferences and concerns, and of course being stakeholders.

[vjudeu]

If what you say could happen , bitcoin was broken since the start

It happened. Read about SPV mining, where mining pools started to mine blocks, without validating them, and how they lost their money, because there were enough full nodes to notice that they are building blocks on top of the invalid chain. And imagine that if we would have a lot of nodes blindly trusting the UTXO set, then it could stay unnoticed, and get deeply confirmed.

Also, there are cases, where pools lost their reward, because of things like sigops limit. By having only UTXO set, you cannot check such things, because then you don't have access to all scripts, you only know that some UTXOs should be changed to some other UTXOs.

[HmmMAA]

Wonderful. Only pools can get to tell if an entry is fake or not. Completely decentralized and trustless, as envisioned.  

At the beggining the vast majority was mining nodes . It was the only time that bitcoin was decentralised by your definition , thousands for nodes . The consensus is bitcoin is called proof of work , not proof of most nodes . And to pose a question like the one you said about blocksize , what's the optimal amount for nodes to make a network decentralised ? Is it 10's , is it 100's , is it millions ? And i'd like to see the arguments on your thesis .

Pools are the only entities that add transactions into a block , so there can't be any fake entries into a solved block .
How many blocks have you added to the chain with your node ? How many blocks with fake transactions have you find ? If it's at least one than yes , i'm wrong and you're right .

You can't fully validate a transaction with merely the merkle trees. Related: https://bitcoin.stackexchange.com/a/32533/134811

So , by you logic , why the merkle tree is needed ? If i have all the blocks , merkle tree is almost useless , right ? if so , let's disable them , core is very good at disabling parts that thinks are useless .

Quoting a Satoshi post doesn't make it ideal. You need arguments, like these: https://bitcoin.stackexchange.com/a/37303/134811

The creators thought of how things should be done isn't ideal , that's nice . As for the arguments of the post you shared , these are complete BS . Initial blocksize was 32 MB and there was a reason at the time that 1MB was imposed .  

Every participant of the Bitcoin network contributes to decision-making processes. Some with authority (miners), others with technical competence (developers) and the rest of the users through running software, doing governance proposals, expressing their preferences and concerns, and of course being stakeholders.

By decision making i mean what transactions will be added into a block and keep building the chain .

It happened. Read about SPV mining, where mining pools started to mine blocks, without validating them, and how they lost their money, because there were enough full nodes to notice that they are building blocks on top of the invalid chain. And imagine that if we would have a lot of nodes blindly trusting the UTXO set, then it could stay unnoticed, and get deeply confirmed.

Also, there are cases, where pools lost their reward, because of things like sigops limit. By having only UTXO set, you cannot check such things, because then you don't have access to all scripts, you only know that some UTXOs should be changed to some other UTXOs.

What you mention only affects a mining pool that decided to lose their reward , otherwise we would be still following that fork . To achieve a consensus in pool level the majority of honest pools decide if a block is valid or invalid , following the rules . If someone decided to just waste energy to propagate an invalid block that was rejected from the start at pool level , than good for him . Anyone can decide in what way can spend his money .
You have to understand that pools are interconnected , it is crucial for pools to have the new block as fast as possible to work on it for the next block . That block was rejected instantly from pools , even if it was still propagated to other non mining nodes who thought that they did find an invalid block . Think about it and you'll see that what "full nodes" saw had nothing to do with what pools decided from the begining . Pools are the entities that have the most economic interest to be honest . Pools that try to trick the system get their blocks rejected at pool level , so they are just burning money .

[BlackHatCoiner]

At the beggining the vast majority was mining nodes . It was the only time that bitcoin was decentralised by your definition , thousands for nodes .

No, that's according to your definition. If miners have all the power, then if everyone was a miner, it'd be completely decentralized. That's yours.

How many blocks with fake transactions have you find ? If it's at least one than yes , i'm wrong and you're right .

I'm sure that, whether I've found fake transactions or not, my current state is the true one. My node has synced, and verified everything since the genesis block. If I was to listen to SPV nodes, as you suggest, I couldn't know if I had fake transactions.

So , by you logic , why the merkle tree is needed ?

To make verification more efficient, and to allow SPV.

As for the arguments of the post you shared , these are complete BS . Initial blocksize was 32 MB and there was a reason at the time that 1MB was imposed .

Completely ignoring all the points and simply sticking with the 32 MB block size. Nice. 

By decision making i mean what transactions will be added into a block and keep building the chain .

The order of the transactions isn't the sole process of the Bitcoin network.

To achieve a consensus in pool level the majority of honest pools decide if a block is valid or invalid , following the rules .

No, they don't. I don't know who told you that miners decide the rules, they only decide the order of the transactions, for if they did, we'd already be having 1 GB blocks.

[HmmMAA]

 And to pose a question like the one you said about blocksize , what's the optimal amount for nodes to make a network decentralised ? Is it 10's , is it 100's , is it millions ? And i'd like to see the arguments on your thesis .

And a reply on this , so i can respond in summary later ?

[BlackHatCoiner]

And to pose a question like the one you said about blocksize , what's the optimal amount for nodes to make a network decentralised ? Is it 10's , is it 100's , is it millions ?

The amount is almost irrelevant; the ability to realistically run your own is what makes it decentralized.