Why was the block size not increased?

[Charles-Tim]

All I heard was that the block size was not increased and this led to the creation of Bitcoin Cash. It was a fork but it is an altcoin (shit coin) while bitcoin remain the bitcoin.

But I am thinking recently that if the block size is increased, more transactions can be processed and the mempool will not be congested. If the block size can be in a way that 1 sat/vbyte transactions can all be processed in the next block, will this not be good?

If the block size is increased, what is its disadvantage to bitcoin network and miners?

[1714278602]

1714278602

[1714278602]

1714278602

[1714278602]

1714278602

[ranochigo]

Block size is in a sense still increased, well that depends on your definition. Blocks are definitely bigger than 1MB right now.

The most important period to look at would be the block size debate a few years back. One camp thinks that a hard and fast block size increase is the solution.Then again, how much should we really increase the block size? Can it ever be sustainable? The point about a unsustainable block size increase would be that we would reach a limit where only large entities can run Bitcoin nodes, delay across transaction propagation, etc. Big blocks takes longer to propagate, and stale rates would increase. I argue that this point is largely invalid, if you consider propagation speeds of the modern network as well as the inter connectivity of miners.

The other thinks that having second layer scaling as a solution would be the way going forward. Having lightning network was the key thing that made people think that the adoption would skyrocket once adopted and thereby reducing congestion on layer one. Well, it hasn't been extremely effective though adoption is definitely going up.

There are tons of supporters of both sides and they all have their concerns and their vision to what Bitcoin really is. If you want the actual answer, then it boils down a lot more to politics rather than what we can or cannot do.

[BTCapsule]

Paul Sztorc wrote an article called Measuring Decentralization in 2015 that explains why small, cheap nodes are essential to decentralization. Increasing the blocksize only works on a layer two, because you don’t have to store the entire blockchain.

https://www.truthcoin.info/blog/measuring-decentralization/

Scaling Bitcoin with sidechains:

https://www.truthcoin.info/blog/thunder/

[HeRetiK]

But I am thinking recently that if the block size is increased, more transactions can be processed and the mempool will not be congested.

In a perfect world, yes, but from what we've seen in recent months this would only lead to larger Ordinals Inscriptions rather than an increased transaction throughput. Maybe someone can correct me if I'm wrong, but if I'm not mistaken the current congestion is largely due to Ordinals, rather than regular transactions.

[tromp]

If the block size can be in a way that 1 sat/vbyte transactions can all be processed in the next block, will this not be good?

No, that will be terrible, since the block subsidy is slowly being phased out, leaving security of the chain entirely up to fees.

The capped supply can only work in the long term if a fee market develops based on sustained congestion.

[shield132]

All I heard was that the block size was not increased and this led to the creation of Bitcoin Cash. It was a fork but it is an altcoin (shit coin) while bitcoin remain the bitcoin.

But I am thinking recently that if the block size is increased, more transactions can be processed and the mempool will not be congested. If the block size can be in a way that 1 sat/vbyte transactions can all be processed in the next block, will this not be good?

If the block size is increased, what is its disadvantage to bitcoin network and miners?

Bitcoin Cash is built on lies. Roger Ver and other people are calling Bitcoin Cash a real, original Bitcoin and ignore our OG Bitcoin Core. Roger Ver owns Bitcoin.com, reddit.com/r/btc and these lies that were spread via his website, led many people to buy this Fake Bitcoin and led to many loses because people were sending BCH to BTC and BTC to BCH.

I think that we aren't increasing Bitcoin block size because not everyone agrees with that and we will have to make a hard fork and leave our absolutely original Bitcoin. Btw I think that we need to increase block size because times change, demand changes, we need to adapt and be a leader cryptocurrency with less limitations.

[o_e_l_e_o]

Block space needs to be limited to ensure bitcoin's long term survival.

Given that the block subsidy is halving every 4 years, it will not be long before the subsidy alone is negligible and certainly not enough to support even a fraction of the current hashrate. At that point, fees have to be sufficient to take over. For fees to be sufficient, block space has to be limited and there needs to be a full mempool and a competitive fee market. If we increase block size so everything can confirm at 1 sat/vbyte, then even for a (let's say) 16 MvB block you are still only talking about fees of 0.16 BTC.

If you want everything to confirm in the next block at tiny fees, then you need some other mechanism to pay miners once the subsidy is insufficient. That means either lifting the cap of 21 million and having constant inflation, or some other mining incentive like merged mining.

[Synchronice]

All I heard was that the block size was not increased and this led to the creation of Bitcoin Cash. It was a fork but it is an altcoin (shit coin) while bitcoin remain the bitcoin.

But I am thinking recently that if the block size is increased, more transactions can be processed and the mempool will not be congested. If the block size can be in a way that 1 sat/vbyte transactions can all be processed in the next block, will this not be good?

If the block size is increased, what is its disadvantage to bitcoin network and miners?

I understand others who have their interest in mining and related business and want transaction fees to be increased but I don't understand those who are regular users and vote against it. I'll be frank and say that another problem is, what block size is the good size? Accepted by everyone? Some argue it's 4MB, some argue it's 1GB Some ridiculous answers don't make any sense but it's still a good question.

Block space needs to be limited to ensure bitcoin's long term survival.

Block space needs to be limited but not in a way that we don't update the limit that was set a decade ago. It's not 2009 anymore. There is a huge difference between demand that we had in 2009 and what we have in 2023. We can't function with 2009's settings. Can someone imagine working today, doing programming/visual stuff with 2009's computer?
I think that flexible block size, i.e. block size increases and decreases according to number of transactions, that means, if there is a 100K transaction, block next block includes 5% of them, then 5% of what's left and so on. At the same time upcoming transactions are added too. If number of transactions decrease, so will the block size, that means that there will still be a competition to get transaction included in the next block and fees won't be as low as 1 sat/vByte. But is this possible to implement in Bitcoin? Ich habe keine Ahnung (I have no idea).

By the way, yesterday, miners were collecting more reward from fees than from blocks alone.

[Zaguru12]

Given that the block subsidy is halving every 4 years, it will not be long before the subsidy alone is negligible and certainly not enough to support even a fraction of the current hashrate.

In 20 years time we might be at this point, after the 2044 halving the block subsidy fee will be 0.1 bitcoin, even though the bitcoin price might have increased. But this simply means that we don’t have to wait till bitcoin is mined before miners starts depend only on fees.

Block space needs to be limited to ensure bitcoin's long term survival.

Block space needs to be limited but not in a way that we don't update the limit that was set a decade ago. It's not 2009 anymore. There is a huge difference between demand that we had in 2009 and what we have in 2023. We can't function with 2009's settings. Can someone imagine working today, doing programming/visual stuff with 2009's computer?
I think that flexible block size, i.e. block size increases and decreases according to number of transactions, that means, if there is a 100K transaction, block next block includes 5% of them, then 5% of what's left and so on. At the same time upcoming transactions are added too. If number of transactions decrease, so will the block size, that means that there will still be a competition to get transaction included in the next block and fees won't be as low as 1 sat/vByte. But is this possible to implement in Bitcoin? Ich habe keine Ahnung (I have no idea).

By the way, yesterday, miners were collecting more reward from fees than from blocks alone.

I think we already have a change from the 2009 size although practically the size is still 1MB for one block but the implementation of Segwit in 2017 has theoretically made it seems like an upgrade to 4MB per block for all segwit transactions.

Imagine a 100k of transactions is been included in a single block, then this will greatly affect the decentralization of bitcoin, numerous number of transactions that’s can be batched to one separately because the fee is low and this will mean a bigger block size which in turn results into high cost of individuals running a node as the cost to store data will be expensive and also will push out pools with smaller power (hashrate) out of the network and then the network will be centralized to only the big mining nodes which some of them have started censoring transactions already.

Also even if the block size are increased wouldn’t the shittokns like ORDI and STATs continue to spam the network? Decentralization is the major concern whenever the issue of block size increment is discussed, there is no way it wouldn’t be affected.

[ranochigo]

Imagine a 100k of transactions is been included in a single block, then this will greatly affect the decentralization of bitcoin, numerous number of transactions that’s can be batched to one separately because the fee is low and this will mean a bigger block size which in turn results into high cost of individuals running a node as the cost to store data will be expensive and also will push out pools with smaller power (hashrate) out of the network and then the network will be centralized to only the big mining nodes which some of them have started censoring transactions already.

Pools are already as centralized as it is, increment in block size probably decreases their profit margins but it wouldn't mean that they won't be able to run a node. After all, server costs are always going down and increase in block size doesn't mean that they suddenly won't be able to run a node. Most people are also not willing to run nodes anymore, and if you steadily increase the block size, I suspect the impact would be less than expected.

The key issue here is that even with Segwit, we are still facing outrageous fees, and that the network seems to be stagnant after having Segwit. There is also another issue about a hard fork and if the community is willing to adopt it.

Also even if the block size are increased wouldn’t the shittokns like ORDI and STATs continue to spam the network? Decentralization is the major concern whenever the issue of block size increment is discussed, there is no way it wouldn’t be affected.

They will, but that isn't something that you can deal with. If they have the money, then the fee mechanism acts as a regulator for them to incur larger costs with more spam. However, if you can increase the block size to alleviate the on-chain situation while promoting off-chain growth, then I don't see why not?

[pooya87]

All I heard was that the block size was not increased and this led to the creation of Bitcoin Cash.

Block size was increased but by using a soft fork instead of a hard fork. Bcash is also like a lot of other copycat coins that were created and its creation was not because of the fork or lack of it.

It was a fork but it is an altcoin (shit coin) while bitcoin remain the bitcoin.

Keep in mind that bcash is not a shitcoin because it was a hard fork, neither was it because of Roger Ver, Jihan Wu, etc. Instead Bcash is a shitcoin because it created and change and enforced it without reaching majority support. In Bitcoin when we want to change something (soft or hard fork) we first have to reach a threshold of supporters (almost always +90%) before we can move ahead with that change/fork. If we do anything else (like forking with 10% support) we would be creating an altcoin which would be viewed as a shitcoin.

But I am thinking recently that if the block size is increased, more transactions can be processed and the mempool will not be congested.

It depends on why the mempool was congested.
If it is because adoption has grown and more people are using bitcoin, then your assumption is correct. By increasing "capacity" the congestion would go away.
But if it is congested because of a spam attack (like this days with Ordinals scam) then increasing the capacity will only make things worse because it would make it cheaper and easier for the attackers to fill the blocks and create another congestion.

Important thing to remember is that before the Ordinals attack we didn't have any severe and lasting  congestion.

If the block size can be in a way that 1 sat/vbyte transactions can all be processed in the next block, will this not be good?

Yes it would be. And I strongly disagree with those who say congestion should exist to help miners due to block subsidy going down. Because even after the upcoming halving the miners would still be paid about $135k per block they find at the current price. This is enough incentive so that they don't need to rely on fees.

If the block size is increased, what is its disadvantage to bitcoin network and miners?

The real questions are: by how much and when?
We should always keep increasing the capacity, in my opinion. The adoption is increasing and people need to be able to use Bitcoin (BTW more capacity means more txs and more fees which addresses the concern regarding block subsidy) and there needs to be enough block space for that "additional adoption".
But it shouldn't be that big to push us toward centralization where less and less number of people run full nodes.

[o_e_l_e_o]

Block space needs to be limited but not in a way that we don't update the limit that was set a decade ago.

We don't use that limit. The upper limit is now 4 MB on disk, although in reality most blocks are around 2 MB.

I think that flexible block size, i.e. block size increases and decreases according to number of transactions

Monero uses dynamic block sizes, and so fees remain low at all times. However, Monero has a tail emission of 0.6 XMR per block for ever more.

Economically speaking, both achieve the same thing - users pay miners. The difference is whether the user making the transaction pays the miner directly (Bitcoin) or whether every user pays the miner via a very small amount of inflation (Monero). Either way, you need some way to fund miners or the chain becomes insecure.

And I strongly disagree with those who say congestion should exist to help miners due to block subsidy going down. Because even after the upcoming halving the miners would still be paid about $135k per block they find at the current price. This is enough incentive so that they don't need to rely on fees.

For 4 years. Then it halves again. And again. People have this distant figure of "2140" in their head as when the subsidy goes to zero and we can just kick the can down the road and we don't really need to care about fees until then, but in reality most people using bitcoin today are going to live to see the point when the subsidy becomes negligible. It's only going to take 20 years for the block subsidy to fall below 0.1 BTC. Even if we think bitcoin will be $100,000, then you are down to only $10k per block which is around 2-3% of what miners are earning right now per block. And it only goes down from there. Unless you believe bitcoin is going to be worth $10 million or more within in the next 20-30 years, we need a competitive fee market.


I do think that block size will increase again, probably multiple times, but we can't just jump to the initial suggestion of having blocks large enough to let every transaction process at 1 sat/vbyte without greatly decreasing the future security of the network.

[ranochigo]

For 4 years. Then it halves again. And again. People have this distant figure of "2140" in their head as when the subsidy goes to zero and we can just kick the can down the road and we don't really need to care about fees until then, but in reality most people using bitcoin today are going to live to see the point when the subsidy becomes negligible. It's only going to take 20 years for the block subsidy to fall below 0.1 BTC. Even if we think bitcoin will be $100,000, then you are down to only $10k per block which is around 2-3% of what miners are earning right now per block. And it only goes down from there. Unless you believe bitcoin is going to be worth $10 million or more within in the next 20-30 years, we need a competitive fee market.

I agree with having a competitive fee market, and we should absolutely not allow free lunch but there is of course, several considerations. The fee market right now is largely elastic, users mostly don't care if the fees are high because a good proportion of them can delay their transactions for a later date - at least for the average Joe who are trying to use Bitcoin as a daily functional currency. If Bitcoin were to try to break into the mainstream and be more integrated into our society, I expect more settlements to take place on second layer but there has to be a capacity increase to accommodate for the first layer as well. Fee market would become less elastic as time goes by; certain groups wants their transactions to be confirmed with a certainty in a set timeframe and thereby paying more, certain groups are okay with some delay.

With regards to block size, if we were to increase the block size, say 2-3 times, I would think that there would be times where transactions paying 1 sat/vbyte can be confirmed, and there would be times where it would require substantially more. The fluctuation in fees and the vast increase in the number of transactions can potentially offset the security concerns that may exist. Of course, increment has to be done on the premise where the security tradeoff from the drop in the number of nodes and propagation delay is acceptable.

If we were to keep the fee market overly competitive, ie. $20 for a single transaction, it can dissuade people from using Bitcoin as a currency when there are multiple other payment methods as well.

[ABCbits]

If you want everything to confirm in the next block at tiny fees, then you need some other mechanism to pay miners once the subsidy is insufficient. That means either lifting the cap of 21 million and having constant inflation, or some other mining incentive like merged mining.

FWIW few pools already perform merge mining, but the income is extremely small since Bitcoin sidechain isn't popular.

All I heard was that the block size was not increased and this led to the creation of Bitcoin Cash. It was a fork but it is an altcoin (shit coin) while bitcoin remain the bitcoin.

But I am thinking recently that if the block size is increased, more transactions can be processed and the mempool will not be congested. If the block size can be in a way that 1 sat/vbyte transactions can all be processed in the next block, will this not be good?

If the block size is increased, what is its disadvantage to bitcoin network and miners?

I understand of people who have their interest in mining and related business and don't want transaction fees to be increased but I don't understand of those who are regular users and vote against it. I'll be frank and say that another problem is, what block size is the good size? Accepted by everyone? Some argue it's 4MB, some argue it's 1GB Some ridiculous answers don't make any sense but it's still a good question.

That's good question, although there's no definitive answer. While i believe increasing block size should consider technological growth and cost to build and run full node, although it's hard to determine the lower limit. For example, should Raspberry Pi 5 (with SSD & 8GB) able to run full node?

[Medusah]

I read the discussion and I agree with your points, but having small sized blocks is neither in favor of bitcoin's long term survival. 

In the recent 144 blocks, according to mempool.space, the average transaction fee is ~$30.  This might (over)sustain miners' incentive (and network security), but not the on-chain usability.  I hope we all agree on the part that paying $30 is an outrageous amount (only for median size!). 

We have invested in protecting ourselves from 51% attacks, but I do not see anyone referring to "clogging up the network" as a potential attack vector as well.  Rising the block size by a factor of x, would make it x times more expensive to clog up the network and make the currency practically unusable on-chain. 

[o_e_l_e_o]

If we were to keep the fee market overly competitive, ie. $20 for a single transaction, it can dissuade people from using Bitcoin as a currency when there are multiple other payment methods as well.

I don't disagree with this at all. As I've said repeatedly through this whole saga, I think the correct approach here is to work on scaling, and not to arbitrarily ban certain transactions in order to allow other transactions to be processed more cheaply. I have no doubt that increasing the effective block size at some point will be part of that solution, but it cannot be the only solution for the reasons discussed above. Just ramping up the block size by a couple of orders of magnitude destroys bitcoin's long term security and completely centralizes the system, as has happened with shitcoins like BSV.

[hugeblack]

Another point that was not mentioned, but increasing the size of blocks leads to the centralization of the network. If the block sizes are larger than 16 megabytes, then those who can manage full nodes will be limited, and thus the entire network is distributed and not decentralized.

In addition to the low fees on most altcoins because the blocks are mined empty and there is no congestion on the network, the real challenge is to maintain low fees and full blocks, which is what is happening now in Bitcoin.

[DooMAD]

All I heard was that the block size was not increased and this led to the creation of Bitcoin Cash.

Having been around to experience the whole ordeal, I feel that sentence doesn't really do it justice, heh.  Suffice to say there was a great deal more nuance and complexity involved.  The short version is that (almost) everyone agreed that more throughput was required, but couldn't agree on the best way to achieve it.  Some wanted a small increase and the option to explore off-chain ideas, some wanted larger on-chain increases, while others wanted a mix of the two.  It's also worth noting that Bitmain announced a hardfork of their own, but never went through with it.  There was a lot going on at the time.

I have no doubt that increasing the effective block size at some point will be part of that solution, but it cannot be the only solution for the reasons discussed above. Just ramping up the block size by a couple of orders of magnitude destroys bitcoin's long term security and completely centralizes the system, as has happened with shitcoins like BSV.

At the time, during the "civil war", we naturally didn't have this power of hindsight to know for sure what would happen, but thankfully this is the mindset that prevailed.

As I've said repeatedly through this whole saga, I think the correct approach here is to work on scaling, and not to arbitrarily ban certain transactions in order to allow other transactions to be processed more cheaply.

Well said.  

Anyone proposing placing restrictions on the varieties of transactions that are permitted is missing the point of all this, I feel.  There are other projects catering to that kind of approach.  If you have a centralised ledger, you can easily prevent stuff like ordinals.  All you have to do is completely surrender all your freedom and treat transactions in the exact same way banks do.  What a bargain!  

But we don't have a centralised ledger here and we value our freedom (or, at least, some of us do), which is why we call such projects altcoins.  People can go and play with those if they like banning stuff.

[Medusah]

Another point that was not mentioned, but increasing the size of blocks leads to the centralization of the network. If the block sizes are larger than 16 megabytes, then those who can manage full nodes will be limited, and thus the entire network is distributed and not decentralized.

I know people are going to hate this, but I think this tradeoff of sacrificing a "little" decentralization for a lot of economic relief is worth it.  Sure, there will be full blocks, and sure that is not the solution to scaling.  But I would consider it a necessary step to move towards it, in a flexible manner.

There would still be Ordinals.  And maybe in even worse shape, like small videos instead of images.  But the cost per byte would have decreased by orders of magnitude and an attacker (like Ordinal users) would have to pay a lot more to maintain this congestion.  (I consider Ordinal users an attacker for the sake of simplicity, I do not believe they have bad intentions)

[tromp]

But we don't have a centralised ledger here and we value our freedom (or, at least, some of us do), which is why we call such projects altcoins.  People can go and play with those if they like banning stuff.

You can also have a blockchain that prevents arbitrary data (aka spam) by design rather than by banning: https://bitcointalk.org/index.php?topic=5437464.msg61782921#msg61782921