Gold collapsing. Bitcoin UP.

[solex]

As said many times by others, current solutions just kick the can down the road and a proper solution for propagation in the network remains to be found and implemented

Unfortunately, "kicking the can" is a common pejorative term which can be thrown like mud at any interim solution.
It is perfectly valid to implement medium-term engineering changes in steps which are not an ideal end-solution, but may be built upon to get there, or replaced entirely when the "ideal" solution is found and achievable. This is particularly true in order to maintain a known current state (i.e. the headroom for growth state which has persisted since Jan 2009) which will undergo an unpredictable state change within 12 months due to inaction.



or a single MB

[cypherdoc]

i'll be spending more time here:  https://www.reddit.com/r/bitcoin_uncensored/

[cypherdoc]

Bitcoin will like this:

http://www.bloomberg.com/news/articles/2015-08-11/china-weakens-yuan-reference-rate-by-record-1-9-amid-slowdown

[brg444]

i'll be spending more time here:  https://www.reddit.com/r/bitcoin_uncensored/

 

I refuse to believe you are actually an adult person.

[solex]

i'll be spending more time here:  https://www.reddit.com/r/bitcoin_uncensored/

Great! Thanks for the link.
Subscribed.

[Mengerian]

Peter_R:

Great paper! The last paragraph got me thinking though, and I think I have come up with another way of visualizing the system that could generalize the result to the case where block reward is zero.

Mempool Demand Curve:

I think it simplifies things if block reward and transaction fees are treated as the same thing, where the block reward is simply treated as a transaction with a large fee (ie, coinbase transaction would be a very tall skinny triangle). The block reward can then be included in the mempool demand curve, causing it to pretty much start at R instead of 0.

Block Space Supply Curve:

Again, when considering the revenue per block, I will combine the reward and fees (R and M) and call it M_rev. The profit equation then becomes:

Profit = M_rev (h/H) e^(-τ/T) - ηhT
(Sorry for the rudimentary looking equation, I'm not sure how to enter it properly here)

In your paper, you base the supply curve on the "neutral profit". The problem with this is that the analysis breaks down when the block reward is zero. Instead of assuming a profitable empty block, I will simply solve for the total revenue (reward plus fees) needed to yield a profit. So, to get the block space supply curve, simply set the profit to 0 and solve for M_rev, yielding:

M_rev = ηHT e^(τ/T)

Similar to your formulations, this curve will curve upward as block size increases, but will intersect the y axis at ηHT. So for a miner to profit by mining an empty block, the block reward must be greater than ηHT.

Plotting the Supply and demand curve together looks like this:
(I have normalized both curves to a single miner’s point of view by multiplying by h/H)

https://i.imgur.com/mxgW7UE.jpg

And the miner’s profit is the distance of the revenue curve above the cost curve.

The nice thing about plotting it this way is that we can also consider what would happen if transaction fees become a significant source of revenue and the block reward is not sufficient to profitably mine empty blocks:

https://i.imgur.com/Cd1Anik.jpg

We can see that in this case, it would only make sense for the miners to include enough transactions to be in the region of the graph where revenue exceeds cost. This would also work in the extreme case where R=0.

[iCEBREAKER]

or a single MB

Good insight solex.  Bitcoin's ongoing (yet still potential) Great Schism does appear to cleave along Taoist/Buddhist cypherpunk vs Confucian corporatist lines.

Betting (and especially fighting) against the Chuang-Tzu acolytes of Crypto-Shaolin is highly contraindicated...

Our Supreme Abbot is worth twelve hundred thousand inferior imperial functionaries (whether they hail from DC, London, or Beijing).  And as Hearn enrages the young blood, XT will be (subtly) massacred....

[Zarathustra]

Using logic, I can see two possible reason for being a block minimalist developer.

1)  Since "Uh oh, here it is we who decide the size of the blocks", because having power is good. Since there is no consensus within the self appointed dominator group, we have to wait until the royals can come to agreement.

2) They want to suffocate bitcoin, permanently if possible, to get a head start on their endevour into competing systems.

Yes:

The iCEman: "more debate prolongs the stalemate"

https://bitcointalk.org/index.php?topic=68655.msg12067133#msg12067133

[NewLiberty]

Using logic, I can see two possible reason for being a block minimalist developer.

1)  Since "Uh oh, here it is we who decide the size of the blocks", because having power is good. Since there is no consensus within the self appointed dominator group, we have to wait until the royals can come to agreement.

2) They want to suffocate bitcoin, permanently if possible, to get a head start on their endevour into competing systems.

Or the opposite of #1.  As a developer, having power is very bad.  
The goal of the project is to avoid centralization of power, and at least some are working on achieving that goal for themselves by divesting of it while it remains possible to do so.  (BIP100)

This improvement proposal is the only significant one so far that removes the dev team from picking arbitrary numbers and dates and puts the size to the market of miners.

There are some other proposals on miners paying to a forward pool to increase the block size, but they are not so formalized yet.

[iCEBREAKER]

The iCEman: "more debate prolongs the stalemate"

Blessed is the Eternal Stalemate, for it preserves and strengthens Satoshi's Holy Sanity Check from the aggression of Bitcoin's adversaries.

   TIL there is intelligent life on Reddit:

I'm not sure if you are aware of the centralization pressure that occurs when miners are allowed to pick their own block sizes. Miners have incentives to encourage a very high orphan rate, if the orphan rate is properly targeted. Mining is a 0-sum game, which means that miners have incentive to hurt eachother. (less competition means lower difficulty and more blocks for you).

The ideal scenario for a miner is that the block they produce immediately hits a large portion of the hash power (at least 51%, but I'm not sure what the optimal percentage is), and then never hits the remaining hashpower at all. That remaining hashpower will have to find 2 blocks before the rest of the hashpower finds a single block - this will be detrimental to the profits of the minority hashpower, significantly so.

Large blocks provide a way to achieve this to some effect for bigger miners....

...This attack can be levied by a single large miner with no collusion. Simply by prioritizing the other large miners, and refusing to send the block to the low-bandwidth minority, a big miner can create blocks large enough to heavily impact the orphan rate of smaller miners without significantly affecting their own orphan rate.

This is very bad. The block size limit is important to stop this class of attack.

The vast majority of research demonstrates that blocksize does matter, blocksize caps are required to secure the network, and large blocks are a centralizing pressure.

Here’s a short list of what has been published so far:

1) No blocksize cap and no minimum fee leads to catastrophic breakage as miners chase marginal 0 fees:

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2400519

It’s important to note that mandatory minimum fees could simply be rebated out-of-band, which would lead to the same problems.

2) a) Large mining pools make strategies other than honest mining more profitable:

    http://www.cs.cornell.edu/~ie53/publications/btcProcArXiv.pdf

2) b) In the presence of latency, some alternative selfish strategy exists that is more profitable at any mining pool size. The larger the latency, the greater the selfish mining benefit:

    http://arxiv.org/pdf/1507.06183v1.pdf

3) Mining simulations run by Pieter Wuille shows that well-connected peers making a majority of the hashing power have an advantage over less-connected ones, earning more profits per hash. Larger blocks even further favor these well-connected peers. This gets even worse as we shift from block subsidy to fee based reward :

    http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg08161.html

4) Other point(s):

If there is no blocksize cap, a miner should simply snipe the fees from the latest block and try to stale that block by mining their own replacement. You get all the fees plus any more from new transactions. Full blocks gives less reward for doing so, since you have to choose which transactions to include. https://www.reddit.com/r/Bitcoin/comments/3fpuld/a_transaction_fee_market_exists_without_a_block/ctqxkq6

tl;dr  La Serenissima is long accustomed to laughable failed sieges by stymied enemies, Gavincoin merely being the most recent.

[majamalu]

Using logic, I can see two possible reason for being a block minimalist developer.

1)  Since "Uh oh, here it is we who decide the size of the blocks", because having power is good. Since there is no consensus within the self appointed dominator group, we have to wait until the royals can come to agreement.

2) They want to suffocate bitcoin, permanently if possible, to get a head start on their endevour into competing systems.

I'm leaning more and more towards 2, judging by the percentage of Blockstream supremacists and monero pimps between block minimalists.

[awemany]

[...]
So to answer your question, my view is that IBLT would not affect the health of the fee market (but it would reduce fees overall).
[...]

I think this unclear and could be misconstrued. This is the fee per transaction you are talking about, correct? As no one really knows about the total amount of fees without assumptions about the demand curve.

[NewLiberty]

Using logic, I can see two possible reason for being a block minimalist developer.

1)  Since "Uh oh, here it is we who decide the size of the blocks", because having power is good. Since there is no consensus within the self appointed dominator group, we have to wait until the royals can come to agreement.

2) They want to suffocate bitcoin, permanently if possible, to get a head start on their endevour into competing systems.

I'm leaning more and more towards 2, judging by the percentage of Blockstream supremacists and monero pimps between block minimalists.

I don't follow your logic.
Larger blocks would help Blockstream be effective.
I doubt there are many people (if any) in either Blockstream or Monero that are seeking for Bitcoin to not succeed.

It is disingenuous to assume a wicked motive in this debate just because you disagree on the risk assessment.
Those that disagree with you could do the same and say that you want big blocks ahead of other developments because you want Bitcoin to fail and it would also not make any sense or be useful to getting the right answer.

[Erdogan]

Using logic, I can see two possible reason for being a block minimalist developer.

1)  Since "Uh oh, here it is we who decide the size of the blocks", because having power is good. Since there is no consensus within the self appointed dominator group, we have to wait until the royals can come to agreement.

2) They want to suffocate bitcoin, permanently if possible, to get a head start on their endevour into competing systems.

I'm leaning more and more towards 2, judging by the percentage of Blockstream supremacists and monero pimps between block minimalists.

I don't follow your logic.
Larger blocks would help Blockstream be effective.
I doubt there are many people (if any) in either Blockstream or Monero that are seeking for Bitcoin to not succeed.

It is disingenuous to assume a wicked motive in this debate just because you disagree on the risk assessment.
Those that disagree with you could do the same and say that you want big blocks ahead of other developments because you want Bitcoin to fail and it would also not make any sense or be useful to getting the right answer.

I used "logic" to sound arrogant, it is a bad habit. Anyway, there is absolutely no higher risk with 1.1 MB than 1.0 MB. I don't want to repeat all the other arguments either way.

[brg444]

Using logic, I can see two possible reason for being a block minimalist developer.

1)  Since "Uh oh, here it is we who decide the size of the blocks", because having power is good. Since there is no consensus within the self appointed dominator group, we have to wait until the royals can come to agreement.

2) They want to suffocate bitcoin, permanently if possible, to get a head start on their endevour into competing systems.

I'm leaning more and more towards 2, judging by the percentage of Blockstream supremacists and monero pimps between block minimalists.

I don't follow your logic.
Larger blocks would help Blockstream be effective.
I doubt there are many people (if any) in either Blockstream or Monero that are seeking for Bitcoin to not succeed.

It is disingenuous to assume a wicked motive in this debate just because you disagree on the risk assessment.
Those that disagree with you could do the same and say that you want big blocks ahead of other developments because you want Bitcoin to fail and it would also not make any sense or be useful to getting the right answer.

I used "logic" to sound arrogant, it is a bad habit. Anyway, there is absolutely no higher risk with 1.1 MB than 1.0 MB. I don't want to repeat all the other arguments either way.

There is also absolutely no point to move from 1.0 MB to 1.1 MB.

[sgbett]

Using logic, I can see two possible reason for being a block minimalist developer.

1)  Since "Uh oh, here it is we who decide the size of the blocks", because having power is good. Since there is no consensus within the self appointed dominator group, we have to wait until the royals can come to agreement.

2) They want to suffocate bitcoin, permanently if possible, to get a head start on their endevour into competing systems.

I'm leaning more and more towards 2, judging by the percentage of Blockstream supremacists and monero pimps between block minimalists.

I don't follow your logic.
Larger blocks would help Blockstream be effective.
I doubt there are many people (if any) in either Blockstream or Monero that are seeking for Bitcoin to not succeed.

It is disingenuous to assume a wicked motive in this debate just because you disagree on the risk assessment.
Those that disagree with you could do the same and say that you want big blocks ahead of other developments because you want Bitcoin to fail and it would also not make any sense or be useful to getting the right answer.

I think what he is saying is that he doesn't think the [2] people want bitcoin to fail, they want to leverage the artificial fee market to push the adoption of their preferred alternative technology.

[brg444]

Using logic, I can see two possible reason for being a block minimalist developer.

1)  Since "Uh oh, here it is we who decide the size of the blocks", because having power is good. Since there is no consensus within the self appointed dominator group, we have to wait until the royals can come to agreement.

2) They want to suffocate bitcoin, permanently if possible, to get a head start on their endevour into competing systems.

I'm leaning more and more towards 2, judging by the percentage of Blockstream supremacists and monero pimps between block minimalists.

I don't follow your logic.
Larger blocks would help Blockstream be effective.
I doubt there are many people (if any) in either Blockstream or Monero that are seeking for Bitcoin to not succeed.

It is disingenuous to assume a wicked motive in this debate just because you disagree on the risk assessment.
Those that disagree with you could do the same and say that you want big blocks ahead of other developments because you want Bitcoin to fail and it would also not make any sense or be useful to getting the right answer.

I think what he is saying is that he doesn't think the [2] people want bitcoin to fail, they want to leverage the artificial fee market to push the adoption of their preferred alternative technology.

Right, that would make sense until you realise in both cases (lightning and sidechains) these technologies need bigger blocks to scale.

[NewLiberty]

Right, that would make sense until you realise in both cases (lightning and sidechains) these technologies need bigger blocks to scale.

...and Monero has had scaleable block sizes since inception. 

The assumption of invidious motive degrades the debate.  It is not an effective method to getting closer to a resolution.
When politicians use this method and claim that their opposition hates their country, rather than persuade based on the merits of their position, it irks me just as much. 

[justusranvier]

Right, that would make sense until you realise in both cases (lightning and sidechains) these technologies need bigger blocks to scale.

But before they need to scale, they just might need some help convincing potential users they are even necessary at all.

[brg444]

Right, that would make sense until you realise in both cases (lightning and sidechains) these technologies need bigger blocks to scale.

But before they need to scale, they just might need some help convincing potential users they are even necessary at all.

Are you suggesting they are not?