Gold collapsing. Bitcoin UP.

[brg444]

This needs to be read by every doomsayers here:

https://medium.com/@allenpiscitello/there-is-no-crisis-20b58e14b09c

More theoretical and idealogical bs

Such arguments! Much convincing! 

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[sgbett]

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?

I'm suggesting that it is putting the cart before the horse.

Let bitcoin scale. Let LN/Sidechains succeed on merit.

Have we not yet come to an agreement that raising the block size is not exactly a scaling solution?

Have we not yet come to an agreement that LN/Sidechains are not a scaling solution *without bigger blocks*

[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?

I'm suggesting that it is putting the cart before the horse.

Let bitcoin scale. Let LN/Sidechains succeed on merit.

Have we not yet come to an agreement that raising the block size is not exactly a scaling solution?

Have we not yet come to an agreement that LN/Sidechains are not a scaling solution *without bigger blocks*

I'm not against bigger blocks. I simply disagree with the urgency suggested by some of their proponents as well as the current proposed implementations (especially the very dangerous XT fork)

[nby]

I'm not against bigger blocks. I simply disagree with the urgency suggested by some of their proponents as well as the current proposed implementations (especially the very dangerous XT fork)

The truth is that there's nothing dangerous in the XT fork, and the "smallblockers" are fully aware of this.

Either there will be a clear voting majority behind the push to bigger blocks, or there won't even be a fork. No fork will begin until 75% of the hashing power will start supporting it. In that case it will be crystal clear which fork can claim itself being Bitcoin, and which instead will end up as an altcoin.

[sgbett]

This needs to be read by every doomsayers here:

https://medium.com/@allenpiscitello/there-is-no-crisis-20b58e14b09c

More theoretical and idealogical bs

Such arguments! Much convincing! 

Here's a quick synopsis of some of the alternative solutions

Limit Mempool Size
All transactions are equal, but some are more equal than others

ReplaceDouble Spend by Fee
...

Child Pays For Parent
The solution to having too many transactions in the mempool is MOAR TRANSACTIONS

Wallet Improvements
With enough UI glitter, this shit can look amazing.

Now it might be that I am wrong, and that chap Piscitello is right. Thing is nobody knows.

What we do know is that any increase be it 1.1MB, 8MB, 20MB needs a hard fork, and that a hard fork of this nature will take several months to happen.

What we also know is that the transaction rate is increasing. Whether it is linear or exponential is hard to say, but it is increasing. One effect of this is that average block size is also increasing.

Maybe it will be 18 months before we actually start to regularly see full blocks, if we knew that then we could spend another six months arguing about the values and the schedule. There is a risk however that we could see full blocks sooner BIP101 specified 11 Jan 2016 as the *earliest* date that bigger blocks can be mined. I hope this is timely enough.

I am not arguing we should have bigger blocks *now*, I am arguing that we need to put in place the machinery to have bigger blocks when we need them. Surely you know about the grasshopper and the ant.

The most important thing that has been said countless times, but seemingly never heard is:

If we don't *need* 8mb blocks then *nothing happens*.

[brg444]

All transactions are equal, but some are more equal than others

I guess that's where we disagree.

[sgbett]

I'll really not waste my time to prove obvious. :-) .. this mean I'll not print you book in leather with golden letters.

"Current technology cannot handle 24 GB blocks (and will not any time soon)" :-)

You must not understand what proof means.

The problem with your statement is that you've expressed it in terms of an unsolvable problem, which is begging the question.

Processing 24 GB of data in a 10 minute period is possible with technology that exists today. It does not require faster-than-light communication, or violating mass/energy conservation, or solving the halting problem, or anything else that's actually impossible.

Perhaps what you actually mean is that handing a 24 GB every 10 minutes would be expensive using existing technology. Perhaps even so expensive as to cost more than Bitcoin users would be willing to pay.

Expressed in those terms, you have a statement that can actually be rationally evaluated.

You'd need to establish how much it would cost to pay for the hardware and operating expenses to operate a 24 GB/10 minute network, and then estimate how much the users would be willing to pay per-transaction. If the estimated costs exceed the estimated budged, then you'd be correct to say that the network would probably be too expensive to operate.

Of course, once you've phrased the problem in a manner that allows for potential solutions, then it becomes possible to talk about productive things like, "what steps could we take to reduce the cost of operating the network?"

On the other hand, if you phrased your "obvious truth" in a form of an unsolvable problem deliberately because you have a preference for the problem remaining unsolved, then keep doing what you're doing.

Sublime response Justus. The mind cleansing power of rationality!

[sgbett]

All transactions are equal, but some are more equal than others

I guess that's where we disagree.

I know, Napoleon.

[brg444]

All transactions are equal, but some are more equal than others

I guess that's where we disagree.

I know, Napoleon.

So are you suggesting I shouldn't be allowed to pay more fees to get priority?

[sgbett]

All transactions are equal, but some are more equal than others

I guess that's where we disagree.

I know, Napoleon.

So are you suggesting I shouldn't be allowed to pay more fees to get priority?

No.

Now answer my question: are you suggesting raising the block size limit prevents that phenomenon?

[brg444]

All transactions are equal, but some are more equal than others

I guess that's where we disagree.

I know, Napoleon.

So are you suggesting I shouldn't be allowed to pay more fees to get priority?

No.

Now answer my question: are you suggesting raising the block size limit prevents that phenomenon?

No... but I honestly fail to see the point you're trying to make.

Why then the argument that "all transactions are equal"?

[Chalkbot]

Man, I'm so tired of the block size debate. I don't even care anymore. Is anyone trying to find a workable compromise, or is it still everyone pushing their own agenda under the guise of bitcoin being doomed if you don't assimilate?

What if we removed the cap altogether, and then just made it so that transactions with no fees had a 50% chance to bumped to the next block? Or something to that effect, such that microtransactions are still a thing, but a fee market is also a thing? I'm sure there's a good reason why this doesn't work. I have a cold and I just took some Dayquil. Brain no workie.

[sgbett]

All transactions are equal, but some are more equal than others

I guess that's where we disagree.

I know, Napoleon.

So are you suggesting I shouldn't be allowed to pay more fees to get priority?

No.

Now answer my question: are you suggesting raising the block size limit prevents that phenomenon?

No... but I honestly fail to see the point you're trying to make.

Why then the argument that "all transactions are equal"?

It's not *my* point it's Piscitello's

Mempools can be bounded, such that only the top priority transactions are stored. Low priority transactions are passed on or rejected once the limit is reached or are replaced by higher priority transactions. This prevents nodes from crashing due to being overwhelmed by transactions.

He is suggesting explicitly rejecting valid transactions because they don't pay enough fees as a way to solve the issue of the mempool ballooning if the block size is not large enough. Assuming that what will happen is that people will just pay higher fees to get in the block.

The protocol defines a valid transaction, and if a transaction is valid it accept it into the mem-pool => All transactions are equal
Piscitello defines 'priority' (a more palatable name for 'fee size') and says we let things back up and reject low fee transactions => Some transactions are more equal than others

Nodes will not be overwhelmed by transactions because they aren't economically viable to include in a block, they will be overwhelmed by transactions because the block size limit prevents them from including those transactions.

Let me draw you a picture of a theoretical scenario of not allowing a f(r)ee market to develop:

[brg444]

All transactions are equal, but some are more equal than others

I guess that's where we disagree.

I know, Napoleon.

So are you suggesting I shouldn't be allowed to pay more fees to get priority?

No.

Now answer my question: are you suggesting raising the block size limit prevents that phenomenon?

No... but I honestly fail to see the point you're trying to make.

Why then the argument that "all transactions are equal"?

It's not *my* point it's Piscitello's

Mempools can be bounded, such that only the top priority transactions are stored. Low priority transactions are passed on or rejected once the limit is reached or are replaced by higher priority transactions. This prevents nodes from crashing due to being overwhelmed by transactions.

He is suggesting explicitly rejecting valid transactions because they don't pay enough fees as a way to solve the issue of the mempool ballooning if the block size is not large enough. Assuming that what will happen is that people will just pay higher fees to get in the block.

The protocol defines a valid transaction, and if a transaction is valid it accept it into the mem-pool => All transactions are equal
Piscitello defines 'priority' (a more palatable name for 'fee size') and says we let things back up and reject low fee transactions => Some transactions are more equal than others

Nodes will not be overwhelmed by transactions because they aren't economically viable to include in a block, they will be overwhelmed by transactions because the block size limit prevents them from including those transactions.

Let me draw you a picture of a theoretical scenario of not allowing a f(r)ee market to develop:

I understand your point. But it seems to me that anyone who supports this position effectively suggests that the block size limit should be lifted altogether (at least that's the stance of PeterR & a couple others). Otherwise all you're really doing is moving your quota line to the right.

Assuming we increase the limit to 8mb. Do you propose that the additional supply will NOT get filled relatively quickly and if it does what step is next, increasing the limit again?

 
 

[thezerg]

this sounds exactly like something i'd say:
The Blockstream Business Plan (self.Bitcoin)
submitted an hour ago * by Celean

And if this is true Blockstream is making a HUGE mistake.  I don't think many people are doing multiple txns per day, every day right now.  I don't even think many people do 1 txn per week.  I doubt that people will be willing to sequester coins into the LN for significant periods (no I have no facts to back up this intuition).  

So I don't think that the lightning network solves the problem we have today which is getting people to do their FIRST txn (expand the network) and then getting them to use it periodically (use encourages merchants to accept it).

Once people are using BTC a couple times per day, LN is becomes very valuable.  Its actually WORSE if you do just one txn in a payment channel (it takes 2 blockchain txns instead of 1).

So LN won't actually solve the typical use pattern today.  And if that pattern is forced to pay high fees people will choose other payment options stagnating Bitcoin growth (or best case transforms into low velocity digital gold) to the point where we'll never need the volumes LN can offer.

Bad argument.

The current network @ 5 tps can handle 432k transactions per day. If all the high volume stuff (most of which is tied to speculation in one form or another) were moved off that would be maybe 431k people on-ramping per day which is vastly more than is needed.

I'm not sure that you have any basis to your claim that the high volume stuff is tied to speculation.   Regardless, the purpose of the use does not matter.  What matters is the structure of their transactions.  I can invent lots of network structure and use patterns which LN does not work for but is speculative.  For example, lots of people doing weekly dollar cost averaging purchases could take a large bite out of that 400k daily txn rate.

Also presupposing the high volume stuff is moved offchain means txn fees are likely high and blocks filled which will negatively affect new users making their one time purchases.  People tend not to do stuff proactively, especially when it entails adopting a new technology operating within a questionable legal framework (are LN nodes money transmitters?)

Also, I think we've onboarded most of the speculative investors we are going to get in this phase -- we need a wave of utility next.  I have a hard time believing this utility use moves from once per month to multiple daily txns.  Rather it will be monthly txns becoming weekly txns driven by B2B, remittance, and intermittent online purchases by bitcoin users.  And it will be colored coin and ledger use (which LN cannot optimize).

[brg444]

Also, I think we've onboarded most of the speculative investors we are going to get in this phase -- we need a wave of utility next.  I have a hard time believing this utility use moves from once per month to multiple daily txns.  Rather it will be monthly txns becoming weekly txns driven by B2B, remittance, and intermittent online purchases by bitcoin users.  And it will be colored coin and ledger use (which LN cannot optimize).

I have to disagree and I think is far removed from reality. Utility use cases are and will remain marginal until we onboard many many more waves of speculative investors.

Institutional investors wave is next.

Take it from the mouth of one of the reasonable guy in the industry (Vinny Lingham):

I think the whole idea of bitcoin is so consumer unfriendly, I can't see it taking off and we're the largest consumer site on the blockchain. It's not going to go mainstream.

http://www.coindesk.com/keynote-2015-fintech-voices-join-blockchain-conversation/

[sgbett]

All transactions are equal, but some are more equal than others

I guess that's where we disagree.

I know, Napoleon.

So are you suggesting I shouldn't be allowed to pay more fees to get priority?

No.

Now answer my question: are you suggesting raising the block size limit prevents that phenomenon?

No... but I honestly fail to see the point you're trying to make.

Why then the argument that "all transactions are equal"?

It's not *my* point it's Piscitello's

Mempools can be bounded, such that only the top priority transactions are stored. Low priority transactions are passed on or rejected once the limit is reached or are replaced by higher priority transactions. This prevents nodes from crashing due to being overwhelmed by transactions.

He is suggesting explicitly rejecting valid transactions because they don't pay enough fees as a way to solve the issue of the mempool ballooning if the block size is not large enough. Assuming that what will happen is that people will just pay higher fees to get in the block.

The protocol defines a valid transaction, and if a transaction is valid it accept it into the mem-pool => All transactions are equal
Piscitello defines 'priority' (a more palatable name for 'fee size') and says we let things back up and reject low fee transactions => Some transactions are more equal than others

Nodes will not be overwhelmed by transactions because they aren't economically viable to include in a block, they will be overwhelmed by transactions because the block size limit prevents them from including those transactions.

Let me draw you a picture of a theoretical scenario of not allowing a f(r)ee market to develop:

I understand your point. But it seems to me that anyone who supports this position effectively suggests that the block size limit should be lifted altogether (at least that's the stance of PeterR & a couple others). Otherwise all you're really doing is moving your quota line to the right.

Assuming we increase the limit to 8mb. Do you propose that the additional supply will NOT get filled relatively quickly and if it does what step is next, increasing the limit again?
 

I don't know, but you are saying we shouldn't do anything, because doing something might not be quite enough?

[Peter R]

I understand your point. But it seems to me that anyone who supports this position effectively suggests that the block size limit should be lifted altogether (at least that's the stance of PeterR & a couple others). Otherwise all you're really doing is moving your quota line to the right.

I support BIP101 (Gavin's proposal); I don't support removing the limit entirely right now.  The results of my paper apply either in the absence of a limit or if the limit is far above the transactional demand.  

So, indeed we are moving the quota line to the right, but so long as the line is far to the right of Q* (the block size that maximizes the miner's profit), then the fee market behaves as described in feemarket.pdf.  

Assuming we increase the limit to 8mb. Do you propose that the additional supply will NOT get filled relatively quickly...

Not at all.  I suggest that the block space will get filled at close to the historical rate of growth, as illustrated by either the "high" or "moderate" curves in this chart:

...and if it does what step is next, increasing the limit again?

We slowly remove the limit (doubling it every two years) until there is effectively no limit at all.  

Before bitcoin can be digital gold, the world needs to understand its value.  The first step is to build a payment network for planet earth.

[brg444]

I don't know, but you are saying we shouldn't do anything, because doing something might not be quite enough?

I'm saying that the pretense that 1 MBers are playing central bankers seems funny in the light considering most block increase proponents are the ones arguing for arbitrary control of supply.

So yes, we shouldn't do anything but optimize the current infrastructure under existing parameters and observe how the network reacts.

The notion that there be dragons at the capacity limit is unfounded and reactionary. We have to make the journey and find out what is, in fact, there at the edge - as many others have argued in the list. This is our opportunity to make scientific observation and discovery for the benefit of Bitcoin - while it is still in its early years and the capacity limit untested.

http://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-August/010179.html

[brg444]

Not at all.  I suggest that the block space will get filled at close to the historical rate of growth, as illustrated by either the "high" or "moderate" curves in this chart:

Well I sure hope you can understand some people are wary of making such assumptions.

Before bitcoin can be digital gold, the world needs to understand its value.  The first step is to build a payment network for planet earth

This is a fundamental disagreement on the value of Bitcoin then which IMO is first SOV then payment network.

Bitcoin will become a global refuge for wealth way before it gains any relevant traction as "a payment network for planet earth".

https://medium.com/@allenpiscitello/what-is-bitcoin-s-value-proposition-b7309be442e3