Gold collapsing. Bitcoin UP.

[Peter R]

Are these figures factual? I assumed the orphan chance to increase but only by a very small amount, small enough to completely ignore it. Does adding 500KB to a block really increase the orphan chances by 0.4%? I thought it would be many orders of magnitude less.

I think it was Gavin who estimated the orphan cost per kB, and it was not insignificant.  I can't find the post off hand, but perhaps someone else can point us to it.  I'd like to be reminded of the actual numbers too.  

I do know that the core devs want to reduce the orphan cost by propagating blocks by TX hash whenever possible.  High orphan costs are sometimes blamed for the hesitation of some miners to build larger blocks.  

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[wachtwoord]

Are these figures factual? I assumed the orphan chance to increase but only by a very small amount, small enough to completely ignore it. Does adding 500KB to a block really increase the orphan chances by 0.4%? I thought it would be many orders of magnitude less.

I think it was Gavin who estimated the orphan cost per kB, and it was not insignificant.  I can't find the post off hand, but perhaps someone else can point us to it.  I'd like to be reminded of the actual numbers too.  

I do know that the core devs want to reduce the orphan cost by propagating blocks by TX hash whenever possible.  High orphan costs are sometimes blamed for the hesitation of some miners to build larger blocks.  

Anyway, thank you both, I'll need to do some more reading/investigating on this. I'll check back here tomorrow whether someone did find that post

[justusranvier]

I do know that the core devs want to reduce the orphan cost by propagating blocks by TX hash whenever possible.  High orphan costs are sometimes blamed for the hesitation of some miners to build larger blocks.

Of course they do, just like how McDonalds wants to reduce the marginal cost of cooking a Big Mac and a FedEx wants to reduce the marginal cost of shipping a package.

Allowing the network to process more transactions at a lower cost is a good thing.

[Peter R]

Allowing the network to process more transactions at a lower cost is a good thing.

Agreed.

[vuduchyld]

cypherdoc, I think this is the best thread ever.  What's the secret?  Running up a huge page count so that most new posters don't want to sift through all the info?

Somehow, present company excepted, this thread manages to attract thoughts and posts almost exclusively from thoughtful, knowledgeable, and thorough members.  It's my only real can't-miss thread every day.

[NewLiberty]

Say the situation where a miner includes n transactions in a block or n+1 is equivalent in cost*.

This situation does not exist.

The cost is very real and not-insubstantial - the increased orphan risk which you completely glossed over above.

The marginal cost can - and should - be brought very low but it will never reach zero.

The amount of transactions a miner can process in a ten minute interval is finite, therefore it is scarce, therefore the service of including transactions in a block will always have a price.

QFT!
The marginal cost decreases with the block reward proportionate to the mining fee.
So while the n vs n+1 will never be equivalent, they should be expected to increasingly approach the risk/reward for orphaning.
This should then also be expected to increase the desirability of including the n+1 transaction in the block.

At some future time the transaction fees may be more than the block rewards, as block sizes increase and the block rewards decrease.
This future time will likely be after a much longer term bitcoin price stability than anything in its history.  This may well be for younger people than I to observe.  
So far, bitcoin valuation has increased so much faster than block rewards decrease, and so transaction fees have decreased faster than block rewards.  We should not expect this to be true forever, just for a long time to come, and also for block sizes to increment over time.

tl;dr The protocol works very well and these considerations are baked in.  Bitcoin is quite secure in this regard.

[justusranvier]

tl;dr The protocol works very well and these considerations are baked in.  Bitcoin is quite secure in this regard.

So many people get caught up in the trap of "how will we make sure a market will arrive at the correct price for a service" without understanding that the question itself is invalid.

[cypherdoc]

what i don't get is why isn't Gavin moving to increase block size now as opposed to when we're in the middle of the next bubble or two when tx size will have surely increased along with price and his back is against the wall?  i'm not advocating this, just asking the question.

he's already shown a reticence to make changes to the protocol.  not that i'm complaining, mind you, as i think he's done a stellar job as lead dev.  but at that point, it may be such a political hot potato that nothing may get done at all.  

[justusranvier]

what i don't get is why isn't Gavin moving to increase block size now as opposed to when we're in the middle of the next bubble or two when tx size will have surely increased along with price and his back is against the wall?

he's already shown a reticence to not make changes to the protocol.  not that i'm complaining, mind you, as i think he's done a stellar job as lead dev.  but at that point, it may be such a political hot potato that nothing may get done at all.

It may be the case that we don't get any protocol improvements until Bitcoin Core loses its monopoly on the full node network.

[cypherdoc]

what i don't get is why isn't Gavin moving to increase block size now as opposed to when we're in the middle of the next bubble or two when tx size will have surely increased along with price and his back is against the wall?

he's already shown a reticence to not make changes to the protocol.  not that i'm complaining, mind you, as i think he's done a stellar job as lead dev.  but at that point, it may be such a political hot potato that nothing may get done at all.

It may be the case that we don't get any protocol improvements until Bitcoin Core loses its monopoly on the full node network.

i don't see that ever happening as long as Gavin remains lead dev.  there's no one even close to him that has the political capital, trust, or good will he has generated.

[cypherdoc]

btw,

nom, nom, nom, nom

[justusranvier]

i don't see that ever happening as long as Gavin remains lead dev.  there's no one even close to him that has the political capital, trust, or good will he has generated.

We'll see.

The reference client has already lost the technical lead to btcd, and their dev team is orders of magnitude more functional than Bitcoin Core's.

In addition, he doesn't have as much goodwill as you think. I'm not the only person who's noticed that there has been no substantial development in the reference client for about two years.

[cypherdoc]

i don't see that ever happening as long as Gavin remains lead dev.  there's no one even close to him that has the political capital, trust, or good will he has generated.

We'll see.

The reference client has already lost the technical lead to btcd, and their dev team is orders of magnitude more functional than Bitcoin Core's.

In addition, he doesn't have as much goodwill as you think. I'm not the only person who's noticed that there has been no substantial development in the reference client for about two years.

i can see that being true amongst other devs all of whom are desperately trying to make their mark or advocate for vested alternative interests.  but amongst the general users i think what i said holds.  i know it does from my perspective.

[balanghai]

Seems like this Gold vs. BTC saga isn't gonna end soon. 

[justusranvier]

but amongst the general users

General users don't matter from the perspective of the future composition of the full node network.

Businesses and mining pool operators matter.

[cypherdoc]

but amongst the general users

General users don't matter from the perspective of the future composition of the full node network.

Businesses and mining pool operators matter.

they do matter when some of the largest holders of bitcoin come from that segment of the community.

[cypherdoc]

but amongst the general users

General users don't matter from the perspective of the future composition of the full node network.

Businesses and mining pool operators matter.

they do matter when some of the largest holders of bitcoin come from that segment of the community.

the other thing is that there are plenty of general users who understand Bitcoin both technically and economically as well, if not better, than business and mining pool operators.  they are very aware of issues like block size limits and bandwidth limitations.  

[solex]

When historians look back they might well conclude that the 1MB limit resolution was Bitcoin's "betamax moment", the most important decision point determining its ultimate fate.

coinmarketcap.com is interesting because it gives a market assessment of Bitcoin's future prospects.

Right now the total cryptocurrency market cap is $8,197,074,397 and Bitcoin's is $7,678,842,953 or 93.68%
(higher if MSC and XCP and other BTC-based alts are included).

So, the cryptocurrency market is effectively pricing a >93% probability of Bitcoin dominating this new asset class - long term. An asset class of such importance that many crypto investors consider could make all fiat obsolete and perhaps even demonetize precious metals as well.

If the 1MB limit is not handled properly, in good time, and is allowed to seriously disrupt organic growth, then that percentage will fall significantly. Perhaps even causing an irrecoverable erosion in the first-mover status, opening the window for alts like NXT and XMR.

This is the stakes in play.

[IamCANADIAN013]

Seems like this Gold vs. BTC saga isn't gonna end soon. 

Of course it won't. If shit ever hits the fan, most people are going to want something physical (gold) to trade for goods that they have that others need.  i don't see gold ever collapsing like some people want/or think it will.

Gold is here to stay whether bitcoiners like it or not.

[justusranvier]

When historians look back they might well conclude that the 1MB limit resolution was Bitcoin's "betamax moment", the most important decision point deciding its ultimate fate.

coinmarketcap.com is interesting because it gives a market assessment of Bitcoin's future prospects.

Right now the total cryptocurrency market cap is $8,197,074,397 and Bitcoin's is $7,678,842,953 or 93.68%
(higher if MSC and XCP and other BTC-based alts are included).

So, the cryptocurrency market is effecting pricing a >93% probability of Bitcoin dominating this new asset class - long term. An asset class of such importance that many crypto investors consider could make all fiat obsolete and perhaps even demonetize precious metals as well.

If the 1MB limit is not handled properly, in good time, and is allowed to seriously disrupt organic growth, then that percentage will fall significantly. Perhaps even causing an irrecoverable erosion in the first-mover status, opening the window for alts like NXT and XMR.

This is the stakes in play.

Bitcoin can not disrupt fiat currencies unless it's a network that everyone on the planet is actually capable of transacting on.

Pulling out all the FUD/propaganda stops to keep the transaction throughput rate capped is the best possible strategy the defenders of he legacy system could employ to save themselves.

If they can force most transactions off chain, into the waiting arms of Coinbase and Circle, then most of the benefits of Bitcoin will remain inaccessible to most of the world's population.

Given the stakes involved, I don't trust Gavin to be capable of making good decisions even if he wanted to. A single point of control is a single target for blackmail and extortion.

they are very aware of issues like block size limits and bandwidth limitations.

What you're talking about are  symptoms of a sub-optimal network layer.

The fact that the P2P network suffers from a tragedy of the commons effect because there is no price discovery for bandwidth or storage is nothing inherent to Bitcoin - it's inherent to the current design of the reference client.

If people who don't want Bitcoin to succeed can stop that problem from ever being fixed in the reference client, they can point to the tragedy of the commons problem as an example of why never to raise the transaction rate, forever.

Of course, that strategy only works when a single codebase has a monolopy on the implementation of the protocol.