Increasing the block size is a good idea; 50%/year is probably too aggressive

[NewLiberty]

Theory and practice diverge here.
A miner can put as many transactions as they like in a block with no fees.
The cost is then replicated across every full node which must store it in perpetuity.

And the rest of the miners are free to ignore a block like that. You have yet to convince me there's a problem. Miners can fill blocks with worthless free transactions today.

Then maybe the problem isn't a large maximum blocksize, but the allowance of unlimited feeless transactions. They are not free for the network to store in perpetuity, so why not eliminate them?

Eliminate free transactions and eliminate the maximum blocksize. Problem solved forever.

I'll let Satoshi speak to that: 

Free transactions are nice and we can keep it that way if people don’t abuse them.

Lets not break what needn't be broken in order to facilitate micropayments (the reason for this proposal in the first place, yes?)

[2112]

And the rest of the miners are free to ignore a block like that. You have yet to convince me there's a problem. Miners can fill blocks with worthless free transactions today.

Then maybe the problem isn't a large maximum blocksize, but the allowance of unlimited feeless transactions. They are not free for the network to store in perpetuity, so why not eliminate them?

Eliminate free transactions and eliminate the maximum blocksize. Problem solved forever.

How would you enforce those non-free transactions? If the transaction spammer is the miner then he can include any fee whatsoever because he pays himself. The only cost for him is that the coins are frozen for about 100 decaminutes.

Are you thinking of making the validity of the block dependent on how well the transactions in it were propagated over the network? I don't think this is going to work without a complete overhaul of the protocol.

[Syke]

I'll let Satoshi speak to that: 

Free transactions are nice and we can keep it that way if people don’t abuse them.

Lets not break what needn't be broken in order to facilitate micropayments (the reason for this proposal in the first place, yes?)

I agree with Satoshi. You pointed out that free transations can be abused, so lets eliminate them when we adjust the max blocksize.

[Syke]

How would you enforce those non-free transactions? If the transaction spammer is the miner then he can include any fee whatsoever because he pays himself. The only cost for him is that the coins are frozen for about 100 decaminutes.

You're thinking of the current network. We're talking about a hard fork. A hard fork could require all transactions to have some sort of minimum fee included.

[2112]

You're thinking of the current network. We're talking about a hard fork. A hard fork could require all transactions to have some sort of minimum fee included.

Again, what is the point of minimum fee if the transaction isn't propagated? Miner-spammer includes the fee payable to himself. What's the point of that exercise?

[Syke]

Again, what is the point of minimum fee if the transaction isn't propagated? Miner-spammer includes the fee payable to himself. What's the point of that exercise?

Ok, good point, thanks.

It would have to be a massive miner bloating only his own blocks he solves. Why would someone do that? It's a very limited and not very interesting attack as that is possible today yet doesn't happen.

[trout]

so if the bandwith growth happens to  stop in 10 years

Why would it? Why on earth would it???

It's all about predicting the value of some constants in the future.
I've no idea what they would be in 10 years.
I'm sure there are people who have much better idea than I.
While (I think we'd all agree  that) predicting technology decades ahead is hard,
 it is not impossible that a group of specialists,  after a thorough discussion, could
get the prediction about right.
May be we should all bet on them to make it. (No sarcasm intended.)

However it seems reasonable to me to try to find a solution that would involve
predicting fewer constants, and minimize the impact of not getting these few constants
right.

[NewLiberty]

How would you enforce those non-free transactions? If the transaction spammer is the miner then he can include any fee whatsoever because he pays himself. The only cost for him is that the coins are frozen for about 100 decaminutes.

You're thinking of the current network. We're talking about a hard fork. A hard fork could require all transactions to have some sort of minimum fee included.

Either we've gone through the looking glass, or else the goal is that Bitcoin should fail and some alt coin take its place?
Why hard fork Bitcoin to enable microtransactions if only to make them too expensive, as well as add risk and cost and also remove functionality in the process?

Gavin's 2nd proposal also seems worse than the first by the arbitrariness factor.  x20 size first year, for years two through ten x1.4, then stop.  

Is there some debate method outside Lewis Carroll where you get increasingly absurd until folks stop talking with you, and then you declare victory?
Lets stop this painting-the-roses-red stuff and get back to serious discussion if we want to increase the block size limit at all.

[acoindr]

While (I think we'd all agree  that) predicting technology decades ahead is hard,
 it is not impossible that a group of specialists,  after a thorough discussion, could
get the prediction about right.

I linked you to the report of Bell Labs achieving 10Gbps over copper wire. Here is the link to them achieving 100 petabits per second over fiber in 2009:

http://www.alcatel-lucent.com/press/2009/001797

This transmission experiment involved sending the equivalent of 400 DVDs per second over 7,000 kilometers, roughly the distance between Paris and Chicago.

These are demonstrated capacities for these two mediums. The only limiting factors for achieving such rates for individual consumers are physical and economic considerations for building out the infrastructure. Nonetheless the technologies for achieving exponential increase in bandwidth over current offerings is proven. Achieving these rates in practice on a scale coinciding with historical exponential growth of 50% annually, which does take into consideration economic and physical realities, seems well within reason. I'm sure telecommunications specialists would agree.

[Cubic Earth]

Either we've gone through the looking glass, or else the goal is that Bitcoin should fail and some alt coin take its place?
Why hard fork Bitcoin to enable microtransactions if only to make them too expensive, as well as add risk and cost and also remove functionality in the process?

Gavin's 2nd proposal also seems worse than the first by the arbitrariness factor.  x20 size first year, for years two through ten x1.4, then stop.  

1) It's not about micro-transactions.  It about the network having enough capacity to handle normal transaction (let's say over $0.01) as adoption grows.

2) It's not arbitrary.  Gavin's revised proposal is better than the first because it is more finely tuned to match the current and projected technological considerations.  Remember, the point of the proposal is not to maximize miner revenue or create artificial scarcity.  It is allow the network to grow as fast as possible while still keeping full-node / solo mining ability withing the reach of the dedicated home user.  That is not an economic question, but rather a technical one.  Gavin and the rest of the core devs are computer experts and are as well equipped to make guesses about bandwidth and computer power growth as anyone.

Lets look at each of the three phases of Gavin's revised proposal.  Step one: raise the MaxBlockSize to 20MB as soon as possible.  That would be a maximum of 87GB per month of chain growth, or 1 TB / per year - easy to store on consumer equipment.  Using myself as an example, I have a 20Mbps cable connection, which would actually be able to handle 1.4 GB every 10 minutes, so 20 MB blocks would utilize just 1/70th of my current bandwidth.  I think most of us would agree 20MB blocks would not squeeze out interested individuals.

Phase 2 is 40% yearly growth of the MaxBlockSize.  That seems entirely reasonable considering expected improvements in computers and bandwidth.

Phase 3 is stopping the pre-programmed growth after 20 years.  This recognizes that nothing can grow forever at 40%, and that our ability predict the future diminishes the farther out we look.  Also, lets image that in years 16 - 20, computation resources only grow by 30% per year, and the network becomes increasingly centralized.  After year 20 network capacity would freeze, but not computer speed growth, so the forces of decentralization would have a chance to catch up.

Gavin - I hope you have enough support to implement this.  You are the best chance for reaching consensus.  And thanks for being willing to lobby on its behalf.  100% consensus is impossible, but 75% - 80% percent should be enough to safely move forward.

Everyone else - remember that without consensus we are stuck at 1 MB blocks.  Gavin's proposal doesn't have to be perfect for it to still be vastly better than the status quo.

[NewLiberty]

While (I think we'd all agree  that) predicting technology decades ahead is hard,
 it is not impossible that a group of specialists,  after a thorough discussion, could
get the prediction about right.

I linked you to the report of Bell Labs achieving 10Gbps over copper wire. Here is the link to them achieving 100 petabits per second over fiber in 2009:

http://www.alcatel-lucent.com/press/2009/001797

This transmission experiment involved sending the equivalent of 400 DVDs per second over 7,000 kilometers, roughly the distance between Paris and Chicago.

These are demonstrated capacities for these two mediums. The only limiting factors for achieving such rates for individual consumers are physical and economic considerations for building out the infrastructure. Nonetheless the technologies for achieving exponential increase in bandwidth over current offerings is proven. Achieving these rates in practice on a scale coinciding with historical exponential growth of 50% annually, which does take into consideration economic and physical realities, seems well within reason. I'm sure telecommunications specialists would agree.

As a telecommunication specialist, No. I do not agree.

Sure, we were also able to get x.25 and x.75 telecom to run over barbed wire, in the lab.  (There are places in the world that still use these protocols, some of which would deeply benefit from bitcoin in their area.)
The logistical challenges of implementation is not what you find in the lab. 
This stuff has to go out in environments where someone backs up their truck into a cross country line so they can cut it and drive off with a few miles of copper to sell as scrap.  We live in the world, not in the lab.

Designing something to work and designing to not fail are entirely different endeavors and someone qualified for one is not necessarily qualified to even evaluate the other.

[Gavin Andresen]

Designing something to work and designing to not fail are entirely different endeavors and someone qualified for one is not necessarily qualified to even evaluate the other.

Pure coincidence, but I had lunch today with a local developer who will be putting up a building in downtown Amherst. They are planning on running fiber to the building, because they want to build for the future and the people they want to sell to (like me in a few years, when we downsize after my kids are in college) want fast Internet.

If I gaze into my crystal ball...  I see nothing but more and more demand for bandwidth.

We've got streaming Netflix now, at "pretty good" quality.  We'll want enough bandwidth to stream retina-display-quality to every family member in the house simultaneously.

Then we'll want to stream HD 3D surround video to our Oculus Rift gizmos, which is probably another order of magnitude in bandwidth. To every member of the family, simultaneously. While our home security cameras stream to some security center off-site that is storing it as potential evidence in case of burglary or vandalism....

Then... who knows? Every prediction of "this will surely be enough technology" has turned out to be wrong so far.

[NewLiberty]

Then... who knows? Every prediction of "this will surely be enough technology" has turned out to be wrong so far.

We agree.

[acoindr]

Sure, we were also able to get x.25 and x.75 telecom to run over barbed wire, in the lab.  (There are places in the world that still use these protocols, some of which would deeply benefit from bitcoin in their area.)
The logistical challenges of implementation is not what you find in the lab.  
This stuff has to go out in environments where someone backs up their truck into a cross country line so they can cut it and drive off with a few miles of copper to sell as scrap.  We live in the world, not in the lab.

We're in luck then, because one advantage of fiber lines over copper is they're not good used for anything other than telecom

I'm no telecommunications specialist, but do have an electronics engineering background. Raise some issue with fundamental wave transmission and maybe I can weigh in. My understanding is it's easier to install fiber lines, for example, because there is no concern over electromagnetic interference. Indeed, the fiber lines I witnessed being installed a week ago were being strung right from power poles.

However, is such theoretical discussion even necessary? We have people being offered 2Gbps bandwidth over fiber not in theory but in practice in Japan, today.

That's already orders of magnitude over our starting bandwidth numbers. I agree with Gavin that demand for more bandwidth is inevitable. It's obvious all networks are converging - telephone, television, radio, internet. We'll eventually send all our data over the internet, as we largely do now, but in ever increasing bandwidth usage. To imagine progress in technology will somehow stop for no apparent reason, when history is chock full of people underestimating what technological capacity we actually experience is not only shortsighted, it borders unbelievable.

[NewLiberty]

Sure, we were also able to get x.25 and x.75 telecom to run over barbed wire, in the lab.  (There are places in the world that still use these protocols, some of which would deeply benefit from bitcoin in their area.)
The logistical challenges of implementation is not what you find in the lab.  
This stuff has to go out in environments where someone backs up their truck into a cross country line so they can cut it and drive off with a few miles of copper to sell as scrap.  We live in the world, not in the lab.

We're in luck then, because one advantage of fiber lines over copper is they're not good used for anything other than telecom

I'm no telecommunications specialist, but do have an electronics engineering background. Raise some issue with fundamental wave transmission and maybe I can weigh in. My understanding is it's easier to install fiber lines, for example, because there is no concern over electromagnetic interference. Indeed, the fiber lines I witnessed being installed a week ago were being strung right from power poles.

However, is such theoretical discussion even necessary? We have people being offered 2Gbps bandwidth over fiber not in theory but in practice in Japan, today.

That's already orders of magnitude over our starting bandwidth numbers. I agree with Gavin that demand for more bandwidth is inevitable. It's obvious all networks are converging - telephone, television, radio, internet. We'll eventually send all our data over the internet, as we largely do now, but in ever increasing bandwidth usage. To imagine progress in technology will somehow stop for no apparent reason, when history is chock full of people underestimating what technological capacity we actually experience is not only shortsighted, it borders unbelievable.

Perhaps few disagree that Bitcoin can be improved by a plan for block size maximum adjustment.  My issues with the proposals are less what it achieves (a good thing) but what it doesn't (preventing this from happening in the future).

There are myriad external realities that we can not know about.  The development of the telecom technology is perhaps less the issue than what the world has in store for us in the coming decades.  I don't know, and no one else does either, but that shouldn't stop us from striving to achieve what has not been done before.

Undersea cables are cut accidentally, and by hostile actions, economic meltdowns and military conflicts halt or destroy deployments, plagues, natural disasters etc, OR new developments can accelerate everything, robots might do this all for us.  We can't know by guessing today what the right numbers will be.  We could be high or low.  I am just hoping that some more serious thought goes into avoiding the need to guess or extrapolate (an educated guess but still a guess).  We do not have a crisis today other than some pending narrow business concerns (some of which are on the board of TBF and possibly suggested that Gavin "do something").  I am also thankful that he is doing so.  This is an effort that deserves attention (even with the other mitigating efforts already in development).  Gavin is a forward thinking man, and is serving his role well.  We should be all glad that he is not alone in this, and that no one person has the power to make such decisions arbitrarily for others.

The difficulty adjustment algorithm works without knowing the future.  We should similarly look for a way that can also work for many generations, come what may, and save Bitcoin from as many future hard forks as we can. 

This is our duty, to our future, by virtue of us being here at this time.

[e4xit]

Sure, we were also able to get x.25 and x.75 telecom to run over barbed wire, in the lab.  (There are places in the world that still use these protocols, some of which would deeply benefit from bitcoin in their area.)
The logistical challenges of implementation is not what you find in the lab.  
This stuff has to go out in environments where someone backs up their truck into a cross country line so they can cut it and drive off with a few miles of copper to sell as scrap.  We live in the world, not in the lab.

We're in luck then, because one advantage of fiber lines over copper is they're not good used for anything other than telecom

I'm no telecommunications specialist, but do have an electronics engineering background. Raise some issue with fundamental wave transmission and maybe I can weigh in. My understanding is it's easier to install fiber lines, for example, because there is no concern over electromagnetic interference. Indeed, the fiber lines I witnessed being installed a week ago were being strung right from power poles.

However, is such theoretical discussion even necessary? We have people being offered 2Gbps bandwidth over fiber not in theory but in practice in Japan, today.

That's already orders of magnitude over our starting bandwidth numbers. I agree with Gavin that demand for more bandwidth is inevitable. It's obvious all networks are converging - telephone, television, radio, internet. We'll eventually send all our data over the internet, as we largely do now, but in ever increasing bandwidth usage. To imagine progress in technology will somehow stop for no apparent reason, when history is chock full of people underestimating what technological capacity we actually experience is not only shortsighted, it borders unbelievable.

Perhaps few disagree that Bitcoin can be improved by a plan for block size maximum adjustment.  My issues with the proposals are less what it achieves (a good thing) but what it doesn't (preventing this from happening in the future).

There are myriad external realities that we can not know about.  The development of the telecom technology is perhaps less the issue than what the world has in store for us in the coming decades.  I don't know, and no one else does either, but that shouldn't stop us from striving to achieve what has not been done before.

Undersea cables are cut accidentally, and by hostile actions, economic meltdowns and military conflicts halt or destroy deployments, plagues, natural disasters etc, OR new developments can accelerate everything, robots might do this all for us.  We can't know by guessing today what the right numbers will be.  We could be high or low.  I am just hoping that some more serious thought goes into avoiding the need to guess or extrapolate (an educated guess but still a guess).  We do not have a crisis today other than some pending narrow business concerns (some of which are on the board of TBF and possibly suggested that Gavin "do something").  I am also thankful that he is doing so.  This is an effort that deserves attention (even with the other mitigating efforts already in development).  Gavin is a forward thinking man, and is serving his role well.  We should be all glad that he is not alone in this, and that no one person has the power to make such decisions arbitrarily for others.

The difficulty adjustment algorithm works without knowing the future.  We should similarly look for a way that can also work for many generations, come what may, and save Bitcoin from as many future hard forks as we can. 

This is our duty, to our future, by virtue of us being here at this time.

Decreasing the block limit (note, not required block size) in the future would not be a hard fork, it would be a soft fork.

[NewLiberty]

It would seem that there could be a simple mathematical progressive increase/decrease, which is based on the factual block chain needs and realities of the time that can work forever into the future.

Here is an example that can come close to Gavin's first proposal of 50% increase per year.

If average block size of last 2 weeks is 60-75% of the maximum, increase maximum 1%, if >75% increase 2%
If average block size of last 2 weeks is 25-40% of the maximum decrease maximum 1%, if <29% decrease 2%

Something like this, would have no external dependencies, would adjust based on what future events may come, and won't expire or need to be changed.

These percentage numbers are ones that I picked arbitrarily.  They are complete guesses and so I don't like them anymore than any other number.  This is just to create a model of the sort of thing that would be better than extrapolating.  To do even better, we can do a regression analysis of previous blocks to see where we would be now and tune it further from there.

[David Rabahy]

http://en.wikipedia.org/wiki/Hysteresis

[David Rabahy]

One does not want to see a burst of transactions sit in a queue waiting to be blocked into the chain for very long ever.  Instead we should address the source of transactions to make sure excessive spam is precluded or excluded.  Having a maximum block size at all is an aberration; except if there is some functional restriction.  In the face of such then the only reasonable course forward would be to reduce the time between blocks.

[trout]

It would seem that there could be a simple mathematical progressive increase/decrease, which is based on the factual block chain needs and realities of the time that can work forever into the future.

Here is an example that can come close to Gavin's first proposal of 50% increase per year.

If average block size of last 2 weeks is 60-75% of the maximum, increase maximum 1%, if >75% increase 2%
If average block size of last 2 weeks is 25-40% of the maximum decrease maximum 1%, if <29% decrease 2%

Something like this, would have no external dependencies, would adjust based on what future events may come, and won't expire or need to be changed.

These percentage numbers are ones that I picked arbitrarily.  They are complete guesses and so I don't like them anymore than any other number.  This is just to create a model of the sort of thing that would be better than extrapolating.  To do even better, we can do a regression analysis of previous blocks to see where we would be now and tune it further from there.

This may be manipulable:  miners with good bandwidth can start filling the blocks to capacity, to increase the max and push miners with smaller bandwidth out of competition.