Bitcoin Forum
March 28, 2024, 11:19:35 AM *
News: Latest Bitcoin Core release: 26.0 [Torrent]
 
   Home   Help Search Login Register More  
Poll
Question: Bitcoin fork proposal by respected Bitcoin lead dev Gavin Andresen, to increase the block size from 1MB to 20MB.
pro
anti
agnostic
DGAF

Pages: « 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 [25] 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 ... 125 »
  Print  
Author Topic: Bitcoin 20MB Fork  (Read 154756 times)
RoadStress
Legendary
*
Offline Offline

Activity: 1904
Merit: 1007


View Profile
February 05, 2015, 02:17:50 AM
 #481

I don't give a fuck about the "perfect app"  I just want my bitcoin the way it is now. We should push it till it breaks then pick up the peaces and then and only then fix what ever broke.

bitcoin is in an evolving and developing stage. It will not stay the way it is now just because you like it this way.

1711624775
Hero Member
*
Offline Offline

Posts: 1711624775

View Profile Personal Message (Offline)

Ignore
1711624775
Reply with quote  #2

1711624775
Report to moderator
1711624775
Hero Member
*
Offline Offline

Posts: 1711624775

View Profile Personal Message (Offline)

Ignore
1711624775
Reply with quote  #2

1711624775
Report to moderator
Each block is stacked on top of the previous one. Adding another block to the top makes all lower blocks more difficult to remove: there is more "weight" above each block. A transaction in a block 6 blocks deep (6 confirmations) will be very difficult to remove.
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction.
1711624775
Hero Member
*
Offline Offline

Posts: 1711624775

View Profile Personal Message (Offline)

Ignore
1711624775
Reply with quote  #2

1711624775
Report to moderator
inBitweTrust
Hero Member
*****
Offline Offline

Activity: 658
Merit: 501



View Profile
February 05, 2015, 02:36:56 AM
Last edit: February 05, 2015, 02:51:31 AM by inBitweTrust
 #482

Quote from: stan.distortion
network limitations

20MB block / 10 min = 2MB/min = 0.033MB/s, common even on very very basic household connections.

No, that's not true.  Not in the US, at least.  Even high-end connections have caps of less than 400 GB/mo.  2MB/min is 84 GB/mo, per connection.  That means your node gets four peers, maybe.

True , but just to place this in context-
... This math assumes 20MB blocks , which is unlikely to be seen for years as this hardfork just raises the limit so we can process temporary spikes in traffic or have unrestricted apps like lighthouse, twister/open bazaar. Some of those soft caps will charge overage when exceeded and some will simply slow down the connection.

The biggest issue is users who stream a lot of video and torrent probably shouldn't become nodes if the current caps remain in place and aren't increased and if traffic substantially grows where 10-15MB blocks become the norm(unlikely to happen for years)

So the bottom line is that normal broadband users would not be effected immediately but may be effected in the future or not ...

P.S... those interested in the latest sidechain update-
https://www.youtube.com/watch?v=jE_elgnIw3M

Federated peg sidechains- 1-3 more months eta, but true sidechains without manual oversight may take another year to start making its way out in the wild to allow testing

AgentofCoin
Legendary
*
Offline Offline

Activity: 1092
Merit: 1001



View Profile
February 05, 2015, 02:46:06 AM
 #483


So what happens if you are on Chain A or C, and you send your BTC to an exchange that is only using Chain B?
Or you are on Chain B, and you send your BTC to an exchange that is only using Chain A or C?
Thats what I'm referring to. Doesn't the exchange not verify those coin and thus are lost?


The owners of Bitcoin exchanges are not performing chimpanzees at a tea party. If a fork occurred and two chains were similar size then the CEOs of Bitcoin businesses would quickly agree (with Core dev and the mining pools) which chain to use (B) and which chain to ignore (C) , even if this meant suspending trading in the meantime.

This is why Gavin has consulted with many Bitcoin companies/players already, to find out what their view is. He reports that they support scalability by a big margin. Bitcoin businesses are going to want their business model to have the best chance of success, and that does not include crippling the tx throughput on the blockchain which wil also cripple business models.

The rejected chain C will quickly find that the difficulty (40+ billion) is way too high for the devoted "anti" rump of miners clinging to it, and it will take several hours to mine each block. This will get worse as the coinbase rewards can't be sold for decent fiat at any significant exchange. Miners will to drift to the majority chain. It will probably take 1 year for the difficulty to fall on chain C until it is usable. So chain C will need to be forked in order to slash the difficulty for the few users who still want the 1MB lmit.

Just for the record, because this thread has gotten pretty crazy with misunderstandings, FUD, and my inability to properly articulate, but I'm for the fork to raise the limit.
My quote above wasn't meant as an actual question. But i would like to see some chimpanzees sipping tea with crumpets, and they need monocles too. Smiley
I agree with Solex's statements.

I support a decentralized & unregulatable ledger first, with safe scaling over time.
Request a signed message if you are associating with anyone claiming to be me.
AgentofCoin
Legendary
*
Offline Offline

Activity: 1092
Merit: 1001



View Profile
February 05, 2015, 02:48:51 AM
 #484

... It is mind boggling there is such a resistance by some.
You are right.
Maybe there is something more going on here.

I support a decentralized & unregulatable ledger first, with safe scaling over time.
Request a signed message if you are associating with anyone claiming to be me.
benjamindees
Legendary
*
Offline Offline

Activity: 1330
Merit: 1000


View Profile
February 05, 2015, 05:08:43 AM
 #485

Well, after quite a bit of research and reading arguments and yelling at various people, I am still convinced that the block size limit must be raised.  It was always a temporary limit.  We all knew this.  1MB blocks are not sufficient for any kind of future, global usage for anyone but a tiny fraction of a percent.  That was never the point of Bitcoin.

Furthermore, I am completely unconvinced by any of the proffered economic arguments for limiting the block size.  Not only do I find them utterly idiotic, those who have made these arguments are now somewhat suspect, in my view.

However, Gavin's proposal, as stated, is quite aggressive, and fails to account for several factors.  Among them:

  • Data caps.  Even though advertised speeds may be quite high, broadband connections in the US have restrictive data caps of less than 400 GB/month.  20MB blocks would not be immediately workable.  Worse, we can't count on these being lifted at any predictable rate.  Bumping up against these makes us dependent upon last-mile providers that tend to command oligopoly, if not monopoly, rents.  I don't think Bitcoin is in a position to pick a fight with ISPs quite yet.
  • Wireless.  Targeting a "pretty good home network connection" into the future risks leaving out a large fraction of users -- those with wireless links.  Wireless speeds do grow at a similar rate as wired and fiber optic networking, but they lag behind.  And, unlike point-to-point links, wireless spectrum is shared.  We need to at least consider the limits of (high-end) mesh networks as well.
  • Censorship.  This is the big one.  As far as the anti-fork crowd is concerned, every byte over the current limit is an invitation for some bureaucrat to insert themselves into the free-trade of Bitcoin transactions, to enforce whatever arbitrary nonsense they currently do with fiat, be it tariffs on bananas or morality codes or simply protecting the privileges of the "investor" class.  Every byte added makes Bitcoin more centralized, more dependent upon resources ultimately-paid-for in fiat, and more vulnerable to disruption and attack.  The day that the Bitcoin network is controlled by venture capitalists running servers in datacenters and not by individuals communicating peer-to-peer is the day we all lose our precious Bitcoins to stuffed-suits with bouffant hairdos.

So, over the last several days, I've come up with a few usage scenarios and various block sizes they would require.  All are based on a few assumptions, 1) that sidechains or a similar solution will arise to take most day-to-day transactions off of the main chain, 2) that the main chain should be accessible in some manner to a large group of people beyond just institutions, and 3) that network bandwidth and the aforementioned concerns are the key limits to block size growth.

The first scenario is the status quo.  Keeping 1MB blocks forever into the future doesn't even qualify as a serious proposal, in my view.  This would mean that the average person would be able to make one transaction every 73 years, if they are lucky enough to live that long.  Practically, access to the main chain would be limited to large institutions.  This is not even an improvement over the current financial system, as far as I'm concerned.  What is the benefit in running a node on your home computer so that you can audit the equivalent of gold transfers between central banks?  It's pointless for the average user.  Arguing that this limit benefits the average person is disingenuous, at best.

The second scenario is Gavin's proposal.  An immediate jump to 20MB blocks would likely be followed by weaponized spam providers such as CounterParty and various dice games rising to fill them.  Home-user nodes on capped or slow connections would be driven off the network, which would contract to perhaps a thousand or so highly-connected servers in datacenters, users with home fiber connections, and miners.  All of these would become immediate targets for regulators and whitelist profiteers wanting to filter out all transactions that can't be tracked to a government ID.  Nodes that tried to avoid this through Tor would overwhelm that network and bring it crashing down as well.  Gavin's brain chip would be activated, triggering him to don his mad scientist costume and make Youtube videos assuring the Bitcoin community that all is going "according to plan".  In case it's not obvious, this is somewhat tongue-in-cheek.  But I can see how the chance of this happening gives the anti-fork crowd pause.  So, like I said, 20MB blocks are a bit much.

But, assuming that sidechains or similar will eventually take the majority of daily transaction load off of the main chain, what is a reasonable size to target?  With a 130 MB block size, everyone on Earth would be able to make two transactions per year.  That's a minimally-functional savings account, in my book.  Anything less would have to be considered useful for "institutions-only".  Again, not the point of Bitcoin.  So I think this is a reasonable minimum to consider.  Getting there in 10 years would not be much of a burden.  I would love to hear valid arguments from the anti-fork crowd against this schedule, especially ones that don't involve magical artificial-scarcity-based economics or shrill cries of "think of the miners!"  Any takers?

Is there any reason to go beyond that?  Over twenty years, I think it's possible the blocksize could grow from 2 MB to 2 GB, and still stay pretty comfortably within the parameters of the limits listed earlier.  There would still be friction, of course, in various places and at various times.  But, overall, Bitcoin would prevail.  2 GB blocks represents nearly 7,000 transactions per second, rivaling Visa.  And that's just on the main chain, not to mention sidechains.  This schedule is much more conservative than what Gavin has proposed, yet, still would represent an impressive feat for a trustless P2P network.  I don't see any technical limits to achieving it.  Political risks exist, as always, but would be much lower.

Regardless, my view is that we need to explore more of a compromise.  Both of the proposals have issues of one type or another.  Burying our heads and ignoring the issue won't solve it.  And, if there is going to be a fork, which I think is inevitable, sooner is better than later.

Civil Liberty Through Complex Mathematics
tvbcof
Legendary
*
Offline Offline

Activity: 4564
Merit: 1276


View Profile
February 05, 2015, 05:09:42 AM
 #486

But you are wrong I risk nothing by staying on the old chain its only those who fork that risk anything. I can send my coins to the new Giga-bloatcoin chain at any time. But those on the Bloated new chain can't move back to Bitcoin

Stop using this term. It is wrong. As it was already stated multiple times in the thread,

It's wrong because a gaggle of circle-jerkers stated so multiple times in trolltalk?  To quote Gavin, 'Okey Dokey'.

increasing the limit to 20 MB doesn't mean that the blocks will be full from day 1. The chain will grow bigger over time, not over night.

Every two-bit moocher wants to use the highly subsidized high security global messaging framework for their own whacked out needs.  Lots of idiotic stuff is in the pipeline so there is a very good chance that 'Giga-bloachain' is exactly what we'll have and in probably not to long.  Gotta run...logging into Coinbase to put the rest of my lifes' savings into the newer bigger better Bitcoin...what could possibly go wrong?


sig spam anywhere and self-moderated threads on the pol&soc board are for losers.
tvbcof
Legendary
*
Offline Offline

Activity: 4564
Merit: 1276


View Profile
February 05, 2015, 05:26:19 AM
 #487

The limit increase permits a much healthier outcome for the Bitcoin network and ecosystem.

Today is the limit increase, what will be tomorrow? Are people really wanting to go all in and bet all the todays consensus on the hard-fork? If you read Gavin post about the need for hard-fork, its a totally fear-based move with arguments Bitcoin will be replaced by Altcoins, this means its a matter of time until another need for a hard-fork happen and next time it wont be as trivial need as just increase block-size. I predict next hard-fork will want to increase the number of coins.

So no arguments against, just anti-fork by the rule? If I'm not mistaken, bitcoin has already been forked twice (2013 and 2010?). Are you sure you're on the very first fork?

The big difference here is that the earlier forks fixed obvious problems.  The giga-bloatchain fork does just the opposite.  To add insult to injury, 140 tps doesn't even com remotely close to the starry-eyed dreams of being the universal one-world currency that does everything for everyone that so many of you mouth-breathers are peddling (and/or buying.)

I'll tell you (and the Bitcoin Foundation) what.  State what you want Bitcoin to become, put it to numbers, and fork the motherfucker to a value which achieves it.  None of this weaselly backdoor incremental crap.  There is no legitimate reason for not doing so other than fear of losing the fish you've got on the line and trying to reel it on slowly.

Do that and you'll have my full support...and, parenthetically, you can buy most of my BTC as well.


sig spam anywhere and self-moderated threads on the pol&soc board are for losers.
amspir
Member
**
Offline Offline

Activity: 112
Merit: 10


View Profile
February 05, 2015, 05:32:40 AM
 #488


Is there any reason to go beyond that?  Over twenty years, I think it's possible the blocksize could grow from 2 MB to 2 GB, and still stay pretty comfortably within the parameters of the limits listed earlier.  There would still be friction, of course, in various places and at various times.  But, overall, Bitcoin would prevail.  2 GB blocks represents nearly 7,000 transactions per second, rivaling Visa.  And that's just on the main chain, not to mention sidechains.  This schedule is much more conservative than what Gavin has proposed, yet, still would represent an impressive feat for a trustless P2P network.  I don't see any technical limits to achieving it.  Political risks exist, as always, but would be much lower.

Regardless, my view is that we need to explore more of a compromise.  Both of the proposals have issues of one type or another.  Burying our heads and ignoring the issue won't solve it.  And, if there is going to be a fork, which I think is inevitable, sooner is better than later.

IMHO, the proposal is both too aggressive in the short term and short-sighted in the long term.

I think a better proposal would be to quadruple the block size limit every 4 years, like the block reward is halved every 4 years.   This would put the block size limit in line with Moore's Law, and allow normal users to run full nodes on ordinary hardware.    



homo homini lupus
Member
**
Offline Offline

Activity: 84
Merit: 10


View Profile
February 05, 2015, 07:05:11 AM
 #489

the point is: the chain is already pretty big. If it becomes 20 fold as big i will be forced to stop using bitcoin because i don't want a lite-client or rely on 3rd parties with my coins but on the other hand can't afford upgrading harddrive all the time (especially not with these bad btc prices).

If you raise blocklimit 20-fold it will become unaffordable for normal people to store the blockchain on their computers and because of that people loose access.


On a sidenote:
I am not the only one totally annoyed by how bitcoin behaves in an effort to keep the dominant position and be the 'one coin for all' and with this hurts the alt-industry without an actual need as crypto is easy and fast to convert to other crypto. I think at this point it becomes inevitable to start using more than one chain and stop looking at btc as the only coin worth bothering with.
All the problems dissolve at exactly the moment we accept a multi-coin/chain solution.


raising the blocklimit will ensure little people to loose access.
Conclusion: one blockchain for everyone is no viable idea

With raising the blocklimit and creating a chain as big as 200gb and more as soon as 1 or 2 years down the road bitcoin won't be able to reach the enduser.

I would argue for actually doing nothing until we really reach the blocklimit and problems occure and see from there - any other approach isn't rational
RoadStress
Legendary
*
Offline Offline

Activity: 1904
Merit: 1007


View Profile
February 05, 2015, 07:08:51 AM
 #490

the point is: the chain is already pretty big. If it becomes 20 fold as big i will be forced to stop using bitcoin because i don't want a lite-client or rely on 3rd parties with my coins but on the other hand can't afford upgrading harddrive all the time (especially not with these bad btc prices).

If you raise blocklimit 20-fold it will become unaffordable for normal people to store the blockchain on their computers and because of that people loose access.

No need to post the same thing in 2 separate threads. Here is my answer:

my point is: the chain is already pretty big. If it becomes 20 fold as big i will be forced to stop using bitcoin because i don't want a lite-client or rely on 3rd parties with my coins but on the other hand can't afford upgrading harddrive all the time (especially not with these bad btc prices).

If you raise blocklimit 20-fold it will become unaffordable for normal people to store the blockchain on their computers and because of that people loose access.

Why does everyone believe that raising the block limit will instantly raise the blockchain too? It will not. It will take time until that will happen!

homo homini lupus
Member
**
Offline Offline

Activity: 84
Merit: 10


View Profile
February 05, 2015, 07:10:18 AM
Last edit: February 05, 2015, 07:23:53 AM by homo homini lupus
 #491

the point is: the chain is already pretty big. If it becomes 20 fold as big i will be forced to stop using bitcoin because i don't want a lite-client or rely on 3rd parties with my coins but on the other hand can't afford upgrading harddrive all the time (especially not with these bad btc prices).

If you raise blocklimit 20-fold it will become unaffordable for normal people to store the blockchain on their computers and because of that people loose access.

No need to post the same thing in 2 separate threads. Here is my answer:

my point is: the chain is already pretty big. If it becomes 20 fold as big i will be forced to stop using bitcoin because i don't want a lite-client or rely on 3rd parties with my coins but on the other hand can't afford upgrading harddrive all the time (especially not with these bad btc prices).

If you raise blocklimit 20-fold it will become unaffordable for normal people to store the blockchain on their computers and because of that people loose access.

Why does everyone believe that raising the block limit will instantly raise the blockchain too? It will not. It will take time until that will happen!

Even if it takes time: the blockchain is already very big - if you make it bigger normal people will need to upgrade their hardware to use it and people won't do that.


Right now there isn't even an immediate need to fork so the proposale doesn't make sense at this point in time.

As noted before: reaching the blocklimit will at first result in microtransactions being pushed off the chain and that won't be an issue for most users.

Fork to a bigger chain isn't rational at this point in time. Period.

Do you know how many viable blockchains are out there with almost only empty blocks and very small chanis (below 1bg storage)? Dozens!

Blockchains aren't scarce. So why would i use one blockchain that requires hundreds of GB storage when i can use one almost as secure  with much less HD-use? I personally will leave btc behind for good with a larger chain (just refuse using Gavincoin - it isn't even 'bitcoin' - it is really 'gavincoin') or stick to the old fork in case it can survive.
johnyj
Legendary
*
Offline Offline

Activity: 1988
Merit: 1007


Beyond Imagination


View Profile
February 05, 2015, 07:19:30 AM
 #492

Currently a block can take 1 minute to propagate to most of the node, if large blocks took more than 10 minutes to broadcast, the whole network will be segmented, or you have to rely on several large bitcoin hubs on ISP's backbone. But if the block size is small and thousands of nodes become the hub for off-chain small transactions, then the system will still be very decentralized, although not distributed

Bitcoin itself does not know the capacity and health of network infrastructure, certain kind of human intervention is necessary, but should be in a very smooth manner

altcoin hitler
Member
**
Offline Offline

Activity: 84
Merit: 10


View Profile
February 05, 2015, 07:34:39 AM
 #493

got a new one for ya


King of the real Bitcoin Foundation https://bitcointalk.org/index.php?topic=934517.0
Eamorr
Sr. Member
****
Offline Offline

Activity: 280
Merit: 250


View Profile
February 05, 2015, 07:56:20 AM
 #494

Investors love uncertainty and in-fighting.
hdbuck (OP)
Legendary
*
Offline Offline

Activity: 1260
Merit: 1002



View Profile
February 05, 2015, 07:56:54 AM
 #495

Investors Speculators love uncertainty and in-fighting.

ftfy
amincd
Hero Member
*****
Offline Offline

Activity: 772
Merit: 501


View Profile
February 05, 2015, 07:59:45 AM
 #496

This is the most comprehensive argument made so far for doing the hard fork:

Permanently keeping the 1MB (anti-spam) restriction is a great idea if you are a bank.  When those in favor of keeping the limit in place say that Bitcoin network can still be a financial backbone of sorts they don't know how right they are.  The problem isn't a limit in general but that 1MB is so low that under any meaningful adoption scenario it will push all individual users off the blockchain to rely on trusted third parties.  In essence you will probably be priced out of the blockchain and while Bitcoin still has some value the blockchain becomes yet another network you will never have direct (peer) access to, just like FedWire, SWIFT, and other private closed transfer networks.  There is no realistic scenario where a permanently capped Bitcoin network can have meaningful adoption and allow direct access without using intermediaries.

Can we stop talking about a cup of coffee please?
You may have heard someone say something like "Every $5 starbucks coffee doesn't need to be on the blockchain so there is no need to raise the limit".   The implied message is that while the cost of the limit is that trivial purchases will be knocked off chain you will still have direct access to the blockchain for everything else (i.e. more than a cup of coffee) but 1MB puts such a chokehold on the network that even larger more meaningful transactions will eventually be knocked off as well.  As a greater and greater portion of the overall transaction volume occurs off chain with third parties (aggregators) those entity will make arrangements with each other to allow cross entity off chain transactions and then settle the difference.  With only 1MB of transaction capacity, it doesn't take that large of a transaction volume before settlements between these third parties consumes the entire block and at that point it doesn't matter if you want to use a third party or not you no longer have meaningful direct access to the blockchain because it will be space will be priced upward to a point where individual transactions are just not economical.

Before we get to why I do also want to point out those who believe that everything should be on the blockchain including dust and sub penny transactions are just as extreme going in the other direction.  Centralization isn't always that bad. <gasp>.  Context matters so try to read the rest before freaking out.  I don't really care if my morning coffee is paid for using a centralized service.  Have you ever given or received a gift card?   Can't get more centralized than that.  The reality is if I put $100 in Bitcoins in a centralized wallet or to an account linked debit card the risk I have incurred for that centralization is very small and scope of the potential loss is trivial and limited.  The important thing is that I still have the option to keep the bulk of my wealth outside of third parties under my direct control.  It isn't a binary choice as long as there is access to the blockchain (at reasonable cost) I can rely on no third party for life altering amounts and gain the flexibility of off chain transactions for the trivial amounts.

If I lose direct access to the blockchain then I am forced to hand over all my wealth (not just enough funds to cover trivial purchases) to a third party.  If that happens we have just reinvented the interbank network.  Keeping the 1MB limit permanently will lead to just that unless widespread adoption never happens.  My only alternative at that point may be to liquidate my holdings and move to a network where I still retain the option to transaction directly without third party intermediaries.

The issue is that a 1MB restricted Bitcoin network provides so little transaction capacity (probably a lot less than you think) that under any level of adoption that most people would consider successful the demand for transaction processing will vastly outstrip the token capacity afforded by the 1MB limit.  When that happens a growing super majority of transactions will need to occur off the network.  Initially these third parties will only process internal transactions off the blockchain (i.e. coinbase customer paying coinbase merchant) but in time to meet demand and reduce the number of on chain transactions the largest third parties will work out mutual lines of credit so they can treat transactions between themselves off chain as well (i.e. coinbase customer paying a circle merchant).  Then much like how banks work today they will only need to settle periodically to the net difference on transactions in both direction.   One settlement transaction may represent thousands of off chain transactions.   The third parties can charge lower fees, offer zero confirmation times, and still collect enough in aggregate to out pay individuals who are transacting directly on the chain.   It doesn't take very much settlement volume to consume all the transaction capacity at which point you are in a position of having to outbid defacto banks to get your transaction in a block.

Under such a scenario.  Now you may still "have" some Bitcoins (on the ledger of your custodian) but you won't have access to the direct network and without that Bitcoin becomes no different than any other closed networks.   Have you ever thought about the fact that you send a bank wire yourself.  Now you even call it "sending a bank wire" but in reality what you are requesting that your custodian (the bank who has your funds) perform a bank wire on your behalf.  The bank has access to the wire network and you can only request that they make the transaction for you (and at the price they set which may not bear any resemblance to the actual cost).  It may seem a small difference but it is night and day.  

If you think this type of scenario is impossible then you probably don't realize how tiny the current transaction capacity is.  We are talking a mere 10,000 or so transactions per hour.   A hundred or so third parties operating globally could use up that capacity without any outside transaction volume.  In a settlement network the upper limit on the number of settlements grows exponentially with the number of participants.  There are ways to optimize that using peering levels but they add complexity and if it happens it will be because the new banks need more capacity not because they feel the need to allow outsiders to use their network.

Wait I don't get how off blockchain transactions could occur across entities
If you get the concept of settlements and peering agreements you can skip this section.  Say someday Chase and HSBC both handle Bitcoin payments and thousands of customers of each bank request to make payments to customers of the other bank.  Now Chase and HSBC can simply swap information and on agreement have both entities update their internal ledgers.  Tada thousands of transactions occur off chain and across entities (i.e. customer at Chase sending funds to a customer at HSBC) and are confirmed instantly.  Of course both entities collect fees despite the transactions not being on the blockchain.  Now if the total amount sent in each direction matches then the books reconcile but if they don't then ahead of time Chase and HSBC agree to extend a limited amount of funds as a short term line of credit.  In the traditional banking world it would be no longer than a business day but on the blockchain it could be no longer than an hour.  So lets say the sum of the amounts Chase customers paid HSBC customers is 100,000 BTC and the sum of the amounts HSBC customers paid Chase Customers is 30,000 BTC.   Now net-net Chase owes HSBC 70,000 BTC.  So to settle these thousands of off blockchain transactions Chase can make a single on blockchain transaction to HSBC for 30,000 BTC.  Now when space runs out in the block who do you think can pay more in fees to ensure their tx makes it into the block.  You or an third party settling thousands of off blockchain transactions which they collected fees on.  I don't care if you are trying to transfer thousands of BTC you aren't going to compete with banks on who can get priority access.

There is no 7tps limit there is currently a 1 MB anti-spam restriction.
Before we look at why 1MB is simply unable to scale lets dispel the myth that there the network can handle 7tps.  It can't.  I am not sure who started that claim but it doesn't hold up to even basic math.  To achieve 7 tps using one block of 1 MB every 600 seconds means that the average transaction size must be 240 bytes (1,000,000 bytes / 600 seconds / 7tps = 240 bytes).  That is not just not possible.  If you have a Bitcoin wallet handy take a look at your last dozen transactions and if you don't have a wallet handy just use a blockchain type site to look at the transactions in the most recent block.  How many of the transactions were under 240 bytes? Not very many.  I am going to go out on a limb and say the majority of your transactions were in the 300 to 700 byte range and you wouldn't be an exception.  

Can you form a 240 byte transaction?  Sure as long as you only have only a single input.  A transaction input is requires at least 147 bytes so even two inputs puts us over the 240 byte average.  While some transactions may have one input what is more useful if the average number of inputs per transaction.  The total number of inputs in the blockchain will roughly equal the the total number of outputs.

Bitcoin Axiom: As the number of blocks approaches infinity the ratio of inputs to outputs in a well functioning blockchain will approach 1:1.

Since outputs will eventually become inputs it makes more sense to look at block capacity using balanced transactions (number of inputs matches number of outputs) and single input, single output exceptions are very rare.   A 2 input, 2 output transaction using all compressed keys and a P2PKH script is rather typical and weighs in at 373 bytes.  At 373 bytes per transaction and 1MB per block the network will not exceed 4.4 tps..  So 4.4 tps isn't 7 tps but it isn't that bad. Right?  Well 4.4 tps isn't going to ever happen with 1 MB blocks either because it is a nearly optimized example and not all transactions will be as compact.  

The average txn size is going to be larger due to factors like uncompressed keys being used, more complex scripts, and a limited number output selection.  Looking at the last million transactions in the blockchain I show an average txn size of 560 bytes.  At 560 bytes per transaction and 1MB per block the network will not exceed 3.0 tps.  This is very likely to decrease over time as transaction sizes creep higher due to multisig and other complex scripts becoming more common.  Since single key outputs are pretty much as small as it can get transaction sizes only have room to increase.  A good estimate for the network throughput when limited to 1MB blocks would be 2 to 4 tps depending on how optimistic (naive) you want to be.

Here is a direct comparison of the combined script size for some different types of scripts.  The scriptPubKey is encoded in a transaction output and the scriptSig is encoded in the transaction that "spends" that output.  Since outputs eventually become inputs in new transactions the overall "roundtrip" script size is what is important.

Code:
       P2PkH:   131 bytes per script round trip (25 byte scriptPubKey +   106 byte scriptSig)
  2-of-3 P2SH:   253 bytes per script round trip (22 byte scriptPubKey +   231 byte scriptSig)  
  3-of-5 P2SH:   383 bytes per script round trip (22 byte scriptPubKey +   361 byte scriptSig)
15-of-15 P2SH: 1,481 bytes per script round trip (22 byte scriptPubKey + 1,459 byte scriptSig)

A comparison of the average txn size to the theoretical max throughput with the 1MB limit in place.  Once again I think 2tps on the lower end and 4 tps on the upper end is a more realistic range than the often quoted 7tps.
Code:
Txn Size  Upper Bound   Example  
373       4.4 tps       (2in, 2out, P2PkH)
416       4.0 tps
520       3.3 tps       Current average
555       3.0 tps
616       2.7 tps       (2in, 2out, 2-of-3 P2SH)
833       2.0 tps


1MB can not support a sufficient number of direct users
One argument that is made by those favoring small blocks is that Bitcoin doesn't need to be used as a transactional currency to be successful.  Much like gold, users could primarily acquire Bitcoins to use as a store of value (savings) and use other currencies for routine purchases.  If Bitcoin had a very low velocity (like bullion) the smaller transaction capacity could support more users.  There is nothing wrong with this idea in general (and it might even happen with larger block sizes) but those thinking this is a solution to the incredibly small transaction capacity imposed by the 1MB restriction probably fail to realize just how restrictive it is.

I don't know how exactly how widely adopted Bitcoin will be over the long run but the 1MB restriction ensures Bitcoin can not scale to any level that most people would consider a success even if used primarily as a store of value.  If the objective of such a system would be to provide a decentralized, portable, and liquid savings that users have direct control over without a third party acting as an intermediary then the average user doesn't need the capacity to complete dozens of transactions per day, but they do at least need the capacity to make a dozens of  transactions a year.  The best comparison would be a savings account where users do not move funds for every purchase but rather transfer funds periodically throughout the year while the lower value more frequent payments are completed by checking account or a credit card.  If your savings account or brokerage account restricted you to only one deposit per quarter and one withdrawal per year I would imagine you would look for something better.  Bitcoin even as a "store of value network" needs to at least compete favorably with existing stores of value and for a given number of transactions annually that puts a limit on the number of active users.  The numbers below are for 2tps.  Double the numbers if you think 4tps is more appropriate but it doesn't materially change the insignificant upper limit.

Code:
Total #        Transactions per  Transaction
direct users     user annually    Frequency
    <200,000        365          Once a day
       500,000       126          A few (2.4) times a week
    1,200,000         52          Once a week
    2,500,000         24  Twice a month
    5,000,000         12  Once a month
   20,000,000          4  Once a quarter
   63,000,000          1          Once a year
  100,000,000          0.6        Less than once a year
1,000,000,000          0.06       Less than once a decade

As you can see even with an average transaction frequency of just once a week or once a month the network can't support more than a token number of users.  When someone advocates a permanent cap of 1MB what they are saying is I think Bitcoin will be great if it is never used by more than a couple million users making less than one transaction per month.  Such a system will never survive even as a store of value as it is eclipsed by alternatives which are more inclusive.  

1MB doesn't can't even keep up with existing non-retail payment networks.
Going back to that coffee meme, the implied message is that 1MB is fine unless for everything else.  You know substantial stuff like paying your mortgage, business deals, major capital expenditures, or paying a supplier for inventory.  This just isn't the case though.  Do you know anyone who pays for coffee with a bank wire? The FedWire service (run by US federal reserve) processes ~150 million bank wires annually.   The FedWire service only operates in the US.  Internationally the largest clearinghouse is SWIFT and it processes more than 5 billion transfers annually.  The US ACH network is even larger with 19 billion transactions annually (excluding converted checks).  There are also about 2 billion international remittances annually (western union, moneygram, and other networks).  A 1MB restricted Bitcoin network couldn't even keep up with these transfer networks even if you forget about retail sales completely.  The idea keeping the 1MB restriction, only keeps limits the utility of small payments is simply incorrect.

Code:
Bitcoin block size to reach comparable network volume based on average txn size
Network    txn volume        Average transaction size
           annually (mil)    373 bytes   560 bytes   833 bytes
FedWire       150               1.1 MB      1.7 MB      2.3 MB
Remittance  2,000              14.2 MB     21.3 MB     31.7 MB
SWIFT       5,000              35.5 MB     53.3 MB     79.3 MB
ACH        19,000             134.8 MB    202.4 MB    301.0 MB

On a transaction fee basis.
Currently the cost of the network is roughly $300 million annually. The users of the network are collectively purchasing $300 mil worth of security each year.  If users paid $400 million the network would be more secure and if they paid $200 million it would be less secure. Today the majority of this cost is paid indirectly (or subsidized) through the creation of new coins but it is important to keep in mind the total unsubsidized security cost.  At 2 tps the network the unsubsidized cost per transaction would be about $5. At 100 tps it would be $0.05.  If Bitcoin was widely adopted, more users purchasing more coins should mean a higher exchange rate and thus the value of potential attacks also rises.  The future cost of the network will need to rise to ensure that attacks are not economical and non-economic attacks are prohibitively expense relative to the benefit for the attacker.   It may not rise linearly but it will need to rise.   If someday one Bitcoin is worth $10,000 and we are still only spending $300 million a year on security we probably are going to have a problem.  Now advocates of keeping the limit may argue that the majority of the network cost won't be paid by fees for many years but the reality is that with the limit on potential transactions there are only two other ways to balance the equation and that is much higher fees or much lower security.

Conclusion
The blockchain permanently restricted to 1MB is great if you are a major bank looking to co-opt the network for a next generation limited trust settlement network between major banks, financial service providers, and payment processors.   It is a horrible idea if you even want to keep open the possibility that individuals will be able to participate in that network without using a trusted third party as an intermediary.
hdbuck (OP)
Legendary
*
Offline Offline

Activity: 1260
Merit: 1002



View Profile
February 05, 2015, 08:00:59 AM
 #497

if i generate my own vanity addresses, and indefinitely leave my bitcoins on them, they would not automatically be 'updated' if the fork would come true, correct?
solex
Legendary
*
Offline Offline

Activity: 1078
Merit: 1002


100 satoshis -> ISO code


View Profile
February 05, 2015, 08:05:47 AM
Last edit: February 05, 2015, 08:16:52 AM by solex
 #498

if i generate my own vanity addresses, and leave my bitcoins on them, they would not automatically be 'updated' if the fork would come true, correct?

The fork has no effect on anyone's existing bitcoin holding. It only affects newly mined bitcoins rewarded after the fork occurs.

edit: i.e. you don't want to mine on a fork which is not the majority fork, because the reward will be worth little or nothing.

hdbuck (OP)
Legendary
*
Offline Offline

Activity: 1260
Merit: 1002



View Profile
February 05, 2015, 08:07:00 AM
 #499

if i generate my own vanity addresses, and leave my bitcoins on them, they would not automatically be 'updated' if the fork would come true, correct?

The fork has no effect on anyone's existing bitcoin holding. It only affects newly mined bitcoins rewarded after the fork occurs.

great ty.

ima play swiss neutrality. here for the long run anyway.
Buffer Overflow
Legendary
*
Offline Offline

Activity: 1652
Merit: 1015



View Profile
February 05, 2015, 08:18:55 AM
 #500

I personally will leave btc behind for good with a larger chain[/s] (just refuse using Gavincoin - it isn't even 'bitcoin' - it is really 'gavincoin') or stick to the old fork in case it can survive.
I'm afraid you are a victim of propaganda and lies.
The 1MB cap was always a temporary measure, bitcoin is just following it's original game plan of removing it. The true bitcoin will be the chain removing the choke.

Pages: « 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 [25] 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 ... 125 »
  Print  
 
Jump to:  

Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!