Bitcoin 20MB Fork

[Cryddit]

If your question is "do full blocks, and a transaction backlog increase the security of Bitcoin?" the answer is clearly yes, as this would induce bigger transaction fees, thereby inducing a bigger incentive for miners to secure the network.

The answer is clearly no, because a transaction backlog means people have to wait for their tx to go through and have no guarantee that they'll go through at all, thus they stay away in droves and the miners get no fees. 

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[danielpbarron]

They don't have any money, and therefore will not get their way in this world.

I mean, who supports everything from Minecraft and Apple sales to Kardashians? It's probably just Bill Gates and Buffett who buys all that stuff
Let's build a coin for those two.

You think those people have money? They have bezzledollars. They have lots of money as long as they don't try to spend it on anything meaningful. Imagine if Bill Gates tried to buy 40 billion dollars worth of steaks or massages.

of course mp can bribe miners (i even outlined in this thread how he could do this): but this doesn't change the fact that its THEIR decision...

Not that there's anything wrong with bribery, but that's not even how this would go down. The miners have to sell their loot to pay for the electricity costs. They may be on the 95% chain but if they can't sell the block reward, they have to switch back to the old chain or stop completely. I'm willing to bet that redditards will not be able to out-spend MPEx customers.

To make it perfectly clear : in no case will MPEx accept this fake Bitcoin, as it's not accepted any other fake Bitcoin to date, and for the exact reasons. Moreover, my budget to sink this scam exceeds the budget of everyone involved on the supporting side. That is all.

[justusranvier]

If the marginal cost of adding a transaction is zero

If I had a flying unicorn, I'd be king of the world.

[davout]

The answer is clearly no, because a transaction backlog means people have to wait for their tx to go through and have no guarantee that they'll go through at all, thus they stay away in droves and the miners get no fees.  

Let's put a bullet in the head of this argument once and for all.
If people drive away, it frees up space in blocks, it's a self-correcting problem that nicely filters out people that thought they needed the Bitcoin-level bulletproof security level and finally realize they didn't.

[NewLiberty]

One thing I would add is that IBLT could result in reduced DDOS protection.  These vulnerabilities could be created by any node not just the miner as the IBLT isn't part of the proof of work and as such have no cost.   With very small blocks the computational resources to reconstruct the block from the IBLT proof is small but with larger blocks it could be used to degrade the network.  Before IBLT is deployed we should strongly look at DDOS vulnerability and ways to harden against it.  One way would be to put the IBLT (or at least some of the metadata) into the blockheader itself but that would require a hard fork as well.  If nothing else it would be useful if the blockheader contained the number of transactions.

Yes.  Though this is still a bit off topic, it does relate a bit.

A high microtransaction economy may be functionally difficult to distinguish from a DDOS.
When you also throw in mixers, dice, and other oddities..  the traffic can grow quite large.

Rather than arbitrate what it is to be legitimate traffic, the fee-for-TX incentive structure should do this work.

The "do you have a superset?" issue from IBLT also encourages transaction queueing.  TX that didn't make it into the last block are more likely to be in the peer's set than a newly broadcast TX, and so may have a slightly higher value to the miner due to reduced orphan risk.

Security remains the guiding issue.  In order for Bitcoin to remain trustworthy, and increase its trustworthiness, is not enough to build something that might possibly work, it has to resist attempts to actively break it at its most fundamental levels.

[davout]

You know that thinking in nominal terms for a computing network is silly.  In 1980 someone would have said 1MB blocks every 10 minutes to tens of thousands of nodes all over the world would have been an impossibly high resource requirement to base a decentralized network on but today it is trivial.

I concur, but it's equally silly to use this as a basis to extrapolate. What do we know? Maybe the average internet connection speed increase will slow down over the years? Maybe internet providers won't have a big incentive to keep the speeds increasing more and more? Thing is we don't know. It really can't hurt to wait for something to become real before actually starting to rely on it becoming real as a condition for a system to work, isn't it ?

My point is that IBLT only results in O(1) if the IBLT set is smaller than the resource availability of median node.

I'd say yes, but I'd also add the median mining node, I don't see the median bw of a non-mining node being relevant in this reasoning.

As a thought exercise, if there was no block limit today and IBLT was already implemented could a miner create a 1GB block have O(1) cost?  The answer is probably not.  The median node would not have a superset of the txns in the IBLT set.  They would either be dropped due to being stale or simply because the node had insufficient bandwidth to relay all txns.  So solving the IBLT would fail and the receiving node would need to request the full block at O(n) costs.  Would it make sense for a miner under that scenario to create that block with txns which pay less than the expected orphan cost?  Once again no, no more than it would without IBLT.

Sure, if you assume an average 500 bytes tx, a gigabit link (which is commonly found in professional settings) yields ~430 tx/s. We're nowhere near that. You can also turn it around and say that if you have a 1GB block size limit, you'll *need* a gigabit link to stand a chance as long as most miners are professionals.

What about all blocks up to the median (i.e. a set which has a high confidence of being a subset of the memory pool of >50% of the nodes)?  Well you're right the marginal cost would be near zero but the miner can't control the resource availability of other nodes so he can't force them to accept more.  Also if the majority of nodes can handle that volume and there is sufficient demand for that volume why would we want to artificially prevent that transaction volume?

If I follow you and am not mistaken that means we can easily have ~200 tx/s with an epsilon marginal cost of inclusion. We're really nowhere near supporting the network on fees, and the next halving is approaching...

In other words, with a 1gb block limit we can easily have the network grow x100 without even starting to support it with fees.

Now a jump to 1GB (or unlimited) block size would be bad today.  It doesn't have anything to do with fees or economics though.  It has to do with the original reason for the limit and that is security.  It would not be economical (in fact it would be moderately expensive) for a miner to create 1GB blocks but they would hurt the network by bloating the blockchain.  This is why I am not in favor of an unlimited block size.   The current block limit has had no impact on economics but it does provide an upper bound on the damage caused by an attempt to maliciously bloat the blockchain.  Those arguing unlimited block sizes often forget this fact.

I agree with this, both arguments are not mutually exclusive though.

[R2D221]

How many businesses in the world function by accepting any amount a customer is willing to pay, as long as that amount isn't zero?

Well, any business that has sufficiently low costs to be able to turn this amount into a positive profit.

But do you have an example of such a business?

[Gavin Andresen]

Let's put a bullet in the head of this argument once and for all.
If people drive away, it frees up space in blocks, it's a self-correcting problem that nicely filters out people that thought they needed the Bitcoin-level bulletproof security level and finally realize they didn't.

With economic reasoning like that, I see why Paymium has such low transaction volume (if you're making massive profits because your costs are so much lower processing so many fewer transactions than the bigger exchanges, then I'll adjust my priors).

[Realpra]

Just do this already.

The Bitcoin chain that only allows 2-5 million people really using it will quickly die as people migrate to the 20 mb one simply in order to actually USE Bitcoin.

To begin with those opposed to the change is only 40%, screw them. They'll change their minds in a week.

[NewLiberty]

How many businesses in the world function by accepting any amount a customer is willing to pay, as long as that amount isn't zero?

Well, any business that has sufficiently low costs to be able to turn this amount into a positive profit.

But do you have an example of such a business?

Rather than get into specific examples (and there are many types of businesses with freemium models), it might be helpful to consider that there may be other potential sources of revenue for miners beyond just TX fees.
Some of these might be considered unsavory by folks that have privacy / freedom / political goals.  There may well be reasons a miner may have to include TX irrespective of the fee in the TX.


Although I strongly favor reason over authority and don't much care whose face is on a position so much as what that position may be... I'm not political at all myself (though political people tend to assume that I am), and only hope for the success of Bitcoin.  It is the most important development in money in hundreds of years so I remain very grateful for its creation and development.  

For that I am grateful to both Gavin AND to MP (and to the many that came before them), and most all of you involved in this discussion to the extent that the information presented here advances the state of the art of crypto currency.

[NewLiberty]

Just do this already.

The Bitcoin chain that only allows 2-5 million people really using it will quickly die as people migrate to the 20 mb one simply in order to actually USE Bitcoin.

To begin with those opposed to the change is only 40%, screw them. They'll change their minds in a week.

The amount of damage the notion of Democracy has done to human kindness and ethics may be incalculable.

[R2D221]

If people drive away, [...]

Why do you want people away from Bitcoin? What we need is global acceptance, and we can't get it if we need people NOT to use Bitcoin.

It works the same way as homeopathy (which, actually, doesn't work).

[danielpbarron]

If people drive away, [...]

Why do you want people away from Bitcoin? What we need is global acceptance, and we can't get it if we need people NOT to use Bitcoin.

Because the alternative is worse. In order to make bitcoin into the thing you describe, it would necessarily be less secure and less sound. There already exist payment processors available to everyone; bitcoin doesn't need to compete with them.

I think the better question is: why do you keep repeating the same defeated arguments?

V. The fork is needed because otherwise some people won't be able to use Bitcoin.

Bitcoin isn't for everybody. Creating something useful that everyone can use is an exercise in trying to create something that's useful but worthless. Such a thing may exist, in the sense perpetuum mobile may exist. As far as the science of physics goes, they do not.

Should blocks ever become full, older coinbases will be prioritized over newer coinbases, and larger mining fees and transactions prioritized over smaller mining fees and smaller transactions. This means that someone who wishes to pay for very little with Bitcoin will be forced to use something else, so to speak is forced to "give his seat" to someone richer. This is exactly the point and the intent of Bitcoin : to force the poor to yield to the rich, unversally, as a matter of course.

You may not like this, but that is entirely an emotional problem of yours, which you're welcome to resolve any way you can : stop being poor, take a lot of pills, whatever. You may try to solve it by attempting to make it impossible for the rich to construct tools that they will then use to force you to yield to them, but this will necessarily not work : being rich means by definition they have more resources than you, and whatever you devise they can make a counter.

If you are more practically inclined, and having understood, accepted and come to terms with your fundamental human inferiority as it flows from your poverty, some solutions to your predicament of "I wish to buy myself a basket" have already been discussed :

For the reasons noted and for many other reasons I am pretty much satisfied that Bitcoin is not nor will it ever be a direct means of payment for retail anything. You may end up paying for a month's worth of coffee vouchers at your favourite coffee shop via Bitcoin (so shop scrip built on top of Bitcoin), you may end up settling your accounts monthly at the restaurant in Bitcoin (so store credit built on top of Bitcoin), you will probably cash into whatever local currency from Bitcoin (be it Unified Standard Dubaloos or Universally Simplified Dosidoes or whatever else) but all that is entirely different a story.

Run along now, back to playing in the mud with the other naked kids in your village. Bitcoin's just not for your kind.

[iCEBREAKER]

The answer is clearly no, because a transaction backlog means people have to wait for their tx to go through and have no guarantee that they'll go through at all, thus they stay away in droves and the miners get no fees.  

Let's put a bullet in the head of this argument once and for all.
If people drive away, it frees up space in blocks, it's a self-correcting problem that nicely filters out people that thought they needed the Bitcoin-level bulletproof security level and finally realize they didn't.

You are correct, but not in the mindset of the Fundamentalist Monopolists.  They consider altcoin use heresy, and seek to include every possible transaction on the One True Blockchain as an offering to Lord Satoshi.

This isn't about economic logic (with its convenient self-regulating substitution effect) for them, it's an ideological desire to wage jihad on altcoins.

Thus they pretend that we face a false binary choice between Bitcoin and fiat, with no regard for

https://en.wikipedia.org/wiki/Substitute_good

and all the off and on-(alt)chain (Lite/Prime/Peer/Doge/*-coin) options in between.  These more established altchains also offer bulletproof security, but not ultimate NBC (nuclear, biological, chemical) survivability to the extent of BTC.

Then there is the greedy VC/.gov pet project of making BTC a retail/consumer standard, so corporations and taxing agencies may use its radical transparency to analyze even more intimately details of consumers' preferences and spending habits.   

[justusranvier]

verbal diarrhea

The mistake that you, and quite a few other people, are making is that what makes money security has something to do with transactions. It doesn't.

Monetary security is about maintaining the quantity.

When you own some bitcoins, you know precisely what fraction of the bitcoin ledger belongs to you, and that's why Bitcoin is value. What you do or do not spend it on is immaterial.

The best money is the one that provides the most quantity security and is used by the most people.

There is no reason whatsoever to prefer any money except the best money, which is why the market will eventually converge to a single money.

[hdbuck]

guise, nothing's wrong with bitcoin.
its better than the good ol gold rush.
we are hedging Time.
even 'the blythe' is on it.  
people not accumulating are just out of their minds.

cant wait for next halving..

on a side note, the antis have raised more than 'reasonable' concerns not to just 'cattle' with the pros.

[zebedee]

I'd like to thank D&T and Justus for their contributions.  They've convinced me that what I always felt in my gut about block economics was right.

[DooMAD]

I'd like to thank D&T and Justus for their contributions.  They've convinced me that what I always felt in my gut about block economics was right.

Absolutely agreed.  Of all the contributors to this thread, they're the ones who consistently provide the most reasoned, well-founded and detailed responses.  Their efforts are to be commended.

[hdbuck]

I'd like to thank D&T and Justus for their contributions.  They've convinced me that what I always felt in my gut about block economics was right.

Absolutely agreed.  Of all the contributors to this thread, they're the ones who consistently provide the most reasoned, well-founded and detailed responses.  Their efforts are to be commended.

if i may, i do also appreciate the material these gents provide, but its not about people.

[iCEBREAKER]

reasonable discussion

The mistake that you, and quite a few other people, are making is that what makes money security has something to do with transactions. It doesn't.

Monetary security is about maintaining the quantity.

When you own some bitcoins, you know precisely what fraction of the bitcoin ledger belongs to you, and that's why Bitcoin is value. What you do or do not spend it on is immaterial.

The best money is the one that provides the most quantity security and is used by the most people.

There is no reason whatsoever to prefer any money except the best money, which is why the market will eventually converge to a single money.

"No reason whatsoever" is the kind of snotty absolutism we expect from a Fundamentalist Monopolist. 

You may have no reason whatsoever for using altcoins, but others certainly do.  That's why our alt sub was promoted and expanded.

"Best money" depends on the context.  Traditionally you preserve value with gold and transact with silver, making small change in copper.

Bitcoin can have the lion's share at the top of the Pareto distribution, but we should expect a long tail of other crypto with varying degrees of suitability for substitution.  If people prefer to use coins based on a silly picture of a dog or constellations of prime numbers, they will.  You need to accept that and move on.

The problem with maintaining BTC's monetary security and the GigaBloat fork is that huge blocks will have predictable and unpredictable negative effects on the network.

Many do not with to risk BTC's secure store of value function to chase the impossible dream of every Coke machine, laundromat, and hot dog stand transacting directly on the One True Blockchain.

We were sold Bitcoins backed by a defensible network accessible via TOR or other slow/hardened connections.  Changing the quality of that social contract is no better changing the quantity 21e6 (The Sacred Number).