Permanently keeping the 1MB (anti-spam) restriction is a great idea ...

[justusranvier]

I was already assuming a perfectly idealized p2p network that had no overhead or sub-linear scaling. I've done as much to explore the space of efficiency gains in this kind of system as any two other people combined here, come on. Please don't try to play off that I don't know how the system works.

What I mean is that your perfectly idealized p2p network is still wrong.

A more detained explanation is forthcoming.

This is the explanation to which I was referring:
http://bitcoinism.liberty.me/2015/02/09/economic-fallacies-and-the-block-size-limit-part-2-price-discovery/

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[bambou]

Thank you OP. This perspective is sorely needed.

Those wishing to keep a small block size are in favor of a useless Bitcoin network. Some may be simply being manipulated by some half baked economic theory that says miners will go broke if they process lots of transactions and the protocol gives them the ability to process many more per block...but I suspect there are people who truly wish to try and make raising the limit a real problem for the dev community.

People advocating for a tiny max block size are no friends of Bitcoin.

+1

+2

Totally agree and my vote is with D&T's support of increased block size.

In agreement here, too.  And the best part is, it doesn't matter what the anti-fork crowd think, because whatever they say, we can go ahead and do it without them.  They can stay on their old, limited chain if they want, but they can't force the rest of us to stay.    

[Zombier0]

Block size has to be incrassed thats obvious

[Black Arrow]

I've read at least hundreds of posts on this topic, but OP's post is far and away the most convincing of any I've read.

[amincd]

I've read at least hundreds of posts on this topic, but OP's post is far and away the most convincing of any I've read.

+1

[funkenstein]

The issue is not whether or not a larger block is technically advantageous, it clearly is.

The issue is that many people will not update or go with the new fork, thus creating mass chaos.

I'm not sure it will be that chaotic.  The last hard fork wasn't that bad. 

[sangaman]

I was already assuming a perfectly idealized p2p network that had no overhead or sub-linear scaling. I've done as much to explore the space of efficiency gains in this kind of system as any two other people combined here, come on. Please don't try to play off that I don't know how the system works.

What I mean is that your perfectly idealized p2p network is still wrong.

A more detained explanation is forthcoming.

This is the explanation to which I was referring:
http://bitcoinism.liberty.me/2015/02/09/economic-fallacies-and-the-block-size-limit-part-2-price-discovery/

Wow! Great article and I think the system you describe seems like the ideal way to price the various services required to keep the bitcoin network running, and could put an end to the block limit debate once and for all. A miner creating a large block could have to pay a premium to the nodes for promptly propagating the block. Users sending transactions may also have to pay for their transaction to be propagated. Both of these would have the effect of disincentivizing spammy transactions that may overburden the network. Did I get that right more or less? This is the first I've heard of such an idea for bitcoin.

I had never heard of micropayment channels, and that's still the piece that I'm having the hardest time grasping. I clicked on the link to read about micropayment channels some more, but it's still hazy to me. I might just need to spend more time reading about it.

[smoothie]

At some point 1 MB cap is going to restrict user access to the block chain, yes. It is the same as saying that you can't have a growing economy with limited resources to support that economy.


Smaller transaction amounts are not more important than larger transactions. The block chain does not have this bias currently today nor do I think it ever will be. So the notion that a cup of coffee should be done off chain says one transaction is more important than another. That is something I do not believe Bitcoin was intended to imply, ever.

I wouldn't necessarily say that side chains are a trust free alternative as the security of side chains will vary (from chain to chain) as SCs pop up to offer alternatives. SCs as an "trust free" alternative can be a misspeak. If an SC is less secure, then although they offer some transaction capacity on the primary chain at a certain point in time does not mean it will always be that way. There is a lot of risk in transferring coins from main chain to an SC.

Agreed the 1 MB limit is insufficient concerning moving transactions off the primary chain and onto an SC.

Keeping the idea of having intermediary parties to transact on the block chain at bay will keep Bitcoin's utility as it was created for in tact. Removing that to put in centralized parties (trusted 3rd parties) is a huge mistake. Decentralization to Centralization…pointless.

Using 3rd parties which are not trust less prior to using an alternative crypto currency to transact would be a mistake in my opinion. If the main chain got to a point that the ability to have access to the block chain was limited by the adoption rate of users of the main chain I would see no reason people would not want to use an alternative chain to transact that is not an SC.

[smoothie]

Off chain transactions with Chase and HSBC (as the example) would require 3rd party audits of their internal ledgers. From past experience when information is not publicly available (private internal ledgers), shenanigans will occur.

I guess to begin with the fact that people would store their bit coin with a CHASE or an HSBC would require trust from the user level. Currently bit coin allows users to keep their coins in their possession. I suppose having multisig would apply to some extent here if the adoption rate of users exceeded some defining threshold that made it impractical for the average joe to use to transact.

D&T you bring up an interesting dilemma that may come some day concerning being priced out of being able to transact on the chain as a normal user and being forced to use an alternative method to transact. Instead of using a trusted 3rd party, why not use another block chain that is not an SC to transact?

 Of course there are exchange fees to get this done. So perhaps the lesser cost of the two may be the solution. In that case order book depth needs to be taken into account as well and any exchange transaction fees, withdraw fees and network fees. This is very interesting to explore as the ability to transact with less cost may change from time to time. Of course no one knows the future but it is a plausible thought to consider when discussing the topic.

[marcus_of_augustus]

Off chain transactions with Chase and HSBC (as the example) would require 3rd party audits of their internal ledgers. From past experience when information is not publicly available (private internal ledgers), shenanigans will occur.

I guess to begin with the fact that people would store their bit coin with a CHASE or an HSBC would require trust from the user level. Currently bit coin allows users to keep their coins in their possession. I suppose having multisig would apply to some extent here if the adoption rate of users exceeded some defining threshold that made it impractical for the average joe to use to transact.

D&T you bring up an interesting dilemma that may come some day concerning being priced out of being able to transact on the chain as a normal user and being forced to use an alternative method to transact. Instead of using a trusted 3rd party, why not use another block chain that is not an SC to transact?

 Of course there are exchange fees to get this done. So perhaps the lesser cost of the two may be the solution. In that case order book depth needs to be taken into account as well and any exchange transaction fees, withdraw fees and network fees. This is very interesting to explore as the ability to transact with less cost may change from time to time. Of course no one knows the future but it is a plausible thought to consider when discussing the topic.

Payment channels

[smoothie]

Where did the myth of 7tps limit while using 1 MB cap come from?

The part about showing the limitations based on average txn size of the last million transactions is quite interesting. I guess the idea of 7 tps limit did not take into account the variability of tx sizes. It is always good to over estimate (or under) to make sure your estimations are likely to be within the bounds of the claims being mentioned. Clearly the 7tps claim did not account for that.


BTW, @D&T, great post! 

[redsn0w]

Check this :  Why would anyone host a 1 MB full node if they can only use the blockchain once per decade?  (http://www.reddit.com/r/Bitcoin/comments/2vec37/why_would_anyone_host_a_1_mb_full_node_if_they/)

[hdbuck]

Check this :  Why would anyone host a 1 MB full node if they can only use the blockchain once per decade?  (http://www.reddit.com/r/Bitcoin/comments/2vec37/why_would_anyone_host_a_1_mb_full_node_if_they/)

I hear such arguments, but it is the +1Billion users postulate that sounds kinda cultish to me.

"Bitcoin for 7billion people", "Bitcoin for Africa", "Bitcoin for unbanked"..
I ear this a lot but think that this is nothing close to reality.

Masses just really dont give a dam about finance, monetary policies or internet of things. They need jobs and food.

[redsn0w]

Check this :  Why would anyone host a 1 MB full node if they can only use the blockchain once per decade?  (http://www.reddit.com/r/Bitcoin/comments/2vec37/why_would_anyone_host_a_1_mb_full_node_if_they/)

I hear such arguments, but it is the +1Billion users postulate that sounds kinda cultish to me.

"Bitcoin for 7billion people", "Bitcoin for Africa", "Bitcoin for unbanked"..
I ear this a lot but think that this is nothing close to reality.

Masses just really dont give a dam about finance, monetary policies or internet of things. They need jobs and food.

Yes of course , bitcoin is for all the world but some people don't have neither the access on internet/smartphone (with 3G). So you are right, for the moment not all the people can use bitcoin but this fork is necessary at least for rise the limit of TX per second.

[hdbuck]

Check this :  Why would anyone host a 1 MB full node if they can only use the blockchain once per decade?  (http://www.reddit.com/r/Bitcoin/comments/2vec37/why_would_anyone_host_a_1_mb_full_node_if_they/)

I hear such arguments, but it is the +1Billion users postulate that sounds kinda cultish to me.

"Bitcoin for 7billion people", "Bitcoin for Africa", "Bitcoin for unbanked"..
I ear this a lot but think that this is nothing close to reality.

Masses just really dont give a dam about finance, monetary policies or internet of things. They need jobs and food.

Yes of course , bitcoin is for all the world but some people don't have neither the access on internet/smartphone (with 3G). So you are right, for the moment not all the people can use bitcoin but this fork is necessary at least for rise the limit of TX per second.

All im saying is that whatever happens, try not to 'put the cart before the horse' gents.

[painlord2k]

We see a huge concentration in mining environment 4-5 hands control 75%+ of mining power (Pools and Large Ops)
If the Blocksize increase exponentially the numbers or nodes may drop in a significant way just because they require to much disk, actually the network increase but there are not so many full nodes (nodes sharing the blocks)

With centralized mining and few nodes Bitcoin will be weaker.
I understand the reasons of Gavin A. to increase the Blocksize but we need to find a solution for the problem and an analysis that includes all the players in the Bitcoin ecosystem.

1 TB cost 120 € retail, and would fill in 3 year and 9 months at least with 20 MB blocks (full).
With pruning, the full nodes could just keep the hashes and be able to verify any data they receive from a server.
But, anyway, many companies would prefer to keep their own copy of the blockchain just to speed up the processing & checking of transactions.
For example, a POS would ask for a transaction and relay it to the network after checking the transaction is correct. It would need an updated local copy of the blockchain.

There is no need to have a fully decentralized network with every node having a full copy of the blockchain. It is just needed the number of copies of the blockchain existing around the network are high enough and in enough different and competing hands. No one will be able to censor 1.000.000 copies around the world, at the same time. If the users are one billion and the copies are one million, it is not centralized.
Centralized is when there is just one copy or few copies under the control of a central authority able to affect them at will.

In the end, if we want Bitcoin to revolutionize the payment systems and the monetary systems, we need a block size in the 1 GB range, at least.
Maybe not tomorrow, or the next year, but surely we want it in future.

[HarmonLi]

I completely agree with DeathAndTaxes (love the handle, BTW!) Limiting the block size to 1 MB is just hard-capping the maximum amount of transactions possible in 10 minutes (approx.) This doesn't make sense!!! There are solutions against orphaned blocks, etc. ready to be implemented well before the problem of >1MB blocks actually arises!

[gotpetum]

We have instead a *feedback* process. LOWER fees (not ZERO fees) means LESS mining (not NO mining) which in turn means LONGER confirmation times (not COMPLETE COLLAPSE) which leads to MORE FEES which leads to mining power switching back on. It's what engineers call a negative feedback loop, designed to keep the hashing rate broadly stable, or at least oscillating within a fairly narrow range.

Larger blocks and lower fees means less mining, but not longer confirmation times, since larger blocks will still be mined every 10 minutes.

All it takes for transaction fees to go down to ~zero is a benevolent or a malevolent miner occasionally accepting 0 fee transactions.

The question is, will stakeholders step up to mine "at a loss" to secure their funds?

Increasing the block size limit is a poor implementation of PoS...

[justusranvier]

All it takes for transaction fees to go down to ~zero is a benevolent or a malevolent miner occasionally accepting 0 fee transactions.

...and we know this is true because transaction fees have already gone down to zero.

I mean, if we had objective empirical evidence that transaction fee revenue was positively correlated with transaction volume over a six year period that might be a different story...

[R2D221]

All it takes for transaction fees to go down to ~zero is a benevolent or a malevolent miner occasionally accepting 0 fee transactions.

One miner accepts 0 fee transactions. Why would the other follow their example?

Increasing the block size limit is a poor implementation of PoS.

Bitcoin is not implementing POS. I don't know what gave you that impression.