we could make it so that all off chain transactions are handled in a mini-blockchain that is later integrated into the network for validity... it would be necessary, but then again... I can just send the private key of a recently made wallet over bitmessage with no cost and still lots of security.
Wouldn't the recipient lack the assurance that you would not spend the coins first? 
Topic: Are off-chain transactions necessary to keep Bitcoin unbroken? - page 2. (Read 2594 times)
FWIW I gave a talk at the Bitcoin conference talking about how off-chain systems can be audited, as well as how to setup systems where operators of them are punished for fraud and other losses: http://www.youtube.com/watch?v=4d3LA8KpdMQ
Very nice presentation Mr.Todd. I guess the debates will be forever ongoing... Thanks for helping me get more plugged in. BTW I'm quoting something cool you said in an article that will be published on LetsTalkBitcoin.com soon after they relaunch their website.
why would we want to police off-chain transactions?
In fact why is it necessary to have off chain transactions?
If the ECDSA encryption is the most compact available is there a way to further decrease the transaction size or make multiple input transactions more efficient? I think I saw a 20kb transaction once... that is a lot of inputs.
we could make it so that all off chain transactions are handled in a mini-blockchain that is later integrated into the network for validity... it would be necessary, but then again... I can just send the private key of a recently made wallet over bitmessage with no cost and still lots of security.
In fact why is it necessary to have off chain transactions?
If the ECDSA encryption is the most compact available is there a way to further decrease the transaction size or make multiple input transactions more efficient? I think I saw a 20kb transaction once... that is a lot of inputs.
we could make it so that all off chain transactions are handled in a mini-blockchain that is later integrated into the network for validity... it would be necessary, but then again... I can just send the private key of a recently made wallet over bitmessage with no cost and still lots of security.
FWIW I gave a talk at the Bitcoin conference talking about how off-chain systems can be audited, as well as how to setup systems where operators of them are punished for fraud and other losses: http://www.youtube.com/watch?v=4d3LA8KpdMQ
I mean imagine if in 1970s someone had said...
I bet some jackass was saying that 
If Mtgox (clients) have a combined sum of 1,000,000 BTC and you transfer 1 BTC from your account to another MtGox account holder then MtGox clients still have a combined sum of 1,000,000 BTC. There is no need to EVER record a block chain tx.
Ok I'm putting it together. If they take in 1k BTC in the form of 1k centralized clientside transactions, then they can add a single 1k BTC transaction to the blockchain, and all of the transaction data is owned by the third party, and does not appear on the blockchain. I think that's a terrible application of Bitcoin tbh.Disclaimer: hopefully that made sense. I broke open a bottle of port, LBV 2005 so while the above made sense I can't guarantee it will make sense to anyone else.
“To alcohol! The cause of... and solution to... all of life's problems” ― Matt Groening
If Bitcoin is still used in X years of time and the size ceiling is being hit, the block size limit will be increased. Imagine if SMTP had a 4 KB email limit which was fine decades ago, but completely silly today.
The question is not raising it too much so that mining power doesn't become even more centralized, and getting everyone to migrate.
The question is not raising it too much so that mining power doesn't become even more centralized, and getting everyone to migrate.
The transaction limit is CURRENTLY limited to 7tps. This can be raised with a hard fork. I don't want to trivialize it (as some do) but I find it hard to believe this limit will last forever. I mean imagine if in 1970s someone had said CPU will never break the 1Ghz barrier or 1TB of storage will never exist, or nobody will need more than 640KB of RAM. It would seem logical in the short term but almost idiotic in the long term.
Eventually the 7tps "limit" will constrain future growth of Bitcoin and as such there will be increased pressure by stakeholders (users, bitcoin related companies, developers, miners, merchants, etc) to raise the limit. While miners don't want to see unlimited tx volume (as that means no fee pricing power) they also don't want to see Bitcoin die. With ASICs they can't simply switch to LTC so they have a very vested interest in ensuring Bitcoin adapts.
My guess is either Bitcoin dies out or the limit is eventually raised. Either way that means the 7tps is a non-issue. We will solve it or Bitcoin will by default ( 0 tps < 7 tps).
As for how can off chain tx work. Currently you can pay someone on MtGox or someone on coinbase with off chain tx. Either entity simply updates a ledger. If Mtgox (clients) have a combined sum of 1,000,000 BTC and you transfer 1 BTC from your account to another MtGox account holder then MtGox clients still have a combined sum of 1,000,000 BTC. There is no need to EVER record a block chain tx.
However today this is limited to a single entity. It only works if you and your receiver are both on MtGox. However look forward a couple years and say you have a MtGox account and someone else has a coinbase tx. In theory MtGox and Coinbase could extend reciprocal lines of credit so MtGox notifies coinbase and coinbase instantly reflects your new balance. Once a day MtGox and coinbase "settle" the books with a single blockchain tx. Just to be clear this does NOT currently exist but it could. Eventually a network of these entities could exist. In someways this resembles a banking network with one SIGNIFICANT difference. Today you can't be your own fiat bank (well at least not with any reasonable cost) but you can choose to be your own Bitcoin bank. All you need the ability to run a full node and willingness to put all tx on the blockchain.
Disclaimer: hopefully that made sense. I broke open a bottle of port, LBV 2005 so while the above made sense I can't guarantee it will make sense to anyone else.
Eventually the 7tps "limit" will constrain future growth of Bitcoin and as such there will be increased pressure by stakeholders (users, bitcoin related companies, developers, miners, merchants, etc) to raise the limit. While miners don't want to see unlimited tx volume (as that means no fee pricing power) they also don't want to see Bitcoin die. With ASICs they can't simply switch to LTC so they have a very vested interest in ensuring Bitcoin adapts.
My guess is either Bitcoin dies out or the limit is eventually raised. Either way that means the 7tps is a non-issue. We will solve it or Bitcoin will by default ( 0 tps < 7 tps).
As for how can off chain tx work. Currently you can pay someone on MtGox or someone on coinbase with off chain tx. Either entity simply updates a ledger. If Mtgox (clients) have a combined sum of 1,000,000 BTC and you transfer 1 BTC from your account to another MtGox account holder then MtGox clients still have a combined sum of 1,000,000 BTC. There is no need to EVER record a block chain tx.
However today this is limited to a single entity. It only works if you and your receiver are both on MtGox. However look forward a couple years and say you have a MtGox account and someone else has a coinbase tx. In theory MtGox and Coinbase could extend reciprocal lines of credit so MtGox notifies coinbase and coinbase instantly reflects your new balance. Once a day MtGox and coinbase "settle" the books with a single blockchain tx. Just to be clear this does NOT currently exist but it could. Eventually a network of these entities could exist. In someways this resembles a banking network with one SIGNIFICANT difference. Today you can't be your own fiat bank (well at least not with any reasonable cost) but you can choose to be your own Bitcoin bank. All you need the ability to run a full node and willingness to put all tx on the blockchain.
Disclaimer: hopefully that made sense. I broke open a bottle of port, LBV 2005 so while the above made sense I can't guarantee it will make sense to anyone else.
Is this statement correct:
"The limit of the blocksize is 1MB, transactions are fixed at 7/sec, so off-chain transactions are good because you can process transactions instantly without worrying about the fee, and they will still appear on the Bitcoin blockchain at a later point."
Or are these transactions kepy off the chain forever!?
Even if offchain transactions work, won't we still have a huge problem if the amount of transactions per second increases significantly? How do these transactions ever get on the blockchain? Is it just supposed to work like a Bitcoin version of ACH?
"The limit of the blocksize is 1MB, transactions are fixed at 7/sec, so off-chain transactions are good because you can process transactions instantly without worrying about the fee, and they will still appear on the Bitcoin blockchain at a later point."
Or are these transactions kepy off the chain forever!?
Even if offchain transactions work, won't we still have a huge problem if the amount of transactions per second increases significantly? How do these transactions ever get on the blockchain? Is it just supposed to work like a Bitcoin version of ACH?
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