Topic: Bitcoin will never hit a scale ceiling (Read 187 times)

Yes we can say that bitcoin fork to Segwit hasn’t actually totally achieved or solved the entire scalability issue although many stated that this fork was mainly to solve transaction malleability issue but regardless the scalability of bitcoin transactions has been made better or improved with segwit. With transactions been done in segwit you have the signatures moved from the inputs there by creating more space left by scripts and technically instead of actually having a block of 1Mb you end up having more like 4Mb since the calculations now is in weight, which means more space for more transactions and lesser fees to be paid

The OP's subject line practically contradicts itself: Bitcoin hit a scale ceiling about six months after it started, and it's only gotten slower and more expensive since then.

Bitcoin handles about 500k transactions per day right now, and uses $20B-40B in hardware to do so.

In contrast, worldwide daily credit card processors handle about 2-4 billion transactions per day, and at peak times can process over one million transactions per second.

Bitcoin was never ever designed to be a mainstream currency that people use every day to pay for things--Satoshi was no idiot, and he* knew that his architecture would not support that. Bitcoin was designed to be intentionally slow and expensive to transact, which is what gives it it's security and decentralization.

The blockchain architecture has one unique advantage (and only one): to thwart government control over the network and thus allow transactions to proceed that one or more governments would wish to stop. If you don't want to accomplish this, then using the blockchain architecture is a stupid waste of time and computing resources because every other feature Bitcoin has can be accomplished cheaper and faster and better in other ways.

But the performance tax you pay for this feature is that it will never ever scale to anything close to mainstream.

As for true decentralization per Bitcoin's original purpose, it's worth noting that today there are just a few, very identifiable, publicly known companies that control the majority of the Bitcoin hashrate. Yes, there are thousands of nodes, but there are only perhaps 3-5 legal entities in the world that matter, and those entities could be compelled by (say) the US government to do whatever they wanted them--so Bitcoin ins't really "decentralized" in the way it originally was anyhow.

For Bitcoin's purpose today, which is a meme investment that is fronted by centralized apps and brokers, there is no scalability problem that anybody cares about.


(* We don't know if Satoshi was a "he", "she", or a dev team at the NSA/CIA, but I'm just using that terminology for brevity).

Decentralization is not measured according to how many nodes there are, but in how easy and cost efficient it is for a person to run their own. Given that it is pretty easy to just download Bitcoin Core and let it sync (pruned if you don't have enough disk space), it is pretty decentralized.

And yes, miners was a synonym with nodes back in 2010.

You can have a great estimation by recursively sending getaddr messages across the network.

The amount of nodes doesn't impact that, as it was said.
The size of the block and other things - right up the alley.

The Moore's law was for hardware speed, which can be impactful with multiplied transistors in an input to solve more computational problems. In the last section of this work it's said to help the efficiency of mining operations.


They may have built a crawler around the same way a new node find peers, bitnodes, queries nodes this command 'getaddress' to obtain active peers, which can finalize the number of active nodes. (Using seed nodes) In this chapter of learn Saylor's book, DNS nodes is written to some extent of how it collects Ip addresses of Bitcoin nodes.

I wonder how they count the number of nodes. I run a node for about 30 minutes every day. It's main function is to service my wallets, and it seems to work well. Do they sample the network, and count the number of nodes online at that point, or do they run a monitoring system, and register every node that comes on line during that period. Also, I use up to 6 different Internet providers, and some don't provide consistent IP addresses. Will that affect the count?

No having more nodes seems good but bad as well, as much as it helps enhance faster transactions, so many nodes also cause network congestion.
So I don't nodes as the solution here.

Your Moore's Law comparison is flawed because that one is measuring transistor performance, not financial performance of some asset.

And even Moore's Law hut a brick wall like 5 years ago. Jensen Huang (Nvidia CEO) already pointed that out at CES some years ago.

Bitcoin will eventually reach some saturation point but by then, everyone will be using it.

It doesn't look like that now, but it sure does sometimes.
And, after reading this thread, it's wonderful to get something new to know about Bitcoin. I need to dive deeper into this and why the block size isn't big in the first place.
Is it because it would need more storage and computing power?

I believe that may because in early days they didn't distinguish between a miner and a node. In first couple of years you could mine bitcoin using your PC (CPU mining) so every node was also a miner and every miner was a node.

Today they are more separated, a miner needs to purchase mining hardware (ASIC) and they mostly don't even run a node, instead they connect to a mining pool that runs it for them.

Thanks for the clarification, the block size that was at 1Mb, how many space does the segwit now allow? And the impact it has made on the network so far, I may have misunderstood Satoshi's statement on hardware speed to be referring to nodes as a contributor to the rate at which transactions are being validated.

Having more nodes doesn’t affect the scalability of bitcoin rather things that can affect the scalability of bitcoin is having a much block space reason to why the network underwent the forking to actually get the current segwit protocols which allows more transactions into the 1mb block due to the use of weights as unit and the segregation of the signature or witness from the main transaction.

One of the importance of having much nodes is to ensure decentralization so that everyone is a contributor to the network. The amount of nodes might be reducing as a result of maybe the difficulty in been a solo bitcoin miner due to expenses of power or hashrate needed as such many have stopped running their nodes. But as said it doesn’t contribute to the scalability issue of bitcoin

The number of nodes would not impact network congestion.  It would only add more validating nodes.  Looking at the mempool size, it doesn't appear to be congested. 

No. Having more nodes can not solve the congestion. Having more nodes can help in making the network more decentralized. If talking of network congestion, this is another discussion entirely that is not about nodes nor about decentralizing the bitcoin network.

Satoshi had both eyes on all components of Bitcoin, here, he was envisioning Bitcoin to certainly do better than ever and considered the problem of slow transaction rate. He had to involve Moore's law as a factor that would increase hardware speed, with available nodes

As a result of a massive adoption, his challenge of Bitcoin hitting more transactions volumes than Visa was achieved, with Bitcoin on   $46.4 billion daily transactions. However, the second aim is declining...nodes. In 2021, according to Luke Dash jr there were about 83,000 valid nodes, but, today, the number of active reachable nodes is at 21,000, base on what's on site, though some nodes in older versions are skipped, the number dropped. While the law by Moore's makes an impact, having more nodes participate in the network, would add up to fix network congestion.