Topic: Block issue SOLVED!? Extension Blocks - page 2. (Read 3473 times)

segwit wont 'buy some time
bcause the network effect of users feeling the change. does not occur due to just activating segwit. it occurs by people voluntarily moving their funds over to segwit keys.

the burden of moving 46mill UTXO will create MONTHS of constant mempool bloat of native key users moving across. or years of slow switching over of keys just to even try attaining the ~4500tx a block hope.

the other failure of segwit is by offering a 'discount' it make the fee continue to rise, which then begins to impact native key users 4x(due to segwits 75% discount). EG a 10% segwit fee rise is 40% native key rise

the end result is native key users will eventually be paying more to move their UTXO than their UTXO is worth.
we are already seeing that now.
which just results in people not moving their UTXO and creating dead UTXO set of millions of what then becomes 'dust' due to being under say $6 value.

sorry but your and blockstreams high school level understanding of economics is the failure

if a block can only handle ~2500 native transactions
then this is the result:
if blockreward * current bitcoin price leaves a deficit of say $2500 (EG bitcoin price went from $1200-1000 = $15,000 to $12,500)
then that means fee's need to be ~$1 to combine to make up for that deficit.
if blockreward * current bitcoin price leaves a deficit of say $7500 (EG bitcoin reward went from 12.5-6.25 = $15,000 to $7,500)
then that means fee's need to be ~$3 to combine to make up for that deficit.

the result is a LIMITED amount of people (due to only ~2500tx native key users) will get peed off with having to 'just pay more'
the funny part is
segwit with its 75% discount. means although there 'could be' 4500tx segwit users per block IF block was 100% segwit key use. the fee's are then at best 50cent-$1.50 for segwit.
but that means $2-$6 for native key users(undiscounted)


however.
we have a couple years before needing to increase onchain capacity to ofset the next block halving (without having to rely/hope for the bitcoin price to save the day again)

EG imagine the price was stagnant for the next 20 years at $1,200.. and you will see that trying to squeeze more blood out of 2500 people every 10 minutes, wont work.

more transactions per second onchain = more people sharing the burden = less of a burden overall

the thing the network effect is strong, and segwit will buy some time, then LN will buy more time, but after a few more block reward halvings, if the onchain TX fee revenue isn't up significantly...

we can continue to go down the worng path for a long long time, avoiding the inevitable. thats why i'm thinking the consequences are years away.

altho admittedly 30years was a bit much.

Its the potleaf, he meant 3

I agree, should fee's, time and functionality/sustainability for parties as a whole continue to move in the wrong direction, 30 months may even be a stretch.

30 years?  if we don't upgrade, we might not last 30 months.  things move fast in the cryptoworld which is only 7 years old.  look what happened in less than a year with the marketshare...95% to 66%. 

There is a ton of crazy business interest schemes with SegWit.  Why not do what has always been done?  Either make blocks 1.2MB or be big time like LTC and go to 2MB.  

It's a simple thing that has got twisted ...

After much consideration, I have finally decided to point my miners to a BU pool. 

  

we can safely assume we are not in competition with paypal or visa, crypto is more compelling than them on many levels, if fees end up a little higher than paypal its not going to impact our success much. however other crypto are in direct competition with us, and while they are subject to the same Hardware limitations ( internet speeds, storage etc.) they are not bound by any silly self imposed limits like 1MB blocks.
we have seen bitcoins market share drop drastically now at scary levels, because of our inability to upgrade.

and off-chain scaling ISN'T GOOD ENOUGH...

on-chain scaling isn't important  because" lower fee = more adoption ", on-chain scaling is important because "  higher miner revenues = more security ".

what's best for miners ( and by extension blockchain security ) is a dynamic blocksize which can adapt itself to the ever growing fee paying TX demand.

if bitcoin doesn't upgrad on-chain, ether or dash will, and 30 years from now dash's blockchain could be more secure than bitcoins!

i agree, i intuited what you are saying before, but credit to you for writing about it!

but obviously there is also the constraint of what other
payment types besides Bitcoin are offering right?

Very nice Killerpotleaf, do you happen to teach?

i made a few edits to the stock graph to better illustrate what i'm saying

as block size goes up fees go down, but fee revenue is at its highest at 2MB, because science.

I agree that there is a natural cost to miners for including TXs in blocks. But i do not think this will be the limiting factor in determining Blocksize. Peter says we dont need a block size limit at all because miners won't produce blocks that have a bad risk/reward chance-to-orphen/fees.

I'm saying Peter's theory determines an upper limit, but blocksize won't get close to this limit at all because miners will set a limit which will create fee pressure. This will be like 2MB with today level of adoption and maybe 2.2MB 6 months from now. ( obviously no where near peters limit)

miners are in the business of selling blockspace
they can:
 A) offer lots and lots of blockspace for cheap ( near peters cost per byte )
or
 B) offer a very limit amount of blockspace at a high price

which will yield the more revenue?

well... this is a classic economic problem with a straightforward way of determining how to price your good ( or in this case how to size your blocks )



this optimal amount of block space the miners should be offering, depends on fee paying TX demand, which isn't limitless, and very much tied to adoption.

miners are incentivized to set an Excivies Blocksize (EB) which doesn't go over this optimal block size limit.

miners won't create massive blocks unless there is Massive TX demand.

TX demand will take YEARS to get anywhere near needing 16MB blocks.

and many will shift from ethereum to tezos due to dictatorship and centralization not to mention the hardfork problem that leads to ethereum classic and also the unsecure javascript unverified code

I'm slightly confused on your position because it sounds like you agree with Peter that EC can solve the issues...on the other hand, Peter
is advocating that we shouldnt and neednt have a limit that is below market demand, while you are saying blockszie cannot outpace adoption.
I'm not sure if there's an actual disagreement or you're just describing a different property of the natural fee market.

 

yes i read it.
I reference it in my essay:
https://medium.com/@adamstgbit_25789/bitcoin-unlimited-to-bring-stability-to-bitcoins-fee-market-6b5a4f882fc0

You make a lot of sense but i'm not sure we need a blocksize limit to do this. 
I'm curious if you've read Peter Rizun's whitepaper about the fee market sans blocksize limit.

Seems like there could be an enforced minimal fee to prevent spam and past that a sliding schedule that controls how soon the transaction gets put in a block.   While it would be artificial it could increase fee revenue.    After all why should buying a car and driving it off the lot be the same as buying a cup of coffee?   If you needed quicker confirmation you should pay a higher fee for that.

There are several dynamics that can be played around with:
1) Size of transaction --- basically what we have now  ... if you use a lot of data it costs more
2) Speed of the transaction --- Seems logically that there should be a fee schedule and low fee payers simply wait longer even if the wait is artificial.
3) Amount of the transaction --- Maybe it does make sense to have some very small fee the scales on on transaction size.  Say something like 0.01%  <== Okay I know this is evil     

It actually does not need a block limit. Miners can dynamically produce their own block sizes to cope with mempool transaction pool demand pressure and by artificially delaying lower paying transactions fees. If bitcoin price rockets out of the solar system, big blocks full of 1 sat transaction fees and no coinbase reward will work perfectly fine.

the best way to do it is using some basic economics 101
making blocks that have a size which creates some fee pressure, will net alot more fees in total.
even not considering altcoin competition its clear that a any static blocksize limit will fail to produce a healthy fee market.
1MB = fees pressure so high that poeple simply cant TX
50MB = fees pressure so low that everyone TX can get in the block for free.
both do nothing to maximizes fees/block, and so both lead to less security for bitcoin.
we NEED a dynamic blocksize limit which will yield the most optimal  pressure fees, or bitcoin will be very insecure in the future, and therefore useless and therefore worth 0.

best way to do that is probably increase the user base, because increasing fees per transaction
is greatly limited due to competition. Iow, why would I (or anyone interested in saving money)
pay more with Bitcoin when another method is cheaper?

The miners are screwing themselves over by proving to be bad actors.