Topic: Block Size Scalability Issues - page 2. (Read 587 times)

I agree that mining is today a business which also tends to be centralized. I may be also tempted to propose "mining for everybody". But unfortunately the things are more complicated.

Clearly, "mining for everybody" means a war against ASICs and Bitcoin may get out quite badly hit from such a war.
The coins that can be mined by average Joe tend to have very low price.
"Mining by everybody" will face accusations that main miners are botnets.
Changing the algo from time to time to stay ahead of ASIC manufacturers means forks which can be seen as signs against stability.

So unfortunately there's no really better alternative to the current way the mining goes. We can just hope that mining businesses can survive in different countries so the mining stays "somewhat decentralized" in the future too.

This is a centralized approach to the issue though. Why not making available to anyone instead of excluding users from it?

SegWit introduced a maximum block weight of 4.000.000 units (compared to 1.000.000 bytes).

A 'typical' (non-segwit) byte in a transaction has a weight of 4 units.A witness byte weighs 1 unit.

So, theoretically if all transactions would be segwit we'd have 4 times more transactions inside the blocks than pre-segwit.
But the block size itself (for the non-witness part of the transactions still is at 1 MB.

You are only partly right about the block rewards (and that means you are party wrong too).
Even yesterday, at a jump in price, people reacted heavily and the number of transactions grew a lot, also the tx fees started to rise. Since we aim to get to bigger numbers than VISA can handle, there's a good chance that average tx fees will be higher than the basic 1 sta/byte. You need patience though.
Then there's something else you've missed. The price of Bitcoin. If today the reward only from tx fees in a block is maybe 0.2 BTC, with high enough price of Bitcoin even this amount would do.
Bitcoin mining doesn't have to be for everyone(*), only the most efficient ones will keep up.

(*) If Bitcoin mining would have been for everybody, big changes would have been needed, see Monero.

Ok, but did the Lightning Network not throw a fox into the chicken coop? Satoshi's idea was for the Block reward to decrease over time and for the tx's to increase, so that the miners rewards would eventually replace the Block reward? Now we are implementing a 2cnd layer solution that would effectively reduce micro payments from the Bitcoin Blockchain and this reduces the tx volume.

We are hoping the Lightning Network will solve the scaling limitations and that it will increase adoption, but what happens if this does not happen? We need to look to a future where the miners rewards needs to replace the Block rewards. 

 

It's not a problem for there to be less miners/hashrate, so long as it is distributed (decentralized). There's no reason to say that we have to pay miners some set amount or maintain parity with the current level of profitability.

Exactly!

And as an addition, we can also squeeze more inputs and outputs in a single transaction using SegWit addresses.

---

Quite anti-Mining? Caring too much about the price? (uhhh, I'm guilty too)
Bitcoin hasn't been paying miners to process transactions, they simply mine what's profitable.
This isn't the only SHA-256 coin out there, and the total hashrate won't affect the number of transactions per minute, just the network security.
Quitting miners: not much of a problem considering on how Bitcoin was designed.

The one who got a recipe of failure are Bitmain and ASIC Manufacturers, but they are currently bathing in profits for now.

The center of your attention based on your assessment should be: Bitcoin with low Network hashrate will be much more easier to attack with easy to access hardwares if/after most of the miners quit.

SegWit already quadrupled the maximum block size to 4 MB. Your argument is invalid.

TLDR; You cannot assume that the value of the block reward in the future must be the same as it is today. You cannot assume that the maximum transaction rate depends directly on the maximum block size.

The security of the network depends directly on the value of the block reward. As such you must determine a minimum value of the block reward that will provide the minimum viable level of security. I don't know how to determine that value, but I'm sure that some smart person can figure it out. It depends on the value of the transactions, the maximum size of a block and the price of including a transaction in a block. I believe that the current value of the block reward exceeds the minimum necessary value by a large factor, so a large drop in the network hash rate going forward would have little impact on security.

It is possible to use Bitcoin without including every transaction in the blockchain. Already, a large portion of Bitcoin transfers are transacted off-chain through private channels provided by companies such as Coinbase and BitPay. In the future, the Lightning Network will provide another way to transact without going directly to the block chain, and other methods will probably be developed in the future. I don't think it would be crazy to predict that less than 1% of all bitcoin transfers will be done on-chain in the future.

The history of last winter tells that the 1 MB block size may be better for miners than larger sizes because that can force a quite big rise in fees if the number of transactions grow enough.
So if you base your calculations on the assumptions that the number of transactions in 100 years will be at levels comparable the ones we have today and the price will also stay on this level, you are wrong. The price has to rise a lot (buzz words: deflationary coin, scarcity), the number of transactions (on chain and off chain should grow, maybe even exponentially)...

Then there's the difficulty. That may make my calculations wrong, but Bitcoin had in history moments when mining was not worth it anymore to certain categories. They stopped their gear and maybe the difficulty didn't rise that fast.  This could also happen in the future too if the price continues to drop.

As far as I can tell, these calculations are correct if things stay as they are today.
However, one may assume that the transaction fees are not going to stay at today's level. It may very well be that on-chain transacting on the bitcoin network won't be that cheap. Also, these calculations don't include off-chain scaling. We don't know now how big the impact of the lightning network will be and how it may affect the scalability problem.

     Let’s talk a little bit about the Bitcoin scaling issues. We will look at some projections for the future using estimates based on todays numbers. I realize that some of the numbers change quite a bit so it makes it a little difficult to calculate perfectly, but we can get some good generalizations. If I am missing something or if my logic is wrong or my math is wrong, please kindly help me understand, as this is meant for information purposes only and meant to provoke meaningful thought. Especially for Bitcoin core, who can not agree on how to scale, so, so far nothing has been implemented as far as block size is concerned. There is a lot of info to share So let’s begin…
    
     At current prices of $6,600 and with a block reward of 1800 coins a day (12.5 X 6 X 24) the current rewards paid out to the miners each day is $11,880,000. At some point in the future, around 2120 I think, the last bitcoin will be mined and the miners will have to live off of transaction fees alone. If that were to happen today, at todays rates, we would need to pay out the miners the roughly $11,880,000 with transaction fees alone. Something has to give. Either there will be less miners due to loss of profitability, or much higher network fees. At todays rate of $.572 average transaction fee (source https://bitinfocharts.com/comparison/bitcoin-transactionfees.html#3m ) we would need 20,769,230 transactions a day to pay the miners with the fees generated. We are currently just shy of 200,000 transactions a day. (source https://www.blockchain.com/en/charts) This means that we would need 103.8 times as many transactions a day to reach the 20,769,230 to make up the difference needed to sustain the miners. This comes out to 240.38 transactions per second! If you are familiar with the current block size limits you already know that the Bitcoin network can handle between 3.3-7 transactions per second. (source https://en.wikipedia.org/wiki/Bitcoin_scalability_problem) So, this means that the MINIMUM block size would need to be 35mb, not 1mb, not 2mb, not 8mb, but 35mb. No one is talking about a block size that large. No one. Again back to Bitcoin core. The block size is supposed to be scalable but they refuse to even double the size from current levels.
    
     These numbers listed above are conservative and if the price of Bitcoin goes up as high as some are speculating, they only get much worse. At a $50,000 Bitcoin price, and after the next Block reward halving (900 coins a day,) the amount of transactions would need to be 910.5 per second in order to pay the miners for their work if the block reward was gone. If we wanted to be at a point to where the network was growing at a rate that could keep up with miner payouts based on fees each time a block reward halving happens, then the network will need to grow to 910.5 transactions a second just to make up for the $45,000,000 lost in the block reward halving as well. So far we are not even close to that kind of adoption. Again, the network is currently capable of 3.3-7 transactions per second. Fast forward to 2120 when the last Bitcoin is mined and the numbers will have to be huge. What I am getting at is that in the end, if miners are going to live off of transactions fees alone, the current block size is only a tiny fraction of what will be required.  In the $50,000 Bitcoin price example shown above the block size would need to be 275.92 times as large to accommodate that many transactions. Bitcoin core will not even double the block size to 2 mb which would allow the Bitcoin network to reach a measly 6.6-14 transactions per second. What are they thinking? Some of the core members want to make no changes to Bitcoin and that means it will never see mainstream adoption. How could it? The numbers are simply impossible.

     One final thought: When the Bitcoin price rises mining becomes more profitable and the Hash rate will rise as more miners plug in to compete for the rewards. As prices fall, mining becomes less profitable and people will unplug their miners causing the hash rate to fall. It’s not the other way around. Just because the hash rate goes up it does NOT mean that the price of Bitcoin will also go up in order to support all the miners. It is possible to lose money mining Bitcoin.

This has been a brief summary of my thoughts The more we crunch these types of numbers the more obvious it becomes that the current situation on the Bitcoin network is a recipe for failure. The block size must be changed. We Better start asking the core guys really nice if they would like to go ahead and save the network, or are we doomed to live by their indecision forever? What are the motives to stay the same?