Topic: How a floating blocksize limit inevitably leads towards centralization - page 8. (Read 71521 times)

One of the most lucid comments I have read so far. Thank you jgarzik

Aren't you yet running into meatspace retailers who don't accept cards for transactions totalling less than somewhere around five bucks/loonies or so?

Or are merchants where you are still offering minitransactions (meaning, seemingly, less than five bucks/loonies or so) over card networks?

Downtown? (aka, is downtown / uptown more or less commonly doing this than less-trafficked parts of town?)

Are card companies losing userbase due to the common pedestrian's inability to buy a cup of coffee with a card unless they accompany it with a cookie, or other similar crippling failures to accomodate minipayments? (Wah, I can't buy a stick of gum with it, I am off to find a more useful alternative...)

-MarkM-

Isn't it possible to have a better happy medium though? Where transactions are say........ a dollar at most? Or maybe a few?  Just how big would they get? Maybe that's why all the devs are saying wait and see. :T
But yeah it would still be an achievement to actually need a greater block size

1 - seems doubtful.

2 - seems 'so what?'

3 - seems that Bitcoin would fall into a role where it can provide a solid and reliable backstop against which other solutions may built and evolve.  Some will be scams or maybe even fractional but those which don't work or are mis-managed will die and those which do and are well managed will thrive.  Critically, Bitcoin may still be used...possibly at some cost...as a shuttle between competing solutions when the need arises.

Of course I would like to see Bitcoin be everything to everybody.  Perfect in every way and all that.  But it's not realistic.  #3 would still be one hell of an achievement and a great leap forward.

Well, to some degree, this is true.  However, don't forget that the $10 transaction fee would only be for those who needed their confirmations now.  The majority of transactions would just be delayed until their fee made sense.  If they never made sense, that becomes the economic incentive for the out-of-band parrallel transaction networks and solutions, which in turn reduces the future demand upon the main chain, thus reducing the common transaction fees.  It's just another marketplace, and doesn't necessarily spell the end of bitcoin.  It certainly doesn't imply that a alternative cryptocurrency would take over in bitcoin's place, because the economics of bitcoin and it's desirability as a payment method isn't so easily separated from the clearinghouse service that the blockchain provides.  More likely, IMHO, several solutions that provide for out-of-band transfer networks as well as off network member2member wallet services would fill those gaps; both in the context of subdivisions of the economy (Silk Road and other specialized markets with an internal M2M exchange, already so and pretty much required anyway;  MtGox or Coinbase develops cryptographicly signed digital cheques; some unknown programmer develops an android app that lets users trade in the private keys in some semi-trustworthy manner for use in meatspace) and locales (The Bitcoin Bank of Hong Kong develops a member android app that is widely used in Hong Kong, but not often elsewhere; The Bitcoin Bank of London uses plastic casino chips; etc.).

Most of these alternatives suffer from either a loss of anonimity or an increase in security risks, which are themselves a form of cost to the users; but most of them will have their own place within their own niches.  I wouldn't be surprised at all if wallet services can be developed with the two factor signing that prevents the newer wallet services from losing your deposit from root hacks as well as a business2buisness network similar to Ripple that permits Alice to buy a widget from Bob using their separate wallet services and a mutually trusted middle service, and still preserve anonimity of both Alice and Bob but also Wallet Service A from Wallet Service B using Wallet Intermediary C; and everyone settling  up accounts once each week on the main blockchain only if there is an unresolved balance from all the various B2BRipple transactions during the week.  (It's an idea, feel free to steal it)

that's another thing i meant to ask you about... I was wondering how do you figure that? just out of curiosity.  for instance if you suddenly have high transaction rates of.. say 10-20 dollars you are going to push a lot of transactions off the chain to something else. Those transactions pay fees too that you no longer would be getting right? (or do I misunderstand?)

No, because Bitcoin would remain the chain with the highest hash rate / proof of work.

What about step 15? The fact that if an alternate chain starts being used and gains value.. and that chain can do everything bitcoin can do but also doesn't have the artificial limit... or maybe it has a smarter limit that dynamically adjusts... would bitcoin cease to exist? Because some people seem to think that expensive transactions will kill bitcoin.  I realize that in order for transactions to get that expensive... to an extent that means bitcoin has to "succeed" to get to that point.

what if a transaction costs the equivalent of 10 dollars? It's going to push more than just 10 dollar and less transactions off the network. Even if you use a payment processor you have to send your money to the processor. And then what? Right now I can spend money for instance and send some to the reddit tip bot. Or I can donate to wikileaks. If I'm forced to use a payment processor then in order for me not to kill myself financially I would have to move everything I own to it all at once and leave it in their hands. I'm no longer in control of my own wealth. Exchanges are a weak link because governments or criminals can attack them. If they go down... that hurts.

So just to be clear it seems to me this is the case: Gavin and Mike hearn want to "wait and see what happens" . But it sounds like they want to raise the limit somehow and do it in an intelligent way. It sounds like Jgarzik wants to leave the cap in place and never move it.

Maybe we shouldn't worry about it.......... because in order for it to be a problem bitcoin has to succeed. But I don't want it to collapse after it succeeds.  I realize that "microtransactions" like satoshi dice will inevitably have to be done off the blockchain. But that still doesn't justify 10... 15... 20 or even higher transaction fees.

I'd like to throw in my 2 cents. I would like to see the block size cap removed. I think the decentralization of bitcoin could be similar to the decentralization of science, in that not everybody checks everything but everybody *can* check anything with a certain investment of time and money. As long as anyone can become a miner with an investment of $50k in today's dollars, it ensures there will always be competition and the profit margins for miners won't grow too high.

We cannot predict how miners will behave and almost certainly many of them do not act not in the best interests of bitcoin. As long as the barrier of entry is not too high though, it should keep the mining community more or less honest. Compare that to the banking community, where no new banks have been approved in the US or the UK in the last 100 years afaik.

You didn't actually address any of my concerns, you just dismissed them all.  Any reasons why?

I gave a reason to doubt the assumption that a fixed block size will necessarily lead to greater hashing power here: https://bitcointalksearch.org/topic/m.1546008

Only if its not a good enough number to be used to #define a macro instead of a constant. As a muliplier that happens again by/in June 2015 (18 months after its Jan 2014 first application) though, who knows?

-MarkM-

I very much doubt any of the items in that list are valid concerns. The only real broken promise of a fixed block size are the eventual high transaction fees. It is still not clear that this is a bad thing. One thing is for certain, however. A fixed block size should deliver Bitcoin's promise of "largest hash rate of any block chain"

Would you mind briefly listing the negative incentives you perceive?

The negatives that bother me about not changing the block size limit are:
1) It will end the promise of a universal payment network (modulo micropayments).
2) It will end the promise of widespread disintermediated finance/personal financial sovereignty.
3) With (2) comes the possibility of a few intermediaries having "sovereignty" over a very large quantity of all bitcoins.
4) Also with (2) comes a weakening of the promise of censorship-resistance (it could very well work like in China, for example, where it's possible to evade censorship, but too much of a pain in the ass for most to bother).
5) It will end the promise of stability due to widespread direct use of "high-powered money" (i.e. it opens the possibility of a fluctuating fractionally backed money supply).

I'll take my mention of "sovereignty" here as an opportunity to drop an Omar Little quote cause I like it: "Man, money ain't got no owners, only spenders."

Oh nice, an actual number, thanks! And it is less than a doubling of the max size, too!

Thanks. There ya go Gavin, we got a times two so far for, likely, the bottom of the range of values to have at your fingertips when time comes to type the proverbial #define



Sounds like maybe the times 1.5 each year won't cut it, but times two per eighteen months might still be in the running.

-MarkM-

Well I don't know about that. More likely we will see fees trending upwards over several months until an equilibrium is reached.


I agree, but alt chains are already in development. When I say that they will appear, I mean that previously unused or rarely used networks may gain popularity.


Hmm...no, coinbase is not an alt chain. They are merely an exchange. Ripple is an example of an alt chain.

All this might have to happen in a frantic week!
I think it is terribly sanguine to just assume that alternate chains can appear quickly and integrate seamlessly alongside the main blockchain. This is extremely speculative. We need some of these alt-chains to be up and running right now, taking volume, and proving themselves. Is coinbase an "alt-chain" in your example?

markm. You seem to advocate waiting until the last minute before executing the hard-fork. Yes, more information will be available to set the increased value/formula, but surely in opensource the best hard-fork is one that is executed as early as possible so that people can upgrade at their convenience.

The lily pads are increasing 10-fold per year (500 transactions per day in Jan 2011, 5000 per day in Jan 2012, 50000 per day in Jan 2013. Jan 2014 will require 1.8Mb blocks if that continues. Yes SD could be throttled or killed, yet I think it is doing bitcoin a favor, by highlighting this issue "within the community". It would be different if it was Mega or Wordpress racking up the volume.

Leaving unchanged until closer to actually needing it to be raised was what I thought was being said in that ancient thread.

What did Satoshi say would constitute an actual need, as possibly distinct from lobbyist pressure or gosh knows what other things that could lead some folk to use words such as "need"?

Can haz moar? Needz moar moar moar! Must haz moar!

Who was it said "always leave the audience wanting more", or maybe it was "always leave them wanting more"? Someone with no knowledge of and/or experience with markets and/or marketing?

-MarkM-

We are guessing, but we know that up until now the number of lily pads at least doubles every day and the pond is about 25% covered already.

I don't know.  Neither do you.  That is my point.  We're just guessing!