Topic: How a floating blocksize limit inevitably leads towards centralization - page 9. (Read 71590 times)

How many times can it happen? A few orders of magnitude more times.

How many potential customers does Mega have compared to Satoshi Dice? What happens if a blockchain-based game takes off in Japan, China or India? Do you think 2013 is going to be better or worse for BitPay and Coinbase than 2012 now that they've got high-profile customers like Wordpress and Reddit. Where's the tipping point where web business owners have heard so much positive news about bitcoin that a bunch of them decide to jump in en masse?

I already outlined the likely scenario describing what happens when transaction volume reaches the max block size limit:


There will be no "chaos" or long transaction times, just high transaction fees. Users for whom it makes economic sense to utilize the Bitcoin network will pay the fees. Everyone else will use alternatives which are guaranteed to appear for economic reasons. If Bitcoin's transaction volume requires fees that are so high that some people get pushed off the network (like SatoshiDice) there is clearly a market for payment networks.

We should be so lucky that we get transaction volume sufficient to drive up fees to where users look for alternatives. It means Bitcoin is doing something right!!!

And if that does happen, at that predicted time, the developers will have a much better idea of exactly how much to raise the hard limit by then, so setting the actual value of the #define can be a last moment thing just before they all compile the upgrade that fixes it.

Right now we don't even know whether it even will hit that limit that soon, and the soft limits make it pretty much impossible (more transaction fees than there are bitcoins to pay them with, I was told) to actually hit the hard limit.

(Admittedly, commenting out the soft limits would be a cheaper method of reaching the hard limit, but what percent of hashing power has done that so far? At what rate is how much hashing power doing it? By the end of the year how much percent of hasing power will have done it?)

Now don't panic about that "#define at the last moment" bit, I am thinking in terms of Gavin having obtained from us all by then a range of values and possibly a range of network conditions affecting the decision as to the final number to plug in, not that he will by fiat pull a whole different new number out of his ass that hadn't even come up in the discussions carried out between now and the end of the year*.

* "end of the year": an alias for "the time the fix is compiled for release"..

-MarkM-

You keep using those words.  I don't think they mean what you think they mean.

You don't understand the soft limit.

I, like many others who have commented in support of changing the max block limit, have a primary objective: to prevent bitcoin hitting a wall.

This is where the 1Mb limit is reached and transaction delays occur to such an extent that the chaos and negative press stops enough people from using bitcoin that it can limp along with saturated 1Mb blocks. Just when everyone thinks the problems are resolved they pile in again and the delays occur again. In this scenario, which may be within a year, the alternative layers/systems may not be mature enough to handle bitcoin volume growth without a lot of bad press and very upset people, badly tarnishing bitcoin's reputation.

Surely , making the limit algorithmically flexible so that it increases by a minimum to support growth without bottlenecks, until alternative layers/systems take up the slack, on their own merits, will NOT "vastly degrade the economics surrounding bitcoin, creating many negative incentives.".

So you're saying that we have at least 6 months?

Or are you saying that past performance is not a reliable indicator of future returns?

Or, perhaps, both?

Again, we're just guessing.  Did that transaction volume increase because there are 5 times as many active users?  Or was the metoric rise of Satoshi Dice the greater factor?  If the latter, how many times is that going to happen?  Truth be told, I've suspected that Satoshi Dice was set up the way it was in order to function as a block transaction padding system.

250k to 1M is only two doubling times.

The transaction volume has gone up by a factor of 5 during the last year.

Once again, we're all really just guessing.  I suppose time will tell which one of us was the luckiest guesser.

Are you sure about that?

http://blockchain.info/charts/my-wallet-n-users

Given the pace of news stories regarding more businesses accepting bitcoin payments, and new exchanges and payment processors popping up around the world I'd be very surprised if we don't hit the hard limit before the end of the year.

Looking at how long it took to go from 0.7 to 0.8 there really isn't a lot of time to waste.

Actually, he did.   But just like us, Satoshi didn't have any crystal ball, and thus no way to objectively determine what the block limit should actually be.  We can take an average of the transactions over the past four years, but that would not account for either protocol enforcible contracts nor transaction scripting that is likely to eventually increase the average size of transactions.  Nor would it account for many-in-many-out transactions that would only become common in the context of some large companies' weekly payroll.  The problem is that we don't know what the future holds, and can only make educated guesses as to how bitcoin will be used in the future.  There is no precedent for any of this guys, try to remember that we are all pioneers in this field and no one really has any applicable experience to guide us.

Satoshi chose a hard limit of 1 meg as an arbitrary design decision, effectively putting off the issue till the future, wherein hopefully there would be more useful data to make a more informed decision.  Unfortunately, we really don't have better data; at least not data that we know how to use for this purpose.  And since Satoshi left, we really don't have a tiebreaker to make a final decision when we can't come to a consensus.  Thus, what we are left with is some measure of dissent no matter what we choose to do.  The soft limit really was a short term convention.  Can we come to a decision regarding that first?  That is actually more pressing.  Should we permit the miners to double that soft limit, comment out the soft limit altogether, or include passive/aggressive enforcement rules to the vanilla clients in order to punish violators, or nothing at all.  Bear in mind, nothing is the default condition and that is what we will get with gridlock.

There is also a thread, maybe even this one, that starts with the premise that raising the limit before the optimisations are in place pretty much just invites not bothering with the optimisation, since the limit can just be skyrocketed, or eliminated, or increase over and over again (any time someone otherwise might have to actually materialise these vapourware optimisations even maybe...)

Which makes maybe a middle ground: deliberately crippled by the vaporware optimisation creators' or inventors' failure to materialise the optimisations.

Once optimal use is made of the size already provided, more size might reasonably be made available. While the size already provided is being wastefully wasted, throwing good size after bad doesn't seem like a good way to motivate materialisation of that vapourware.


If they weren't vapourware, they would probably have been adopted by now.

Increasing the size prematurely isn't scalability, its actual scaling. Heck even when it is time to do it (when it is no longer premature) it still will be actual scaling, not mere scalability. Get the difference? Scaling (actually increasing the size) awaits scalability (the mythical or vaporous or simply not quite yet ready to be merged-in optimsations).

-MarkM-

Amen, brother.  However, this is really a fairly distant issue.  Jgarzik is certainly correct that bitcoin can scale external to the main blockchain as well as it can via a hard fork for the main chain.  If we can't garner an overwelming majority in favor of changing the protocol, it's not likely to ever be changed.  That would not be the end of bitcoin, but would certainly alter how the average end user transacts with bitcoin.  I would be in favor of raising the hard limit to 10-20 MBs, so long as the soft limit remains, and perhaps a passive soft limit rule is included in future clients; but only after much consideration and time.  It has taken us four years to start bumping into the soft limit, we're not really at risk of hitting the hard limit any time soon. 

Guys, cool down.  No one is going to be making any changes to anything soon.

I can not reconcile this statement with the comments made by Satoshi in the rest of the thread. Apparently nobody knew it was "intentionally limited" back then, including the designer.

I'll accept that you and other developers changed your mind at some point about whether or not to increase the block size, but that leaving it limited was the plan from the beginning is not at all credible.

I'm glad you asked

Being the person who actually posted a faux-patch increasing the block size limit, it is important to understand why I disagree with that now...  it was erroneously assuming that the block size was the whole-picture, and not a simple, lower layer solution in a bigger picture.

The block size is an intentionally limited economic resource, just like the 21,000,000-bitcoin limit.

Changing that vastly degrades the economics surrounding bitcoin, creating many negative incentives.

You misquoted that last one.....

And I think there is misunderstanding because everyone isn't on the same page including the developers. For instance


now there is this


Those two quotes overlap but they don't quite coincide if you notice.  In mikes it would appear "deliberately cripple" means not raise the limit from 1 MB ever. garizk's on the other hand said it can scale even with the limit.......... correct me if I'm wrong plz

Call the "other layers" whatever you want, but if it turn out the scalability restrictions on the blockchain are not lifted people are going to look at the wiki, and look at the threads talking about this and conclude they've been taken in by a bait-and-switch. Bitcoin is not being advertised right now as a base settlement layer that the average person will never be allowed to interact with directly but instead will be required to interact with a third-party entity who is privileged enough to use one of the 200 million permitted transactions per year. Bitcoin will not be served well by the appearance (justified or not) that vested interests want to keep the transaction rate crippled in order to promote their pet projects and alternative cryptocurrencies.

The worst thing that can happen for Bitcoin is for scalability solutions to exist, but not be adopted for political reasons.

Some folks cling to dogma and don't actually read all the responses.

Who says you need more than one currency?

The cluelessness in this thread astounds me. How do people manage to keep repeating the same factually incorrect claims after they've refuted in allcaps?

What changed in your understanding of marketing during the last three years?

https://bitcointalksearch.org/topic/m.15145

It's hard enough to sell the idea of a distributed cryptocurrency without also needing to explain that we need more than one of them to get full functionality. That will tend to make merchants who would otherwise adopt it just throw up their hands and forget about the whole thing.