I am trying to find out what is your stance in the "scaling debate", though I am too lazy to read all your past posts. But are you for bigger blocks? If yes, then what is your opinion on Bitcoin Cash? Is it good enough or can it be better?
I could give you a simplistic answer, but it wouldn't be the right answer. The simplistic answer is:
yes, of course bigger blocks. However, I think that a single question, like, "are you for bigger blocks" misses entirely the point, simply because everything influences everything. That's like asking a doctor "are you for or against chemotherapy".
I think bitcoin has fundamental design issues on the deepest conceptual level, that far overshadow the simple question of "bigger blocks". I think bitcoin is fundamentally broken on the following points:
- the PoW consensus mechanism that is too wasteful and leads to centralization of power, even though it is a very good consensus (no dispute) mechanism, it doesn't provide the other desired factors, on the contrary.
- the fact that the consensus mechanism is remunerated (which, in itself, is necessary for PoW), which gives rise to a lot of game-theoretical issues and is the motor of centralization, by "economies of scale".
- bitcoin's coin emission curve, which links erroneous monetary theory, market speculation, crazy power consumption and security in one big clusterfuck
- bitcoin's lack of anonymity and hence lack of fungibility
In the face of these issues, the block size question is in fact of minor importance: when the overall structure is ill designed, you don't care about smaller design failures.
But if you tell me: "we want to keep all that, and for some or other reason, we think it is the right system", then it is obvious that block size is really not an issue, because, as I pointed out elsewhere,
bitcoin is a client/multi-server system, not a P2P system (which itself, is a consequence of PoW and the remuneration of it).
Here's that post:
https://bitcointalksearch.org/topic/m.29426613That doesn't mean that I think that things like the LN are necessarily a bad idea: there can be useful applications of this. For instance, high frequency trading is a perfect application of it. But not to solve the non-existing scaling problem. There is no scaling problem in bitcoin's model, and Satoshi even explained that already in November 2008. You simply have to accept that bitcoin is not a P2P system, but a client/multi-server system. That is the natural consequence of the design principles of bitcoin, and that is also what is de-facto observed today. In a client/multi server system, there's no scaling problem, and blocks can be of huge size, because they only need to be kept on servers that have in any case way higher expenses than the data volume it represents. I repeat that the non-P2P nature of bitcoin is not something that has to do with block size, but is the natural consequence of the PoW design and remuneration of bitcoin, no matter what block size. You automatically split the ecosystem in "miners" and "users" and you get a power law distribution in the "miner" business, that limits the amount of "servers" to a small number.
PoW was a good P2P thing when people could use their PC. However, the following aspects of bitcoin rendered it a killer of P2P:
- the all-or-nothing nature of block remuneration. There are only 52000 blocks to be won per year.
- the increasing difficulty (which in itself is related to the emission curve of bitcoin, which in itself makes it bad money and good speculation)
- the possibility to have specialized hardware outperforming general-purpose computers, leaving it to "specialists"
- the possibility to pool mining, which brings an advantage to flatten out statistical fluctuations.
There has been a lot of disinformation around this entire issue. People seem to refuse the natural consequences of the design principles of bitcoin (even though Satoshi explained that projection already in 2008), and invented an entirely bogus story about "decentralization". Mind you, that client/multi server system can work very well ! In fact, there are incentives for the "multi servers" to continue playing by the rules, even if this thing is not decentralized as a true libertarian would dream it. And that's why bitcoin is functioning even though the power in in the hands of 3 or 4 entities. All this discussion is about a religious notion of "decentralization" which is not possible in a system like bitcoin, not because of blocks, but because of the design problems I mentioned higher up. But it works.
I think that the LN invention, in itself, is a good thing, which is why BCH lacking it, is a problem. But I think that keeping the silly block limit in bitcoin, is a crazy idea too. The problem with wanting to promote the LN as a "second payment layer", which is in my opinion, a bad application of the LN technology, is self-contradictory for the following reason. The LN
as a second layer only makes sense if the block chain is congested, has high fees, and "pushes people off-chain. Otherwise, people would use the block chain. But when the block chain is congested, the LN becomes less secure ! And if the block chain works well and can easily guarantee you your opening and settling of channels without a hassle, there's no need for it. I think this has been entirely misguided.
The LN has much better NEW applications, like HF trading, atomic swapping and so on, but also securing your holdings on an exchange. It can eventually be used for special cases where a lot of fast micropayments have to be made between a limited set of players. But it is a bad idea IMO to think it should replace the fundamental function of payments on chain.