New video: Why the blocksize limit keeps Bitcoin free and decentralized - page 4.

ArticMine

legendary

Activity: 2282

Merit: 1050

Monero Core Team

There are legitimate concerns with an unlimited blocksize limit that does not address the incentives for miners once the new coin subsidy is eliminated in a ballpark time frame of 100 years. This is the reason why a dynamically changing maximum blocksize must take into account the impact on difficulty. The other important consideration is that an increase in the blocksize must be driven by genuine transaction demand and not be the result of artificial manipulation. This is critical to ensure a decentralized network. While I do not believe that genuine transaction demand will lead to centralized control of the blockchain, for the reasons I have stated above, artificial manipulation can. For example if one were to allow the artificial expansion of the maxblock size to say that needed to accommodate 10x the current VISA transaction volume over say a 6 month period one will drive the little guy out, on the other hand a similar expansion over say a 10 - 20 year period will not.

I do not see transactions outside of the blockchain as the solution here simply because such transactions become replacing Bitcoin with either a regulated PayPal, bank transfer, Western Union, Credit Card etc option or an unregulated and illegal e-gold, Liberty Reserve etc., option. If one reads the Fincen guidance carefully one can understand why. Blockchain transactions can be unregulated and legal like fiat cash transactions, while outside of the blockchain transactions must be either be regulated and subject to centralized control or illegal.

One another note what exactly is the advantage of using Bitcoin with say a 40 USD transaction fee when I can send a bank wire transfer for less?

tvbcof

legendary

Activity: 4760

Merit: 1283

Quote from: solex on May 29, 2013, 09:13:39 PM

I understand what you are saying, and agree with your response. Decentralization is the best protection against the risk of prostration before authorities which would have Bitcoin as subservient as Paypal/Mastercard.

Glad to hear it. I actually hold a fair amount of BTC (and no other crypto-currencies currently) so, in addition to believing that it is the right thing for humanity, I also believe that my argument is the right thing for my own pocketbook. It is defiantly not BS that Bitcoin is valuable to me in direct proportion to it's resistance to regulatory pressures and other like attacks.

Quote from: solex on May 29, 2013, 09:13:39 PM

It is just that inflexibility about the 1MB also introduces major risks. I really don't understand why some flexibility on this is impossible when one likely scenario is that block sizes may not even be 3MB when fidelity-bonded banks are up and running, and decentralization still healthy, enabling a smooth transition.

I think you will find that most people who think along the lines that I do are not glued to the 1MB number. We simply want to be very careful about this aspect of the system as it is one of the more critical avenues of attack and points of failure. Opening up the data rate it is what pilots might refer to as a 'box canyon' meaning one won't be able to turn around once it is entered.

I think that even some of those who are not as adamant on the point as I (and to be honest, not many people are) still wish to push into the limit a little to find out empirically what the economics are. That will give more input into how to structure the engineering tradeoffs.

I would like to think that we have some time, but I do fear the potential for a external factor (such as the Cypress thing) to produce a flood of traffic. I hope that people working both on the core Bitcoin and possible off-chain solutions of one form or another are at least considering this as a possibility.

For my part I mostly hope that as many people as possible are considering as many of the issues as possible once this thing comes to a point where it absolutely must be addressed. We are yet in the almost embryonic stages of Bitcoin's lifecycle, and my confidence in this assertion waxes and wanes but tends to grow stronger by the month.

solex

legendary

Activity: 1078

Merit: 1006

100 satoshis -> ISO code

Quote from: tvbcof on May 29, 2013, 08:58:12 PM

Quote from: solex on May 29, 2013, 08:40:03 PM

Quote from: tvbcof on May 29, 2013, 06:51:49 PM

I argue that the end result will always be off-chain transactions (hopefully of the variety ~retep talks about where the possibility of counter-party fraud is minimized) so we might as well stop growth when the actual core blockchain is as nearly universally accessible as possible. Because, again, in that state the core system is nearly impossible to successfully attack.

And this is where your hitherto reasonable arguments depart from reality.

Yes, you can stop Bitcoin growth, but you can't stop cryptocurrency growth in the worldwide market which is now well aware of the exciting potential future of currency and payments.

Leaving a 1MB concrete block on the track may derail the Bitcoin train, but what about Litecoin and others? As soon as Bitcoin fails to scale, another alt-coin will embrace a flexible or unlimited block size and probably seize all the momentum from Bitcoin's first-mover status which it will have just thrown away.

3rd-party, off-chain solutions MUST take loading off the Bitcoin blockchain organically, on their own merits, not because Bitcoin has been derailed in a high-stakes gamble that the market can be forced to behave a centrally-planned way.

I'd call it a much more high-stakes gamble to design around an assumption of a friendly and compliment operating environment and prostrate oneself to the tender mercies of the regulatory authorities and network carriers. I'm doubtful that Bitcoiners will be getting the 'seven strikes' or whatever afforded to media pirates.

And if that is the path chosen, I hope that the stakeholders have saved up some significant lobbying funds. Enough to get close to matching those of the financial industry. I'll likely not be around to chip in.

I understand what you are saying, and agree with your response. Decentralization is the best protection against the risk of prostration before authorities which would have Bitcoin as subservient as Paypal/Mastercard.

It is just that inflexibility about the 1MB also introduces major risks. I really don't understand why some flexibility on this is impossible when one likely scenario is that block sizes may not even be 3MB when fidelity-bonded banks are up and running, and decentralization still healthy, enabling a smooth transition.

tvbcof

legendary

Activity: 4760

Merit: 1283

Quote from: solex on May 29, 2013, 08:40:03 PM

Quote from: tvbcof on May 29, 2013, 06:51:49 PM

I argue that the end result will always be off-chain transactions (hopefully of the variety ~retep talks about where the possibility of counter-party fraud is minimized) so we might as well stop growth when the actual core blockchain is as nearly universally accessible as possible. Because, again, in that state the core system is nearly impossible to successfully attack.

And this is where your hitherto reasonable arguments depart from reality.

Yes, you can stop Bitcoin growth, but you can't stop cryptocurrency growth in the worldwide market which is now well aware of the exciting potential future of currency and payments.

Leaving a 1MB concrete block on the track may derail the Bitcoin train, but what about Litecoin and others? As soon as Bitcoin fails to scale, another alt-coin will embrace a flexible or unlimited block size and probably seize all the momentum from Bitcoin's first-mover status which it will have just thrown away.

3rd-party, off-chain solutions MUST take loading off the Bitcoin blockchain organically, on their own merits, not because Bitcoin has been derailed in a high-stakes gamble that the market can be forced to behave a centrally-planned way.

I'd call it a much more high-stakes gamble to design around an assumption of a friendly and compliment operating environment and prostrate oneself to the tender mercies of the regulatory authorities and network carriers. I'm doubtful that Bitcoiners will be getting the 'seven strikes' or whatever afforded to media pirates.

And if that is the path chosen, I hope that the stakeholders have saved up some significant lobbying funds. Enough to get close to matching those of the financial industry. I'll likely not be around to chip in.

solex

legendary

Activity: 1078

Merit: 1006

100 satoshis -> ISO code

Quote from: tvbcof on May 29, 2013, 06:51:49 PM

I argue that the end result will always be off-chain transactions (hopefully of the variety ~retep talks about where the possibility of counter-party fraud is minimized) so we might as well stop growth when the actual core blockchain is as nearly universally accessible as possible. Because, again, in that state the core system is nearly impossible to successfully attack.

And this is where your hitherto reasonable arguments depart from reality.

Yes, you can stop Bitcoin growth, but you can't stop cryptocurrency growth in the worldwide market which is now well aware of the exciting potential future of currency and payments.

Leaving a 1MB concrete block on the track may derail the Bitcoin train, but what about Litecoin and others? As soon as Bitcoin fails to scale, another alt-coin will embrace a flexible or unlimited block size and probably seize all the momentum from Bitcoin's first-mover status which it will have just thrown away.

3rd-party, off-chain solutions MUST take loading off the Bitcoin blockchain organically, on their own merits, not because Bitcoin has been derailed in a high-stakes gamble that the market can be forced to behave a centrally-planned way.

ArticMine

legendary

Activity: 2282

Merit: 1050

Monero Core Team

Quote from: tvbcof on May 29, 2013, 06:51:49 PM

...
Lastly, nobody in their right mind thinks that home users are going to be running VISA+ scale systems. So the use of native Bitcoin will increase until it stops increasing where-upon use will be off-chain in some form of another. The only real question is do we stop when an ordinary geek could still operate the infrastructure? When 'a few thousand enterprises' can? When '6 large entities' own the blockchain?
...

Actually some of us actually believe that this will happen in the near future. https://en.bitcoin.it/wiki/Scalability. Take for example bandwidth. It would take 2.2TB a month for Bitcoin to handle the transaction load of VISA with a block size of say 0.5 GB. Well I can now purchase a consumer internet connection with 1TB of bandwith a month. So it is very reasonable to assume that in a few years 2.2TB of bandwith a month will be readily available to consumers. As for storage and CPU power this is even less of a concern.

By the way the amount of computing power available to consumers has been growing at an exponential rate. What has also happened is that the typical consumer computer running Windows comes with so much marketing bloatware and DRM that the perception is that there is no increase in computing power. Replace Windows with GNU/Linux and watch some really old hardware shine. By the way I currently run a full Bitcoin node on a laptop that is over 10 years old and has a Windows 2000 logo. The OS is GNU/Linux.

tvbcof

legendary

Activity: 4760

Merit: 1283

Quote from: Technomage on May 29, 2013, 06:27:05 PM

Excellent post ArticMine. That is exactly what I'm talking about. In Finland there is most certainly no issue for mining or running a full node even at much higher blocksize limits. It will get tough for individuals after a certain point, but the point is nowhere near 1MB. When we need a number that's nowhere near 1MB, it's likely that the specs of our computers and network connections are nowhere near where we are now either.

So what we are talking about here is likely a complete non-issue. Mining incentive on the other hand is another issue but I think we'll get adequate hashing power with the current tx fees alone. Add assurance contracts or something like that in the future if it isn't secure enough.

Nobody is arguing that going much higher than 1MB is not possible as things stand today.

Some people are arguing that it is patently absurd that governments, when they feel threatened, will induce network carriers to attack solutions which threaten them. I think these people are short sighted, and very probably fatally wrong.

It is also worth note that anyone who mentions HDD size either misses the danger issue, or expects that their audience will.

Bitcoin adoption is likely to be driven mostly by failures of alternate solutions. It won't be at all associated with Moore's law (or Gate's law.) So it is probable that adoption rates will be very spiky and not correlated with the steady (and imho unimpressive) increases in computer/network capabilities available to consumers.

Lastly, nobody in their right mind thinks that home users(*) are going to be running VISA+ scale systems. So the use of native Bitcoin will increase until it stops increasing where-upon use will be off-chain in some form of another. The only real question is do we stop when an ordinary geek could still operate the infrastructure? When 'a few thousand enterprises' can? When '6 large entities' own the blockchain?

I argue that the end result will always be off-chain transactions (hopefully of the variety ~retep talks about where the possibility of counter-party fraud is minimized) so we might as well stop growth when the actual core blockchain is as nearly universally accessible as possible. Because, again, in that state the core system is nearly impossible to successfully attack.

Edit: (*) home users other than ~ArticMine. See following post.

Technomage

legendary

Activity: 2184

Merit: 1056

Affordable Physical Bitcoins - Denarium.com

Excellent post ArticMine. That is exactly what I'm talking about. In Finland there is most certainly no issue for mining or running a full node even at much higher blocksize limits. It will get tough for individuals after a certain point, but the point is nowhere near 1MB. When we need a number that's nowhere near 1MB, it's likely that the specs of our computers and network connections are nowhere near where we are now either.

So what we are talking about here is likely a complete non-issue. Mining incentive on the other hand is another issue but I think we'll get adequate hashing power with the current tx fees alone. Add assurance contracts or something like that in the future if it isn't secure enough.

ArticMine

legendary

Activity: 2282

Merit: 1050

Monero Core Team

I would suggest that we can support at least 50x the current block size with existing technology and easily keep the ability to run a full node in the hands of many consumers let alone computer enthusiasts. Hard drives in the 3TB are well with the reach of consumers and so are Internet connections that allow 500 GB of data per month. The more important point is that the price of storage, bandwith and computing power is falling faster than any reasonable growth of the Bitcoin network, so while in a few years we could have a block size that approached say 1GB a typical consumer and most certainly an enthusiast would have the computing power, storage and bandwith to be able to handle it.

Let us not forget that 100 years ago sending 1MB of data over the telegraph network would have cost about 50,000 USD in 1913 dollars. Well out of the reach of the average person, but something that J. P. Morgan, the individual, would have been able to afford. Should we limit future generations of Bitcoin users with a hard limit based on today's technology and cost, on the argument that only J. P. Morgan, the corporation, would be able to afford today what in the future would be easily accessible to large numbers of people?

When it comes to the block limit we need a dynamic solution that responds to network demand, difficulty and the real cost of bandwith, digital storage and computing power. If developed correctly this will allow the network to grow while at the same time ensuring that mining and the running of full nodes remains possible for consumers and computer enthusiasts.

By the way transactions outside of the blockchain are not the answer. To understand why one can read http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html.

Technomage

legendary

Activity: 2184

Merit: 1056

Affordable Physical Bitcoins - Denarium.com

Also I didn't like the fact that people should lobby against any attempts at raising the limit. Not smart. Most people here are not for blindly raising it, instead a well thought of long term plan must be realized. I will lobby against stupid solutions but in general at this time there is no valid reason for raising it up to 10MB.

Higher than 10MB, I agree that there could be an issue with that. Higher than that is not required in a good while though. When a higher than 10MB limit is actually necessary, it's quite possible that the hardware needed to run the current implementation at the time is actually available for more people than those that have large datacenters.

Technomage

legendary

Activity: 2184

Merit: 1056

Affordable Physical Bitcoins - Denarium.com

My first comment was based on the previous discussions over the issue. I decided to check the video, and as usual it has the same fallacies as the previous discussions.

First of all, hardware scaling. I agree that we shouldn't aim for a situation where only large datacenters mine and run nodes, certainly not. That is not what is going to happen though. Even with a 10MB limit and with current hardware, running Bitcoin either as a miner or a full node is not an issue in most places where Bitcoin is popular right now. I for one would have no problem running it with that limit.

A 100MB limit or higher? That's a different story, we can worry about that in the future, when the hardware will most likely be much better, and transferring the blocks optimized etc. Even with today's hardware limiting it to 1MB simply because of centralization fears is absolutely ridiculous. Not that it makes sense to change it right now, it doesn't, but once we hit the limit there is no good reason for not changing it.

The second fallacy is the whole concept of using payment processors for off chain transactions. If we do that, we end up with exactly the same thing as we have now with PayPal etc. I liked the part in the video which explained auditing off chain transactions using cryptography, well that is a great idea.

If that can be viable then I like the idea a lot more, since to me the main reason for using Bitcoin blockchain directly is that it doesn't need to be audited in any way, everything is right there for everyone to verify. I have great distaste for solutions where third party trust is required.

tvbcof

legendary

Activity: 4760

Merit: 1283

Quote from: N12 on May 29, 2013, 02:01:42 PM

...
How ironic would it be if today's "bankster elite" would be some of the only ones to enjoy the properties of Bitcoin all the while serving the 99% via coinbase and bitpay which they control?

Very. That is exactly what I see happening as the ability to operate the system progressively squeezes out all but the more well capitalized participants.

One big take-away from the 2013 conference is that most of the devs seem to have very few qualms about introducing 'taint' or 'tarnish' into the system as a means to deter crime.

If this happens at a time when the system is operated almost exclusively by entities who cannot walk away from the investment they have in infrastructure (because they are bound by corporate law if nothing else), I predict that it will be the end of core Bitcoin in anything like what we know it today. This because the infrastructure operators will be under pressure to leverage the tarnishing system to achieve political goals and will have no choice but to comply.

End users who by necessity, are relying on SPV will have not much say in the matter if there are no SPV servers which they can attach to so they will mutter, but continue to upgrade to software which actually allows them to access their BTC value.

Technomage

legendary

Activity: 2184

Merit: 1056

Affordable Physical Bitcoins - Denarium.com

I'm not really interested in debating the issue, since to me it's not an issue. Raising the blocksize limit is the obvious right move since none of the potential concerns (which are not significant) of less centralization due to raising it are worth the limitations it puts on the use of bitcoins, which would in fact make Bitcoin significantly less usable than it is now.

Of all the issues that have been on the table since I started using Bitcoin, I'm most strongly against keeping the blocksize limit as it is. I do understand the issues related to it, all of them, and I'm happy that we're not in a hurry to change it. There is plenty of time to think of the best way to change it. The limit is nowhere near problem zone right now. Eventually however, it will need to be changed.

I hope a super majority of the core Bitcoin community understands this and does not fall to this idiotic idea. The potential advantage of having a maximally decentralized core network only comes into play in extreme situations, while the potential disadvantage of limiting the usability of Bitcoin will come into play immediately, and basically will start making Bitcoin far less useful than it is and thus many users will move on to more scalable networks.

What we need is a scalable and usable payment network, which can be done with Bitcoin. Perhaps not for every microtransaction, but certainly for a lot of things. We do need decentralization as well, but I don't see a problem there either. The concerns over that are highly overrated. Mining and running nodes is already a very specialized operation, and it isn't a problem if it becomes a more specialized task. The network will simply be less decentralized, but that is not the same as centralized.

N12

donator

Activity: 1610

Merit: 1010

Quote from: tvbcof on May 29, 2013, 01:50:58 PM

Bitcoin is, by design, a finite resource like gold.

I see no reason why cheap transaction fees will change the reality that the wealthy eventually obtain a fair fraction of the wealth.

In actual fact, it would probably be a lot easier for those with the financial resources to do so, to reach out and grab the BTC if they are flying around at high velocities as Joe Sixpack buys his morning coffee.

Keeping 'native Bitcoin' lite and accessible is mostly a mechanism to keep the actual 'lords with the chain' being pretty much any geek of any nationality situated in any jurisdiction. Or even floating in the ether between jurisdictions if need be.

No, naturally Bitcoin changes nothing about inequality of wealth, but that's not what I'm aiming at. The vision of Bitcoin is to introduce digital cash-like transactions to the people rather than having them at risk for confiscated/lost/stolen funds, denied transactions etc.

How ironic would it be if today's "bankster elite" would be some of the only ones to enjoy the properties of Bitcoin all the while serving the 99% via coinbase and bitpay which they control?

tvbcof

legendary

Activity: 4760

Merit: 1283

Quote from: N12 on May 29, 2013, 01:12:11 PM

...
Seems like the future will be the lords with the chain and the chained peasants.

Bitcoin is, by design, a finite resource like gold.

I see no reason why cheap transaction fees will change the reality that the wealthy eventually obtain a fair fraction of the wealth.

In actual fact, it would probably be a lot easier for those with the financial resources to do so, to reach out and grab the BTC if they are flying around at high velocities as Joe Sixpack buys his morning coffee.

Keeping 'native Bitcoin' lite and accessible is mostly a mechanism to keep the actual 'lords with the chain' being pretty much any geek of any nationality situated in any jurisdiction. Or even floating in the ether between jurisdictions if need be.

N12

donator

Activity: 1610

Merit: 1010

First off, I'm not a coder.

As I understand it, the block size limit can only be increased via hard forks which in the future with a much larger userbase and more diverse clients could become infeasible as it would take too long. If the limit is not increased regularly to catch up with increased demand, Bitcoin the block chain will essentially become a system for fat cats who can afford to pay hundreds of today's USD for a single transaction. There would be a divide between the 99% who have no choice but to trust a third party and the 1% who can make use of the block chain's properties. Mainly, no counterparty risk.

Therefore, the solution would have to ensure that the value of a typical transaction's fee stays fairly constant as Bitcoin progresses. Now if there was a way to do it like difficulty, measuring the average fees within a certain amount of blocks and retargeting the block size limit based upon a targeted fee, it would be ideal, but since we will become more reliant on fees given that the block subsidy for miners decreases, I have no idea if this could even be done on paper since that needs to be accounted for, and probably the valuation of Bitcoin would need to be measured too, which is impossible.

I heard about off-chain transactions, but I don't see how it provides non-chain users with 0 counterparty risk. Could users demand some form of bitcoin chain based contract that will release coins eventually if not paid out or withdrawn by the user on a certain date? I doubt it.

Seems like the future will be the lords with the chain and the chained peasants.

tvbcof

legendary

Activity: 4760

Merit: 1283

snip - we are going around in circles on the likely look and feel of BTC-backed second tier processors. We're not likley to reach a useful conclusion on this so we'll just have to wait and see.

Quote from: amincd on May 29, 2013, 03:28:13 AM

Quote from: amincd on May 29, 2013, 01:37:43 AM

Going full circle, the 1MB (or reasonable) limit is simply to keep the kernel of the distributed crypto-currency ecosystem widely distributed and having a realistic chance of survival under the most significant and coordinated of attacks.

There is very little to attack if there's a 1 MB block size limit. BTC won't be a major player. It'll be centralized banks that handle credit redeemable in BTC that dominate the BTC economy, if indeed BTC becomes widely accepted, which I don't believe it will if transaction fees need to reach $20 to handle global scale traffic.

I'll grant that in the unlikely event that bitcoin succeeded under a 1 MB block cap, and this kind of economy came to be, at least the currency wouldn't be inflated by governments, but everything else will be like the modern financial system, as far as I can see.

There is no limit to the amount of value which could be moved around at 7 transactions per second.

If one could have the same confidence in Bitcoin as they have in gold, it seems likely to me that Bitcoin would end up acting a lot like gold does today on a global level. While it is downplayed in the West, behind the scenes there huge stockpiles and large (often 'virtual') transfers of it.

In certain societies where there is a cultural affinity (e.g., India), it is common that gold his held as a individual or family store of value. In other cultures it is not common to do so, but perfectly possible...and has worked out quite well for some.

Two huge advantages that Bitcoin (or something like it) have over gold is that it is inherently auditable and globally fluid. The latter being important since the barrier to entry for anyone to own it is low.

If real Bitcoin grows to the point where only a relatively small number of highly capitalized entities can operate the system, Bitcoin loses it's value proposition as a reliable store of value. At least to me and some fraction of the potential user-base. And if it becomes even mildly popular (by my definition of popular) globally for raw native use, it WILL reach that condition. In fact, if I were tasked with coming up with a strategy to destroy Bitcoin, this very well may be the approach I would take.

Kazimir

legendary

Activity: 1176

Merit: 1011

Excellent work on the site and video! I don't fully understand the off-chain solution yet (will read some more on it) but you're doing great work!

Topic: New video: Why the blocksize limit keeps Bitcoin free and decentralized - page 4. (Read 15266 times)