Topic: Permanently keeping the 1MB (anti-spam) restriction is a great idea ... - page 17. (Read 105082 times)

Probably the best time to let soft-limits persist was in 2011/12 when the ecosystem was smaller, the funds at stake were a lot smaller, users considered the software more experimental than beta, and the world's press wasn't really watching.


My experience of (centralized) financial systems over many years is that ignoring hardware and software constraints as they are approached invariably causes outages. Also, that trying to train a user-base or worse, a market, to behave differently to accommodate IT constraints is a Sisyphean task. There are probably hundreds of IT experts who are concerned about the block size limit, because they can see the risks in it, which they recognize from prior (usually bitter) experience.

And, this is where the role of Core Dev is crucial. If there are major efficiencies to be had, "low-hanging fruit", then it would be wonderful to see them go live and reflected in smaller blocks etc. But right now, we can only project forwards, from what is happening with the average block size.

Centralized miners suffer much lower orphan blocks if the orphan block rate is macroscopic and driven by actual propagation time. If you're in a regime where one would want to do something to lower their orphan rate, the optimal income maximizing strategy is to centralize, not to reduce sizes.

Though at least fundamentally we know there there is no need for the orphan rate to increase proportional to block-size, if miners use more efficient relaying mechanisms that take advantage of the transactions having been already sent in advance.

The chance of orphan blocks should provide some competition for space.  Miners may find with current network topology a 4MB block is the right size.   As more nodes and faster connections occur size can be adjusted.  Is a hard limit an algorithm?

We don't have hardcoded fees in Bitcoin Core... except very low ones for relay permission which have been, in practice, below typical. They're kind of ugly, and I'm generally opposed to hardcoded fees, but if they're below behavior in practice they don't cause much harm (and are very very help at preventing resource exhaustion attacks). Bitcoin Core 0.10 has a automatic fee system based on the transactions in the mempool and recent blocks, where you can set a target number of blocks to wait and it will pay based on recent history.

This is relatively straight forward to support. When a new transaction comes into the mempool, if it pays at least $increment more fees per KB than the conflicting already mempooled transaction, replace it and forward on.  Then you just need fairly simple wallet support to revise a transaction. Petertodd (IIRC) already wrote "replace by fee" code that does this.  The catch is that implemented this way it makes zero-confirmed transactions less safe, since you could have a greater success in double spending.   This can be addressed by narrowing the set of allowed replacements (e.g. all outputs must be equal or greater), but AFAIK no one has bothered implementing it.

With correctly setup software there is no relationship between your bandwidth or electricity costs as a miner and the transactions you accept into your blocks, and any slight residual relation can be divided down to nothing by pooling with other N other miners (centralizing the consensus in the process) in order to have 1/Nth the bandwidth/cpu costs. As a miner you maximize your personal income by accepting all available transactions that fit which pay a fee, it's best for you when other miners reject low fee paying transactions to encourage people to pay high fees, but you dont and instead hoover up all the fees they passed up. They take the cost of encouraging users to pay higher fees, you defect and take the benefit.

Sounds good, but hopefully you can understand that some people are not very comfortable betting Bitcoin's future on not-yet-public theorems (which sounds like they must be at odds with the best understanding available from the active technical community _and_ academia...).  There have been many "bitcoin scaling" ideas that accidentally turned out to have no security or implied extreme centralization once considered more carefully. There are a few ideas which I think will someday help a lot, but they're not practical yet and its not clear when they will be.

This is a great explanation!
It fits the "unconstrained" block size scenario, which is how Bitcoin has worked for most of its existence, except for a day or so about March 6th, 2013, when the 250KB soft-limit was effective. It does mean that when users create a transaction they have a single-shot at getting the fee right. In the simplified example, if a user pitches their fee so that 2 miners will accept it (out of 10), and then change their mind, deciding that waiting an expected 50 minutes is too long, then they are SOL, the unconfirmed tx can't be changed. Fortunately this is rare.

The "constrained" block size scenario makes necessary the ability for ordinary users to increase the fee. Users will want to update the fee on their unconfirmed tx to manage the instability in confirmation times, otherwise their tx can remain stuck in cyberspace, and they are helpless.

Certainly, protocol block limits should not be hit unless all wallets first support the updating of fees on unconfirmed tx.

I am almost certain that if Satoshi had originally coded a block limit doubling every 2 years along with block reward halving every 4 years then this would never have been discussed or even pondered in so much questionable detail. People would be like, "Oh yeah, that's the way it works, let's just deal with now".

gmaxwell: thanks for your timely input on the necessary decentralisation quantification.

Do not forget that the hard-coded fees constants fix should be addressed simultaneously with this issue since they are inter-linked .... or we'll be back arguing about that eventually also.

Looks like were concluding that doing this has also a few (potential) drawbacks. All that was discussed is theoretical as we do not really know.

I'm amazed how the thread took a turn to discussing the issues of p2p networks.

What I mean is that your perfectly idealized p2p network is still wrong.

A more detained explaination is forthcoming.


That's exactly true, and I'm not trying to escape it.

Everything that any network does has inherent costs, and every one of them in existence of which I am aware either fails to recognize this fact or else does so and does the wrong thing in response.

I was already assuming a perfectly idealized p2p network that had no overhead or sub-linear scaling. I've done as much to explore the space of efficiency gains in this kind of system as any two other people combined here, come on. Please don't try to play off that I don't know how the system works. Decentralization has inherent costs.  You're not saying anything to escape that. It's not good enough to just say "broken broken" when reality doesn't behave like you wish it did.  I also wish there wasn't a tradeoff here, but it doesn't make it so.  (And to be clear, I think there is some amount where the costs are insignificant and not a concern and that cutoff changes over time; it's only the unlimited view which I think is clearly at odds with strong decentralization and risks disenfranchising the actual holders and users of bitcoin; people who weren't signing up for a system controlled by and operated at the complete whim of a few large banks ('miners'/pools)).

The assertion that a fee market only works if miners act as a cartel is false.  The situation in which miners do not act as a cartel simply presents the consumer with a range of prices which they can choose among, paying a premium if they are willing to pay for high-priority or prompt service or taking a discount for making low-priority or slow transactions.

Imagine a market in which there is no cartel.  To make it simple, suppose that there are ten miners each with ten percent of the hashing power, and that the block size limit is not routinely reached.  Because they are economically rational and facing different prices for bandwidth and electricity in their respective neighborhoods, they all set different minimum-fee policies.

The consumer is faced with ten different price points for a "minimum acceptable" fee, which determines how many of these miners would accept his or her transaction.  

So... paying a minimum fee would get your tx accepted by one miner.  On average you're going to have to wait ten blocks before that miner gets a block, so your expected tx time is about 100 minutes.  Paying a median fee would get your tx accepted by any of five miners.  On average you're going to have to wait two blocks before one of those five gets a block, so 20 minutes.  Paying the highest fee would get your tx into any block regardless of who mines it, so you'll be in the very next block in around 10 minutes.  

The point is that consumers are not faced with a binary "pay enough" or "don't pay anything" choice; they are faced instead with the opportunity to select a level of responsiveness desired and pay for the priority they want or need on a by-transaction basis.  

All you've done here is reinforce the fact that the design of the P2P network is broken and should be fixed, which is indeed an argument I am making, with a side order of red herring regarding the issuance schedule.

The difference between us is that I don't accept a permanently broken P2P network as a given and conclude that we should employ broken economics as a work around.

The broken economics of having a block size limit, and the broken P2P network should both be fixed.

I know, we can never do a valid poll on this forum.
However I agree with the 20 MB limit, I don't think will be a problem for the bitcoiner users.

So - they could be all sockpuppet accounts (as this forum supports that).

Any poll on this forum is worth *zero* so posting the result of any such poll has *zero credibility*.

Here https://bitcointalk.org/index.php?topic=941331.0;topicseen 215 forum users don't think the same :

Typical central planner hubris.
You're making assumptions about the preferences of current and future Bitcoin users which are not warranted.

If the world wants a system which can conduct transactions at the lowest possible price, then the world will not choose to use Bitcoin, regardless of what you try to shape their behaviour with arbitrary protocol rules.

If, on the other hand, there is any demand for censorship resistance and money with a predictable supply, then that demand will express itself as a willingness to pay some price to obtain it.

If Bitcoin is going to fail because there is not enough demand for what it provides that people are willing to pay what it costs to obtain it, then Bitcoin is going to fail.

If that's what's going to happen, then no amount of tampering with the price discovery process can change that outcome, and indeed will only be counterproductive to any chances at success Bitcoin does have.

The plot shows the total daily fees in USD versus the number of transactions per day.  Indeed the correlation between the BTC value and the number of transactions per day is stronger, but that doesn't make the chart I plotted invalid.  In other words, if the network growth in the future is anything like the network growth in the past, the total fees will continue to increase along with the number of transactions per day (and along with the price of a bitcoin). 

This is a bit unhinged.  The _inherent_ costs of transactions is roughly   size_of_data * decenteralization_level (actually there is a quadratic component in a decentralized network too, but lets ignore that; good design can make it small).  In a free market for transaction capacity based purely on the inherent cost optimal competition can drive decentralization down to lower costs. With a completely centralized system the cost of almost any imaginable scale is basically nothing (e.g. a single <$2000 host on a sub-gigabit network connection is able to process a hundred thousand transactions per second).

So effectively one can replace the fee market with a market that favors the most centralization as they have the lowest costs (as thats all network income would pay for).  This may be true, but it's not interesting-- since if a highly centralized system were desirable there are more efficient and secure ways to achieve one.

I believe you're making a false comparison. None of the market participants have a way to express their preference for a decentralized network except by defining Bitcoin to be one though the rules of the system. Absent that someone who doesn't care and just wants to maximize their short term income can turn the decentralization knob all the way down (as we've seen with the enormous amount of centralization in mining pools) and maximize their income-- regardless of what the owners of bitcoins or the people making the transactions prefer. You could just as well argue that miners should be able to freely print more Bitcoins without limit and magically, if the invisible-pink-hand decides it doesn't want bitcoin to inflate, "the market" will somehow prevent it (in a way that doesn't involve just defining it out of the system).

This data is massively outdated... it's before signature caching and ultra-prune, each were easily an order of magnitude (or two) improvements in the transaction dependent parts of propagation delay. It's also prior to block relay network, not to mention the further optimizations proposed but not written yet.

I don't actually think hosts are faster, actually I'd take a bet that they were slower on average, since performance improvements have made it possible to run nodes on smaller hosts than were viable before (e.g. crazy people with Bitcoind on rpi). But we've had software improvements which massively eclipsed anything you would have gotten from hardware improvements. Repeating that level of software improvement is likely impossible, though there is still some room to improve.

There are risks around massively increasing orphan rates in the short term with larger blocks (though far far lower than what those numbers suggest), indeed... thats one of the unaddressed things in current larger block advocacy, though block relay network (and the possibility of efficient set reconciliation) more or less shows that the issues there are not very fundamental though maybe practically important.

A non-scarce good is one that does not require allocation because the available supply at a price of zero exceeds the maximum achievable demand at that price.

No good that requires time or energy to deliver can be non-scarce.

Including transactions in a block will always require both time and energy, therefore the space in a block will be scarce.

Because space in a block is scarce, miners will need to allocate the inclusion of transactions into a block, and there exists a price below which they will not do so.

We can't calculate ahead of time what the equilibrium price of a transaction will be in the future, because that depends on the future actions and preferences of millions of other people.

The regression is dominated by increase of BTC value not that of fees.

what is misused and what can not be calculated?