Topic: review of proposals for adaptive maximum block size (Read 5250 times)

Unfortunately, this is what I'm mostly coming across.  Unsubstantiated claims and assumptions.

This is a sentence that mathematicians call "indeterminate form of the type zero times infinity". In other words: not a good sign of logical deduction.

This is how I currently understand it:

1) Remove the block size limit.
2) Allow clients to set their preferred bandwidth.
3) Let the free market work between these two opposing preferences.  The more miners push the block size beyond the clients' collective capability to download it, the more they run the risk of being orphaned by a smaller block better suited to the current bandwidth.

By the time the exchange rate rises to those levels the amount of space those outputs require would be insignificant.

Actually Gavin had advocated abandoning wallets swollen with coins that aren't currently economically significant.

By the time the exchange rate rises to the levels you are thinking of all the private keys will be forgotten, lost or abandoned.

The only hope is some sort of "admiralty rules" similar to "flotsam and jetsam" that will grant enterprising miners the salvage rights.

But that would be a hard fork, so...

Yes. So lets work on unlimited exchange rate, raise that high enough and raising other stuff will seem a whole lot less awful to stakeholders.

-MarkM-

Not forever. Only until the exchange rate is such that they have non-negligible purchasing power.

This for example:

http://blockchain.info/tx/ead4232286d7f843c6fd94fa13b12eaee810ca95dc26ffd3deae45a87ffb5d17

The transaction included five 0.00000001 inputs, but that cost the sender 0.0005 in fees (total fee 0.001 with toxic inputs, would have just been 0.0005 without them). There is economic incentive to leave them unspent forever. Make enough of those and you're practically undoing the 0.8 client upgrade back to 0.7 performance.

The toxic outputs can be spent, that's why they can never be discarded.

Of course they are spendable, but the fees required to do so might be too high in a limited block size scenario.

Also they might be used as fees as far as I understand, but probably again even just including these with the intention to just give them to miners might be more expensive than the space they take up in the chain.

They can't be pruned because they CAN be spent with 0 fees and/or free transactions.

Now that sounds like a problem. WTF, SatoshiDice?!

I'm confused though, if the outputs of these SatoshiDice transactions are unspendable then why can't they be pruned? Is it because we need to keep them to detect a double spend?

Normal use transactions have inputs and spendable outputs. Once they're spent, they can be completely forgotten (pruned). SatoshiDice is creating massive amounts of unspendable and unprunable transactions. They are not paying enough for the load they're putting on the network.

Why, what's s the big deal? Soon, blocks will always be a megabyte, does it matter what transactions go into the block as long as the fees get paid? The block chain is going to grow at a constant rate with or without SatoshiDice. As far as I'm concerned, SatoshiDice can have their way with the Blockchain as long as there is insufficient transaction volume to fill every block out to one megabyte. And when transaction volume does cross this threshold, SatoshiDice will have to pay market rates for fees just like everyone else.

It's not a problem.

SatoshiDICE sends 0.00000001 back to you for some losing bets.  Basically, they are using the permanent blockchain as an instant messaging protocol.

There is no such thing as a minimum fee in the protocol, only in the current rules of the most used client. The minimum fee is either 0 or - if you say 0 is "no fee" - 1 Satoshi.

Maybe testnet could be more prominently placed in the client, so people can play around (which is mostly the reason for 1 Satoshi transactions I guess), also with more meaningful amounts.

I would like to ask devs that before anything is done with the block size limit, the 0.00000001 BTC spam be dealt with.

Bitcoin should be about money and 0.00000001 BTC is not money. A transaction should not be allowed to have an output lower than the minimum fee. Such output is essentially unspendable and is just spam.

Once low output spam is stopped, the block limit will be enough for 1-2 years to come, even with extreme bitcoin adoption. That's enough time to reach the best decision how to continue forward.

The thing is that hashing adds directly to proof of work.  A miner's costs become proportional to his hash power.  There is an economy of scale here.  If the optimal point is at 0.01% of the total hashing power, then things stay distributed.  If economies of scale continue so that a miner with 90% of the hash power is more efficient than one with 10% of the hashing power, then you end up with a "natural" monopoly.

A situation where things might end up as a natural monopoly must be avoided.

If miners become bandwidth limited, then an entirely new dynamic takes over.

This means that the primary cost for a miner is bandwidth.  In this situation, a miner's costs are not proportional to his hashing power.  A miner with 90% of the market only needs to pay for bandwidth once and gets 90% of the fees, while a miner with 10% of the hashing power also pays the same, but only gets 10% of the fees.  This puts the 10% guy out of business.

Bandwidth usage doesn't add to the formal proof of work of the main chain, so it is just a deadweight loss, without adding security.

If most of a miner's costs are hashing power, then things are much less likely to end up in the natural monopoly situation (unless hashing ends up with massive economies of scale too).

I'm not sure what you try to tell me about block size with this...? If that is a (bad) attempt at sarcasm, please keep that out of the debate and post some clear arguments/reasons. As far as I get it, you're saying that there is a threat of centralisation and 3 miners competing in an endgame scenario? Sorry, but it is really not clear to me what point you want to get across.

I think misterbigg's voting proposal is the best one thus far. My reasoning: Miners are more likely to keep on mining if they can maximize their real revenue. And if over 90% of mining power thinks that increasing the max block size will increase their revenue, I'd say it's very very likely that this is indeed the case.

Of course this will mean big boys will drive hobbyist miners out of the market. But they can do this regardless: Large scale ASIC operations with industry level electricity contracts (and located in places where energy is cheap) can drive difficulty so high that hobbyist rigs can never even dream of turning profit.

So it'd be like the search engine circle-jerk back when the most relevevant possible page, in the engine's eyes, was its own output.

So we got what, a big three in each part of the world?

Modulo the fact that blocks are not cultural/linguistic the way web pages are, so maybe the big three can be the same big three world-wide, no "you don't even speak our language, you don't understand the nuances of our pages, thus your searches suck" effect helping very-different cultures to prop up a big one of their own (do they even get to have a big three, or do the regions where the big three aren't the biggest only have a big one of their own not their own whole big three?)

Way to not centralise. Are the big number two and big number three still shrinking relative to the big one or are they becoming more equal?

-MarkM-

I strongly disagree with this, as limited block size is not the only limitation in the system.

I agree that miners want to earn fees and users want to pay as few fees as possible. Miners however in your (limited block size scenario) not only can leave transactions out of blocks, they have to leave them. Even if there are more transactions out there that the miner would like to include, he has to choose as subset of the available ones.

Even if miners only can ignore transactions, they will do so - including more transactions means slower block propagation times and as already said in a different thread, bandwidth is still a limiting factor in an unlimited/virtually unlimited block size scenario. People are getting worried that miners might start to inflate blocks to drive other miners out of the network. Still having a bunch of miners that can only send blocks with a 100% used 10 GBit link between them would just mean they'd have the longest chain but nobody can use it, as it is not accessible to anyone outside any more (sending data out of the mining network would mean the miner gets driven out of business by his colleagues that have no more need for him). I'd like to call it the miner circlejerk scenario.

Anyways, since larger blocks = higher risk for orphans = fees need to be higher to migitate that risk (e.g. 5% orphan risk = needs 5% more fees than needed with 0% orphan rate), miners still can and will create a market for fees, even with (practically) limitless blocks.