Topic: Soft block size limit reached, action required by YOU - page 12. (Read 64257 times)

Luke-Jr is again posting about something that he has not even basic understanding: financial networks. This by itself isn't new.

But I think it is worthwhile to show that the classic credit card are using two messages per transaction: authorization and capture.

http://www.authorize.net/support/merchant/Submitting_Transactions/Credit_Card_Transaction_Types.htm

Typical self-serve fuel pump would use two transactions: the authorization to unlock the dispenser and capture one the dispenser is put back in the locked position. Physical store checkout stand transactions typically roll those two phases into a single compressed form.

Directly the above information has no bearing to Bitcoin. But the "payment protocol" is an area of the active development in Bitcoin. It would be great that more people understood how the typical payments work and think on how to translate them to the Bitcoin global broadcast network.

One thing is to prevent double-spends. But there is additional value to be gained from discovering who even attempted to authorize more spending that they really had available funds.

The reduction was too great, but a reduction was necessary. It needs to be somewhat proportional to fiat currency exchange rates otherwise bitcoin doesn't do what it says on the tin (low transaction fees)

Maybe the solution is in more blocks with lower reward (ie. 5x more blocks, with 5btc reward each)

Either way, if bitcoin can never handle 5000+ transactions per second, why are we even bothering?

Handling 1000 transactions per second for 10 active users (SatoshiDice) and handling 1000 tx/sec for 100000 active users are two totally different things.
The latter grows the infrastructure, the former overloads it.

If it takes double-spending to stop SD's abuse, then it's good that it's easier to do.
If SD is going to take the "tough, we don't care about the problems we cause" road while they abuse the network, I don't see one reason why the network should give a care if miners exercising their by-design choices makes SD more vulnerable because they don't even follow common best practices in accepting transactions.

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While I agree that eventually the block size limit may need to be raised somehow, that day is far far in the future. With miners doing their job filtering out flooding attacks (the only major one currently being SatoshiDice), we are nowhere near even the soft limit being a concern.

Bitcoin's scaling problems are mostly limited to using the blockchain. There are many ways to avoid using the blockchain. Already, the vast majority of Bitcoin transactions (yes, even more than the SD flood!) occur within MtGox's system never touching the blockchain! The new payment protocol should help with some use cases as well. There are various possibilities for transparent trust-chain type transactions as well.

But all these different improvements require time to develop, understand, and implement in clients. With the current situation of active developers, it will probably take years before Bitcoin can scale nearly as well as competitors. Bitcoin Foundation is helping improve this situation by paying at least Gavin to work on things full time. Real adoption among rational people (ie, not gamblers or druggies) also brings with it an equivalent percentage of potential open source volunteer developers to join in the efforts.

SatoshiDice flooding the network does not. Anarchist nuts daring the government(s) to ban Bitcoin does not. These are counter-productive, and only harm the probability that Bitcoin will be able to achieve the adoption it needs to get to the point that it's truly viable.

Couldn't disagree more.  There is no social contract with Bitcoin, and to the extent any contract at all exists, Satoshidice follows it.  That nodes and miners have agreed to process SD transactions is self evident, despite your protests and claims to the contrary; unanimity was never a requirement.

The reduction of Satoshi's 0.01 minimum fee to 0.0005 was an error. A divine design was altered by whims and perceived exponential growth of Bitcoin value, without considering future impact on the network. Whims like those seen all over this forum in the past few weeks.

The transaction volume currently being experienced, which pays an average of 0.5 bitcoin per block, would instead be paying 10 bitcoin per block, on track to replace the mining reward on schedule. Bitcoin would be used for transferring currency between individuals in exchange for goods and services, instead of for frivolous applications.

Instead we have this thread.

The solution is to pay more for your transactions instead of demanding more for less. The current block size and new higher fee prioritization code allows us to crowd out the spammy with only nominal fees, even though it is still not necessary to include more than the default fee for next-block service. Economics will regulate the applications of Bitcoin to those uses that are worth paying a reasonable fee for reasonably fast processing. Unfortunately version 0.3.23 broke proper economics.

Payers have no incentive to ever include any fees, including today, because they are not the ones who actually care about double spending risk. After all, you know you're trustworthy, right?

It's actually the recipient that cares about confirmation. And recipients have many ways to incentivize mining. For example, via network assurance contracts, which I have proposed many times in various other discussions. If you see mining as a public good then assurance contracts are a method that's been both widely theoretically studied and implemented in practice (most obviously kickstarter, other examples are around too).

There is also the rather obvious and oft-overlooked fact that mining generates waste heat, and there are lots of people/places that actually need heat. Because mining hardware is small, portable and scalable, if you're already heating something with electrical resistance it may make sense to use mining ASICs instead and at that point you don't really care about the cost. You still need a full node or a pool to take part but I think that'll be easy to run even at high traffic levels.

Do people trading Gold need more than 7 tx's per second?

(i.e. do you think Bitcoin would really *die* if that was the limit?)

It's just a judgement call.

If you think the problem will go away before getting there, for some external development - say, Ripple integration or some other hybrid solution becoming common - then yeah, you can opt for Luke's patch and the problem is delayed for likely several years.

If you think this moment is as good as any other to press the community into looking for a solution, then you don't touch the block soft limit and you keep accepting all transactions.

Honestly, I think having people pay fees for the right to bloat the blockchain is something we should do sooner rather than later.

Bitcoin simply doesn't compete with paypal at this point. Only marginally if at all.

Its simple, because a currency needs to be spendable. If the network can't handle this many transactions then its not scalable for the world. A lot of people here believe in Bitcoin becoming a global currency, and this is why people are paying a lot of money for a Bitcoin.

I get this feeling some people against the blocksize increase think that 7 transactions a second is fine and Bitcoin will be like gold and it'll be this massive store of wealth. Well if millions of people can't move their wealth around your Bitcoins will be worthless, no matter how many thousands you have.

Bitcoins only have value because people think (incorrectly) that Bitcoin can scale up as a payment network and store of wealth, If you told CNN/BBC and every new adopter that the network is actually capped at a max of 7 transactions a second* and that a decent amount of the main developers think this is fine, and that no one will ever need a transaction volume higher than 1000 transactions a second. Then you will see that $45 drop and it will not recover. It won't recover because another system will take its place.

Remember VISA/MasterCard/PayPal only represent a fraction of money moved in the world. Everyday hundreds of millions of people are paid into their bank accounts from work, billions are moving cash to one another. If bitcoin sticks to 7 transactions a second and another crypto-currency that can handle 10,000 transactions a second comes about, one that allows users to download part of the blockchain and allows users to connect into a node instead of being a entire node themselves, that currency will win.

*I heard from a forum member a while back the max transactions per second is 7 before the 1MB is no longer sufficient.

I never said tx's don't matter and if tx's fell to 0 then Bitcoin would die - the question is whether it really has been designed to compete with Paypal/Visa for that purpose.

(it's not an argument of extremes I am trying to make at all)

Who said it was all that mattered?

They matter. They are not the only thing that matters but they do matter. To have 0 transactions you don't need any system. Problem solved! You see? it's just as ridiculous to say that it's ALL that matters as it is to say they don't matter at all.

Was that "eventually" intentional? Do you think the limit should be set now to accommodate the anticipated future volume?  If so, are you not concerned with the incentive structure you are imposing between now and then?  Or did you think that the limit should be dynamically adjusted as we go, to (almost) accommodate the growth?

Let me be clear, I'm not suggesting that block size limit should be lifted completely, at least not yet.

I would like to know the reasoning behind 1MB hard limit and the 250KB soft limit?  It seems to me that the soft limit is artificial, but maybe not?!?

Sam

Again why?

If # of tx's was the #1 priority then why would you even have a 10 minute confirmation time?

And why bother with even having a 21M limit if all that mattered was the # of tx's?

Because in real life it doesn't take that many people making purchases and other transactions to reach 5000 t/s. I do as many as 30 per day easily.

5000 t/s makes up 432 million/day. It would only take some 14.4 million people (with a usage pattern similar to mine) evenly distributed across the world to reach that limit. (Much fewer people if they are in the same time zone or close).

Bitcoin must scale to more than 10 million odd people.

Because:

Why?

Frankly - blaming satoshi dice is fucking retarded.

What is the point of bitcoin afterall? It's buying stuff, it's sending money, it's gambling, it's everything a currency is used for. That includes Satoshi Dice.

Solve the problem, don't go blaming a site which has arguably done more for bitcoin than any other.

Bitcoin needs to be able to handle 5000 transactions per second, eventually.

Satoshidice just rushed us into this situation. But let's be clear: we'd eventually get here if adoption rises to somewhere remotely close to mainstream.

Luke's patch is fine, but either enforcing some fees or reducing block size sound like the way things will eventually have to go.

@Mike: for the sake of informed discussion here, would you please briefly explain the economics of fees in the scenario you are proposing? What is the incentive for payers to include fees, and for miners to keep mining?