Topic: The Blocksize Issue = Doing the Dirty Dishes (Read 2134 times)

Then it is not the problem that the hard-coded limit is there to solve.

If someone is able to send any size block the want, how many stack overflow exploits, heap overflow exploits, array overflow exploits and so on are hacker going to find when they send a petabyte-sized block?

How about when they send a billion-petabyte block?

The max block size is about the maximum size of blockeach and evry full node has to be able to handle.

Currently, every full node right now can handle one megabyte.

Once every full node has upgraded to be able to handle two megabytes, the max could be raised to two megabytes.

The more fees you the people put in, the sooner all full nodes will be upgraded.

Show how urgently you want bigger blocks by sending larger fees faster.

-MarkM-

the blocksize doesn't concern me so much... though i suppose if you're solo mining on, say, 10mbit upstream, you'd probably want to have a dozen or two really nice nodes on your addnode list, turn off listen, and set maxconnections to 20 or something.

(or alternatively just set maxblocksize to some low number in the conf file)

In reference to my trust in bitcoin as a long term viable option even with huge price shocks, the bubble of 2011 proved that we don't need artificial stabilization for bitcoin to work. Also, that bubble will probably be the second biggest record breaking shock of all time for bitcoin seeing how volatile bitcoin is during adoption phase (each transaction represents a relatively huge percentage of the bitcoin economy atm). The biggest shock will be the one that will happen when a competitor replaces bitcoin - that's when bitcoin won't lose %90 of it's value, it will lose all of it (and that will happen some day).

But in my opinion, for the vast majority of bitcoin's lifetime, you will not see such shocks that are so disproportional to the real value of goods that the currency represents. Especially if it becomes universal to some degree. Just like you don't see huge price shocks for gold (what you actually see is huge shocks of fiat currencies against gold).


tl;dr
I trust bitcoin as a decentralized currency and I don't want to trust miners by giving them the ability to dampen shocks. Especially because allowing so is a system ripe for abuse.

What happened after the Bitcoin bubble of 2011?

I heard that during the upwards 'rocket' phase, zero-fee transactions were accepted just as fast as fee-paying transactions because a) miners didn't give a shit and b) there was so little real commerce going on that block space was practically infinite.

No thank you.

Edit: just to clarify... Bitcoin doesn't need some central banking theory to keep prices stable. Bitcoin prices correlate to the value of goods they represent (both in terms of intrinsic worth and psychological value). There is no need to artificially adjust this. By not artificially adjusting this (as fiat currencies do) there will only be more transparency as to the real worth of the economy and goods, or at least your relative share of it (and bitcoin doesn't exclude competing currencies). No need for third parties to vaguely adjust things for us according to their own interests - a system ripe for abuse (as seen with fiat currencies).

If shocks happen, then they happen. It's for a reason. And if it's "artificial" then you always have competing currencies. Keep your share of litecoin or whatever coin you wish. Keep it gold. Keep it in Dollars. Keep it in whatever you trust. I trust bitcoin to be a great long term hedge, even if shocks do happen. Unless the shock entirely debases bitcoin I believe prices will adjust themselves to what they really are and I see no reason to believe otherwise. Just look at what happened after the bitcoin bubble of 2011.

OK, fair point.
Even with infinite block space, miners can still charge for the service of including transactions.

Take a snapshot of "waiting transactions", and let's say there's 100s of fresh, 'normal' transactions priced from (just pulling numbers out of the air) 0.000001BTC to 0.2BTC.
On top of that let's say there's 5000 'free' transactions on the waiting list. For simplicity, let's say that special transactions with some kind of secondary fee are already covered in the normal group.

Desired situation:
A group of the largest miners continuously work hard to keep Bitcoin stable with some central banking theory. They set and continuously adjust minimum fees. This affects the flow rate of transactions in the BTC ecosystem. If there's a price shock -- some major sell-off or buy-up, or some other currency crashes, the idea is that they can always react to dampen that shock. After all, they're rich in Bitcoin so the incentive is strong.

Bad situation caused by overly abundant block space:
A relatively small miner (e.g.: <1%) decides to play by a different set of rules. E.g.: when they get blocks, they accept ALL transactions. This has a disproportionate effect on price and inflation (many people figure "for the normal fee I'd rather use XYZ-coin because it's cheaper, but because free transactions get through within 2 days anyway, I've got some extra business to do!") So basically you get a small miner potentially ruining, or even sabotaging the hard work that the large miners put in to stabilise.

So you get a sort-of "two speed economy". The large responsible miners only have control over fast ~<1 day phenomena like flash crashes and such-like. However, the slow trends are completely out of control with small miners having disproportionately more influence. OTOH maybe it's not such a bad thing. Thoughts?

I don't see the connection. Could you clarify?

I think services like Ripple could solve the blockchain size problem.

If Bitcoin gets really big then then small transactions would be handled by these services instead, essentially using Bitcoins IOUs instead of actual Bitcoins.

The blockchain would then only be used for large transactions and would have a significant transaction fee.

If you want to hit 12 btc in fees per block, you're gonna need a lot of transactions...big transactions
Don't happen that often. You will need to _raise_ the limit to increase total fees...

Although miners do affect price, there isn't any direct relationship between mining and txn, the number of blocks per day is fixed no matter how many people are mining, even there are thousands of ASICs mining, each block is still the same as when there were only hundreds of CPUs mining

The price is mostly decided by sentiment, not mining profitability. In 2011, difficulty dropped while price also dropped, it can go on for a long time

Yes, exactly right.

I think this problem automatically fixes itself even if there is no hard-coded limit.  At Bitcoin becomes more and more popular, and used for more and more transactions (including micropayments), eventually one would reach a point where the costs to communicate, process and store all that data (even with molecular memories, etc.) becomes too large for miners to accept EVERY zero-fee transaction, and they would start screening for transactions with higher fees.  In other words, even if there was no artificial scarcity (hard-coded block-size limit), there would still be real-world scarcity.  Information is physical, and information processing isn't free.  So, fees would automatically increase to the point where the miners could stay in business even with huge transaction rates.

Mining income gets low. If less miners are producing the same amount of blocks (1 block/10 minutes), then prices rise (less competition). Once prices rise, more miners come back and prices fall (more competition).

Mining income can't get screwed because miners will simply charge more for txn inclusion in their blocks. Either that or all miners will quit, in which case there will certainly be no abundance of block space. Again, self-adjusting.

Ultimately, even with "endless" block space the miners are still competing between each other who gets to distribute it. Since it's all arbitrary, the difficulty will ensure the users always have block space to bid for, but the prices will be adjusted purely by miner's electricity costs plus operating income.

What am I missing?

I'm not understanding this argument for ensuring miner profits by making block space scarce.

Miner profits are ensured by adjusted mining difficulty, no? If block space is scarce then the txn fees dwindles and miners sell their rigs/farms, until it demand overcomes supply and txn becomes expensive and profitable and more miners come to take a share of the larger pie. All this with correlation to electricity prices, of course.

Why create block space scarcity if miner profits are ensured anyway?

That is exactly what the US Treasury is doing.

But that's not what is happening with Bitcoin.  Not a single person is being forced into it.

I guess the developers warnings that Bitcoin is 'experimental' was not enough.

Alternative idea:

Just let Bitcoin saturate to whatever maximum size it can sustain.

Eventually the fees could get so high that people are forced to shop around for cheaper alt-coins. This would challenge the popular perception that Bitcoin is resistant against inflation. It's not -- any "Alternative Coin" that steps into the same niche (pseudonymous Internet money...) inflates the overall "currency soup".

This would ruin some people's idea of using bitcoins as "hard money" for their retirement savings.
On the other hand, some day soon we may be faced with transactions that cost the same or more than competing bank rates. After all, Bitcoin is so awesome, pseudonymous and everything -- why shouldn't the miners be able to charge a premium? Oh that's right. Open source software promotes competition. While pissed off at inflation, at least people will be happy that transaction fees stay cheap.

To me the over-arching issue related to blockchain size, or more generally how to modulate growth and deal with scaling issues,  is not really one of trust per se.  It relates to whether the system remains distributed, or whether it grows into a solution where it is, for all intents and purposes, controlled by a small fraction of the community.  I prefer that it does not since if it does it opens a variety of new failure modes.

Framed differently, I would prefer a small and robust system to a large and at risk one.  I already have my foot in the door to Bitcoin-land which probably influences my personal feelings on the matter, but I think that it goes deeper and exposes my general tastes in system design.  'Brilliant ideas to help' sound to me like one of the most likely of things which could causes a complete system collapse.

Well-said, and people worried is not just a block size issue, but an overall trust issue. ( If bitcoin protocol could change via a easy route, then it is a worring sign).

So set a target in (recent mean) BTC tx fees per block and form an equilibrium around that.  Over the target: max block size increases slightly.  Under the target: max block size decreases slightly.  My suggested target is 12 BTC per block because long term, this means transactors are paying 3% of the total monetary base for the service of securing the transaction log, which just seems about right.  The key, though, is seeing that by setting this target (to whatever value) we resolve the dilemma you outline above.