I have thought about this.
One answer is don't do high frequency trading. Is just parasites anyway. Money 'invested' in a company for fraction of second not do company any good, not contribute wisdom to board, not vote stock even once. Useless.
Simply let bids, asks, all limit orders, accumulate and, when low enough hash generated, bam, all trade at once, same price. One transaction, but big. Algorithm pick price where greatest amount trade can happen, where bid line cross ask line. If everybody can see bids & asks, even post facto, can verify own order is present and can verify price-pick algorithm did what supposed to. Block chain expand by one transaction only. Transaction has many txins and txouts.
Aim for hash periods of a minute or so. Variability means nobody know exactly when transaction close. High volume per round Inhibit volatility caused by high-frequency trading, means larger orders can go through without much affect on market. No high frequency traders, no wild swings too fast for human to react, fair prices, nobody get cheated by getting fraction of second wrong, everybody trade same price each round. No effect on real investor except prevent parasite sucking investor money away on trading system. Price move only in jumps at intervals poisson distribution average around one minute.
Topic: what can Bitcoin learn from high frequency trading regarding the block size? - page 2. (Read 2952 times)
September 09, 2013, 01:51:55 AM
September 08, 2013, 04:59:10 AM
Larger block sizes can ultimately lead to centralization.
Off-chain transactions can ultimately lead to centralization too. It seems the best solution somewhere in the middle.
Btw, higher fees is not an innovation and they don't solve the problem "how to put a million transactions into one block".
September 05, 2013, 08:46:18 AM
I was just asked at the Bitcoin Foundation forum "What is your plan regarding the question of the block size limit?" and "What option do you support, if any?"
I would like to share my answer in this forum, too.
Never change a running system and I agree, that currently there is no need to change the block size (http://bit.ly/17anoxZ).
If this threshold is reached, this will lead to innovations like off-chain transactions or higher fees. And this is highly recommended, because Bitcoin isn't that anonymous many people do think off (http://bit.ly/1cJWkYx, http://bit.ly/BTCFI).
But there is another good argument to keep the block size low, beside of wasting disk space.
In 2010, Spread Networks completed construction of a new high-speed fiber optic cable connecting financial markets in New York and Chicago. Whereas previous connections between the two financial centers zigzagged along railroad tracks, around mountains, etc., Spread Networks’ cable was dug in a nearly straight line. Construction costs were estimated at $300 million. The result of this investment? Round-trip communication time between New York and Chicago was reduced . . . from 16 milliseconds to 13 milliseconds. 3 milliseconds may not seem like much, especially relative to the speed at which fundamental information about companies and the economy evolves. (The blink of a human eye lasts 400 millisec- onds; reading this parenthetical took roughly 3000 milliseconds). But industry observers remarked that 3 milliseconds is an “eternity” to high-frequency trading (HFT) firms, and that “anybody pinging both markets has to be on this line, or they’re dead.” (http://bit.ly/HFQALGT)
This battle of arms is going to happen between the miners, too. I am following the argumentation of Peter Todd at the bitcointalk.org forum (http://bit.ly/14tBOWL) which is summed up for non IT people here: http://keepbitcoinfree.org.
Larger block sizes can ultimately lead to centralization.
I would like to share my answer in this forum, too.
Never change a running system and I agree, that currently there is no need to change the block size (http://bit.ly/17anoxZ).
If this threshold is reached, this will lead to innovations like off-chain transactions or higher fees. And this is highly recommended, because Bitcoin isn't that anonymous many people do think off (http://bit.ly/1cJWkYx, http://bit.ly/BTCFI).
But there is another good argument to keep the block size low, beside of wasting disk space.
In 2010, Spread Networks completed construction of a new high-speed fiber optic cable connecting financial markets in New York and Chicago. Whereas previous connections between the two financial centers zigzagged along railroad tracks, around mountains, etc., Spread Networks’ cable was dug in a nearly straight line. Construction costs were estimated at $300 million. The result of this investment? Round-trip communication time between New York and Chicago was reduced . . . from 16 milliseconds to 13 milliseconds. 3 milliseconds may not seem like much, especially relative to the speed at which fundamental information about companies and the economy evolves. (The blink of a human eye lasts 400 millisec- onds; reading this parenthetical took roughly 3000 milliseconds). But industry observers remarked that 3 milliseconds is an “eternity” to high-frequency trading (HFT) firms, and that “anybody pinging both markets has to be on this line, or they’re dead.” (http://bit.ly/HFQALGT)
This battle of arms is going to happen between the miners, too. I am following the argumentation of Peter Todd at the bitcointalk.org forum (http://bit.ly/14tBOWL) which is summed up for non IT people here: http://keepbitcoinfree.org.
Larger block sizes can ultimately lead to centralization.
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