Topic: Why does there need to be a limit on amount of transactions? - page 2. (Read 3783 times)

That math is valid and the CPU really isn't the bottleneck.  If it ever became a bottleneck the use of OpenCL GPU accleration or even dedicated ASIC processors capable of highspeed ECDSA verification and SHA256 hashing are certainly a possibility (eventually the "easy money" for producing ASIC miners will dry up).  That still may happen anyways to reduce power consumption, heat, and processor load (much like many servers use dedicated ASICS for SSL or TCP offloading).

The bottleneck is more in this order (from most critical to least critical):
bandwidth (for residential connections the upload segment tends to be rather constrained)
memory (to quickly validate txs & blocks the UXTO needs to be kept in memory, sure pulls from disk are possible and ... panfully slow)
storage (as much as people worry about storage it is a free market unlike residential last mile and HDD capacities already have a massive "headstart")
cpu (with moore's law I don't see this ever being a problem but as pointed out non CPU solutions are possible)

This article says the inverse, that the amount of transactions can still go up dramatically for a standard home pc:
https://en.bitcoin.it/wiki/Scalability

"As we can see, this means as long as Bitcoin nodes are allowed to max out at least 4 cores of the machines they run on, we will not run out of CPU capacity unless Bitcoin is handling 100 times as much traffic as PayPal"

"Let's assume an average rate of 2000tps, so just VISA. ... That means that you need to keep up with around 8 megabits/second of transaction data. ... This sort of bandwidth is already common for even residential connections today, and is certainly at the low end of what colocation providers would expect to provide you with."

What do you think of the arguments and calculations presented?

Then what are they using? I think most people google for bitcoin and end up on bitcoin.org where they see this:

http://bitcoin.org/en/choose-your-wallet

So yeah they end up using bitcoin-qt. Then they complain that the blockchain download is taking ages I know that's exactly what happened to me.

Bitcoin's transaction fee being low is one of its major advantages over the dollar, which has to use relatively expensive third party payment processors like Visa for digital transactions.

If bitcoin transactions become too expensive for most uses, then bitcoin will be just like fiat currency, where you are forced to use large private third party intermediaries, like Visa, for transaction processing, who can hike up their fees because they are the only processors with large enough private networks to be useful.

The personal computer's performance did not get any significant gain during recent years and it is already a pain to download the whole blockchain with an average block size less than 256KB. The bitcoin client's setup time is already magnitudes higher than it was 2 years ago but you won't have magnitudes higher harddrive capacity and network bandwidth in 2 years



An interesting view... I suppose that who have the money decide if they want to spend. Of course merchants will give some discount for bitcoin payment, maybe it will work. Then we back to the already-too-big blockchain problem



The VISA transaction fee is very expensive, but that won't affect the value of USD. Same for bitcoin, the blocksize limit is there to ensure the value of bitcoin (decentralized to maximum), but if transaction cost is high, people will just stop use it to do small transactions

What?? You're mixing the value of the currency with the value (cost) of transacting it.

The scarcity of bitcoin is set on stone: 21M units. No more.

Making Bitcoin transactions more scarce - thus more expensive - is more likely to reduce the value of the currency due to its reduced utility (if it's more expensive to transfer it around, it's certainly less useful).

Indeed I thought you were talking about miners. I don't view a smaller number of full nodes as a problem. A single honest full node is enough to spot any attempt of fraud. There'll always be more multiple honest full nodes running.


Come on. You know you'll never need a "largest of the largest company operating in massive datacenters" to run a full node.
100k tps? What's that? Visa apparently operates at 4tps according to the scalability page. How could Bitcoin possibly outgrow visa by 25 times in any reasonable time?

The world has ~7 billion people. A day has 86,4k seconds. With 100k tps, that'd be 8,64 billion transactions per day if I'm not mistaken. It's more than 1 transaction per person in the world per day (even if we consider population growth, it'd still be close to one transaction per person per day at least). I mean... Bitcoin would already be the king of currencies if it ever reach such amounts. It'd be something so freaking important in the world, that you can rest assured there would be more than enough honest nodes running. Remember: one single honest node can spot fraud (like breaking the 21M limit for ex.). And also, by that time, we can't even imagine how powerful hardware will be.


Why disturbing? Btw, that's not something that can be prevented by the protocol.


Yes, the blocksize would only be increased if there's a large consensus, or if the monetary incentives to take more transactions outcome the risks/losses from eventual "orphanage". In this last case, that's supply adapting to strong demand.
See, market coordination.


It depends how you see it. Today there's a protocol rule imposing a 1Mb rule. That's 100% coordination, everybody follows the same rule. By dropping it, you allow a bit more of "independence". Some miners may try a limit slightly larger.

It's unavoidable: there must some planning concerning what's a "too big block", because otherwise the network is vulnerable to flooding. I personally prefer the "planning by the many", and that's miners coordinating what's reasonable and what's not. They will tend to adapt to actual demand. Attempts of "central planning" (elaborating some formula etc) might not produce ideal results, and, as noted yourself, are difficult and error-prone.


If I understand it correctly you're talking about a race attack with the intention to double-spend some payments, not a total overtake. Because an overtake wouldn't work out this way in the long run. It might give some higher chances of a race attack, but I doubt it'd be anything meaningful. By the way, I'm not sure I get how this attack would take place...
Say, I generate a block that I know somehow it will hit the soft limits of 50% of the network (in hashpower). That means I break the network, half of it is mining on top of my block, the other on the previous. Now if I have >25% of the network's hashpower (a lot!) I can outpace any of the competing chains. But the thing is that, whatever chain I choose not to mine on will likely outpace the other. Even if it's the chain with the large block, eventually it will be accepted by those who initially refused it. It would still be very difficult to get any double-spend on anything with a meaningful number of confirmations. High value transactions always should always wait for significant amount of confirmations. And double-spending small transactions is not worth the investment.

Why the wink? Yes I saw that but there is a strong argument against this. As long as an ordinary personal computer can deal with it, it will remain decentralised. But since ordinary personal computers go up in power exponentially, so can the blocksize limit/amount of transactions go up exponentially, right?



I think that is a strong argument against bitcoin that initially came up for me. However this is counterbalanced by people always want to receive sound money in the first place.  Sound money like standardised gold and silver coins, came into widespread usage, not because people insisted on spending those, but because people insisted on receiving those.



Thanks for explaining that scarcity element applied to amount of transactions. I don't follow that reasoning though. Like many others I think the value of the currency goes up thanks to scarcity of amount of bitcoins, but goes down if there is a scarcity of amount of transactions. People will adapt by using another currency for smaller transactions, lowering the value of bitcoin and bitcoins.

Very true we have conceded to value this currency... could it be that the exchanges are hijacking it's value? we have had speculators flooding the market this year, but wow! have you seen how steady the price has been across all the exchanges lately?

so how do we concede to value Bitcoin then, rationally and backed by science? instead of scarcity?

The fees as well, their is a market on fees... but more importantly it seems to be guided by luck. Maybe your lucky and you get a ASIC miner to take care of your transaction instead of a efficient FPGA miner.

and what about the ecosystem from the other alt coins? how does that change it's valuation?

the factors for Bitcoin are complex and deep, but very entertaining to discuss.

I don't have answered just questions.

Will you change a bank just because one bank opens 24/7 and another bank open only 4 days a week? I guess the priority should be based on the security and the interest that banks provide. Currently bitcoin bank pay you an interest of 1000%+ per year, and you still complain that you have to wait in line to withdraw

The value of a currency comes from trust and consensus, not supply and demand, this is the most significant difference between money's valuation and anything else's valuation. The demand for money is always endless, given enough trust for that money

Yes...that's more or less what satoshi suggested.

We did just hard fork a few days ago...not sure many noticed   It _can_ be done relatively seamlessly.

I just thought of another reason to keep the block size limited.

Perhaps it's true that without a protocol limit the blockchain would grow to the point that even the most well funded datacenters would find that keeping the entire history all the way back to the Genesis Block was unfeasible.

That by itself wouldn't be a problem for Bitcoin - the only essential data in the blockchain is the UTXO set, plus enough recent history to handle a reorg event. If the blockchain got too large too quickly it would grow to a point at which pruning becomes essential and nobody is able to keep a permanent record of every transaction that has ever happened since 2009.

That would be wonderful for privacy and could be implemented with a negligible reduction in network security. I can understand why some people would be opposed to that.

Scarcity only matters to the extent that it contributes to value. The value of the currency comes from the demand to supply ratio. Demand will be limited if transactions are limited. The supply is 21 million BTC regardless of how many transactions are allowed, so more transactions = more demand for each unit of BTC.


Exactly.

so in the end the 1mb limit is a factor in the evolution of the Bitcoin ecosystem.

We want as many people as possible to participate as possible with as little access as they have, so little bandwidth needed for a node to be run on a cell phone or a computer with a dial up connection, even making it effective to run over TOR or a mesh network effectively.

Maybe this limit creates better compression protocols for the transactions in the future? making them smaller squeezing more transactions into a block: Turning the average T from .36kb to .10 kb much easier for the network to send and increasing over all speed as well.

It can also bring the issue forward about the status of the network, giving it time for high speed mesh networks to be built or vpn corridors to be assembled, targeting nodes with high speed internet offers, etc. have you guys heard of hyperboria? that can be a solution as well free internet access to bypass the cost of running a node.

The economic aspects of the Bitcoin experiment could be enhanced by the limit as people begin to saturate not only the block chain limit but the 24 hour cycle so that no one without a fee can squeeze in, transaction acceptance by market decision, that aspect of the experiment is still left to be truly observed. The limit after all is 400,000 transaction per day, or 144,000 if we consider all the bloat from dust transactions. I do like satoshi dice by the way, that may be another target for optimisation

who knows how else a discussed and debated limit can create change.

What other limits does Bitcoin have?

Have OP watched this: http://www.youtube.com/watch?v=cZp7UGgBR0I  

This is always a political and economic discussion instead of a technical one. In one word: Scarcity create value, aboundant destroy value, as a currency you want it to have highest value possible, so transaction capacity should be scarce, people will adjust their behavior accordingly

VISA is transferring inflative fiat money for the purpose of spending, people will always spend inflative currency at the first place, so even bitcoin's network are capable of handle huge amount of transaction per second, it still will seldom be used to buy milk everyday

You'd think with all this processing power we could harness it a -bit- more efficiently

And that there will continue to be a difference in security between SPV and "full" nodes.

Small companies can afford that. This assumes 16 peers, where I think the average is now 8, bandwidth not getting cheaper, and SPV clients not paying full nodes microamounts for transaction data.

The average Joe is not running a qt client.