Topic: Why does there need to be a limit on amount of transactions? - page 4. (Read 3783 times)

I think the blocksize limit is the ultimate hard proof that Bitcoin is not a Ponzi scheme-when you buy bitcoins, you actually invest on the infrastructure of the network, because a decentralized payment network and a permanent, always available tamper-proof database is useful to people, people are willing to pay miners to run it, if the upkeep is not enough to provide unlimited access to blockchain for everyone, the resource will then have to be rationed, which gives us the 7tps limit-my 2 cents on Jeff's words.

A lot of people are complaining that the Bitcoin network cannot scale to high processing capability, but you can't have it both ways, a system cannot be low-cost, highly-decentralized, and have high-availability all at the same time.

and now reveals why bitcoin mainstreaming wont happen anytime soon.

1. starbucks does more then 7 transactions a second.. add on the transactions of walmart.. instantly with just 2 major retailers bitcoin cannot cope.

2. buying a $1 loaf of bread with a visa card would cost the customer $1 and the retailer would get 99c. with bitcoin he would only get 93c.. why?
well the transaction fee of 0.0005 just to get a fast confirm would cost 6c then add bitpay 1% fee to convert to fiat.

3. as bitcoins fiat value increases gavin andressens ignore dust feature will also add more costs onto small transactions.

so if you want to buy a drink, sandwich or coffee at a vending machine. don't look at bitcoin for your solution.

If Bitcoin is to achieve mass adoption, the protocol will need to be handle way more than 7 tps. This change would be better performed sooner rather than later. The userbase is growing, and it will only become increasingly difficult to get everyone to update to the latest client with time.

I'm still vetting the history on this, but, I believe the 1 MB limit was originally set arbitrarily as a way of protecting the block chain from attack. It was never intended to be a limit on real economic activity.

That said, from a technical perspective, it's easier for the network to deal with 7 tps (transactions per second) than 7000 tps. With the way the block chain is stored now, 7000 tps would make for some rather big blocks and rapid block chain growth. I'm uncertain how much magic can be invented by our mostly unpaid devs to implement the technically challenging pruning and compression that's oft written about (but it's a boat load of work and would cost a fortune in the real world).  

Anyhow, I view Bitcoin's value as paralleling the total # of tps. It's a relationship that's held generally true. Those who have bitcoins stand more to gain than those who don't by raising the max block size, IMHO. Those with no or few Bitcoins can make more money by devaluing Bitcoin by limiting the max block size and creating their own Bitcoin-like network for off chain transactions.

To me, it's just a question of what do you want to be more valuable, Bitcoin or off-chain-processors. I also believe the limited resource argument is FUD. Miners set the real limit no matter what the max block size is (well, not above it!).

Bitcoins for payments? You disapoint Visa guys. VisaNet processed an average of almost 11,000 transactions a second during the busiest minute of the year.

Sorry, I don't know what you mean?

1. Is this a hard cap in the client?

Yes, the current client would not acceppt blocks > 1 MB as valid and reject them.

2. Are the ~7 Transactions per second per client.

No, that's the (rough) total number of transactions that can be included in a block. If there would be more some would never be confirmed, no matter what fee they would pay.

But this topic has really beaten to death. Read this thread if you want more information about this: https://bitcointalksearch.org/topic/the-maxblocksize-fork-140233

just leaving this here

This is per client?

There is a hard limit in the protocol that doesn't allow for blocks bigger than 1 MB.

Nodes would not accept Blocks that are bigger than 1 Mb and reject it. Changing this would require a hard fork, meaning all current version would not accept blocks of the new version as valid and therefore forking the network between a old version Blockchain and a new version Blockchain.


Meaning that changing that limit would affect Bitcoin in the same way as changing the 21 Mil Coin limit.

Jeff seems to have the opinion that "there will never be more than ~7 transactions per second" is as much a core principle of Bitcoin as "there will never be more then 21 Mil bitcoins" and changing either on of this numbers would destabilize Bitcoin and have people to loose confidence in it and maybe have some other negative effects.

I know this subject has been beaten to death but I still don't understand the technicals.

I would think that amount of transactions can go up with personal computer power. Since personal computer power grows exponentially, can amount of transactions also not increase exponentially?  

I also don't understand this expression:
"The block size is an intentionally limited economic resource, just like the 21,000,000-bitcoin limit. Changing that vastly degrades the economics surrounding bitcoin, creating many negative incentives. - Jeff Garzik"

Any help is appreciated.