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Comment by rebuilder | Hacker News Reader

This doesn't even remotely address the scaling problem, such as it may be. I'm not keen on forced blocksize caps as I don't see how that kind of planned economy model is compatible with the free-market money ideas behind Bitcoin, but even an unlimited blocksize would be unlikely to truly solve scaling.

Bitcoin simply doesn't scale very well because of the way transaction history need sto be stored. As long as the rate of blockchain growth can't be significantly reduced, transaction rate can't grow very much.

So small block proponents are likely to be right in that on-chain scaling is unrealistic, but if the market must be forced by developers to adhere to an artificial limit, I think that in itself implies Bitcoin is unlikely to be able to grow very far as the market is unable to self-regulate.

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Bitcoin will never scale as well as a centralized system. But it's not necessarily a problem. Bitcoin only needs to scale well enough to succeed. For example, just looking at brute network statistics, a 1MB blocksize causes a well connected node to use approx 1 Mbps of bandwidth. Therefore with zero improvements in the way the blockhain is implemented, we could scale to a 100MB blocksize, allowing 350-700 tps, and the bandwidth would only cost $50-100/month (cost of a 100 Mbps unmetered colocated host in the US). Disk usage would grow 5TB per year without pruning, maybe 2-3 TB with pruning, that's $50-70 per year in HDD.

I don't know about you but I feel pretty good that without any algorithmic optimizations, Bitcoin seems to have a 100x scaling potential, with a full node still remaining affordable to run by a "serious" Bitcoin individual (~$100 /month).

you want as many miners as possible or the whole network will be in danger when there are only a few miners having 50% of the mining power. it would be grate if smartphones could mine when they are charging or idle, and also run a full node and make transactions.

Right now mining equipment cost thousands of dollars... so for real, they can spend a few bucks on hardware.

I already have issues with my smartphone's drain-rate. Withstanding the issue of a huge ledger, you don't what to be mining on your smartphone.

From what I've read, one of the issues is that it's very difficult to maintain that extra bandwidth through the Great Firewall of China, resulting in any miners on the other side of where the block was found being at a disadvantage as they will get the blocks too late to be competitive. This will result in mining finally being 100% concentrated in China.

This begs the question: couldn't the Chinese government intentionally delay even small (outgoing) blocks to give Chinese miners an advantage (with either benign or malicious motives)?

Or not even the government but the miners themselves... "Oh our connection is slow [stands strategically in front of router QoS settings]"

That's basically what the "selfish mining" attack is, isn't it?

I think the interesting thing about the government doing it is it doesn't require any coordination between miners within China. They wouldn't even necessarily know it was happening unless they looked for it.

100mbps guaranteed is not the same as best effort. Besides it's an average which would max out on bandwidth from time to time unable to process data at full speed.

And with that kind of cost, forget about individuals hosting.

Also since each block is so huge, others miners will take something like 30+ seconds to validate a block leading to an unfair start on the next block. (5% of a 10 min sounds like some serious gain.)

> So small block proponents are likely to be right in that on-chain scaling is unrealistic, but if the market must be forced by developers to adhere to an artificial limit, I think that in itself implies Bitcoin is unlikely to be able to grow very far as the market is unable to self-regulate.

Apples and oranges. Blocksize trade-offs are related with how decentralized the network is/will be. Off-chain is a way to build layers on top of bitcoin to allow payments to start being only sent between off-chain payment hubs, which at the very long-term will convert on-chain(layer1) transactions into more of a settlement system (instead of payment system).

This, doesn't have anything to do with developers or project governance. Even if the network is decentralized, you cannot decentralize knowledge. In opensource, meritocracy is king, and obviously it will always be like this (so long as know-how is required to solve technical problems).

As long as economies of scale apply, mining will centralize, regardless of blocksize. Bigger miners can push out smaller ones.

As far as full nodes go, incentives are a big problem IMO: there's no direct profit in running one, so whoever runs a full node is either a hobbyist/altruist, or needs one to run a business. I don't really see what kind of user needs a full node yet is unable to pay for one, if Bitcoin is more of a high-value settlement network than a high-throughput payment network.

The point is, while blocksize has some effect on centralization I don't think it's all that big a factor in the end.

I'm not sure what you mean with your last point - that the code that gets used is always made by the developers best equipped to set economic policy? Because that is what decisions on blocksize are.

What's the point of Bitcoin if that's just a high-value settlement network?

From the perspective of end users, all the Bitcoin advantages materialize only if they use it directly as a payment network; otherwise they are de-facto using something else and it doesn't really matter how that something else is settled in the background, it matters how that something else works and if it works differently than Bitcoin, they're using that and not really Bitcoin.

From the perspective of users (organizations) who need high-value settlement networks, the classic alternatives (e.g. Target2) are better than Bitcoin since the needs are quite different, and the advantages of cryptocurrencies aren't that useful for high-value settlement, they matter mostly for end users.

> Because that is what decisions on blocksize are.

I disagree, blocksize is only related to decentralization/throughput trade-offs, not economic policy. The only economic policy that bitcoin has is the inflation rate, which is set in stone and very unlikely to ever change.

I can't really agree here. Blocksize sets a max cap on transaction rate, which is effectively a decision that the network should prefer high-value, low-frequency transactions, even though from a miner profitability (and therefore hashrate-security) standpoint, the opposite might be better. Might also be that a settlement network is the best use case for Bitcoin, but we don't know what the market would prefer because the scales are tipped in favour of high-value tx by people who believe they know best.

> I'm not keen on forced blocksize caps as I don't see how that kind of planned economy model is compatible with the free-market money ideas behind Bitcoin, but even an unlimited blocksize would be unlikely to truly solve scaling.

Bitcoin is not an economy, it's a protocol. Bitcoin does not consist of people, whereas an economy does. A planned economy is literally planning people's lives. An agreed-upon constant in a protocol is not related to this.

Block size is protocol's security parameter. Cap on block size is not artificial. Thought experiment: if block size is unlimited, would it affect security? The answer is obviously yes, so it's not artificial.

Satoshi added the block size cap as a DOS-prevention mechanism (to stop blocks from being bloated with 'dust' txns and grinding the network to a halt). It was done without any real discussion and the value was probably whatever felt right to him at the time. If he'd made it 10Mb, we'd be having this discussion in a few years time rather than now.

Yes, I agree it is very reasonable to debate whether limit should be 1 MB or 10 MB or whatever. I don't think it is reasonable to say it should be unlimited, or decided by market, or such.

> Satoshi added the block size cap as a DOS-prevention mechanism (to stop blocks from being bloated with 'dust' txns and grinding the network to a halt).

Please spare us the pure unsubstantiated and uninformed conjecture.

There's something to be said for being civil, don't you think?

Hm?

> Thought experiment: if block size is unlimited, would it affect security? The answer is obviously yes, so it's not artificial.

Obviously yes? I think you will have to explain it anyway since the block size cap does not affect mining difficulty.

The Lightning Network addresses the scaling problem. Segwit enables the lightning network. Ergo, segwit addresses the scaling problem.

LN is still vaporware, stop pushing it as the solution for everything. It's not even certain if it will work.

Jesus, not this bullshit again. It's not vaporware IF YOU CAN USE IT ALREADY. It's already available for you to use on Litecoin. Lightning works, it just needs the services to become user friendly now.

Did they solve the routing problem? No? Then it's not ready.

Also, LN requires larger blocks if it wants to scale anything at all. You need to get your coins to and from it you know.

> You need to get your coins to and from it you know.

Once LN works people will need to do this every few weeks, months, or even years.

That alone makes LN a bad idea.

How so? That's how bank accounts work now. You put your money into them, and then you spend it as needed. Why is that a problem?

It's not whether Lightning works or not. We all know it's technically possible to send value using the Lightning Network protocol.

What remains unknown, however, is whether this form of clearing network will be sufficient to scale Bitcoin payment processing to a sufficient degree. This is yet to be determined. In other words: can LN support a billion users doing ~50k TPS while keeping fees per payment at or below VISA fees?

The Lightning Network is not a solution that allows scaling Bitcoin payments to an arbitrary high throughput and arbitrarily low payment fee. LN has a limit on throughput and a minimum bound on average fee, and what that is for a LN network with N payers and M payees we simply don't know yet. For example: what will the maximum throughput, and average fee, of an LN network with 10 million payers and 10 thousand payees be?

I think you are just a few steps too ahead. We aren't at billion users just yet but needs a solution in the near future and scaling to billion users can be discussed a little later.

Actually, you can't use LN on Litecoin yet. Still waiting for the implementations.

The thing to realize is that right now, there isn't a scaling problem at all. There is one group of people doing everything they can to make sure that the block size limit is not increased, including censoring /r/bitcoin, posting non-stop with irrelevant and misleading information, making and breaking promises, etc. If the block size limit was lifted to 8MB, nothing would happen, everything would function exactly the same.

There is no technical reason for the limitation, no limits of bottlenecks have been reached now that the blocks are full and anyone could see that bitcoin as it stands takes very little CPU power and very little bandwidth to sync with the chain. If you can watch a stream on twitch or youtube, you can sync with bitcoin's chain with lots of bandwidth to spare.

Limit was to stop spams to bloat the chain. If there wasn't one, you can have a million tx and block size gets insane.

That isn't a scaling problem and is a false dichotomy. A scaling problem would be if putting the max block size cap higher than it is now caused network problems.

Seeing that there is trivial resource usage currently and that the 1MB block size limit was chosen arbitrarily, that seems incredibly unlikely.

When I say there isn't a scaling problem and you say 'there has to be something to stop spam' these two things are not mutually exclusive. The fact that you haven't distinguished between one or the other is why FUD and propaganda works so well with bitcoin at this stage.

Bitcoin CAN scale globally right now if remove 1 MB cap. If someone doesn't want to hold every transaction of blockchain they can use pruning, and some us us use it already.

For a simple user, it's not worth to keep all blockchain, because it does not matter. they can't change it or include transaction into a new block if they not mining.

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