Bitcoin Network Capacity Analysis – Part 2: Macro Transaction Trends | Hacker News Reader

Bitcoin Network Capacity Analysis – Part 2: Macro Transaction Trends

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30 pointsbarracuda166 comments

Very accessible writeup from the standpoint of a casual observer. Is there a strong counterargument for increasing max blocksize?

Mostly that the blockchain is getting unmanageably large for individuals and that making it grow even faster is going to increase centralisation.

The basic problem is that Bitcoin wasn't designed to scale - it was a prototype to prove that something like Bitcoin was possible. Then they ran with it. MORAL: nothing persists like a quick hack.

"The design outlines a lightweight client that does not need the full block chain. ....I anticipate there will never be more than 100K nodes, probably less. It will reach an equilibrium where it's not worth it for more nodes to join in. The rest will be lightweight clients, which could be millions. At equilibrium size, many nodes will be server farms with one or two network nodes that feed the rest of the farm over a LAN." - Satoshi Nakamoto, July 2010 [1]

On the subject of quick hacks persisting, the (arguably flawed) design of BGP on a restaurant napkin is a great example. [2]

[1] https://bitcointalk.org/index.php?topic=286.msg2947#msg2947

[2] http://wikipedia.org/wiki/Yakov_Rekhter

Quick hacks on napkins can be pretty awesome, e.g. UTF-8. http://www.cl.cam.ac.uk/~mgk25/ucs/utf-8-history.txt

The strongest arguments for and against raising the blocksize are all about decentralization.

For the raise: As the number of transactions organically grows, if the blocks fill up, users will be pushed to "off-chain" services such as CoinBase or ChangeTip. This will hurt decentralization, because these services are basically banks.

Against the raise: As the size of blocks have grown, the number of full nodes has fallen. Further increases in block size will only make the number of full nodes decrease further (because of increased requirements for bandwidth, memory, and disk space), which will hurt decentralization.

Makes sense. Interesting balancing act. Thanks for your insight.

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