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LegendaryActivity: 1106Merit: 1045 Re: New video: Why the blocksize limit keeps Bitcoin free and decentralized May 17, 2013, 03:47:32 PM #5 Quote from: bg002h on May 17, 2013, 03:17:05 PM The video is really well done. I'm not sure where the tipping point is for the block size to push the little guy out of running a node, but surely it's a lot more than 1MB.



I though that too until I thought more deeply about how important privacy is.



Quote from: bg002h on May 17, 2013, 03:17:05 PM I love the idea of off chain transactions. Is it anything more than an idea at this point though?



Yes and no.



Off-chain is how the majority of transactions are probably performed on Bitcoin today: all the exchanges are off-chain for internal activity, The Silk Road and every site like it is totally off-chain, and then there's stuff like the recent Russian payment processor now supporting Bitcoin denominated accounts, again, off-chain.



However, the technology to do anything other than simply trust the payment processors is all stuff on paper right now. Some of the tech, like processors signing to prove they actually own the Bitcoins they say they do, is dead obvious that it'll work. The other extreme is stuff like fidelity bonded banks where we don't really know yet. Then you have in-between stuff like trusted hardware that has been used very successfully outside of Bitcoin, think smartcards, but whether that'll actually be seen on Bitcoin is an open question.



Of course, from the FinCEN guidance we've seen they're very against off-chain transactions and will consider it highly regulated. That's a tough hurdle for stuff like BitPay, although for anything underground they don't care one bit. I though that too until I thought more deeply about how important privacy is.Yes and no.Off-chain is how the majority of transactions are probably performed on Bitcoin today: all the exchanges are off-chain for internal activity, The Silk Road and every site like it is totally off-chain, and then there's stuff like the recent Russian payment processor now supporting Bitcoin denominated accounts, again, off-chain.However, the technology to do anything other than simply trust the payment processors is all stuff on paper right now. Some of the tech, like processors signing to prove they actually own the Bitcoins they say they do, is dead obvious that it'll work. The other extreme is stuff like fidelity bonded banks where we don't really know yet. Then you have in-between stuff like trusted hardware that has been used very successfully outside of Bitcoin, think smartcards, but whether that'll actually be seen on Bitcoin is an open question.Of course, from the FinCEN guidance we've seen they're very against off-chain transactions and will consider it highly regulated. That's a tough hurdle for stuff like BitPay, although for anything underground they don't care one bit. BTC: 1FCYd7j4CThTMzts78rh6iQJLBRGPW9fWv PGP: 7FAB114267E4FA04

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DonatorLegendaryActivity: 1441Merit: 1010I outlived my lifetime membership:) Re: New video: Why the blocksize limit keeps Bitcoin free and decentralized May 17, 2013, 05:06:47 PM #9 Quote from: fornit on May 17, 2013, 04:52:21 PM i think developing off-chain transaction technology is very important to bitcoin in the long run. however, until that is done, increasing the block size limit is still the only way to move forward. current consumer hardware can handle a lot more than just 1mb.

so encouraging users to support a 1mb limit is imho the wrong way. if we should go beyond 5, 10 or 20mb in the next few years is up to discussion. but staying at 1mb is just not an option. it will massively hamper short-term growth and thats too high a price to pay just to have every c64 be able to run a full node.







A testnet mega workout would be helpful. I'm running a testnet node on consumer level (but decent) hardware on a decent (but home based) internet connection. Perhaps we could all offer our computers to the devs to run a stress test on testnet? We could try block sizes of 1-100 mb and see how it goes. A testnet mega workout would be helpful. I'm running a testnet node on consumer level (but decent) hardware on a decent (but home based) internet connection. Perhaps we could all offer our computers to the devs to run a stress test on testnet? We could try block sizes of 1-100 mb and see how it goes.

1GCDzqmX2Cf513E8NeThNHxiYEivU1Chhe Hardforks aren't that hard. Its getting others to use them that's hard.

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StaffLegendaryActivity: 3178Merit: 4299 Re: New video: Why the blocksize limit keeps Bitcoin free and decentralized May 17, 2013, 05:07:33 PM

Last edit: May 17, 2013, 05:17:46 PM by gmaxwell #10 The important point of this is recognizing there is a set of engineering tradeoffs here.



Too big and everyone can transact but the transactions are worthless because no one can validate basically that gives us what we have with the dollar.



Too small and everyone can validate but the validation is worthless because no one can transact this is what you have when you try to use real physical gold online or similar.



The definition of too big / too small is a subtle trade-off that depends on a lot of things like the current capability of technology. Retep added to my thinking on this by pointing out that anonymization technology lags the already slow bandwidth scaling we see in the broader thinking, and the ability to potentially anonymize all Bitcoin activity is protective against certain failure scenarios.



My general preference is to error towards being more decentralized. There are three reasons for this:



(1) We can build a multitude of systems of different kinds decentralized and centralized ones on top of a strongly decenteralized system but we can't really build something more decentralized on top of something which is less decentralized. The core of Bitcoin sets the maximum amount of decentralization possible in our ecosystem.



(2) Decentralization is what makes what we're doing unique and valuable compared to the alternatives. If decentralization is not very important to you... you'd likely already be much happier with the USD and paypal.



(3) Regardless of the block size we need to have robust alternatives for transacting in BTC in order to improve privacy, instant confirmation, lower costs for low value transactions, permit very tiny femtopayments, and to (optionally!) better support reversible transactions. ... and once we do the global blockchain throughput rate is less of an issue: Instead of a limit of how many transactions can be done it becomes a factor that controls how costly the alternatives are allowed to be at worst, and a factor in how often people need to depend on external (usually less secure) systems.



...and also because I think it's easier to fix if you've gone too small and need to increase it, vs gone too large and shut out the general public from the validation process and handed it over to large entities.



All that said, I do cringe just a little at the over-simplification of the video... and worry a bit that in a couple years it will be clear that 2mb or 10mb or whatever is totally safe relative to all concerns perhaps even mobile devices with tor could be full nodes with 10mb blocks on the internet of 2023, and by then there may be plenty of transaction volume to keep fees high enough to support security and maybe some people will be dogmatically promoting a 1MB limit because they walked away from the video thinking that 1MB is a magic number rather than today's conservative trade-off. 200,000 - 500,000 transactions per day is a good start, indeed, but I'd certainly like to see Bitcoin doing more in the future. ... But I suppose the community can work on educating people about that them with concrete demonstrations. Thing like bg002h's suggestion of a maxed out testnet would be interesting in establishing exactly what the scaling limits of current technology are.





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LegendaryActivity: 1330Merit: 1000 Re: New video: Why the blocksize limit keeps Bitcoin free and decentralized May 17, 2013, 06:47:12 PM #11 If you're concerned about anonymity, then above all you want as many people using Bitcoin for as many transactions as possible. The weak link in maintaining anonymity will always be the person you are sending Bitcoins to. If you're the only person who sent him Bitcoins this week, or this month, or if you're the only person who uses Bitcoin in your neighborhood, then you're not remotely anonymous. Civil Liberty Through Complex Mathematics

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StaffLegendaryActivity: 3178Merit: 4299 Re: New video: Why the blocksize limit keeps Bitcoin free and decentralized May 17, 2013, 09:01:14 PM

Last edit: May 17, 2013, 09:27:54 PM by gmaxwell #12 Quote from: benjamindees on May 17, 2013, 06:47:12 PM If you're concerned about anonymity, then above all you want as many people using Bitcoin for as many transactions as possible. The weak link in maintaining anonymity will always be the person you are sending Bitcoins to. If you're the only person who sent him Bitcoins this week, or this month, or if you're the only person who uses Bitcoin in your neighborhood, then you're not remotely anonymous.

I think you're mistaking the kind of anonymity being talked about here. Say some random authority wants to force miners to only mine transactions that the authority approves of and not mine any that match some kind of blacklist, and to not extend any chains that contain violations of these rules. If successful this would substantially undermine the purpose and goals of Bitcoin.



If it is easy to mine with relatively high anonymity if you can validate on a single high performance server with a commodity consumer grade broadband connection and announce over tor or some other anonymity network it would be difficult to impose such a criteria: too many miners would disappear into the mists if you tried, and so there would be no reason to try. If, instead, running a _validating_ node (much less a miner) requires a rack of expensive equipment and a multi-gigabit network connection that is far less clearly the case. I think you're mistaking the kind of anonymity being talked about here. Say some random authority wants to force miners to only mine transactions that the authority approves of and not mine any that match some kind of blacklist, and to not extend any chains that contain violations of these rules. If successful this would substantially undermine the purpose and goals of Bitcoin.If it is easy to mine with relatively high anonymity if you can validate on a single high performance server with a commodity consumer grade broadband connection and announce over tor or some other anonymity network it would be difficult to impose such a criteria: too many miners would disappear into the mists if you tried, and so there would be no reason to try. If, instead, running a _validating_ node (much less a miner) requires a rack of expensive equipment and a multi-gigabit network connection that is far less clearly the case.

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LegendaryActivity: 1078Merit: 1000100 satoshis -> ISO code Re: New video: Why the blocksize limit keeps Bitcoin free and decentralized May 17, 2013, 09:44:28 PM #13 Quote from: gmaxwell on May 17, 2013, 05:07:33 PM All that said, I do cringe just a little at the over-simplification of the video... and worry a bit that in a couple years it will be clear that 2mb or 10mb or whatever is totally safe relative to all concerns



gmaxwell, it is always a relief to read your level-headed analysis of a problem after a serious amount of arm-waving and hyperbole.



The video is completely dishonest from the point where data-centers is mentioned. It makes the false case that up to 1MB blocks allow for decentralization and anything larger needs PayPal-like server farms for each node. It may be that the network would hum along fine with 2MB or 5MB blocks right now. We just don't know.



If Peter Todd had run NASA's Apollo space program no astronauts would ever have landed on the moon because they would still be doing Earth orbit missions, tinkering with the technology.



What is desperately needed is software that scans the Bitcoin network and provides metrics of exactly how much decentralization exists (by what ever measurement is sensible, such as propagating node-hours up-time) and plot this against average block size. Blocks are now about 0.18 MB each, so there is still time to gather stats and project how much fall-off (if any) occurs at values above 1.

gmaxwell, it is always a relief to read your level-headed analysis of a problem after a serious amount of arm-waving and hyperbole.Thefrom the point where data-centers is mentioned. It makes the false case that up to 1MB blocks allow for decentralization and anything larger needs PayPal-like server farms for each node. It may be that the network would hum along fine with 2MB or 5MB blocks right now. We just don't know.If Peter Todd had run NASA's Apollo space program no astronauts would ever have landed on the moon because they would still be doing Earth orbit missions, tinkering with the technology.What is desperately needed is software that scans the Bitcoin network and provides metrics of exactly how much decentralization exists (by what ever measurement is sensible, such as propagating node-hours up-time) and plot this against average block size. Blocks are now about 0.18 MB each, so there is still time to gather stats and project how much fall-off (if any) occurs at values above 1.

P2Pool decentralized mining at 1KxvX5Hx8nh36ig2gT5bpeEcqLQcwJsZGB

rocks: Changing the supply limit fundamentally destroys bitcoin, but increasing the blocksize limit is absolutely needed to make it successful. Please help fund projects to advance Bitcoin:at 1KxvX5Hx8nh36ig2gT5bpeEcqLQcwJsZGB

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Sr. MemberActivity: 269Merit: 250 Re: New video: Why the blocksize limit keeps Bitcoin free and decentralized May 17, 2013, 10:48:14 PM

Last edit: May 17, 2013, 11:11:15 PM by Serith #14 retep, with your design, no more then 5 payment processors will have 80% share of all bitcoin transactions because this is how things work, you can take the clue practically from any other global market consolidation. So what is the point of having decentralized validation system if a user has to choose between 5 centralized solutions to make a transaction?



EDIT: just realized that some people may not understand the consequences. It will be super easy to regulate those payment processors and enforce arbitrary rules about what people can or can't do with their money.

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StaffLegendaryActivity: 3178Merit: 4299 Re: New video: Why the blocksize limit keeps Bitcoin free and decentralized May 17, 2013, 11:00:38 PM

Last edit: May 17, 2013, 11:13:20 PM by gmaxwell #15 Quote from: solex on May 17, 2013, 09:44:28 PM gmaxwell, it is always a relief to read your level-headed analysis of a problem after a serious amount of arm-waving and hyperbole.



The video is completely dishonest from the point where data-centers is mentioned. It makes the false case that up to 1MB blocks allow for decentralization and anything larger needs PayPal-like server farms for each node. It may be that the network would hum along fine with 2MB or 5MB blocks right now. We just don't know. At the same time, it's a video made in an environment where some people are saying that it would be totally fine to _completely_ uncap it or leave it up to some hash-power majority some even going so far as arguing that people who urge caution have dishonest motivations. It's outright toxic at times.

(I'd provide some citations they're easy enough to find... but I think it might be a little unfair because in places where the debate has become heated some people have made arguments that I don't think they would have made outside of the heat of the argument, and I don't think they ought to be held personally accountable for them... the fact that the discussion goes acrimonious so easily is problematic, not the people)



I'm personally suffering some conflict over the "controversy" making needless drama and the fear that the video exaggerates some points while at the same time feeling thankfulness that someone has taken an extreme position that moves the middle and maybe makes thoughtful dialog _easier_ because careful discussion about the very real tradeoffs might suffer less from people blowing it off saying its a non-issue. If you want to argue it's a non-issue, first you must duke it out with the one-meggers. In the mean time, people who want to think instead of fight are free to find the middle path. I was also happy to see that the website linked from the video seemed to have a more even handed presentation.



I certainly think the nuance here is far more easily explained as a tension between two completely legitimate engineering objectives which we as a community have to carefully compromise over, rather than just some right vs wrong binary question of "is a bigger blocksize bad".



From one perspective bitcoin as an unstoppable, unregulatable, absolutely trustworthy egold practically any block size is bad... smaller is pretty much always better. People are already using SPV wallets in large numbers because of the current cost of validating the chain, people are choosing centeralized pools over P2pool because of the cost of dealing with the chain. There is no doubt in my mind that this is already hurting the decentralization of the system to an unacceptable degree: Hacking or kidnapping just _two_ people (or hacking one and DOS attacking one or two others) is enough to do enormous chain rewrites right now. For untrusted high value transaction people should be waiting 10-20 confirmations now or more: ASIC miner claims plans to have a signficant multiple of the whole network's hash rate in a few months: What if they already have it now? Centralization creeps in easily, and it really undermines our security model... but at least being fully decenteralized is still _possible_, the centralization we see now is an artifact of the path of least resistance rather than a requirement at our scaling level.



And at the same time from another perspective Bitcoin as practical unit for common every days payment cheaply available to as many people as possible practically any block size restriction is bad. It's also completely clear to me that transaction costs even insubstantial ones have already turned some people off from using Bitcoin. A tiny sub-bitcent fee is _infinitely_ worse than zero by some metrics. If we can first just accept that each of these views are valid conclusions from different objectives for the system... then after that we can have a polite discussion about where on the compromise spectrum the system will delivers the best value to the most people.



An interesting question that this begs is how do we measure the decentralization impact. Right now the best I have is basically a "gmaxwell-test" what is my personal willingness to run a node given a certain set of requirements? Given that I'm an exceptional sample in many regards including having hundreds of cores and tens of terabytes of storage at home, if some scale level would dissuade me it's probably a problem. Whatever qualities or flaws that criteria might have as an engineering objective, though, one way that it completely fails is that its not persuasive for other people. It doesn't form arguments that can act as a consensus mechanism, excepting insofar is that other people might apply their personal version of it and get the same results that I do.

At the same time, it's a video made in an environment where some people are saying that it would be totally fine to _completely_ uncap it or leave it up to some hash-power majority some even going so far as arguing that people who urge caution have dishonest motivations. It's outright toxic at times.(I'd provide some citations they're easy enough to find... but I think it might be a little unfair because in places where the debate has become heated some people have made arguments that I don't think they would have made outside of the heat of the argument, and I don't think they ought to be held personally accountable for them... the fact that the discussion goes acrimonious so easily is problematic, not the people)I'm personally suffering some conflict over the "controversy" making needless drama and the fear that the video exaggerates some points while at the same time feeling thankfulness that someone has taken an extreme position that moves the middle and maybe makes thoughtful dialog _easier_ because careful discussion about the very real tradeoffs might suffer less from people blowing it off saying its a non-issue. If you want to argue it's a non-issue, first you must duke it out with the one-meggers. In the mean time, people who want to think instead of fight are free to find the middle path. I was also happy to see that the website linked from the video seemed to have a more even handed presentation.I certainly think the nuance here is far more easily explained as a tension between two completely legitimate engineering objectives which we as a community have to carefully compromise over, rather than just some right vs wrong binary question of "is a bigger blocksize bad".From one perspective bitcoin as an unstoppable, unregulatable, absolutely trustworthy egold practically any block size is bad... smaller is pretty much always better. People are already using SPV wallets in large numbers because of the current cost of validating the chain, people are choosing centeralized pools over P2pool because of the cost of dealing with the chain. There is no doubt in my mind that this is already hurting the decentralization of the system to an unacceptable degree: Hacking or kidnapping just _two_ people (or hacking one and DOS attacking one or two others) is enough to do enormous chain rewrites right now. For untrusted high value transaction people should be waiting 10-20 confirmations now or more: ASIC miner claims plans to have a signficant multiple of the whole network's hash rate in a few months: What if they already have it now? Centralization creeps in easily, and it really undermines our security model... but at least being fully decenteralized is still _possible_, the centralization we see now is an artifact of the path of least resistance rather than a requirement at our scaling level.And at the same time from another perspective Bitcoin as practical unit for common every days payment cheaply available to as many people as possible practically any block size restriction is bad. It's also completely clear to me that transaction costs even insubstantial ones have already turned some people off from using Bitcoin. A tiny sub-bitcent fee is _infinitely_ worse than zero by some metrics. If we can first just accept that each of these views are valid conclusions from different objectives for the system... then after that we can have a polite discussion about where on the compromise spectrum the system will delivers the best value to the most people.An interesting question that this begs is how do we measure the decentralization impact. Right now the best I have is basically a "gmaxwell-test" what is my personal willingness to run a node given a certain set of requirements? Given that I'm an exceptional sample in many regards including having hundreds of cores and tens of terabytes of storage at home, if some scale level would dissuade me it's probably a problem. Whatever qualities or flaws that criteria might have as an engineering objective, though, one way that it completely fails is that its not persuasive for other people. It doesn't form arguments that can act as a consensus mechanism, excepting insofar is that other people might apply their personal version of it and get the same results that I do.

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Sr. MemberActivity: 352Merit: 250https://www.realitykeys.com Re: New video: Why the blocksize limit keeps Bitcoin free and decentralized May 18, 2013, 12:16:33 AM #17 I'm a bit puzzled why the people behind this video think that the _blocksize_ of all things is going to be the thing that pushes small miners out of business. Bitcoin mining is a simple, commodity business with serious economies of scale. Specifically:



* Buying 10,000 ASICs will cost you substantially less than 10,000x the price of buying 1 ASIC.

* A commercial customer buying a lot of electricity in volume will pay substantially less per kWh than a domestic customer buying a little bit.

* Setting up, monitoring and maintaining 10,000 identically-configured boxes will cost you orders of magnitude less than 10,000x the cost of setting up and running 1 box.



Bitcoin is designed to make mining a competitive market, so as more efficient miners show up, less efficient miners will constantly be finding that they can't operate at a profit and forced to close. The network connection for transmitting the blocks is a completely trivial factor compared to the raw economics involved in buying hardware and operating it to turn electricity into hash power more cheaply than anyone else.



Centralization of mining power may turn out to be a serious problem, but if it is, it's a fundamental problem with the Bitcoin design, not something that you can prevent by throttling the network to 7 transactions per second. The only way throttling the network might help would be if it kills Bitcoin's growth and makes mining so unprofitable that only hobbyists bother with it.