From mboxrd@z Thu Jan 1 00:00:00 1970 Return-Path: Received: from smtp1.linuxfoundation.org (smtp1.linux-foundation.org [172.17.192.35]) by mail.linuxfoundation.org (Postfix) with ESMTPS id 2650B87A for ; Thu, 20 Aug 2015 14:40:54 +0000 (UTC) X-Greylist: whitelisted by SQLgrey-1.7.6 Received: from mail-ig0-f173.google.com (mail-ig0-f173.google.com [209.85.213.173]) by smtp1.linuxfoundation.org (Postfix) with ESMTPS id 88E11118 for ; Thu, 20 Aug 2015 14:40:52 +0000 (UTC) Received: by igui7 with SMTP id i7so32055705igu.0 for ; Thu, 20 Aug 2015 07:40:52 -0700 (PDT) X-Google-DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=1e100.net; s=20130820; h=x-gm-message-state:content-type:mime-version:subject:from :in-reply-to:date:cc:message-id:references:to; bh=T1KIg7awr8w0042bBrBsKsF8rsnMT0KFHRX23Slvipg=; b=VJrP2JS8E4UCywH3s0O/FPsOcVOP8Y2kq2XQzcXyOh2zsmULGDGXSCSlzbZ1HAJTUI FcbGdJm10D2Cr0ISJqAPNm95MG+Jw38eYwutiy/3qgePPkOhFW+OAMPTx2/OZKLBTZ2L 7v23CcnkUYn0NegkW/Dg/0OnRTDDw1Sb0oRu/JIYgnVG7jXdDdo6mtR3lBJzEXmqmM0H Glbzge6ToSyjRk8yf9M1OBTbq3F8ldi3dLhBPVkRse7Gj1w0v0NZb5Gr7BbcIq1Sj3x8 N0LfH+UhzWg/w5zCFdu25gs3Xybhse6ZylHiEbqQRJGUcbEgucBSIqsgSTG4GQ0OF2c8 oaAg== X-Gm-Message-State: ALoCoQlBrmLoEoGBReEwdsnZs8l4pr/zPNIZeXZtEWzloA+a39D8VtVwYvOi7QGLcKhhm1M3ZCxd X-Received: by 10.50.30.36 with SMTP id p4mr7835868igh.87.1440081651946; Thu, 20 Aug 2015 07:40:51 -0700 (PDT) Received: from [192.168.1.86] (c-73-34-122-98.hsd1.co.comcast.net. [73.34.122.98]) by smtp.gmail.com with ESMTPSA id je3sm5014246igb.9.2015.08.20.07.40.50 (version=TLSv1 cipher=ECDHE-RSA-RC4-SHA bits=128/128); Thu, 20 Aug 2015 07:40:51 -0700 (PDT) Content-Type: multipart/alternative; boundary="Apple-Mail=_83ED57C2-34C4-4D68-9DAF-ACFC5A5789C6" Mime-Version: 1.0 (Mac OS X Mail 8.2 \(2102\)) From: Will Madden In-Reply-To: Date: Thu, 20 Aug 2015 08:40:50 -0600 Message-Id: <166B8CDB-65A9-4183-AACA-5DFECD99C922@bridge21inc.com> References: To: Pieter Wuille X-Mailer: Apple Mail (2.2102) X-Spam-Status: No, score=-2.6 required=5.0 tests=BAYES_00,HTML_MESSAGE, LOTS_OF_MONEY, MIME_QP_LONG_LINE, RCVD_IN_DNSWL_LOW autolearn=ham version=3.3.1 X-Spam-Checker-Version: SpamAssassin 3.3.1 (2010-03-16) on smtp1.linux-foundation.org Cc: Bitcoin Dev Subject: Re: [bitcoin-dev] Fees and the block-finding process X-BeenThere: bitcoin-dev@lists.linuxfoundation.org X-Mailman-Version: 2.1.12 Precedence: list List-Id: Bitcoin Development Discussion List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Thu, 20 Aug 2015 14:40:54 -0000 --Apple-Mail=_83ED57C2-34C4-4D68-9DAF-ACFC5A5789C6 Content-Transfer-Encoding: quoted-printable Content-Type: text/plain; charset=utf-8 >=20 > And if you see Bitcoin as a payment system where guaranteed time to = confirmation is a feature, I fully agree. But I think that is an = unrealistic dream. It only seems reliable because of lack of use. It = costs 1.5 BTC per day to create enough transactions to fill the block = chain at the minimum relay fee, and a small multiple of that at actual = fee levels. Assuming that rate remains similar with an increased block = size, that remains cheap. Apologies, this is going to be long but please read it... For starters, f the =E2=80=9Cminimum relay fee=E2=80=9D is 0.0001 BTC, = and the proven throughput from the recent stress tests was 2.3 = trx/second, it=E2=80=99s 0.0001 x 2.3 x 60 x 60 x 24 or 19.872 BTC to = fill up the block chain for 24 hours, not 1.5 BTC. The math error isn=E2=80=99t important, because the premise of what you = are saying is based on a misconception. No one is advocating that we = should price fix transaction fees at some tiny amount to guarantee cheap = transactions. Furthermore, it=E2=80=99s perfectly realistic to believe = bitcoin can scale reliably without constraining the block size to 1MB, = given certain constraints. A quick disclosure, I run a small bitcoin startup that benefits from = higher bitcoin prices and more people buying bitcoin with their fiat = currency. I also have an inadvisably high percentage of my remaining = personal savings denominated in bitcoin. Back to the point, limiting block size to impose fee pressure is a well = intentioned idea that is built on a misconception of how bitcoin's = economics work. The price of bitcoin is based on the perceived value of = units inside the protocol. Keeping transaction volumes through the = bitcoin protocol capped at around 2.3 transactions / second limits the = number of new people who can use bitcoin to around 100,000 people = performing a little under 2 transactions daily. This is only a tiny bit = more use than where we are presently. It=E2=80=99s forced stagnation. Please, read and understand: constraining the network affect and = adoption of bitcoin lowers its overall value, and by extension reduces = its price as denominated in other currencies. The only alternatives = presently to on blockchain transactions are centralized bank ledgers at = exchanges or similar companies. Yes, while capping the bitcoin = max_block_size to a level that restricts use will drive transaction fees = higher, it will also reduce the underlying price of bitcoin as = denominated in other currencies, because the outside observer will see = bitcoin stagnating and failing to grow like a nascent but promising = technology should. Higher fees combined with lower bitcoin price = negates the value of the higher fees, and the only side effect is to = stymie adoption in the process, while putting more focus on layer = protocols that are no where near ready for mainstream, stable use! =20 Removing the cap entirely is also a catastrophically poor idea, because = some group of jerks out there will absolutely make sure that every block = is 32 MB, making it a real PITA for a hobbyist to get interested in = bitcoin. Yes, some miners limit blocksize in order to balance = propagation times against transaction fee revenue, so there is already a = mechanism in place to push transaction fees higher by limiting size or = not including transactions without fees that could offset a spam happy = bad actor or group of actors, but we cannot leave that to chance. The = damage is too high to allow the risk. Bitcoin is going to grow because = each new curious, technically savvy kid who learns about it can download = and participate as a full node. We=E2=80=99re not anywhere close to = mainstream adoption or at a level of maturity where the protocol is = fully baked, so we have an obligation to keep full nodes within the = grasp of a starving college kid=E2=80=99s budget. That is the barometer = here in my mind. =20 40% should be our best guess for keeping bitcoin in reach of hobbyists, = and safer from more napsteresque node centralization. It's simple, = which makes it less prone to failure and being picked apart politically = as well. It may be too fast, or it may be too slow, but it=E2=80=99s = probably a good guess for 5 years, and if history holds true, it will = work for a long time and make the cost of running a node lower gradually = as well. No one can predict the future, but this is the best we have. = No one knows if it will be radio propagation of blocks, quantum spin = liquid based storage or data transmission, or some other breakthrough = that drives down costs, but something always seems to appear that keeps = the long term trends intact. So why wouldn=E2=80=99t we use these = trends? 8MB is about 40% annually from January 2009 to today. I can buy a 5TB = external hard drive right now online for $130.00 in the US. The true = block time is just over 9 minutes, so that=E2=80=99s 160 blocks a day x = 8MB x 365.25 days a year, or around 467.52GB of new block size annually. = This is 10.69 years of storage for $130.00, or a little over $12 a year = - which is darn close to what the cost was back in late 2010 when I = first learned about this stuff... I fail to see the =E2=80=9Ccentralizati= on" issue here, and when we contrast $12/year for hobbyists against the = centralization risks of mining pools, we should all be ashamed to have = wasted so much energy and time talking about this specific point. The = math does not add up, and it=E2=80=99s not a significant centralization = risk when we put an 8MB cap on this with 40% annual average growth. The = energy we=E2=80=99ve blown on this topic should have been put into = refining privacy, and solving mining pool centralization. There are so = many more important problems. Let's talk about other ideas for a moment. First, while lightning is = really cool and I believe it will be an exponential magnifier for = bitcoin someday, that day is NOT today. Waiting for layers over bitcoin = to solve a self-imposed limit of 1mb is just a terrible, horrible idea = for the health of the protocol. Lightning is really well thought = through, but there are still problems that need to be solved. Forced = channel expiration, transaction malleability are the theoretical issues = that must be solved. There WILL be issues that aren=E2=80=99t = anticipated and known today when it goes out =E2=80=9Cinto the wild=E2=80=9D= . Protocols of this complexity do not go from white paper to stability = in less than one to two years. Remember, even the bitcoin reference = client had a catastrophic bug 1.5 years after its January 2009 launch in = August 2010. I read here that the "deepest thinkers" believe we should = wait for overlays to solve this bottleneck, well, bluntly, that is far = from practical or pragmatic, and is =E2=80=9Civory tower=E2=80=9D = thinking. Discussing approaches like this are worse than agreeing to do = nothing, because it drains our attention away from other more pressing = issues that have a time limit on our ability to solve them before the = protocol crystallizes from the scale of the network effect (like = privacy, mining centralization, etc.) on top of accomplishing little of = immediate value other than academic debates. I=E2=80=99m not winning any popularity contests today=E2=80=A6 but it = was a bad idea to approach this as we did with XT. We should have put = in a solution that addressed just the cap size issue and nothing more. = Other changes, pork, and changing the nature of the community management = around the XT client is just too much political baggage to work without = fracturing the support of the community. And guess what happened? We = have the major community forum moderators actively censoring posts, = banning users, and things are looking to the outside observer as if the = entire system is starting to fall in on itself. Truth is ladies and = gentlemen, our egos and economic interests are creating a tragedy of the = commons that will hurt the lot of us far more than it will help the best = off of us. Yeah, I get that no one wants to code in a hostile = environment, and this community has definitely turned caustic and = behaves like a mob of petulant children, but sometimes you have to suck = it up and get things done.=20 So=E2=80=A6 what do we do? We should get our @#$@ together, stop the = academic grand standing and ego driven debates, raise the cap to 8mb and = permit an average growth of 40% a year, then get back to solving real = problems and working on layer and side chain magnifiers. Allowing = bitcoin to grow reasonably allows adoption to spread, the price to rise, = which creates more demand, higher prices, and more fees. Again, because = the fees and coinbase rewards are denominated in bitcoin, this increases = the return to miners. This, combined with allowing for growth will = encourage the price to rise, and increase stability for layers and side = chains later on down the road when the technology is stable and mature. For the love of whatever it is you care about, can we please just get = this done? Do I have to go brush up on my C++ and start asking everyone = obnoxious, amateur questions? Trust me, no one wants that. Let=E2=80=99s= just get the cap raised to 8MB + 40% on average annualized and fight = viciously about privacy or mining centralization. Something more = important. =20 Thanks. > On Aug 10, 2015, at 8:34 AM, Pieter Wuille via bitcoin-dev = wrote: >=20 > On Mon, Aug 10, 2015 at 4:12 PM, Gavin Andresen = > wrote: >=20 > Executive summary: when networks get over-saturated, they become = unreliable. Unreliable is bad. >=20 > Unreliable and expensive is extra bad, and that's where we're headed = without an increase to the max block size. >=20 > I think I see your point of view. You see demand for on-chain = transactions as a single number that grows with adoption. Once the = transaction creation rate grows close to the capacity, transactions will = become unreliable, and you consider this a bad thing. >=20 > And if you see Bitcoin as a payment system where guaranteed time to = confirmation is a feature, I fully agree. But I think that is an = unrealistic dream. It only seems reliable because of lack of use. It = costs 1.5 BTC per day to create enough transactions to fill the block = chain at the minimum relay fee, and a small multiple of that at actual = fee levels. Assuming that rate remains similar with an increased block = size, that remains cheap. >=20 > If you want transactions to be cheap, it will also be cheap to make = them unreliable. >=20 > --=20 > Pieter >=20 > _______________________________________________ > bitcoin-dev mailing list > bitcoin-dev@lists.linuxfoundation.org > https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev --Apple-Mail=_83ED57C2-34C4-4D68-9DAF-ACFC5A5789C6 Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset=utf-8

And if = you see Bitcoin as a payment system where guaranteed time to = confirmation is a feature, I fully agree. But I think that is an = unrealistic dream. It only seems reliable because of lack of use. It = costs 1.5 BTC per day to create enough transactions to fill the block = chain at the minimum relay fee, and a small multiple of that at actual = fee levels. Assuming that rate remains similar with an increased block = size, that remains cheap.

Apologies, this is going to be long but = please read it...

For starters, f the =E2=80=9Cminimum relay fee=E2=80=9D is = 0.0001 BTC, and the proven throughput from the recent stress tests was = 2.3 trx/second, it=E2=80=99s 0.0001 x 2.3 x 60 x 60 x 24 or 19.872 BTC = to fill up the block chain for 24 hours, not 1.5 BTC.

The math error isn=E2=80=99= t important, because the premise of what you are saying is based on a = misconception.  No one is advocating that we should price fix = transaction fees at some tiny amount to guarantee cheap transactions. =  Furthermore, it=E2=80=99s perfectly realistic to believe bitcoin = can scale reliably without constraining the block size to 1MB, given = certain constraints.

A quick disclosure, I run a small bitcoin startup that = benefits from higher bitcoin prices and more people buying bitcoin with = their fiat currency. I also have an inadvisably high percentage of my = remaining personal savings denominated in bitcoin.

Back to the point, = limiting block size to impose fee pressure is a well intentioned idea = that is built on a misconception of how bitcoin's economics work. =  The price of bitcoin is based on the perceived value of units = inside the protocol. Keeping transaction volumes through the bitcoin = protocol capped at around 2.3 transactions / second limits the number of = new people who can use bitcoin to around 100,000 people performing a = little under 2 transactions daily.  This is only a tiny bit more = use than where we are presently. It=E2=80=99s forced = stagnation.

Please, read and understand: constraining the network affect = and adoption of bitcoin lowers its overall value, and by extension = reduces its price as denominated in other currencies.  The only = alternatives presently to on blockchain transactions are centralized = bank ledgers at exchanges or similar companies.  Yes, while capping = the bitcoin max_block_size to a level that restricts use will drive = transaction fees higher, it will also reduce the underlying price of = bitcoin as denominated in other currencies, because the outside observer = will see bitcoin stagnating and failing to grow like a nascent but = promising technology should.  Higher fees combined with lower = bitcoin price negates the value of the higher fees, and the only side = effect is to stymie adoption in the process, while putting more focus on = layer protocols that are no where near ready for mainstream, stable use! =  

Removing = the cap entirely is also a catastrophically poor idea, because some = group of jerks out there will absolutely make sure that every block is = 32 MB, making it a real PITA for a hobbyist to get interested in = bitcoin.  Yes, some miners limit blocksize in order to balance = propagation times against transaction fee revenue, so there is already a = mechanism in place to push transaction fees higher by limiting size or = not including transactions without fees that could offset a spam happy = bad actor or group of actors, but we cannot leave that to chance. =  The damage is too high to allow the risk.  Bitcoin is going = to grow because each new curious, technically savvy kid who learns about = it can download and participate as a full node.  We=E2=80=99re not = anywhere close to mainstream adoption or at a level of maturity where = the protocol is fully baked, so we have an obligation to keep full nodes = within the grasp of a starving college kid=E2=80=99s budget.  That = is the barometer here in my mind.  

40% should be our best guess for = keeping bitcoin in reach of hobbyists, and safer from more napsteresque = node centralization.  It's simple, which makes it less prone to = failure and being picked apart politically as well.  It may be too = fast, or it may be too slow, but it=E2=80=99s probably a good guess for = 5 years, and if history holds true, it will work for a long time and = make the cost of running a node lower gradually as well.  No one = can predict the future, but this is the best we have.  No one knows = if it will be radio propagation of blocks, quantum spin liquid based = storage or data transmission, or some other breakthrough that drives = down costs, but something always seems to appear that keeps the long = term trends intact.  So why wouldn=E2=80=99t we use these = trends?

8MB is = about 40% annually from January 2009 to today.  I can buy a 5TB = external hard drive right now online for $130.00 in the US.  The = true block time is just over 9 minutes, so that=E2=80=99s 160 blocks a = day x 8MB x 365.25 days a year, or around 467.52GB of new block size = annually.  This is 10.69 years of storage for $130.00, or a little = over $12 a year - which is darn close to what the cost was back in late = 2010 when I first learned about this stuff...  I fail to see the = =E2=80=9Ccentralization" issue here, and when we contrast $12/year for = hobbyists against the centralization risks of mining pools, we should = all be ashamed to have wasted so much energy and time talking about this = specific point.  The math does not add up, and it=E2=80=99s not a = significant centralization risk when we put an 8MB cap on this with 40% = annual average growth.  The energy we=E2=80=99ve blown on this = topic should have been put into refining privacy, and solving mining = pool centralization.  There are so many more important = problems.

Let's = talk about other ideas for a moment.  First, while lightning is = really cool and I believe it will be an exponential magnifier for = bitcoin someday, that day is NOT today.  Waiting for layers over = bitcoin to solve a self-imposed limit of 1mb is just a terrible, = horrible idea for the health of the protocol.  Lightning is really = well thought through, but there are still problems that need to be = solved.  Forced channel expiration, transaction malleability are = the theoretical issues that must be solved.  There WILL be issues = that aren=E2=80=99t anticipated and known today when it goes out =E2=80=9C= into the wild=E2=80=9D.  Protocols of this complexity do not go = from white paper to stability in less than one to two years. =  Remember, even the bitcoin reference client had a catastrophic bug = 1.5 years after its January 2009 launch in August 2010.  I read = here that the "deepest thinkers" believe we should wait for overlays to = solve this bottleneck, well, bluntly, that is far from practical or = pragmatic, and is =E2=80=9Civory tower=E2=80=9D thinking. =  Discussing approaches like this are worse than agreeing to do = nothing, because it drains our attention away from other more pressing = issues that have a time limit on our ability to solve them before the = protocol crystallizes from the scale of the network effect (like = privacy, mining centralization, etc.) on top of accomplishing little of = immediate value other than academic debates.

I=E2=80=99m not winning any popularity contests today=E2=80=A6 = but it was a bad idea to approach this as we did with XT.  We = should have put in a solution that addressed just the cap size issue and = nothing more.  Other changes, pork, and changing the nature of the = community management around the XT client is just too much political = baggage to work without fracturing the support of the community. =  And guess what happened?  We have the major community forum = moderators actively censoring posts, banning users, and things are = looking to the outside observer as if the entire system is starting to = fall in on itself.  Truth is ladies and gentlemen, our egos and = economic interests are creating a tragedy of the commons that will hurt = the lot of us far more than it will help the best off of us.  Yeah, = I get that no one wants to code in a hostile environment, and this = community has definitely turned caustic and behaves like a mob of = petulant children, but sometimes you have to suck it up and get things = done. 

So=E2=80=A6 what do we do? =  We should get our @#$@ together, stop the academic grand standing = and ego driven debates, raise the cap to 8mb and permit an average = growth of 40% a year, then get back to solving real problems and working = on layer and side chain magnifiers.  Allowing bitcoin to grow = reasonably allows adoption to spread, the price to rise, which creates = more demand, higher prices, and more fees.  Again, because the fees = and coinbase rewards are denominated in bitcoin, this increases the = return to miners.  This, combined with allowing for growth will = encourage the price to rise, and increase stability for layers and side = chains later on down the road when the technology is stable and = mature.

For the love of whatever it is you = care about, can we please just get this done?  Do I have to go = brush up on my C++ and start asking everyone obnoxious, amateur = questions?  Trust me, no one wants that.  Let=E2=80=99s just = get the cap raised to 8MB + 40% on average annualized and fight = viciously about privacy or mining centralization.  Something more = important.  

Thanks.


On = Aug 10, 2015, at 8:34 AM, Pieter Wuille via bitcoin-dev <bitcoin-dev@lists.linuxfoundation.org> wrote:

On Mon, Aug 10, 2015 at 4:12 PM, Gavin Andresen <gavinandresen@gmail.com> = wrote:

Executive summary: when networks get = over-saturated, they become unreliable.  Unreliable is bad.

Unreliable and expensive is extra bad, and that's = where we're headed without an increase to the max block = size.

I think I see your point of view. You see demand for on-chain = transactions as a single number that grows with adoption. Once the = transaction creation rate grows close to the capacity, transactions will = become unreliable, and you consider this a bad thing.

And if you see Bitcoin as a = payment system where guaranteed time to confirmation is a feature, I = fully agree. But I think that is an unrealistic dream. It only seems = reliable because of lack of use. It costs 1.5 BTC per day to create = enough transactions to fill the block chain at the minimum relay fee, = and a small multiple of that at actual fee levels. Assuming that rate = remains similar with an increased block size, that remains cheap.

If you want = transactions to be cheap, it will also be cheap to make them = unreliable.

--
Pieter

_______________________________________________
bitcoin-dev = mailing list
bitcoin-dev@lists.linuxfoundation.org
https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev<= br class=3D"">

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