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Cc: Bitcoin Dev <bitcoin-dev@lists.linuxfoundation.org>
Subject: Re: [bitcoin-dev] Fees and the block-finding process
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<html><head></head><body style=3D"background-color: rgb(255, 255, 255); lin=
e-height: initial;"> =
<div style=3D"width: 100%; font-size: initia=
l; font-family: Calibri, 'Slate Pro', sans-serif; color: rgb(31, 73, 125); =
text-align: initial; background-color: rgb(255, 255, 255);"><span style=3D"=
color: rgb(0, 0, 0); font-family: sans-serif;">>It follows then, that if=
we make a decision now which destroys that property, which makes it possib=
le to censor bitcoin, to deny service, or to pressure miners into changing =
rules contrary to user interests, then Bitcoin is no longer interesting. </=
span></div><div style=3D"width: 100%; font-size: initial; font-family: Cali=
bri, 'Slate Pro', sans-serif; color: rgb(31, 73, 125); text-align: initial;=
background-color: rgb(255, 255, 255);"><span style=3D"color: rgb(0, 0, 0);=
font-family: sans-serif;"><br></span></div><div style=3D"width: 100%; font=
-size: initial; font-family: Calibri, 'Slate Pro', sans-serif; color: rgb(3=
1, 73, 125); text-align: initial; background-color: rgb(255, 255, 255);"><s=
pan style=3D"color: rgb(0, 0, 0); font-family: sans-serif;">You asked to be=
convinced of the need for bigger blocks. I gave that.</span></div><div sty=
le=3D"width: 100%; font-size: initial; font-family: Calibri, 'Slate Pro', s=
ans-serif; color: rgb(31, 73, 125); text-align: initial; background-color: =
rgb(255, 255, 255);"><span style=3D"color: rgb(0, 0, 0); font-family: sans-=
serif;">What makes you think bitcoin will break when more people use it?</s=
pan></div> =
<div st=
yle=3D"width: 100%; font-size: initial; font-family: Calibri, 'Slate Pro', =
sans-serif; color: rgb(31, 73, 125); text-align: initial; background-color:=
rgb(255, 255, 255);"><br style=3D"display:initial"></div> =
=
=
<div style=3D"font-size: initial; font-family: =
Calibri, 'Slate Pro', sans-serif; color: rgb(31, 73, 125); text-align: init=
ial; background-color: rgb(255, 255, 255);">Sent on the go,&=
nbsp;excuse the brevity. </div> =
=
<=
table width=3D"100%" style=3D"background-color:white;border-spacing:0px;"> =
<tbody><tr><td colspan=3D"2" style=3D"font-size: initial; text-align: initi=
al; background-color: rgb(255, 255, 255);"> <div =
style=3D"border-style: solid none none; border-top-color: rgb(181, 196, 223=
); border-top-width: 1pt; padding: 3pt 0in 0in; font-family: Tahoma, 'BB Al=
pha Sans', 'Slate Pro'; font-size: 10pt;"> <div><b>From: </b>Mark Friedenb=
ach</div><div><b>Sent: </b>Tuesday, 11 August 2015 08:10</div><div><b>To: <=
/b>Thomas Zander</div><div><b>Cc: </b>Bitcoin Dev</div><div><b>Subject: </b=
>Re: [bitcoin-dev] Fees and the block-finding process</div></div></td></tr>=
</tbody></table><div style=3D"border-style: solid none none; border-top-col=
or: rgb(186, 188, 209); border-top-width: 1pt; font-size: initial; text-ali=
gn: initial; background-color: rgb(255, 255, 255);"></div><br><div id=3D"_o=
riginalContent" style=3D""><div dir=3D"ltr">On Mon, Aug 10, 2015 at 11:31 P=
M, Thomas Zander via bitcoin-dev <span dir=3D"ltr"><<a href=3D"mailto:bi=
tcoin-dev@lists.linuxfoundation.org" target=3D"_blank">bitcoin-dev@lists.li=
nuxfoundation.org</a>></span> wrote:<br><div class=3D"gmail_extra"><div =
class=3D"gmail_quote"><blockquote class=3D"gmail_quote" style=3D"margin:0 0=
0 .8ex;border-left:1px #ccc solid;padding-left:1ex"><span class=3D"">On Mo=
nday 10. August <a href=3D"tel:2015%2023.03.39" value=3D"+12015230339">2015=
23.03.39</a> Mark Friedenbach wrote:<br>
> This is where things diverge. It's fine to pick a new limit or growth<=
br>
> trajectory. But defend it with data and reasoned analysis.<br>
<br>
</span>We currently serve about 0,007% of the world population sending mayb=
e one<br>
transaction a month.<br>
This can only go up.<br>
<br>
There are about 20 currencies in the world that are unstable and showing ea=
rly<br>
signs of hyperinflation. If even small percentage of these people cash-out =
and<br>
get Bitcoins for their savings you'd have the amount of people using Bitcoi=
n<br>
as savings go from maybe half a million to 10 million in the space of a cou=
ple<br>
of months. Why so fast? Because all the world currencies are linked.<br>
Practically all currencies follow the USD, and while that one may stay robu=
st<br>
and standing, the linkage has been shown in the past to cause chain-effects=
.<br>
<br>
It is impossible to predict how much uptake Bitcoin will take, but we have<=
br>
seen big rises in price as Cyprus had a bailin and then when Greece first<b=
r>
showed bad signs again.<br>
Lets do our due diligence and agree that in the current world economy there=
<br>
are sure signs that people are considering Bitcoin on a big scale.<br>
<br>
Bigger amount of people holding Bitcoin savings won't make the transaction<=
br>
rate go up very much, but if you have feet on the ground you already see th=
at<br>
people go back to barter in countries like Poland, Ireland, Greece etc.<br>
And Bitcoin will be an alternative to good to ignore. Then transactio=
n rates<br>
will go up. Dramatically.<br>
<br>
If you are asking for numbers, that is a bit tricky. Again; we are at<br>
0,007%... Thats like a f-ing rounding error in the world economy. You can't=
<br>
reason from that. Its like using a float to do calculations that you should=
<br>
have done in a double and getting weird output.<br>
<br>
Bottom line is that a maximum size of 8Mb blocks is not that odd. Because a=
20<br>
times increase is very common in a "company" that is about 6 years old.<br>
For instance Android was about that age when it started to get shipped by n=
on-<br>
Google companies. There the increase was substantially bigger and the compa=
ny<br>
backing it was definitely able to change direction faster than the Bitcoin<=
br>
oiltanker can change direction.<br>
<br>
...<br>
<br>
Another metric to remember; if you follow hackernews (well, the incubator m=
ore<br>
than the linked articles) you'd be exposed to the thinking of these startup=
s.<br>
Their only criteria is growth. and this is rather substantial growth. Like<=
br>
150% per month. Naturally, most of these build on top of html or othe=
r<br>
existing technologies. But the point is that exponential growth is ex=
pected<br>
in any startup. They typically have a much much more agressive timeli=
ne,<br>
though. Every month instead of every year.<br>
Having exponential growth in the blockchain is really not odd and even if w=
e<br>
have LN or sidechains or the next changetip, this space will be used. And w=
e<br>
will still have scarcity.</blockquote><div> <br></div><div>I'm sorry, =
I really don't want to sound like a jerk, but not a single word of that mat=
tered. Yes we all want Bitcoin to scale such that every person in the world=
can use it without difficulty. However if that were all that we cared abou=
t then I would be remiss if I did not point out that there are plenty of be=
tter, faster, and cheaper solutions to finding global consensus over a paym=
ent ledger than Bitcoin. Architectures which are algorithmically superior i=
n their scaling properties. Indeed they are already implemented and you can=
use them today:<br><br><a href=3D"https://www.stellar.org/">https://www.st=
ellar.org/</a><br><a href=3D"http://opentransactions.org/">http://opentrans=
actions.org/</a><br><br></div><div>So why do I work on Bitcoin, and why do =
I care about the outcome of this debate? Because Bitcoin offers one thing, =
and one thing only which alternative architectures fundamentally lack: poli=
cy neutrality. It can't be censored, it can't be shut down, and the rules c=
annot change from underneath you. *That* is what Bitcoin offers that can't =
be replicated at higher scale with a SQL database and an audit log.<br><br>=
</div><div>It follows then, that if we make a decision now which destroys t=
hat property, which makes it possible to censor bitcoin, to deny service, o=
r to pressure miners into changing rules contrary to user interests, then B=
itcoin is no longer interesting. We might as well get rid of mining at that=
point and make Bitcoin look like Stellar or Open-Transactions because at l=
east then we'd scale even better and not be pumping millions of tons of CO2=
into the atmosphere from running all those ASICs.<br></div><div><br></div>=
<blockquote class=3D"gmail_quote" style=3D"margin:0 0 0 .8ex;border-left:1p=
x #ccc solid;padding-left:1ex">
On the other side, 3Tb harddrives are sold, which take 8Mb blocks without<b=
r>
problems.<br>
</blockquote><div><br></div><div>Straw man, storage is not an issue.<br></d=
iv><div> </div><blockquote class=3D"gmail_quote" style=3D"margin:0 0 0=
.8ex;border-left:1px #ccc solid;padding-left:1ex">You can buy broadband in=
every relevant country that easily supports the<br>
bandwidth we need. (remember we won't jump to 8Mb in a day, it will likely<=
br>
take at least 6 months).<br></blockquote><div><br></div><div>Neither one of=
those assertions is clear. Keep in mind the goal is to have Bitcoin surviv=
e active censorship. Presumably that means being able to run a node even in=
the face of a hostile ISP or government. Furthermore, it means being locat=
ion independent and being able to move around. In many places the higher th=
e bandwidth requirements the fewer the number of ISPs that are available to=
service you, and the more visible you are.<br><br></div><div>It may also b=
e necessary to be able to run over Tor. And not just today's Tor which is d=
eveloped, serviced, and supported by the US government, but a Tor or I2P th=
at future governments have turned hostile towards and actively censor or re=
press. Or existing authoritative governments, for that matter. How much ban=
dwidth would be available through those connections?<br><br></div><div>It m=
ay hopefully never be necessary to operate under such constraints, except b=
y freedom seeking individuals within existing totalitarian regimes. However=
the credible threat of doing so may be what keeps Bitcoin from being repre=
ssed in the first place. Lose the capability to go underground, and it will=
be pressured into regulation, eventually.<br><br></div><div>To the second =
point, it has been previously pointed out that large miners stand to gain f=
rom larger blocks, for the same basic underlying reasons as selfish mining.=
The incentive is to increase blocks, and miners are able to do so at will =
and without cost. I would not be so certain that we wouldn't see large bloc=
ks sooner than that.<br></div><div> </div><blockquote class=3D"gmail_q=
uote" style=3D"margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1e=
x">
We should get the inverted bloom filters stuff (or competing products) work=
ing<br>
at least on a one-to-one basis so we can solve the propagation time problem=
.<br>There frankly is a huge amount of optimization that can be done in tha=
t area,<br>
we don't even use locality (pingtime) to optimize distribution.<br>
>From my experience you can expect a 2-magnitude speedup in that same 6 mont=
h<br>
period by focusing some research there.<br>
</blockquote><div><br></div><div>This is basically already deployed thanks =
to Matt's relay network. Further improvements are not going to have dramati=
c effects.<br> <br></div><blockquote class=3D"gmail_quote" style=3D"ma=
rgin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">Remember 8Gb/b=
lock still doesn't support VISA/Mastercard.<br></blockquote><div><br></div>=
<div>No, it doesn't. And 8GB/block is ludicrously large -- it would absolut=
ely, without any doubt destroy the very nature of Bitcoin, turning it into =
a fundamentally uninteresting reincarnation of the existing financial syste=
m. And still be unable to compete with VISA/Mastercard.<br><br></div><div>S=
o why then the pressure to go down a route that WILL lead to failure by you=
r own metrics?<br><br></div><div>I humbly suggest that maybe we should play=
the strengths of Bitcoin instead -- it's trustlessness via policy neutrali=
ty.<br><br></div><div>Either that, or go work on Stellar. Because that's wh=
ere it's headed otherwise.<br></div></div></div></div>
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