I think trust the data-center logic obviously fails, and I was talking about this scenario in the post you are replying to. You are trusting the data-center operator period. If one could trust data-centers to run verified code, to not get hacked, filter traffic, respond to court orders without notifying you etc that would be great but that's unfortunately not what happens.
Data-center operators are bound to follow laws, including NSLs and gag orders. They also get hacked, employ humans who can be corrupt, blackmailed, and themselves centralisation points for policy attack. Snowden related disclosures and keeping aware of security show this is very real.
This isn't much about bitcoin even, its just security reality for hosting anything intended to be secure via decentralisation, or just hosting in general while at risk of political or policy attack.
Adam
There is a summary of the proposals in my previous mail at https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-July/009808.html
I think there could be a compromise between Gavin's BIP101 and Pieter's proposal (called "BIP103" here). Below I'm trying to play with the parameters, which reasons:
1. Initiation: BIP34 style voting, with support of 750 out of the last 1000 blocks. The "hardfork bit" mechanism might be used: http://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-July/009576.html
Rationale: This follows BIP101, to make sure the new chain is secure. Also, no miner would like to be the first one to mine a large block if they don't know how many others would accept it.
2. Starting date: 30 days after 75% miner support, but not before 2016-01-12 00:00 UTC
Rationale: A 30-day grace period is given to make sure everyone has enough time to follow. This is a compromise between 14 day in BIP101 and 1 year in BIP103. I tend to agree with BIP101. Even 1 year is given, people will just do it on the 364th day if they opt to procrastinate.
2016-01-12 00:00 UTC is Monday evening in US and Tuesday morning in China. Most pool operators and devs should be back from new year holiday and not sleeping. (If the initiation is delayed, we may require that it must be UTC Tuesday midnight)
3. The block size at 2016-01-12 will be 1,414,213 bytes, and multiplied by 1.414213 by every 2^23 seconds (97 days) until exactly 8MB is reached on 2017-05-11.
Rationale: Instead of jumping to 8MB, I suggest to increase it gradually to 8MB in 16 months. 8MB should not be particularly painful to run even with current equipment (you may see my earlier post on bitctointalk: https://bitcointalk.org/index.php?topic=1054482.0). 8MB is also agreed by Chinese miners, who control >60% of the network.
4. After 8MB is reached, the block size will be increased by 6.714% every 97 days, which is equivalent to exactly octuple (8x) every 8.5 years, or double every 2.9 years, or +27.67% per year. Stop growth at 4096MB on 2042-11-17.
Rationale: This is a compromise between 17.7% p.a. of BIP103 and 41.4% p.a. of BIP101. This will take us almost 8 years from now just to go back to the original 32MB size (4 years for BIP101 and 22 years for BIP103)
SSD price is expected to drop by >50%/year in the coming years. In 2020, we will only need to pay 2% of current price for SSD. 98% price reduction is enough for 40 years of 27.67% growth.
Source: http://wikibon.org/wiki/v/Evolution_of_All-Flash_Array_Architectures
Global bandwidth is expected to grow by 37%/year until 2021 so 27.67% should be safe at least for the coming 10 years.
Source: https://www.telegeography.com/research-services/global-bandwidth-forecast-service/
The final cap is a compromise between 8192MB@2036 of BIP101 and 2048MB@2063 of BIP103
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Generally speaking, I think we need to have a faster growth in the beginning, just to normalize the block size to a more reasonable one. After all, the 1MB cap was introduced when Bitcoin was practically worthless and with inefficient design. We need to decide a new "optimal" size based on current adoption and technology.
About "fee market": I do agree we need a fee market, but the fee pressure must not be too high at this moment when block reward is still miner's main income source. We already have a fee market: miners will avoid building big blocks with low fee because that will increase the orphan risk for nothing.
About "secondary layer": I respect everyone building secondary layer over the blockchain. However, while the SWIFT settlement network is processing 300tps, Bitcoin's current 7tps is just nothing more than an experiment. If the underlying settlement system does not have enough capacity, any secondary layer built on it will also fall apart. For example, people may DoS attack a Lightening network by provoking a huge amount of settlement request which some may not be confirmed on time. Ultimately, this will increase the risk of running a LN service and increase the tx fee inside LN. After all, the value of secondary layer primarily comes from instant confirmation, not scarcity of the block space.
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