Big Blocks Can Scale, but Will It Centralize Bitcoin? [video](youtube.com)
youtube.com
Big Blocks Can Scale, but Will It Centralize Bitcoin? [video]
https://www.youtube.com/watch?v=sbD0kiTddEs
4 comments
I think referencing Moore's law is a good rule of thumb. The tokenomics parameters including block size (or, in the case of newer cryptocurrencies like Bitcoin Cash ABC, Monero, etc. the parameters for the blocksize algorithm) represent an agreement between cryptocurrency users, miners, and owners.
If outside parameters like the cost of storage/bandwidth "generally" continue to decrease, then the agreement should be re-adjusted to some reasonable tokenomics parameters. Bitcoin's static 1MB is unreasonable because bandwidth is overvalued. The trend (actual cost of storage/bandwidth decreases) is that it will continue to become more and more unreasonable as time goes on.
Would it follow then that if increasing the blocksize would make the network less decentralized because it would increase the GB-per-node (thus cost-per-node), and if the cost-per-GB is naturally decreasing, then you could increase the blocksize while keeping the cost-per-node (and thus "decentralization") constant. So is the unforked bitcoin (BTC) becoming more and more decentralized over time by merit of its small blocksize? Certainly not.
What is a reasonable blocksize? I couldn't give you an exact answer. I am not a researcher. But I can make a reasonable value-judgement based on the idea that fees should be on the order of a couple cents in order for bitcoin to be a useful currency as satoshi intended.
In any case, it's possible to design a cryptocurrency that does not need to store transactions forever. I think the more important metric is network consensus bandwidth (the maximum amount of bits/second that can be synchronized across 51% mining power). That depends on the topology of the network, and generally the cost of bandwidth does not decrease exponentially.
In an ASIC-mined coin like Bitcoin, the bandwidth/storage requirements for nodes are the least of the problem when it comes to decentralization. I am pretty certain that bitcoin will meet its demise soon enough if the community cannot come back together again to make a hard fork.
If outside parameters like the cost of storage/bandwidth "generally" continue to decrease, then the agreement should be re-adjusted to some reasonable tokenomics parameters. Bitcoin's static 1MB is unreasonable because bandwidth is overvalued. The trend (actual cost of storage/bandwidth decreases) is that it will continue to become more and more unreasonable as time goes on.
Would it follow then that if increasing the blocksize would make the network less decentralized because it would increase the GB-per-node (thus cost-per-node), and if the cost-per-GB is naturally decreasing, then you could increase the blocksize while keeping the cost-per-node (and thus "decentralization") constant. So is the unforked bitcoin (BTC) becoming more and more decentralized over time by merit of its small blocksize? Certainly not.
What is a reasonable blocksize? I couldn't give you an exact answer. I am not a researcher. But I can make a reasonable value-judgement based on the idea that fees should be on the order of a couple cents in order for bitcoin to be a useful currency as satoshi intended.
In any case, it's possible to design a cryptocurrency that does not need to store transactions forever. I think the more important metric is network consensus bandwidth (the maximum amount of bits/second that can be synchronized across 51% mining power). That depends on the topology of the network, and generally the cost of bandwidth does not decrease exponentially.
In an ASIC-mined coin like Bitcoin, the bandwidth/storage requirements for nodes are the least of the problem when it comes to decentralization. I am pretty certain that bitcoin will meet its demise soon enough if the community cannot come back together again to make a hard fork.
I agree it's a good rule of thumb, and better than nothing for the most part. I tend to side conservative: there should be a protocol like Bitcoin which makes running full nodes as cheap as possible in the current environment, but could it increase its block size 50% every 4 years? Probably.
> What is a reasonable blocksize? I couldn't give you an exact answer. I am not a researcher.
We both agree that 'the right size' should be a sophisticated determination. In my view, that suggests a market based, variable approach is the way forward.
> In any case, it's possible to design a cryptocurrency that does not need to store transactions forever
> the more important metric is network consensus bandwidth
You're the only person who I have heard point out these facts that is not doing so in the context of Saito. I invite you to check it out, or while it's small and crypto is relatively inactive, just drop into the Telegram and have a chat with David, an outspoken founder. That project was built on understandings you are repeating here.
> What is a reasonable blocksize? I couldn't give you an exact answer. I am not a researcher.
We both agree that 'the right size' should be a sophisticated determination. In my view, that suggests a market based, variable approach is the way forward.
> In any case, it's possible to design a cryptocurrency that does not need to store transactions forever
> the more important metric is network consensus bandwidth
You're the only person who I have heard point out these facts that is not doing so in the context of Saito. I invite you to check it out, or while it's small and crypto is relatively inactive, just drop into the Telegram and have a chat with David, an outspoken founder. That project was built on understandings you are repeating here.
> the idea that fees should be on the order of a couple cents in order for bitcoin to be a useful currency as satoshi intended
When the block subsidy becomes insignificant in a few decades, Bitcoin's security will require a constant backlog of high-fee paying transactions, which can only arise with a constrained blocksize causing a fee market. Bitcoin's capped supply is great for speculation but a poor design choice for a useful currency.
When the block subsidy becomes insignificant in a few decades, Bitcoin's security will require a constant backlog of high-fee paying transactions, which can only arise with a constrained blocksize causing a fee market. Bitcoin's capped supply is great for speculation but a poor design choice for a useful currency.
To actually address the video:
Citing Moore's law for storage costs as justification to allow blocks to be some arbitrary size is always a kludge. A blockchain which scales for real will have dynamic market prices for block space.