[2016-11-29] The Problem with On-Chain Scaling is there are too many people

[LiteCoinGuy]

The Problem with On-Chain Scaling is there are too many people

While the internet rages on with pointless debates about a 1mb block size limit, or a 2mb blocksize limit, or maybe even a, gasp, 4mb blocksize limit, nobody seems to be seriously addressing the scaling elephant in the room; which is the number of people on the planet who might, theoretically, want to take advantage of the bitcoin network.

https://codesuppository.blogspot.de/201 ... ng-is.html

[iFixBTCmemoryIssues]

The Problem with On-Chain Scaling is there are too many people

While the internet rages on with pointless debates about a 1mb block size limit, or a 2mb blocksize limit, or maybe even a, gasp, 4mb blocksize limit, nobody seems to be seriously addressing the scaling elephant in the room; which is the number of people on the planet who might, theoretically, want to take advantage of the bitcoin network.

https://codesuppository.blogspot.de/201 ... ng-is.html

Your statement is false.

Bitcoin was designed to handle much more capacity than what it is artificially being limited at now.

Take a read of this LiteCoinGuy, it will help you understand Bitcoin better: https://bitcoin.com/bitcoin.pdf

[LiteCoinGuy]

The Problem with On-Chain Scaling is there are too many people

While the internet rages on with pointless debates about a 1mb block size limit, or a 2mb blocksize limit, or maybe even a, gasp, 4mb blocksize limit, nobody seems to be seriously addressing the scaling elephant in the room; which is the number of people on the planet who might, theoretically, want to take advantage of the bitcoin network.

https://codesuppository.blogspot.de/201 ... ng-is.html

Your statement is false.

Bitcoin was designed to handle much more capacity than what it is artificially being limited at now.

Take a read of this LiteCoinGuy, it will help you understand Bitcoin better: https://bitcoin.com/bitcoin.pdf

Bitcoin will handle alot more user in the future, but it has to protect itself from malicious actors.

The scaling roadmap says "the demand for cheap highly-replicated perpetual storage is unbounded". But we can't scale bitcoin in an unbounded way without serious trade-offs.
We would all love for the network to process thousands of transactions per second without any trade-offs, but at present, that is not possible. Simply increasing blocksize creates a problem known as "cost externalizing", which is is a term describing how one party maximizes its profits by off-loading indirect costs and forcing negative effects to a third party. If the block size is increased, the party that maximizes its profits are the people creating transactions because with a higher block size they don't have to pay as much in fees, and the third party having their costs increased are those running full nodes. If those costs increase, the number of nodes will drop, causing the network to be insecure.
Also, the economics of the bitcoin system require that a fee market develop over time as the block subsidy decreases. Without a fee market, there would be no incentive to mine and secure the network.

[iFixBTCmemoryIssues]

The Problem with On-Chain Scaling is there are too many people

While the internet rages on with pointless debates about a 1mb block size limit, or a 2mb blocksize limit, or maybe even a, gasp, 4mb blocksize limit, nobody seems to be seriously addressing the scaling elephant in the room; which is the number of people on the planet who might, theoretically, want to take advantage of the bitcoin network.

https://codesuppository.blogspot.de/201 ... ng-is.html

Your statement is false.

Bitcoin was designed to handle much more capacity than what it is artificially being limited at now.

Take a read of this LiteCoinGuy, it will help you understand Bitcoin better: https://bitcoin.com/bitcoin.pdf

Bitcoin will handle alot more user in the future, but it has to protect itself from malicious actors.

The scaling roadmap says "the demand for cheap highly-replicated perpetual storage is unbounded". But we can't scale bitcoin in an unbounded way without serious trade-offs.
We would all love for the network to process thousands of transactions per second without any trade-offs, but at present, that is not possible. Simply increasing blocksize creates a problem known as "cost externalizing", which is is a term describing how one party maximizes its profits by off-loading indirect costs and forcing negative effects to a third party. If the block size is increased, the party that maximizes its profits are the people creating transactions because with a higher block size they don't have to pay as much in fees, and the third party having their costs increased are those running full nodes. If those costs increase, the number of nodes will drop, causing the network to be insecure.
Also, the economics of the bitcoin system require that a fee market develop over time as the block subsidy decreases. Without a fee market, there would be no incentive to mine and secure the network.

From a legal perspective alone, you can't change the model of Bitcoin. If you change it from peer 2 peer digital cash, to anything else, such as a settlement network, we will be dealing with a regulatory nightmare and major additional risk. As it stands, you can't suppress the free market of Bitcoin, as what is being done now. In most countries, this is a violation of many laws.

Now, in regards to raising the blocksize, which would lower fees, this is a good thing. The block reward will take us well into 2140, at or around the year 2032, the block reward is forecasted to be $780K. This more than covers what any fee market will provide as a good enough subsidy for miners.

As for nodes dropping, I disagree. It is up to the people to work together to educate businesses on the resources required to "be their own bank" and "handle your own merchant requirements". Individuals that choose to run nodes now already have the requirements to handle an increase of 400% in capacity.

With a fee market, we will turn away more adoption from Bitcoin than with-out one. Look at how lousy it is working, it's costing more money than it's worth.

You just have to let things run its natural course. Miners are happy with the block reward subsidy, they aren't begging for fees, they are begging for a blocksize increase as is the majority of the market. Nobody is the fee police.

Please take a good read of the white-paper, "Peer 2 Peer Digital Cash", it is a solid plan: https://bitcoin.com/bitcoin.pdf

[mary.popins]

We would all love for the network to process thousands of transactions per second without any trade-offs, but at present, that is not possible. Simply increasing blocksize creates a problem known as "cost externalizing"

[iFixBTCmemoryIssues]

We would all love for the network to process thousands of transactions per second without any trade-offs, but at present, that is not possible. Simply increasing blocksize creates a problem known as "cost externalizing"

Cost externalizing is going to happen, regardless of whether or not the blocksize is increased. In fact, it is happening right now, to the users and to the market because of the network being held back by attackers.