Subject: Re: [Bitcoin-development] Block Size Increase

From: Alan Reiner <[email-masked]>
Date: Thu, 07 May 2015 15:31:46 -0400

This *is* urgent and needs to be handled right now, and I believe Gavin
has the best approach to this.  I have heard Gavin's talks on increasing
the block size, and the two most persuasive points to me were:

(1) Blocks are essentially nearing "full" now.  And by "full" he means
that the reliability of the network (from the average user perspective)
is about to be impacted in a very negative way (I believe it was due to
the inconsistent time between blocks).  I think Gavin said that his
simulations showed 400 kB - 600 kB worth of transactions per 10 min
(approx 3-4 tps) is where things start to behave poorly for certain
classes of transactions.  In other words, we're very close to the
effective limit in terms of maintaining the current "standard of
living", and with a year needed to raise the block time this actually is
urgent.

(2) Leveraging fee pressure at 1MB to solve the problem is actually
really a bad idea.  It's really bad while Bitcoin is still growing, and
relying on fee pressure at 1 MB severely impacts attractiveness and
adoption potential of Bitcoin (due to high fees and unreliability).  But
more importantly, it ignores the fact that for a 7 tps is pathetic for a
global transaction system.  It is a couple orders of magnitude too low
for any meaningful commercial activity to occur.  If we continue with a
cap of 7 tps forever, Bitcoin *will* fail.  Or at best, it will fail to
be useful for the vast majority of the world (which probably leads to
failure).  We shouldn't be talking about fee pressure until we hit 700
tps, which is probably still too low. 

You can argue that side chains and payment channels could alleviate
this.  But how far off are they?  We're going to hit effective 1MB
limits long before we can leverage those in a meaningful way.  Even if
everyone used them, getting a billion people onto the system just can't
happen even at 1 transaction per year per person to get into a payment
channel or move money between side chains.

We get asked all the time by corporate clients about scalability.  A
limit of 7 tps makes them uncomfortable that they are going to invest
all this time into a system that has no chance of handling the economic
activity that they expect it handle.  We always assure them that 7 tps
is not the final answer. 

Satoshi didn't believe 1 MB blocks were the correct answer.  I
personally think this is critical to Bitcoin's long term future.   And
I'm not sure what else Gavin could've done to push this along in a
meaninful way.

-Alan

On 05/07/2015 02:06 PM, Mike Hearn wrote:
>
>     I think you are rubbing against your own presupposition that
>     people must find and alternative right now. Quite a lot here do
>     not believe there is any urgency, nor that there is an immanent
>     problem that has to be solved before the sky falls in.
>
>
> I have explained why I believe there is some urgency, whereby "some
> urgency" I mean, assuming it takes months to implement, merge, test,
> release and for people to upgrade.
>
> But if it makes you happy, imagine that this discussion happens all
> over again next year and I ask the same question.
>
>
>
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