Re: [bitcoin-dev] The need for larger blocks

From: Jeff Garzik <jgarzik@gmail•com>
To: Pieter Wuille <pieter.wuille@gmail•com>
Cc: bitcoin-dev@lists•linuxfoundation.org
Subject: Re: [bitcoin-dev] The need for larger blocks
Date: Fri, 26 Jun 2015 10:57:42 -0700	[thread overview]
Message-ID: <CADm_Wca+ow4pMzN7SyKjsMdFo0wuUerYYjf5xKs5G_2Q2PzMmA@mail.gmail.com> (raw)
In-Reply-To: <CAPg+sBjOj9eXiDG0F6G54SVKkStF_1HRu2wzGqtFF5X_NAWy4w@mail.gmail.com>

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It is not "fear" of fee pressure.

1) Blocks are mostly not-full on average.

2) Absent long blocks and stress tests, there is little fee pressure above
the anti-spam relay fee metric, because of #1.

3) As such, inducing fee pressure is a delta, a change from years-long
bitcoin economic policy.  Each time we approach the soft limit, Bitcoin
Core increases the soft limit to prevent "full" blocks.  Mike Hearn et. al.
lobbies miners to upgrade.

(note - this is not an endorsement of these actions - it is a neutral
observation)

4) Inaction leads to consistent fee pressure as the months tick on and
system volume grows; thus, inaction leads to economic policy change.

5) Economic policy change leads to market and software disruption.  The
market and software - notably wallets - is not prepared for this.

6) If you want to change economic policy, that's fine.  But be honest and
admit you are arguing for a change, a delta from current market
expectations and behavior.

7) It is critical to first deal with what _is_, not what you wish the world
to be.  You want a fee market to develop.  There is nothing wrong with that
desire.  It remains a delta from where we are today, and that is critically
relevant in a $3b+ market.

On Fri, Jun 26, 2015 at 7:09 AM, Pieter Wuille <pieter.wuille@gmail•com>
wrote:

> Hello all,
>
> here I'm going to try to address a part of the block size debate which has
> been troubling me since the beginning: the reason why people seem to want
> it.
>
> People say that larger blocks are necessary. In the long term, I agree -
> in the sense that systems that do not evolve tend to be replaced by other
> systems. This evolution can come in terms of layers on top of Bitcoin's
> blockchain, in terms of the technology underlying various aspects of the
> blockchain itself, and also in the scale that this technology supports.
>
> I do, however, fundamentally disagree that a fear for a change in
> economics should be considered to necessitate larger blocks. If it is, and
> there is consensus that we should adapt to it, then there is effectively no
> limit going forward. This is similar to how Congress voting to increase the
> copyright term retroactively from time to time is really no different from
> having an infinite copyright term in the first place. This scares me.
>
> Here is how Gavin summarizes the future without increasing block sizes in
> PR 6341:
>
> > 1. Transaction confirmation times for transactions with a given fee will
> rise; very-low-fee transactions will fail to get confirmed at all.
> > 2. Average transaction fee paid will rise
> > 3. People or applications unwilling or unable to pay the rising fees
> will stop submitting transactions
> > 4. People and businesses will shelve plans to use Bitcoin, stunting
> growth and adoption
>
> Is it fair to summarize this as "Some use cases won't fit any more, people
> will decide to no longer use the blockchain for these purposes, and the
> fees will adapt."?
>
> I think that is already happening, and will happen at any scale. I believe
> demand for payments in general is nearly infinite, and only a small portion
> of it will eventually fit on a block chain (independent of whether its size
> is limited by consensus rules or economic or technological means).
> Furthermore, systems that compete with Bitcoin in this space already offer
> orders of magnitude more capacity than we can reasonably achieve with any
> blockchain technology at this point.
>
> I don't know what subset of use cases Bitcoin will cater to in the long
> term. They have already changed - you see way less betting transactions
> these days than a few years ago for example - and they will keep changing,
> independent of what effective block sizes we end up with. I don't think we
> should be afraid of this change or try to stop it.
>
> If you look at graphs of block sizes over time (for example,
> http://rusty.ozlabs.org/?p=498), it seems to me that there is very little
> "organic" growth, and a lot of sudden changes (which could correspond to
> changing defaults in miner software, introduction of popular
> sites/services, changes in the economy). I think these can be seen as the
> economy changing to full up the available space, and I believe these will
> keep happening at any size effectively available.
>
> None of this is a reason why the size can't increase. However, in my
> opinion, we should do it because we believe it increases utility and
> understand the risks; not because we're afraid of what might happen if we
> don't hurry up. And from that point of view, it seems silly to make a huge
> increase at once...
>
> --
> Pieter
>
>
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>

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