Subject: Re: [bitcoin-dev] Why Satoshi's temporary anti-spam measure isn't temporary

From: Pieter Wuille <[email-masked]>
Date: Sat, 1 Aug 2015 23:05:10 +0200

On Sat, Aug 1, 2015 at 10:22 PM, John T. Winslow via bitcoin-dev <
[email-masked]> wrote:

> Regarding the block size increase, at least conceptually it seems to me
> there should be an easy solution. If we look at what works well with
> bitcoin, for example the block reward halving and difficulty regimes which
> due to their step function nature both contribute to the stability and
> predictability of the bitcoin universe while still allowing for the
> necessary dynamic adjustments. It seems to me there should be a
> corresponding and equally simple solution for the maximum block size.
>
> I've never quite understood the supposed rationale behind the proposals
> for a new static maximum of 20 MB or 8 MB or 2 MB other than it would be
> trivial to implement. Why not come up with an equally simple, predictable
> dynamic function consistent with what is already proven to work in the
> bitcoin universe that would both preserve the scarcity of transaction
> capacity to encourage a fee market but also allow for more transactions
> when needed.
>

I disagree with the notion of "needed". The blockchain provides utility at
every size, and perhaps more at some sizes than at other sizes, but any
finite size will permit some use cases and not others. This is already the
case and will remain the case. I think the "demand for payments" should be
considered infinite, and some of them will fit on a block chain and pay a
fee for it, and others will need to rely on more efficient, cheaper, but
higher trust systems. You can't use observed usage as a metric for demand
without fixing the cost.

I think available space should grow with technology, to keep the relative
costs to the ecosystem for maintaining a decentralized system constant.
That may or may not lead to a fee market, but I don't think the fee market
is a goal - only a healthy outcome. The goal is an ecosystem that accepts
that the limit to scalability is set by the requirements of a decentralized
system, and its demand - and certainly not perceived demand at potentially
near-zero fee/cost - can't change that.

> For example how about something like once every month at month-end, take
> the 6-month average non-zero transaction fee block size and multiply by 1.5?
>
>
That's trivially gamable by miners, by filling the blocks with their own
transactions.

-- 
Pieter