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Bitcoin's technical problems are that it fundamentally does not scale. If each node has to verify all transactions that is not sustainable in the long term. Hal

Bitcoin's technical problems are that it fundamentally does not scale. If each node has to verify all transactions that is not sustainable in the long term. Hal Finney knew this way back: https://bitcointalk.org/index.php?topic=2500.msg34211#msg34211 https://bitcointalk.org/index.php?topic=2500.msg34211#msg342... "Bitcoin itself cannot scale to have every single financial transaction in the world be broadcast to everyone and included in the block chain. There needs to be a secondary level of payment systems which is lighter weight and more efficient."

arsenische 11y ago
True, but we are not there yet. Bitcoin can probably scale 20x times without a problem. That would be 20 times lower transaction fees and 20 times more people using it.
- SkyMarshal 11y ago
  It can't scale 20x without running into decentralization problems. http://fc16.ifca.ai/bitcoin/papers/CDE+16.pdf http://fc16.ifca.ai/bitcoin/papers/CDE+16.pdf Most large blockers are running businesses that depend on no/low fees, plus the reddit mob that goes with whatever argument sounds most conspiratorial (aka Blockstream sabotaging Bitcoin for sidechains).
  - arsenische 11y ago
    Thanks for the article. But I don't see where it says that Bitcoin can't scale 20x without decentralization problems. I see that "the block size should not exceed 4MB for X=90%; and 38MB for X=50%", but I don't think that 50% reduction of number of nodes would be a serious decentralization problem (we've seen a similar reduction already due to the implementation of SPV clients). Mining centralization could be a bigger problem, but with headers-first mining the block size wouldn't contribute to it. Also the authors of the article assume the use of Bitcoin’s current peer-to-peer overlay network, that can be drastically optimized. I've chosen 20x because Gavin had conducted 20Mb tests more than a year ago, before many optimizations took place. There is nothing bad in the low fees. Low fees is the marketing strategy to boost the usage of Bitcoin and create the large enough ecosystem. Miners are being subsidised by bitcoin holders for a reason. Larger the blocks while preserving a reasonable degree of decentralization -> lower the fees per transaction -> more people use Bitcoin -> more valuable the bitcoin ecosystem is -> higher the price of bitcoin -> mining is more profitable -> stable and secure infrastructure for the new global economy.
jerguismi 11y ago
"If each node has to verify all transactions that is not sustainable in the long term." It is sustainable, but only for certain amount of transactions. Even if the block size limit stays at 1MB, I'm pretty sure some group of people/organizations will keep using bitcoin for something. Those who are not happy with it will move elsewhere, but there is so much infrastructure/tools/etc for bitcoin already, that many have will hard time switching to something new.
- arsenische 11y ago
  Sorry, I am not sure Bitcoin can be a niche currency. It needs to be big enough to survive. If most people prefer to use other crypto instead then Bitcoin may fall into a death spiral: ...lower the demand for bitcoins -> lower the price of bitcoin AND lower amount of bitcoin transactions -> less profitable the mining -> less secure the network -> lower the demand for bitcoins....
riprowan 11y ago
It is a myth that Bitcoin requires every node to validate all transactions in the long term. That's why the white paper explains the need for spv clients. https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf Moreover it a red herring to assert that Bitcoin has to scale to support every single financial transaction in the world just like it would be a red herring to attack the architecture of the Internet because it cannot scale today to include every form of communication we perform today. Red herring/ strawman / Nirvana arguments are the defense for the entire small block position. Bitcoin, like every other information technology, does not need to meet every need today. It simply needs 1. Sufficient free capacity to encourage growth, and 2. Continuous improvement
- bachback 11y ago
  Seem like you don't see the x^n argument. It should be obvious. Satoshi/Hal Finney were well aware of this, see the link. This has nothing to do with SPV. Producing blocks is what's important.
  - riprowan 11y ago
    I searched the link. Satoshi did not post in that thread and there is no mention of "x^n" Maybe you should present the argument, since it wasn't presented where you said I'd find it.
- bitshare 11y ago
  Can confirm. Bitcoin can scale but is being artificially limited in favor of off chain solutions.
- dgenr8 11y ago
  Very well said riprowan. It is indeed time to get back on track developing SPV!

arsenische 11y ago

True, but we are not there yet. Bitcoin can probably scale 20x times without a problem. That would be 20 times lower transaction fees and 20 times more people using it.

SkyMarshal 11y ago
It can't scale 20x without running into decentralization problems. http://fc16.ifca.ai/bitcoin/papers/CDE+16.pdf http://fc16.ifca.ai/bitcoin/papers/CDE+16.pdf Most large blockers are running businesses that depend on no/low fees, plus the reddit mob that goes with whatever argument sounds most conspiratorial (aka Blockstream sabotaging Bitcoin for sidechains).
- arsenische 11y ago
  Thanks for the article. But I don't see where it says that Bitcoin can't scale 20x without decentralization problems. I see that "the block size should not exceed 4MB for X=90%; and 38MB for X=50%", but I don't think that 50% reduction of number of nodes would be a serious decentralization problem (we've seen a similar reduction already due to the implementation of SPV clients). Mining centralization could be a bigger problem, but with headers-first mining the block size wouldn't contribute to it. Also the authors of the article assume the use of Bitcoin’s current peer-to-peer overlay network, that can be drastically optimized. I've chosen 20x because Gavin had conducted 20Mb tests more than a year ago, before many optimizations took place. There is nothing bad in the low fees. Low fees is the marketing strategy to boost the usage of Bitcoin and create the large enough ecosystem. Miners are being subsidised by bitcoin holders for a reason. Larger the blocks while preserving a reasonable degree of decentralization -> lower the fees per transaction -> more people use Bitcoin -> more valuable the bitcoin ecosystem is -> higher the price of bitcoin -> mining is more profitable -> stable and secure infrastructure for the new global economy.

jerguismi 11y ago

"If each node has to verify all transactions that is not sustainable in the long term." It is sustainable, but only for certain amount of transactions. Even if the block size limit stays at 1MB, I'm pretty sure some group of people/organizations will keep using bitcoin for something. Those who are not happy with it will move elsewhere, but there is so much infrastructure/tools/etc for bitcoin already, that many have will hard time switching to something new.

arsenische 11y ago
Sorry, I am not sure Bitcoin can be a niche currency. It needs to be big enough to survive. If most people prefer to use other crypto instead then Bitcoin may fall into a death spiral: ...lower the demand for bitcoins -> lower the price of bitcoin AND lower amount of bitcoin transactions -> less profitable the mining -> less secure the network -> lower the demand for bitcoins....

riprowan 11y ago

It is a myth that Bitcoin requires every node to validate all transactions in the long term. That's why the white paper explains the need for spv clients. https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf Moreover it a red herring to assert that Bitcoin has to scale to support every single financial transaction in the world just like it would be a red herring to attack the architecture of the Internet because it cannot scale today to include every form of communication we perform today. Red herring/ strawman / Nirvana arguments are the defense for the entire small block position. Bitcoin, like every other information technology, does not need to meet every need today. It simply needs 1. Sufficient free capacity to encourage growth, and 2. Continuous improvement

bachback 11y ago
Seem like you don't see the x^n argument. It should be obvious. Satoshi/Hal Finney were well aware of this, see the link. This has nothing to do with SPV. Producing blocks is what's important.
- riprowan 11y ago
  I searched the link. Satoshi did not post in that thread and there is no mention of "x^n" Maybe you should present the argument, since it wasn't presented where you said I'd find it.
bitshare 11y ago
Can confirm. Bitcoin can scale but is being artificially limited in favor of off chain solutions.
dgenr8 11y ago
Very well said riprowan. It is indeed time to get back on track developing SPV!