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Some increase is warranted but constantly increasing the block size is not scalable and the block limit incentivises the payment of fees which makes it harder s

Some increase is warranted but constantly increasing the block size is not scalable and the block limit incentivises the payment of fees which makes it harder spam the the network. There has to be a price for using the main bitcoin blockchain. The proposal to be able to increase the fee by creating a child transaction is needed and means that real transactions can still get processed, if they pay for it. Anybody with small transactions not worth paying the market fee for should do it off-chain using the lightning network or other exchange. Yes, that means reliance on centralised exchanges but most users don't care and they can be regulated which most people prefer. If you are a diehard libertarian you can still stay decentralised and somewhat anonymous if you are willing to pay the price or take the volatility risk of using another blockchain like LiteCoin.

Hermel 10y ago
Average transaction fees are at an all-time high currently, namely about 0.25 USD per transaction: https://blockchain.info/charts/transaction-fees-usd?timespan=all&showDataPoints=false&daysAverageString=7&show_header=true&scale=0&address= https://blockchain.info/charts/transaction-fees-usd?timespan... This is a level where fees start to hurt by destroying previously viable business cases. It is also equivalent to costs of 500'000 USD per GB of storage on the block chain. I agree that block chain storage should not be given away for free, but 0.25 USD per transaction is too much. Everyone would win if we would allow for more. More users could use Bitcoin, more startups could build on Bitcoin, and the miners would earn more money (thanks to more transaction). The only ones who would not benefit is blockstream, as the demand for their competing solution is reduced. Here is how Satoshi saw scalability: https://bitcointalk.org/index.php?topic=149668.msg1596879#msg1596879 https://bitcointalk.org/index.php?topic=149668.msg1596879#ms...
- codingmyway 10y ago
  Blockstream isn't competing with the blockchain. Their's is one solution to the problem and others are needed as well, the lightning network being another, which is a competitor. Competing off chain solutions to the scaling issue is exactly what we need providing that the main chain is kept secure. Once the extra off-chain capacity comes online fees will reduce again.
- mikeash 10y ago
  Interesting, at 0.25USD/transaction it's starting to approach the same rough order of magnitude as credit card fees. It's still cheaper, but not vastly so. I recall one of the benefits of Bitcoin was supposed to be that transaction fees would be greatly reduced. Are they independently discovering that fees actually need to be higher, or is this just an anomaly?
  - placeybordeaux 10y ago
    This is because the bitcoin network can currently only process 1MB of transactions every 10 minutes. 1MB is an arbitrary limitation that could be changed easily, but there is strong resistance against increasing this limit. Its a fairly safe assumption that increasing the limit will decrease the fee amount roughly proportionally. The worry is that there will be unintended consequences for increasing the 1MB block size.

Hermel 10y ago

Average transaction fees are at an all-time high currently, namely about 0.25 USD per transaction: https://blockchain.info/charts/transaction-fees-usd?timespan=all&showDataPoints=false&daysAverageString=7&show_header=true&scale=0&address= https://blockchain.info/charts/transaction-fees-usd?timespan... This is a level where fees start to hurt by destroying previously viable business cases. It is also equivalent to costs of 500'000 USD per GB of storage on the block chain. I agree that block chain storage should not be given away for free, but 0.25 USD per transaction is too much. Everyone would win if we would allow for more. More users could use Bitcoin, more startups could build on Bitcoin, and the miners would earn more money (thanks to more transaction). The only ones who would not benefit is blockstream, as the demand for their competing solution is reduced. Here is how Satoshi saw scalability: https://bitcointalk.org/index.php?topic=149668.msg1596879#msg1596879 https://bitcointalk.org/index.php?topic=149668.msg1596879#ms...

codingmyway 10y ago
Blockstream isn't competing with the blockchain. Their's is one solution to the problem and others are needed as well, the lightning network being another, which is a competitor. Competing off chain solutions to the scaling issue is exactly what we need providing that the main chain is kept secure. Once the extra off-chain capacity comes online fees will reduce again.
mikeash 10y ago
Interesting, at 0.25USD/transaction it's starting to approach the same rough order of magnitude as credit card fees. It's still cheaper, but not vastly so. I recall one of the benefits of Bitcoin was supposed to be that transaction fees would be greatly reduced. Are they independently discovering that fees actually need to be higher, or is this just an anomaly?
- placeybordeaux 10y ago
  This is because the bitcoin network can currently only process 1MB of transactions every 10 minutes. 1MB is an arbitrary limitation that could be changed easily, but there is strong resistance against increasing this limit. Its a fairly safe assumption that increasing the limit will decrease the fee amount roughly proportionally. The worry is that there will be unintended consequences for increasing the 1MB block size.