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A million transactions per block would increase the block size to a Gigabyte or so. That means the blockchain grows at 52TB a year, significantly increasing the

A million transactions per block would increase the block size to a Gigabyte or so. That means the blockchain grows at 52TB a year, significantly increasing the cost of maintaining a full node. But even that is really not fully taking into account how expensive transactions would be. The current Bitcoin block size and block rate and transaction size limit the network to 7 transactions per second. There are over 7 billion people. Which means that if everyone used Bitcoin, they could get at most 1 transaction every billion seconds. A billion seconds is over 31 years. Bitcoin as it is now is not for the rubes. Layer 1 transactions will, long-term, only be for larger entities. There’d effectively be a hierarchy of who can actually afford to submit transactions on the blockchain, which very much goes against the ethos of the original Satoshi paper. And even with your million transactions per block, you’re still talking about only one transaction per month or two per person in the world, which is far from microtransactions. The transaction fee would necessarily be a lot more than 35¢, as otherwise more people would use it directly. So it’s just not feasible to be both scalable and accessible without a huge hierarchy (ie only big players get to do transactions) and high transaction costs. At least not with the current architecture.

topranks 6y ago
If there were a million transactions per block (every 10 mins,) there would be a lot more than 7 per second.
- Robotbeat 6y ago
  Yes, about 1700 per second. Which is about the average number of Visa transactions when averaged over a whole year but still very small compared to what VisaNet is capable of (about 65,000 transactions per second) I can’t find examples of number of cash transactions per second globally, but the Eurozone averages 1.2 cash transactions per person per day (and 0.3 card txs/person/day). Give that there are 7.8 billion people in the world, if each makes on average 1.2 cash transactions per day and 0.3 card transactions per day, that’s about 100,000 cash transactions per second and 25,000 card transactions per second. Cash, of course, is trivially scalable. At current usage rates, VisaNet could handle all card transactions if everyone used cards as much as Europe. Total payments of about 125,000 per second is about 2 orders of magnitude greater than what a Bitcoin with 1000 fold increase in block size could do. None of these systems is setup for micropayments. And increasing the Blocksize doesn’t change that. Visa or cash still seem far better for the small, casual payments Satoshi imagined Bitcoin would enable.
tgsovlerkhgsel 6y ago
> That means the blockchain grows at 52TB a year, significantly increasing the cost of maintaining a full node. Indeed, bigger blocks increase the cost of running a full node, but anyone who has a need to run a full node is likely processing many transactions each day, i.e. the increased cost of running a node is nothing compared to the transaction costs. That's what I don't understand about the "oh, but full nodes will be more expensive" argument. Apparently, you can still run a node on a Raspberry Pi with a SSD attached to it, for a hardware cost of ~$200. That's less than the cost of 20 transactions (bitcoinfees.co, 6 blocks fee ~$12 right now). To me, that seems like the tradeoff between cost-to-run-a-node and cost-to-transact-on-chain has been chosen very poorly.

topranks 6y ago

If there were a million transactions per block (every 10 mins,) there would be a lot more than 7 per second.

Robotbeat 6y ago
Yes, about 1700 per second. Which is about the average number of Visa transactions when averaged over a whole year but still very small compared to what VisaNet is capable of (about 65,000 transactions per second) I can’t find examples of number of cash transactions per second globally, but the Eurozone averages 1.2 cash transactions per person per day (and 0.3 card txs/person/day). Give that there are 7.8 billion people in the world, if each makes on average 1.2 cash transactions per day and 0.3 card transactions per day, that’s about 100,000 cash transactions per second and 25,000 card transactions per second. Cash, of course, is trivially scalable. At current usage rates, VisaNet could handle all card transactions if everyone used cards as much as Europe. Total payments of about 125,000 per second is about 2 orders of magnitude greater than what a Bitcoin with 1000 fold increase in block size could do. None of these systems is setup for micropayments. And increasing the Blocksize doesn’t change that. Visa or cash still seem far better for the small, casual payments Satoshi imagined Bitcoin would enable.

tgsovlerkhgsel 6y ago

> That means the blockchain grows at 52TB a year, significantly increasing the cost of maintaining a full node. Indeed, bigger blocks increase the cost of running a full node, but anyone who has a need to run a full node is likely processing many transactions each day, i.e. the increased cost of running a node is nothing compared to the transaction costs. That's what I don't understand about the "oh, but full nodes will be more expensive" argument. Apparently, you can still run a node on a Raspberry Pi with a SSD attached to it, for a hardware cost of ~$200. That's less than the cost of 20 transactions (bitcoinfees.co, 6 blocks fee ~$12 right now). To me, that seems like the tradeoff between cost-to-run-a-node and cost-to-transact-on-chain has been chosen very poorly.