4 ms·

Sounds like its based on a flawed assumption: "Now, immediately after a block is found, there will be no more transactions in the network to be claimed by a mi

Sounds like its based on a flawed assumption: "Now, immediately after a block is found, there will be no more transactions in the network to be claimed by a miner making the next block" The fact is there is usually a large backlog of transactions.

Paul-E 6y ago
This paper was published when there were big fights going on about whether the block size should be increased. Om camp argued for the status quo, which was causing high transaction fees and long backlogs. The other camp argued for a larger block size, which would reduce or eliminate the transaction backlog. Eliminating the backlog was generally considered a good thing, and the arguments were mostly around the block size, but this paper essentially came in and said "wait a minute, we might actually need the backlog once the block reward is 0."
- cyphertruck 6y ago
  Not to disagree, but to emphasize that the idea that the only way to increase bitcoin capacity is increasing the block size is in error. You didn't push that idea but others do. Nearly every release of bitcoin over past 8 years has increased capacity or efficiency, often both.
  - troysk 6y ago
    Feels like natural progression as underlying technology (internet speeds and HDD space) improves. So more network traffic can now get synced across more nodes faster.
  - AaronFriel 6y ago
    How many kWh does one transaction consume? Is that higher or lower than 8 years ago?
    - drdeca 6y ago
      I don’t think individual transactions are meaningfully tied to an energy cost.
      - sjy 6y ago
        Why can’t you estimate the power consumption of the whole network and divide it by the number of transactions per second?
        xaxiomatic 6y ago
        You can. But it is not a good metric. Assuming the difficulty adjustments ramp down you could still mine blocks with a couple of raspberry pis. The energy consumption and capital investment in hardware is Bitcoins security model. As it would require you to put in the same amount of HW and energy to subvert the mining process. Probably we are at a point that this is almost impossible other than a state actor or a global conspiracy. The block size increase/decrease is also tied to security. There are latency implications as well as the fact that some nodes might drop of if you increased the block size. In both cases it comes back to security rather than the transactional throughput. I am a huge proponent but still kind of struggle with the idea of how much resources this thing sucks up. But then again if it truly becomes the worlds ledger for wealth preservation... idk ... might be worth it.
        deleted 6y ago
        [deleted]
        drdeca 6y ago
        The choice of the word “meaningfully” was deliberate . Of course you can do that. But I don’t think it is meaningful. The energy use isn’t a result of the transaction.
        imtringued 6y ago
        Because that would imply linear scaling. There is a fixed energy cost that doesn't depend on the number of transactions. It goes up and down all the time.
  - tromp 6y ago
    The point remains that eliminating the backlog of high fee paying transactions would jeopardize mining stability and security in the long term.
    - uncletammy 6y ago
      I think this is depends on how large the network has scaled at the time the block reward dies. If BTC is doing 100x visa levels, each transaction fee can have a tiny fee and mining would still be viable. That being said, I don't BTC has any intention of scaling to that degree (or at all really). The BTC devs seem much more concerned with building second layer products like lightning network. All these products actually reduce the number of on-chain transactions and by extension, miner revenue.
      - imtringued 6y ago
        The problem is that lightning is basically federated Paypal. You have to trust your specific provider to some degree. If he stiffs you, you can get arbitration on-chain. There are almost zero barriers to entry so Paypal can be replaced by Paypal 2.0. I don't believe for one second that when you increase the size of the audience that anyone will care which provider they use. In practice that means they will just use Visa, Mastercard and Paypal, maybe even by skipping lightning entirely.
jtsiskin 6y ago
I think the analysis still hold even with a transaction backlog, as long as the fees in these transactions are exponential distributed (a few very high value txs, then it trails off quickly) However I have know idea if this is close to what it really looks like.
cyphertruck 6y ago
The large backlog these days is mostly spam transactions with almost no fees. Bitcoin has increased capacity dramatically in the past decade.
- tromp 6y ago
  Wrong; there is a large backlog of transactions paying over 50 sat per byte [1], which is over $10 in fees for most transactions. [1] https://jochen-hoenicke.de/queue/#BTC,24h https://jochen-hoenicke.de/queue/#BTC,24h
  - iso8859-1 6y ago
    Why is it $10? According to https://www.buybitcoinworldwide.com/fee-calculator/ https://www.buybitcoinworldwide.com/fee-calculator/ Fee rate: 51 satoshis/vbyte SegWit transaction with 1 input, 2 outputs: ~172 vbytes In total: ~8772 satoshis == ~4.48 USD
    - tromp 6y ago
      Because the average transaction is over 400 bytes in size [1]. [1] https://bitcoinvisuals.com/chain-tx-siz https://bitcoinvisuals.com/chain-tx-siz
- uncletammy 6y ago
  https://bitinfocharts.com/comparison/size-btc.html https://bitinfocharts.com/comparison/size-btc.html Make note of the inflection point around 2016. Yeah, it's right around the time your capacity chart starts looking like a wet noodle. Yeah, that's when a few your scumbag BTC devs removed Gavin Andresen's commit access and killed BTC's last chance of becomming a real currency.

Paul-E 6y ago

This paper was published when there were big fights going on about whether the block size should be increased. Om camp argued for the status quo, which was causing high transaction fees and long backlogs. The other camp argued for a larger block size, which would reduce or eliminate the transaction backlog. Eliminating the backlog was generally considered a good thing, and the arguments were mostly around the block size, but this paper essentially came in and said "wait a minute, we might actually need the backlog once the block reward is 0."

cyphertruck 6y ago
Not to disagree, but to emphasize that the idea that the only way to increase bitcoin capacity is increasing the block size is in error. You didn't push that idea but others do. Nearly every release of bitcoin over past 8 years has increased capacity or efficiency, often both.
- troysk 6y ago
  Feels like natural progression as underlying technology (internet speeds and HDD space) improves. So more network traffic can now get synced across more nodes faster.
- AaronFriel 6y ago
  How many kWh does one transaction consume? Is that higher or lower than 8 years ago?
  - drdeca 6y ago
    I don’t think individual transactions are meaningfully tied to an energy cost.
    - sjy 6y ago
      Why can’t you estimate the power consumption of the whole network and divide it by the number of transactions per second?
      - xaxiomatic 6y ago
        You can. But it is not a good metric. Assuming the difficulty adjustments ramp down you could still mine blocks with a couple of raspberry pis. The energy consumption and capital investment in hardware is Bitcoins security model. As it would require you to put in the same amount of HW and energy to subvert the mining process. Probably we are at a point that this is almost impossible other than a state actor or a global conspiracy. The block size increase/decrease is also tied to security. There are latency implications as well as the fact that some nodes might drop of if you increased the block size. In both cases it comes back to security rather than the transactional throughput. I am a huge proponent but still kind of struggle with the idea of how much resources this thing sucks up. But then again if it truly becomes the worlds ledger for wealth preservation... idk ... might be worth it.
      - deleted 6y ago
        [deleted]
      - drdeca 6y ago
        The choice of the word “meaningfully” was deliberate . Of course you can do that. But I don’t think it is meaningful. The energy use isn’t a result of the transaction.
      - imtringued 6y ago
        Because that would imply linear scaling. There is a fixed energy cost that doesn't depend on the number of transactions. It goes up and down all the time.
- tromp 6y ago
  The point remains that eliminating the backlog of high fee paying transactions would jeopardize mining stability and security in the long term.
  - uncletammy 6y ago
    I think this is depends on how large the network has scaled at the time the block reward dies. If BTC is doing 100x visa levels, each transaction fee can have a tiny fee and mining would still be viable. That being said, I don't BTC has any intention of scaling to that degree (or at all really). The BTC devs seem much more concerned with building second layer products like lightning network. All these products actually reduce the number of on-chain transactions and by extension, miner revenue.
    - imtringued 6y ago
      The problem is that lightning is basically federated Paypal. You have to trust your specific provider to some degree. If he stiffs you, you can get arbitration on-chain. There are almost zero barriers to entry so Paypal can be replaced by Paypal 2.0. I don't believe for one second that when you increase the size of the audience that anyone will care which provider they use. In practice that means they will just use Visa, Mastercard and Paypal, maybe even by skipping lightning entirely.

jtsiskin 6y ago

I think the analysis still hold even with a transaction backlog, as long as the fees in these transactions are exponential distributed (a few very high value txs, then it trails off quickly) However I have know idea if this is close to what it really looks like.

cyphertruck 6y ago

The large backlog these days is mostly spam transactions with almost no fees. Bitcoin has increased capacity dramatically in the past decade.

tromp 6y ago
Wrong; there is a large backlog of transactions paying over 50 sat per byte [1], which is over $10 in fees for most transactions. [1] https://jochen-hoenicke.de/queue/#BTC,24h https://jochen-hoenicke.de/queue/#BTC,24h
- iso8859-1 6y ago
  Why is it $10? According to https://www.buybitcoinworldwide.com/fee-calculator/ https://www.buybitcoinworldwide.com/fee-calculator/ Fee rate: 51 satoshis/vbyte SegWit transaction with 1 input, 2 outputs: ~172 vbytes In total: ~8772 satoshis == ~4.48 USD
  - tromp 6y ago
    Because the average transaction is over 400 bytes in size [1]. [1] https://bitcoinvisuals.com/chain-tx-siz https://bitcoinvisuals.com/chain-tx-siz
uncletammy 6y ago
https://bitinfocharts.com/comparison/size-btc.html https://bitinfocharts.com/comparison/size-btc.html Make note of the inflection point around 2016. Yeah, it's right around the time your capacity chart starts looking like a wet noodle. Yeah, that's when a few your scumbag BTC devs removed Gavin Andresen's commit access and killed BTC's last chance of becomming a real currency.