This is a really complicated discussion, that has been splashed all over reddit and other forums for the last year. The reality is that the network is rapidly approaching if it hasn't already exceeded capacity at 1 MB. This doesn't break the network, but it ends up with load sheddding (people who no longer transact) and worse, people who transact but due to rapidly changing fees have to wait in line indefinitely to get their first confirmation. The mempool will eventually randomly eject transactions, but this can cause issues for wallets and other services.
To say that centralization increases dramatically at 2 MB just isn't the case. Once people stop running full nodes because they don't believe in Bitcoin's potential as a transaction network then what? This is all about control, who gets to control the fate of the Bitcoin network, and right now that battle is being waged between large well funded companies each of which has its own vision for what Bitcoin is.
Development should under no circumstances be centralized with one entity, but there you have it. The only people who benefit from bitcoin being unable to scale are those who want it to simply be a digital gold / store of value, and those that sell alternative solutions for various markets. This is just going to lead to capital flight from Bitcoin into alternative networks that have a growth potential despite being inferior at the moment.
> To say that centralization increases dramatically at 2 MB just isn't the case.
No one is saying that. Core's SegWit proposal also gives us an effective blocksize of ~2mb, the same as Classic - only without requiring a coordinated network-wide upgrade and without the risk of splitting the payment network and currency in two if everyone doesn't upgrade in time. This is the more responsible way to deploy such an upgrade, especially if you consider the capacity bump to be urgent. (a safe hard-fork would require a grace period of 6-12 months to wait for everyone to upgrade, and so would be much slower to roll out than SegWit)
Also, several of the Bitcoin Core members have committed to coding an hard-fork proposal for raising the block size limit within a few months, and to bring it up to the wider development community to gather consensus.
I do agree that this isn't about the technical issues, but about control. The bitcoin development community has been very responsive and insightful throughout the scaling debate, and has provided us with great technical solutions to some very difficult problems. The ones opposing the Bitcoin Core development community seem to disregard the technical merit of their proposals in favor of repeating personal attacks, conspiracy theories and toxicity. This is creating an hostile environment that developers will start running away from... which is a shame, because we don't really have any developers to spare - people with intersection of the domain knowledge required to work on Bitcoin (cryptography, distributed networks, game theory, economics, computer science, etc) are VERY rare.
The fact is that transactions still consistently and reliably get mined quickly with reasonable fees of 40-50 satoshis/byte [0] [1], or roughly $0.04-$0.05 for an average 250 bytes tx. For a global payment network that provides non-reversible payments and near-instant (within a block) settlement, this is a dirt cheap.
The only real issue we're experiencing is due to broken wallets that don't handle fees well. Fortunately, most modern wallets today do handle fees properly, and users are slowly moving away from unmaintained wallet software that don't (the main culprit being blockchain.info's wallet).
The median time for fee paying transactions to get confirmed has been 12 minutes at peak [2] (note that 10 minutes is the average time between blocks, and so the absolute minimum possible average time for the first confirmation), which shows us that the majority of transactions are being conducted using proper wallet software which does not cause delays.
In reality, actual bitcoin-using customers that are detached from all the drama in the online bitcoin community don't actually experience any degraded service or delays (again, except for these using broken wallets), and would be very surprised to learn about all the drama going on.
> Development should under no circumstances be centralized with one entity, but there you have it.
Bitcoin Core is not really an "entity". It is a diverse set of technical experts working on improving Bitcoin using a consensus-driven decision making process. There are hundreds of contributors from various backgrounds, associations, and geographical locations. Communication and discussions are all being done in the open, in mailing lists, GitHub and IRC. There is no hierarchy and no one is in charge, and community members have repeatedly shown their dedication to the consensus-driven approach and opposition to merging controversial changes. This development process has made Bitcoin very resilient to hasty decisions driven by populism, political forces and tyranny of the majority situations.
> those who want it to simply be a digital gold / store of value
Straw man? I'm not sure who you're referring to exactly. There are people who want bitcoin to scale using on-chain capacity, and others that want bitcoin to scale using a multi-layered system with the blockchain as the settlement layer and payment channels acting as a write cache. I'm not aware of any group of people that don't want it to scale at all.
If anything, I would say that these advocating for a multi-layered system are more true to the original vision of bitcoin as an "electronic cash system". Using a write cache would allow for really instant (safe zero-conf), really micro (down to tiny fractions of a cent), really low-fees (approaching zero) and really high-volume (orders of magnitude more than what's possible using blockchain alone) payments -- basically, what bitcoin has always been sold as, but never actually was.
This may be a little unpopular here, but I really appreciate the conservative approach by the Bitcoin core team. There's a lot of cryptocurrencies out there and Bitcoin's dominance is from its long history and staying power. Bitcoin needs to have a near majority of agreement for any breaking change or else its risking its own dominance. Hopefully, transaction fees become less over time, but regardless they're necessary to prevent spam. No matter how big of blocks you have, you're always going to have a spam problem and the Bitcoin forks have yet to show how bigger blocks will mean faster transactions.
Except they're not being conservative. Core's approach has been to introduce new complexities such as replace-by-fee[1] and segregated witness[2]. These are much bigger changes to Bitcoin than a one-time increase of the max block size.
It's just that the core developers seem to be selective about what they are conservative about. Replace-by-fee, which is a very controversial change which there's never been a lot of discussion about, gets fast-tracked, while a comparatively trivial change in block size gets iced because it is not part of 'the vision'.
It's a free market. If you pay a higher transaction fee, your transaction gets processed sooner. Typical transaction fees are now $0.04.
The big spike seems to be over, anyway.[1] Median time never exceeded 13 minutes. Note that this does not include no-fee transaction requests. There may be an attack underway which involves lots of tiny transactions that may never clear. One of the purposes of the fee is to discourage such spamming.
It's a broken market, one in which the supply of space in the blockchain is unresponsive to increases in price induced by higher demand.
This impasse over block sizes and Bitcoin's governance would never have happened if Satoshi Nakamoto had designed the protocol well in this respect. It's unfortunate that nobody seems interested in fixing the basic problem, which is arbitrary parameters trying to do the job of endogenously determined economic variables.
It is a market. I don't think the word 'free' adds anything, except to perhaps avoid analyzing why the market has the structure that it does. Changing the block size changes the market. If the market is currently free, would it still be free if the block size were increased? I think yes. There's no distinguished natural market structure for bitcoin, like all markets. What do you mean by free?
Is the market efficient in the technical sense? Is it as useful as it could be in the human sense? I wouldn't be surprised either way of the answer to the first question, but i'm pretty sure there's a whole 'lotta people who think bitcoin would be more useful to humans if the block size were changed.
it most certainly is not. regardless whether you agree or not with the current blocksize debate, it is undeniable that the supply of blockspace is under the centralized control of the bitcoin-core developers. That's just a fact.
Yes. This is what the whole blocksize controversy is about. Miners want 1MB blocks because it allows them to collect additional fees more quickly. Companies that depend on Bitcoin's hypergrowth as a transaction platform want to bump the blocksize because they want to keep fees minimal so that adoption stays high. These are the two competing interests.
Most people want blocksize increased, relieving competition for miner time and thus requiring smaller fees per tx. However, Bitcoin's design failed to anticipate that hashpower would become so centralized and that so few bitcoin users would be contributing hashpower. Essentially, this means that a handful of miners that have secret, proprietary hardware control the fate of the network and that average users have very little representation, even if they're wasting their own compute trying to chip in as a miner.
At some point, the network will stop awarding new coins to miners as blocks are found. Then the only incentive miners will have is transaction fees. That's scheduled for something like 2021 or 2022. This blocksize controversy is a good preview of what we'll see when that happens.
If your transaction eventually got confirmed, contact the vendor with the transaction hash. The last three times I used bitcoin, I had to do this; I've yet to be refused by a vendor.
This doesn't make any sense. Why would a company intentionally screw over its customers over such a trivial issue? Their window is 15 minutes because of bitcoin's tendency to fluctuate in price. If the network hasn't delivered your transaction, there's literally nothing they can do. Shouldn't you contact the merchant for a refund?
Bitcoin is starting to look like "decentralization" at its worst. Pretty much the only asset ever in existence that hasn't fallen in price due to uncertainty.
Regarding "the halving", how in the world could you design in a doubling of expenses on some arbitrary date in the future? That didn't make any sense to me.
Correct me if I'm wrong, but doesn't this just mean that fees have to be higher? Welcome to markets, where technical constraints and supply/demand dynamics both influence price.
I believe the issue is overall capacity. Sure, you can up transaction fees and get your transaction processed rapidly. But that's not a sustainable strategy if bitcoin continues to rise in popularity. Since total capacity isn't increased, you will have more and more people competing for what capacity exists and this will lead to ever-escalating fees.
Yea this is really not a big problem. Currently people are using Bitcoin to move around amounts as small as a tiny fraction of a cent. That's just a waste of blockchain space. We all know there needs to be a transaction fee to stop these so-called 'dust transactions'
It's a market with an artificial, centrally planned cap on supply. So yes, it means that fees have to be higher, but it also means that some people/transactions will necessarily be priced out (or move to alternative, cheaper blockchains, as is currently happening).
The tone of the article is objective, but surely Coindesk has an interest in Bitcoin Classic. I read it as nothing more than propaganda.
I don't have a side one way or another, and I don't own bitcoin. But, it's ridiculous to see these bitcoin 'companies' taking such desperate measures. Given the nature of all the characters I've seen come out of the woodwork thus far, it is not surprising.
Coinbase has an interest to increase the block size so that the protocol can be further centralized, making people more reliant on their centralized bitcoin as a service business.
Honestly, the whole bitcoin ecosystem is a sinking ship at this point. The protocol is broken and there are too many vested interests to properly fix it. It's time to move over to Ethereum.
I'm really not sure where people are getting this. All companies with the exception of Blockstream want Bitcoin to scale so that it can aquire more users. More users is instrumental to the growth of new companies. Not scaling the network means we will cease to aquire active users, and the entire ecosystem will possibly stall. While that happens we will have capital outflow to other coins.
Ethereum has been a beneficiary of that outflow, but is a significantly less tested code base, with much less hashing power, and significantly fewer users. Its still a very early product with its own vested interests. The two networks aren't even comparable at the moment in terms of capability and ecosystem.
Why is it a sinking ship? I can still send money to anyone anywhere in the world for a very low fee relatively fast, without any restrictions, long forms or questions asked. I don't know what do you think Bitcoin's value is to people, but I surely know what value it has for me personally.
It seems to me that you have it completely backwards.
Smaller block sizes are better for Coinbase, all else equal, because that means transactions on the blockchain are more expensive. Which makes sending payments on third party services more attractive, and long term they can flip bits around in their database while taking a cut, ala PayPal. Except the backing currency is BTC, not USD et al.
I think that Coinbase is primarily interested here in shepherding the Bitcoin ecosystem as a whole towards success, because it doesn't want the pool it's swimming in to dry up. Sometimes selfless and selfish motivations align.
I suspect you have a horse in this race, but it is certainly true that a lot of investors -- both in the currency and in the companies -- are now in too deep, and they know it. That goes for all your alternatives as well.
> Coinbase has an interest to increase the block size so that the protocol can be further centralized, making people more reliant on their centralized bitcoin as a service business.
This is fundamentally not at all how bitcoin works. Nobody relies on coinbase to actually use bitcoin. A bigger -maximum- block size won't increase centralization since 1 MB every 10 minutes is so far from stressing even modest resources. Anyone who can watch netflix can download at least 200 times faster than they need to keep up with the blockchain.
So, I looked up Ethereum hoping to find a dencentralized digital cryptocurrency with transaction times comparable to credit/debit card transactions, but instead I found..I found..what did I find? WTH is Ethereum?
I can't help but notice that the only news about Bitcoin that ever enter HN front page are some sort of drama, or "issue with bitcoin". There are a lot of truly great things going on in the space, yet these are carefully kept off the mainstream news outlets and even HN.
Is there anything preventing an implementation vote by the miners? I would think that convincing 50% of miners would be all it takes to change these types of features.
If companies like Coinbase, which live and die by the health of the Bitcoin ecosystem, have taken so much capital, why can they not solve this problem by spending money to shore up the health of bitcoin ecosystem (I assume this requires adding processing power)?
I don't know anything about Bitcoin, so maybe it's just unfeasible.
This is the paradox. Coinbase does not gain anything if bitcoin gets better. Their business is "we make bitcoin use easier". If both users are Coinbase customers, their transaction is done outside of blockchain. Their goal is to have more users and wonky or slow transactions outside of their servers helps them.
Why it takes so long? Because network is being DoSed.
How? By sending a lot of small transaction to fill out blocks - they also pay for those transactions.
Why? Well, to prove the point. "You need bigger block, you need our fork".
DDoS - the best weapon of Internet, still undefeated.
Lol wut? It's the classic nodes being DOSed. Also, the whole network being full isn't even supposed to be a problem, according to Core. Prices will just rise? Correct?
You don't have to be smart to understand the universe is resource bound.
Bitcoin core seems to have made a money that has a "resource" like behaviour.
The more you mine it, the more it costs. They seem to have a concern about a virtual currency that unlike real ones can prevent some "non realistic" transaction behaviours that are not compliant with the real world.
Transactions are never free. And the bigger a system is the more a a transaction costs.
What frightens me is the High Tech business trying to piggy back on a pretty sane currency and want to influence for their personal interests the system in a way that might deserve the economy globally.
Are all High Tech companies sociopaths just caring about nothing but their private benefits built upon other's works?
[+] [-] buttershakes|10 years ago|reply
To say that centralization increases dramatically at 2 MB just isn't the case. Once people stop running full nodes because they don't believe in Bitcoin's potential as a transaction network then what? This is all about control, who gets to control the fate of the Bitcoin network, and right now that battle is being waged between large well funded companies each of which has its own vision for what Bitcoin is.
Development should under no circumstances be centralized with one entity, but there you have it. The only people who benefit from bitcoin being unable to scale are those who want it to simply be a digital gold / store of value, and those that sell alternative solutions for various markets. This is just going to lead to capital flight from Bitcoin into alternative networks that have a growth potential despite being inferior at the moment.
[+] [-] nadaviv|10 years ago|reply
No one is saying that. Core's SegWit proposal also gives us an effective blocksize of ~2mb, the same as Classic - only without requiring a coordinated network-wide upgrade and without the risk of splitting the payment network and currency in two if everyone doesn't upgrade in time. This is the more responsible way to deploy such an upgrade, especially if you consider the capacity bump to be urgent. (a safe hard-fork would require a grace period of 6-12 months to wait for everyone to upgrade, and so would be much slower to roll out than SegWit)
Also, several of the Bitcoin Core members have committed to coding an hard-fork proposal for raising the block size limit within a few months, and to bring it up to the wider development community to gather consensus.
I do agree that this isn't about the technical issues, but about control. The bitcoin development community has been very responsive and insightful throughout the scaling debate, and has provided us with great technical solutions to some very difficult problems. The ones opposing the Bitcoin Core development community seem to disregard the technical merit of their proposals in favor of repeating personal attacks, conspiracy theories and toxicity. This is creating an hostile environment that developers will start running away from... which is a shame, because we don't really have any developers to spare - people with intersection of the domain knowledge required to work on Bitcoin (cryptography, distributed networks, game theory, economics, computer science, etc) are VERY rare.
[+] [-] nadaviv|10 years ago|reply
The only real issue we're experiencing is due to broken wallets that don't handle fees well. Fortunately, most modern wallets today do handle fees properly, and users are slowly moving away from unmaintained wallet software that don't (the main culprit being blockchain.info's wallet).
The median time for fee paying transactions to get confirmed has been 12 minutes at peak [2] (note that 10 minutes is the average time between blocks, and so the absolute minimum possible average time for the first confirmation), which shows us that the majority of transactions are being conducted using proper wallet software which does not cause delays.
In reality, actual bitcoin-using customers that are detached from all the drama in the online bitcoin community don't actually experience any degraded service or delays (again, except for these using broken wallets), and would be very surprised to learn about all the drama going on.
> Development should under no circumstances be centralized with one entity, but there you have it.
Bitcoin Core is not really an "entity". It is a diverse set of technical experts working on improving Bitcoin using a consensus-driven decision making process. There are hundreds of contributors from various backgrounds, associations, and geographical locations. Communication and discussions are all being done in the open, in mailing lists, GitHub and IRC. There is no hierarchy and no one is in charge, and community members have repeatedly shown their dedication to the consensus-driven approach and opposition to merging controversial changes. This development process has made Bitcoin very resilient to hasty decisions driven by populism, political forces and tyranny of the majority situations.
> those who want it to simply be a digital gold / store of value
Straw man? I'm not sure who you're referring to exactly. There are people who want bitcoin to scale using on-chain capacity, and others that want bitcoin to scale using a multi-layered system with the blockchain as the settlement layer and payment channels acting as a write cache. I'm not aware of any group of people that don't want it to scale at all.
If anything, I would say that these advocating for a multi-layered system are more true to the original vision of bitcoin as an "electronic cash system". Using a write cache would allow for really instant (safe zero-conf), really micro (down to tiny fractions of a cent), really low-fees (approaching zero) and really high-volume (orders of magnitude more than what's possible using blockchain alone) payments -- basically, what bitcoin has always been sold as, but never actually was.
[0] https://bitcoinfees.21.co/
[1] https://bitcoinfees.github.io/
[2] https://blockchain.info/charts/avg-confirmation-time?timespa...
[+] [-] xkarga00|10 years ago|reply
https://www.decred.org/
[+] [-] matthewbauer|10 years ago|reply
[+] [-] ggreer|10 years ago|reply
1. https://github.com/bitcoin/bips/blob/master/bip-0125.mediawi...
2. https://github.com/bitcoin/bips/blob/master/bip-0144.mediawi...
[+] [-] the_rosentotter|10 years ago|reply
[+] [-] Animats|10 years ago|reply
The big spike seems to be over, anyway.[1] Median time never exceeded 13 minutes. Note that this does not include no-fee transaction requests. There may be an attack underway which involves lots of tiny transactions that may never clear. One of the purposes of the fee is to discourage such spamming.
[1] https://blockchain.info/charts/avg-confirmation-time?timespa...
[+] [-] pash|10 years ago|reply
It's a broken market, one in which the supply of space in the blockchain is unresponsive to increases in price induced by higher demand.
This impasse over block sizes and Bitcoin's governance would never have happened if Satoshi Nakamoto had designed the protocol well in this respect. It's unfortunate that nobody seems interested in fixing the basic problem, which is arbitrary parameters trying to do the job of endogenously determined economic variables.
[+] [-] danharaj|10 years ago|reply
Is the market efficient in the technical sense? Is it as useful as it could be in the human sense? I wouldn't be surprised either way of the answer to the first question, but i'm pretty sure there's a whole 'lotta people who think bitcoin would be more useful to humans if the block size were changed.
[+] [-] adrianmacneil|10 years ago|reply
[+] [-] TheOsiris|10 years ago|reply
it most certainly is not. regardless whether you agree or not with the current blocksize debate, it is undeniable that the supply of blockspace is under the centralized control of the bitcoin-core developers. That's just a fact.
[+] [-] alfiedotwtf|10 years ago|reply
[+] [-] EGreg|10 years ago|reply
[+] [-] asdfzxc|10 years ago|reply
I have to point out that I'm completely new to this issue and the underlying technology, so pardon me for ignorance.
[+] [-] pmorici|10 years ago|reply
Yeah because people got frustrated and gave up.
[+] [-] cookiecaper|10 years ago|reply
Most people want blocksize increased, relieving competition for miner time and thus requiring smaller fees per tx. However, Bitcoin's design failed to anticipate that hashpower would become so centralized and that so few bitcoin users would be contributing hashpower. Essentially, this means that a handful of miners that have secret, proprietary hardware control the fate of the network and that average users have very little representation, even if they're wasting their own compute trying to chip in as a miner.
At some point, the network will stop awarding new coins to miners as blocks are found. Then the only incentive miners will have is transaction fees. That's scheduled for something like 2021 or 2022. This blocksize controversy is a good preview of what we'll see when that happens.
[+] [-] unknown|10 years ago|reply
[deleted]
[+] [-] barrkel|10 years ago|reply
[+] [-] beaner|10 years ago|reply
[+] [-] pbreit|10 years ago|reply
Bitcoin is starting to look like "decentralization" at its worst. Pretty much the only asset ever in existence that hasn't fallen in price due to uncertainty.
Regarding "the halving", how in the world could you design in a doubling of expenses on some arbitrary date in the future? That didn't make any sense to me.
[+] [-] exolymph|10 years ago|reply
[+] [-] mrestko|10 years ago|reply
[+] [-] lololomg|10 years ago|reply
[+] [-] adrianmacneil|10 years ago|reply
[+] [-] gruez|10 years ago|reply
[+] [-] dontscale|10 years ago|reply
I don't have a side one way or another, and I don't own bitcoin. But, it's ridiculous to see these bitcoin 'companies' taking such desperate measures. Given the nature of all the characters I've seen come out of the woodwork thus far, it is not surprising.
[+] [-] CyberDildonics|10 years ago|reply
[+] [-] yxitcti|10 years ago|reply
Honestly, the whole bitcoin ecosystem is a sinking ship at this point. The protocol is broken and there are too many vested interests to properly fix it. It's time to move over to Ethereum.
[+] [-] buttershakes|10 years ago|reply
Ethereum has been a beneficiary of that outflow, but is a significantly less tested code base, with much less hashing power, and significantly fewer users. Its still a very early product with its own vested interests. The two networks aren't even comparable at the moment in terms of capability and ecosystem.
[+] [-] snitko|10 years ago|reply
[+] [-] reitzensteinm|10 years ago|reply
Smaller block sizes are better for Coinbase, all else equal, because that means transactions on the blockchain are more expensive. Which makes sending payments on third party services more attractive, and long term they can flip bits around in their database while taking a cut, ala PayPal. Except the backing currency is BTC, not USD et al.
I think that Coinbase is primarily interested here in shepherding the Bitcoin ecosystem as a whole towards success, because it doesn't want the pool it's swimming in to dry up. Sometimes selfless and selfish motivations align.
[+] [-] lvs|10 years ago|reply
[+] [-] CyberDildonics|10 years ago|reply
This is fundamentally not at all how bitcoin works. Nobody relies on coinbase to actually use bitcoin. A bigger -maximum- block size won't increase centralization since 1 MB every 10 minutes is so far from stressing even modest resources. Anyone who can watch netflix can download at least 200 times faster than they need to keep up with the blockchain.
[+] [-] perfectfire|10 years ago|reply
[+] [-] brasky|10 years ago|reply
[+] [-] oleganza|10 years ago|reply
[+] [-] nonuby|10 years ago|reply
[+] [-] lojack|10 years ago|reply
[+] [-] kang|10 years ago|reply
[+] [-] jackgavigan|10 years ago|reply
[+] [-] aminorex|10 years ago|reply
[+] [-] look_lookatme|10 years ago|reply
I don't know anything about Bitcoin, so maybe it's just unfeasible.
[+] [-] al_chemist|10 years ago|reply
[+] [-] thescriptkiddie|10 years ago|reply
[+] [-] al_chemist|10 years ago|reply
DDoS - the best weapon of Internet, still undefeated.
[+] [-] eterm|10 years ago|reply
[+] [-] stale2002|10 years ago|reply
[+] [-] unknown|10 years ago|reply
[deleted]
[+] [-] julie1|10 years ago|reply
The more you mine it, the more it costs. They seem to have a concern about a virtual currency that unlike real ones can prevent some "non realistic" transaction behaviours that are not compliant with the real world.
Transactions are never free. And the bigger a system is the more a a transaction costs.
What frightens me is the High Tech business trying to piggy back on a pretty sane currency and want to influence for their personal interests the system in a way that might deserve the economy globally.
Are all High Tech companies sociopaths just caring about nothing but their private benefits built upon other's works?