Questions for those who want to raise the block size limit:
Does increasing the block size lead to more centralization?
Does increased centralization lead to a less secure network?
Does a less secure network undermine the value of each bitcoin?
If the answer to all 3 questions is 'yes', then it appears that by increasing the block size limit we'll have made it easier to transact something of lesser value. What is the point?
First and foremost, bitcoins must be a monetary foundation and that can only happen if bitcoins themselves have value. Any changes that potentially lead to that value being threatened (eg. centralization) will lead to the failure of Bitcoin.
Centralization of the payment network (off chain solutions) can be kept honest through competition/free market forces, centralization of the underlying money however cannot.
By the same logic we should reduce the block limit down to 125KB right? The "1MB limit" was simply a round number chosen for crude anti dos type attacks in the early network when mining was very easy (and thus a single malicious user could bloat the blockchain by TBs with essentially no cost). For the record the original client had no 1MB limit. It only had a 33,554,432 MB limit on messages and thus no txn or block could be larger than that (because they wouldn't be a valid message). But they a 25MB txn in a 33.5MB block would have been valid for the first 18 months of the network. Even there it is unknown if that was some design choice or rather just a sanity value (i.e. to prevent an developer error which leads to a number of accidental giant blocks or txns and thus increase the early blockchain by 10000% in a few seconds).
Also I hope this doesn't kill the cult of the divine megabyte but the commit which added the "1MB limit" wasn't even authored by Satoshi (at least not according to git) and was lumped in casually with a number of other fixes title "fix openssl linkage problems, disable minimize to tray on Linux because it has too many problems including a CPU peg bug"
https://github.com/bitcoin/bitcoin/commit/a30b56ebe76ffff9f9cc8a6667186179413c6349I see Bitcoin as a settlement network akin to how gold was used in the past by governments settling their trade imbalances with other nations. As long as bitcoins can not be counterfeited and they are kept scarce the Bitcoin network will serve its ultimate role as hard money which can't be manipulated. Anything that puts the network's security at risk, such as centralization, should be avoided.
If on chain settlement could only occur once per second I don't think it would be a problem. Clearly a certain number of transactions need to occur. The fact is we have 7 tps and getting consensus on a change this far down the road is proving to be difficult and may undermine trust in Bitcoin.
In terms of my 3 original questions what are your thoughts?