Quote from: Gavin Andresen on February 04, 2013, 05:17:08 PM

Quote from: jl2012 on February 04, 2013, 05:00:22 AM

Why don't we just let miners to decide the optimal block size?

If a miner is generating an 1-GB block and it is just too big for other miners, other miners may simply drop it. It will just stop anyone from generating 1-GB blocks because that will become orphans anyway. An equilibrium will be reached and the block space is still scarce.

I think this is exactly the right thing to do.

There is still the question of what the default behavior should be. Here is a proposal:

Ignore blocks that take your node longer than N seconds to verify.

I'd propose that N be: 60 seconds if you are catching up with the blockchain. 5 seconds if you are all caught-up. But allow miners/merchants/users to easily change those defaults.

Rationale: we should use time-to-verify as the metric, because everything revolves around the 10-minutes-per-block constant.

Time-to-verify has the nice property of scaling as hardware gets more powerful. Miners will want to create blocks that take a reasonable amount of time to propagate through the network and verify, and will have to weigh "add more transactions to blocks" versus "if I add too many, my block will be ignored by more than half the network."

Time-to-verify also has the nice property of incentivizing miners to broadcast transactions instead of 'hoarding' them, because transactions that are broadcast before they are in a block make the block faster to verify (because of the signature cache). That is good for lots of reasons (early detection of potential double-spends and spreading out the verification work over time so there isn't a blizzard of CPU work that needs to be done every time a block is found, for example).

This.

I am all for "let-the-market-decide" elastic algorithms.

If you let people select what is best for their interests, they will make the best choices through multiple tries in order to maximize profit & minimize risk.

Nobody wants to lose money, and everybody wants to earn the most. Therefore market will balance out the block size and reach perfect equilibrium automatically.