Quote from: caveden on February 19, 2013, 07:52:36 AM

Please people, understand one thing: you can't run a full payment network used by millions as a hobby. The day Bitcoin becomes something really serious (i.e., thousands of transactions per second), being a full node will necessarily be a professional task. It won't be something you can do on your laptop, "just for fun".

Right now the capacity of Bitcoin is about half a million transactions per day. So you can participate in that level of transactions as a hobby. The value of those transactions can be as high as required. If Bitcoin does become a widespread store of value, blocks will probably be transferring hundreds of million of dollars worth of value each, tens of billions every day.

But after all, it's just information, so yes, participating will be perfectly possible as a hobby, and for a fairly affordable fee, you'll be able to even make transactions directly on the world's decentralized value transfer service, the same system big banks will use.

Quote from: caveden on February 19, 2013, 07:52:36 AM

EDIT: And, as Mike said, the idea of converting Bitcoin into some replacement to SWIFT with $20 fees for transactions, which would force people to use bank-like institutions for daily transfers, just because you want "ordinary people to verify transactions", totally turns me off. Bitcoin can be much more than that. If you actually want it to remain this censorship-resistant currency that it is, it has to remain suitable for small transactions like buying some plugin from Wordpress. If you want Bitcoin to remain an alternative for those seeking financial privacy, you have to keep it suitable for SR users and alike - otherwise all these "bank-like" payment processor would ruin your privacy. If you want Bitcoin to remain an alternative for those trying to protect their purchasing power from inflation, you have to keep it suitable for those who want to protect their daily money on their own, without having to use a bank just for storage purposes which would recreate the incentive for fractional reserves. The list can go on. Bitcoin has the potential to be much more than SWIFT 2.0. But for that, processing transactions will have to become a professional activity (it kinda already is actually).

Absolutely. But the solution isn't to make access to the core Bitcoin network, the thing that actually keeps Bitcoin inflation free and secure, require such a huge investment in computer hardware that only big banks and other large institutions can afford access. The solution is to keep blocks small, and build payment systems that work on top of the block chain.

Remember that if the blockchain is kept small enough that validating it is affordable, you don't have to trust the payment processors very much. The protocols will be designed in ways that allow anyone to prove fraud automatically and warn the whole world. The client software people use will see these fraud proofs, and immediately stop using the payment processor, putting them out of business. Yet at the same time, using technologies like chaum tokens, those payment processors can't even know where payments are going too; you're privacy is even more protected than with on-chain transactions, because the links connecting one transaction to another are severed with unbreakable mathematics.

Do you think the banking crisis would have happened if banks were forced to have all their bank-to-bank transactions publicly recorded for the whole world to see? Keeping the blocksize limited does exactly that.

Quote from: caveden on February 19, 2013, 07:52:36 AM

Quote from: Pieter Wuille on February 18, 2013, 10:02:52 PM

But maybe not, and if just one miner starts creating gigabyte blocks, while all the rest agrees on 10 MiB blocks, ugly block-shunning rules will be necessary to avoid such blocks from filling everyone's hard drive (yes, larger block's slower relay will make them unlikely to be accepted, but it just requires one lucky fool to succeed...).

Succeed in what? Killing everybody else? Do you realize that would likely require more than 50% of the network processing power, otherwise the "unacceptably-gigantic" block would always be an orphan? Miners would likely reject blocks way too large, specially if it's filled with transactions never seen before (i.e., a likely attempt of flooding).

Ok, so a 10GiB block is unacceptably large. What about a 5Gib block? Or a 1GiB block? Or a 500MiB block? At some point the block will be confirmed by a large fraction of the hashing power, but not all the hashing power. The hashing power that couldn't process that gigantic block in time has effectively dropped off of the network, and is no longer contributing to the security of the network.

So repeat the process again. It's now easier to push an even bigger block through, because the remaining hashing power is now less. Maybe the hashing power has just given on on Bitcoin mining, maybe they've redirected their miners to one of the remaining pools that can process such huge blocks, either way, bit by bit the process inevitably leads to centralization.

Quote from: caveden on February 19, 2013, 07:52:36 AM

EDIT: And also, as a general comment on the discussion, you people fearing "too much centralization", as in "too few market participants", should realize that, at most, what would happen would be a few pool operators, like we have now. Pool operators do not own the processing power. Such processing power will remain scattered among thousands of people, who may easily migrate to different pools if they feel like. Pretty much like what already happens. Current pools need to have some "professional bandwidth" if only for protecting against DDoS, It already require professional resources to run a mining pool.

Pool operators do own hashing power if the miners contributing the hashing power can't effectively validate the blocks they mine.

If running a validating node requires thousands, or even tens of thousands, worth of expensive equipment, how exactly do you expect to even find out that you've been mining at a dishonest pool? If >50% of the people mining and running validating pools decide to get together and create bogus transactions creating coins out of thin air, you won't even know they've been defrauding everyone.(1) If running a node requires tens of thousands of dollars worth of equipment, and it will to support Visa-scale transaction volumes, only a small handful of large banks are going to run nodes. I think you can see how collusion between half-a-dozen large banks becomes not just possible, but likely.

1) Yes, you can try to create automated fraud proof mechanisms to detect it - I wrote about the idea here - but implementing the software to process fraud proofs is extremely complex, much more complex than applying the same idea to keeping off-chain banking services honest. I also have little hope that those mechanisms will actually get written and tested before the much more simple step of just lifting the block limit is taken.

Quote from: cjp on February 19, 2013, 07:56:19 AM

In this thread I'm a bit disappointed in Gavin. I used to see him as a very conservative project leader, only including changes when there's community consensus about it and no doubt about its security implications. And I liked that, even though it meant that some of the changes I support are not going to be included. For a monetary system, trust and stability are essential, and I hope Gavin will continue to provide that trust and stability, so hopefully he just considers abandoning the transaction limit as an academic "thought experiment", and not something he is planning to actually put into the code in the near term.

I agree %100. Increasing the block limit seems like a conservative change - it's just one little number - but the long-term implications are enormous and have the potential to drastically change what Bitcoin is. It may be a conservative change for the small number of big businesses that are heavily invested in the current system, and can afford the network power to process large blocks, but it's not a conservative change for the rest of us.