Quote from: solex on April 03, 2013, 11:59:07 PM

Accepting this as true, for which you present a strong case in your thread on trusted banks, then this is indeed a complementary service which may well attract a significant user base in the future. It may even succeed in handling 90% of the transaction volume which would otherwise hit the main blockchain. Is that your optimistic scenario?

However, and correct me if I am wrong, but such a trusted banking service does not exist yet. Not even in a prototype form, let alone one that can rapidly substitute for blockchain transactions. Acceptance of new services like this will take some time, at least a few years, surely. The people on this forum are ahead of the masses on bitcoin usage, yet they universally appreciate that their holding is stored on thousands of nodes worldwide. How many of us would quickly and permanently move our bitcoin holding to one single service instead of having it stored directly on the main chain?

We already have off-chain transactions, for instance Mt. Gox, and AurumXchange's code systems. Similarly web wallets allow for transfers from one user to another directly; MPOE reports that quite large amounts of BTC are exchanged between users every day. The Silk Road is another example of off-chain transactions - deposits go into a big shared wallet and transfers within the system are totally off-chain. In that case there are significant privacy advantages, not to mention how it makes implementing escrow easy.

There isn't going to be a single service that does this, that's my whole point: if you achieve scalability by just raising the blocksize, you wind up with all your trust is in a tiny number of validating nodes and mining pools. If you achieve scalability through off-chain transactions, you will have many choices and options. I'm sure the users of the Silk Road have very different ideas about who they can trust than users of BitPay...

Quote from: solex on April 03, 2013, 11:59:07 PM

You use the word "trust", but it takes time to earn it. It has taken Bitcoin four years to earn the trust that is fueling its success today.
I argue that there is not enough time left for that level of trust to be earned by complementary services before the 1MB arbitrary constant becomes as effective as any ddos attack in the history of bitcoin.

Please consider this chart and let us know, in your considered opinion, whether trusted banks will be fully ready, with a proven track record, before its blue line reaches 345,600.

https://blockchain.info/charts/n-transactions?showDataPoints=false&show_header=true&daysAverageString=7×pan=&scale=1&address=

Off-chain transactions aren't something that will be implemented in one big go. Like I said above, the markets can naturally adjust bit by bit gradually moving uses of Bitcoin from on-chain to off-chain as the fees gradually increase. At worst growth in the least important, lowest value, parts of the Bitcoin economy is slowed while off-chain tx solutions catch up.

On the other hand, if the blocksize is raised and it leads to centralization, Bitcoin as a decentralized currency will be destroyed forever.

It might not be sexy and exciting, but like it or not leaving the 1MB limit in place for the foreseeable future is the sane, sober and conservative approach. Exactly what I want from the developers of the brand-new and still poorly understood technology underpinning Bitcoin's $1.5billion market cap. For that matter, I personally have a good chunk of my wealth tied up in Bitcoins and want them to be valuable in the long run.

You know, I work in engineering at a company filled with ex-aerospace guys, guys who are careful and try not to get people killed by things they don't understand. They all find my work on Bitcoin interesting, and a big part of that is because of how crazy high-stakes it is. If anything Bitcoin is kinda like being given alien technology that happens to be able to make a plane that never has to land, and unfortunately doesn't even even seem to be able to land. It's brilliant at moving passengers around, although the current plane can only fit 1000 of them. It's also the only one we have so if you want to change anything you have to do a bit of wing walking and be careful not to get any body parts near the props. Oh, and not to mention, it's currently raining cats and dogs, well, actually mostly dead puppies...

Now, under those circumstances do you think I'd go up to my boss and say "Gee, I dunno, how about I climb out that access hatch at the back and add some sheet metal until the plane is long enough to shove 200,000 passengers in there?" Fuck no. For one thing this plane of ours damn near fell out of the sky a month ago, and it only took 700 passengers to make that happen. We also don't really understand why it flies at all; we've all got our own theories and some of the theories are probably even right, but we've never flown this plane in serious turbulence, let alone been attacked by those monocled guys in airships off in the distance. Heck, we got worried enough when one of them sent us a nasty telegram the other day about how shabby our records were or something.

No, instead I'd be told to work on some prototypes and write some papers and see if maybe I could make some small nimble plane that could fly along-side our hulking monolith. Preferably a plane that can land for maintenance.