Re: Do you think "iamnotback" really has the" Bitcoin killer"?
@dinofelis, you are super smart but not a blockchain developer expert (yet) 
You are correct that I had an error in my (discombobulated/delirium due to meds) thinking w.r.t. to the losses due to his relative orphan rate increasing proportionally as I showed in my original Poison process math post, because for example an increase in revenue by 20% is not offset by a commensurate proportional increase of relative orphan rate e.g. from 0.1% to 0.12%.
Which is even more damning against @Peter R's thesis as you point out.
Per the research I already cited upthread, the current network diameter is around 6 seconds. But it does takes minutes to reach 95% of the network. You are not factoring in that not all nodes have links directly to all nodes, i.e. the peer network is not a fully connected mesh topology. And a node will not forward a block until it has completely verified it (so that it can't be leveraged for a spam amplification attack).
You are correct that as the network becomes centralized into a few pools, then a hub-and-spoke topology is sufficient, but then we don't have decentralization any more.
But the larger point you are not mentioning is that larger blocks are a weapon against decentralization. For the reason stated above, and because those with direct fast links (and collectively more than 33% of systemic hashrate) get disproportionately more reward than their hashrate portion. That is the famous selfish mining paper and more recently the optimal mining strategies paper which adds more strategies.
Miners will simply take their fees as pseudo-anonymous transactions with 0 or low fee.
You had a mistake in your concept of propagation through the network. You are thinking a decentralized network is a fully connected mesh topology.
You don't need that much larger blocks to cause an amplification of propagation delay to the smallest miners in order to destroy decentralization and take 51% control. Also it only requires a very small advantage in relative orphan rate in order to slowly accumulate more hashrate than the opposition, so don't require the 100GB blocks you are computing.
Yes in that case they don't need huge blocks to destroy decentralization because it is already destroyed. In that case, they need to be able increase blocks to whatever they think is the level of transaction fees that maximizes their revenue (volume x transaction fees).
In either case, I am showing that big blocks are a cartelization paradigm. I am being thorough. Please don't fault me for being thorough, just because the network is already centralized.
Yes, this is with block rewards constant. Tail emission. But in the case of rewards proportional to block length (fees), you have to multiply A's revenues with the fact that his blocks bring in more money. He has a lower percentage of blocks on the chain, but these blocks bring him more rewards as they are bigger.
So if his big blocks bring him 20% more income per block, this is neutral.
So if his big blocks bring him 20% more income per block, this is neutral.
You are correct that I had an error in my (discombobulated/delirium due to meds) thinking w.r.t. to the losses due to his relative orphan rate increasing proportionally as I showed in my original Poison process math post, because for example an increase in revenue by 20% is not offset by a commensurate proportional increase of relative orphan rate e.g. from 0.1% to 0.12%.
Which is even more damning against @Peter R's thesis as you point out.
However, the thing to keep in mind is to get an orphan rate of 0.2 by network propagation, it means that on average your blocks take 0.2 of the block period to get to the others. 0.2 of 10 minutes is 2 minutes. If you have good links, in order for them to take 2 minutes, they must be mindbogglingly HUGE.
If it takes 2 minutes to pump a block to another miner with whom you are connected with a 10 Gb/s link, we are talking about 100 GB blocks or something.
If it takes 2 minutes to pump a block to another miner with whom you are connected with a 10 Gb/s link, we are talking about 100 GB blocks or something.
Per the research I already cited upthread, the current network diameter is around 6 seconds. But it does takes minutes to reach 95% of the network. You are not factoring in that not all nodes have links directly to all nodes, i.e. the peer network is not a fully connected mesh topology. And a node will not forward a block until it has completely verified it (so that it can't be leveraged for a spam amplification attack).
As I said earlier, this kind of argument only starts to play a role when the network is already dead. Because if a significant fraction of the block time (10 minutes in bitcoin) is what it takes for miners amongst themselves to propagate blocks and get them orphaned, no "normal node user" can ever obtain the block chain up to date, because normal users have a worse network connection to the miners (source of block chain) than miners amongst themselves. Especially if network quality is impacting seriously on their revenues, miners will have the best possible links between them: mutually advantageous (and much less costly than the mining itself: a 10 Gb/s link to Joe MiningPool is less expensive than your mining gear).
You are correct that as the network becomes centralized into a few pools, then a hub-and-spoke topology is sufficient, but then we don't have decentralization any more.
But the larger point you are not mentioning is that larger blocks are a weapon against decentralization. For the reason stated above, and because those with direct fast links (and collectively more than 33% of systemic hashrate) get disproportionately more reward than their hashrate portion. That is the famous selfish mining paper and more recently the optimal mining strategies paper which adds more strategies.
If you really want a solution to this problem, then "block length" is not the right parameter, but block income is:
one should cap the "block reward + fee", to, say, 20 btc. As such, miners can make all the blocks they want, long, short, but their TOTAL INCOME (reward + fees) is capped to 20 btc FOREVER (part of the protocol). A block with a total reward larger than 20 btc is simply invalid.
one should cap the "block reward + fee", to, say, 20 btc. As such, miners can make all the blocks they want, long, short, but their TOTAL INCOME (reward + fees) is capped to 20 btc FOREVER (part of the protocol). A block with a total reward larger than 20 btc is simply invalid.
Miners will simply take their fees as pseudo-anonymous transactions with 0 or low fee.
None of all this is going to happen. Miners want small blocks and a fighting fee market. The cartel you are talking about with large blocks only sets in with such incredibly large blocks, that they are out of the question in the next few years ; if you want a mining cartel, the telephone between mining pool bosses is a much more useful device than multi-GB blocks that saturate small miner's network links and most of the user nodes.
You had a mistake in your concept of propagation through the network. You are thinking a decentralized network is a fully connected mesh topology.
You don't need that much larger blocks to cause an amplification of propagation delay to the smallest miners in order to destroy decentralization and take 51% control. Also it only requires a very small advantage in relative orphan rate in order to slowly accumulate more hashrate than the opposition, so don't require the 100GB blocks you are computing.
Bitcoin is already centralized
Yes in that case they don't need huge blocks to destroy decentralization because it is already destroyed. In that case, they need to be able increase blocks to whatever they think is the level of transaction fees that maximizes their revenue (volume x transaction fees).
In either case, I am showing that big blocks are a cartelization paradigm. I am being thorough. Please don't fault me for being thorough, just because the network is already centralized.