Quote from: hv_ on July 16, 2017, 06:10:39 AM

Good point. Would you think, that all that drama and meetings werent completely needed if there never ever had been such 1MB limit in the top level consensus rules, but rather every entity hat to limit 'spam' or max size by own definition and duties keeping the Nash equilibrium up and running?

Yes. (but... - see below)

The big invention of bitcoin is immutability of protocol. (not of "software", of "protocol", that is "contract"). This is about the brightest thing that Satoshi did, but I think he didn't fully realize it (or for conspirational thinking, he knew it, but had his reasons). Bitcoin's concept of a shared block chain that allows all users to come to consensus, and those not agreeing with consensus are simply ejected from the system, leads automatically to immutability if the decentralization is wide enough. It is impossible to make ALL users agree upon an ECONOMIC change, because some will win, and others will lose, so the losers will never agree. Of course, purely technical issues where everybody is convinced that it is better, is no problem, if there are no alternatives. If there are technical alternative solutions to a technical problem, you will also get immutability because of "religious wars", people pushing for THEIR pet solution to the contract modification.

In other words, bitcoin's CONTRACT can only be modified if EVERYONE agrees over the single, same, obvious way to solve a difficulty in the advantage of *everybody*. It is the sole exception to immutability ; in the same way that a normal contract can be modified if all parties agree upon modifying it.

Again, I'm not talking about the *software* that *implements* the contract (the protocol). That software can evolve, and be as varied as one wants, in the same way that there are different e-mail clients, but they all talk SMTP.

However, in my opinion, Satoshi screwed up in several conceptual aspects of bitcoin, and these touch the very heart of bitcoin's contract. These derive from the following "axioms":
- fake sound money doctrine: there should be a finite and fixed amount of bitcoins for t -> infinity
- remunerated proof of work will avoid sybilling of the consensus voting process.

If it weren't for these two fundamental mistakes, which are normally seen as the pillars of bitcoin, bitcoin would have been able to turn into a genuine currency generally used. But because of this, bitcoin is deeply flawed in the long term.

A) the "proof of work" was meant to make it more and more expensive to "pretend to be many" (contrary to "firing up more and more full nodes", which Satoshi considered a danger if they had to vote, because you can easily Sybil it). But you KILL ENTIRELY this "making pretending to be many" expensive if you REMUNERATE "pretending to be many" (using a lot of hash power). --> this is the root cause of bitcoin's unavoidable centralization: if you *remunerate* the consensus decision process, and there are economies of scale (unavoidable), then you will have the OPPOSITE effect than decentralization: you will push to a power law distribution of the power to vote the consensus protocol, and hence end up with a few tens of deciders (the pools) at best.

But the problem is that because proof of work is in fact "proof of economic waste", you HAVE to remunerate the consensus decision or nobody is going to make it, leaving the system insecure.

B) and this brings us to the caveat (my "but - see below"): combined with sound money doctrine, you will have to diminish bloc rewards more and more. In the end, the remuneration of the proof of work will have to come from FEES. In order for fees to be sufficiently lucrative to allow sufficient proof of work, TRANSACTIONS NEED TO BECOME SCARCE.

So this is the "but". If you allow unlimited blocs, there's no way to remunerate the centralized deciders of bitcoin in the long run. Satoshi simply *didn't know how to solve that* and *there is no solution for his problem* in the frame of the axioms he put forward. Maybe that's why he introduced the 1 MB limit. Because he didn't know how to solve his unsolvable problem.