Quote from: Witrebel on December 15, 2017, 09:49:20 PM

For bitcoin to be peer to peer cash, as we all know, it will need to scale with regards to transaction capacity per second. Obviously this can be addressed through off chain solutions, but I am curious about on chain scaling.

As I understand it, there are only a few things that could be done to increase on chain capacity without drastically altering the protocol.

1) You can increase block size. The major argument against this seems to be the burden placed on running a node, which would increase centralization by making it harder/more expensive to run a full node.

2) Segwit, which makes more efficient use of a given blocksize, and is already implemented. (I am not well versed in the technical arguments against segwit)

3) Alter the protocol to increase the rate of block production, and decrease the block reward, such that money supply is the same, but you end up with more transactions per second for a given block size. This would appear to have all the drawbacks of 1), and also an increase in the orphan rate.

Are there other ON chain solutions being considered?

I should preface this by emphasizing: On-chain scaling is and always will be a very limited proposition. This is an engineering reality, not a matter of opinion in the sense most people mean that word. At best, we will see incremental, linear improvements to on-chain capacity. Thats not enough, and never will be. I think big. I want for Bitcoin to compete with Visa; and that will require a transactions-per-second capacity increase of about four orders of magnitude. Adding layers vertically (Lightning Network) and horizontally (sidechains) will truly turn Bitcoin into the foundation of a global payment internetwork which will leave Visa in the dust.

But for on-chain capacity, now that we have Segwit, following is a description of two improvements which Core has in the pipeline. There are and will be other ideas, too; I list here the things I reliably expect to happen in the not-so-distant future. Note that these improvements depend on Segwit, and were blocked by the blocking of Segwit. Segwit was not only a capacity upgrade: In addition to fixing bugs such as tx malleability, Segwit also introduced script versioning. The script versioning system will provide a smooth upgrade path for adding these technologies without any forking drama or headaches.

Schnorr signatures with signature aggregation will improve block space usage (thus, scalability) and help making spam attacks economically prohibitive, as well as improving privacy.
Merkelized Abstract Syntax Trees (MAST) will permit payment to large, multi-conditional scripts, while only revealing the pertinent part of the script when the output is spent. Those who use such scripts will thus drastically reduce their use of block space. MAST will also improve smart contract flexibility and privacy.

I think those are the two big things to watch right now. Capacity-wise, I think Schnorr signatures will have a much bigger impact; with the mix of transactions on the real-world blockchain, it will probably give about a 2530% increase in capacity. Incremental, as I said.

Quote from: HeRetiK on December 16, 2017, 12:34:31 AM

Option 2) SegWit already is a block size increase, albeit in itself not a very efficient one -- blocks containing purely SegWit transactions are expected to effectively reach as much as 4MB while handling the equivalent of 2MB worth of legacy transactions. Its main intend is to pave the way for decentralized off-chain scaling.

Those numbers not correct. Segwit lets capacity approach a theoretical limit of 4MB; best estimates Ive seen are that we will eventually see blocks a bit over 2MB. As recently discussed in another thread, if a block contains only old-format transactions, then it is still effectually limited to 1MB. See BIP 141s block weight calculation. (You are absolutely correct about Segwits main purpose.)

Quote from: HeRetiK on December 16, 2017, 12:34:31 AM

You could increase blocksize and solely rely on pruned nodes, but that would weaken Bitcoin security and only solve part of the node resource problem.

I must emphasize that point about the node resource problem. Pruning reduces disk capacity needs for the long-term storage of data at rest; but that is the smallest problem with big blocks! Too bad its what everybody talks about.

If that were the only issue, then I would advocate 32+MB blocks right now. Why not? Buy another few terabytes of disk and snap it in. Or prune. Yawn.

Much bigger problems are latency in block delivery (=orphan rate), network bandwidth, CPU and IOPS for validation, and most of all: UTXO set size growth. Pruning nodes does not help with these problems, not at all. On a forkchain with huge blocks, if the blocks were used to capacity (in which case fees would skyrocket just as in Bitcoin), even if you prune, you will still need a beefy computer with a fast SSD and lots of RAM plugged into the sort of connection you find in datacenters. Or dont run a node. I think thats part of the pointthe other part being that mining would be even worse centralized, due to the orphan rate issue.

Parenthetically, I note that unlike some wannabe competitors, Bitcoin is sufficiently popular and valuable that big blocks would be promptly full. Thats not only a matter of whatever mempool backlog you see, but also of people suddenly making transactions they currently choose to avoid due to fees. So, big blocks would not even kick the can down the road, as some people say.

Back of the envelope, 8MB blocks would get us to somewhere around 1/40 of Paypals average TPS, and less than thousandth of Visas peak TPS. Gargantuan 32GB blocks would get a few supernodes in datacenters processing transactions at maybe a tenth of Paypals average rate. For my part, in the long term, I will accept no less than a ten thousandfold increase in Bitcoins TPS capacity on all layers. Blocksize increase is not a scaling solution.

Of course, you are also right about weakening security.

Quote from: BluOrb on December 15, 2017, 10:34:34 PM

blockstream is controlled by bankers - it will never happen. Bitcoin Cash is our best hope. check out reddit.com/r/BTC for more info.

Shoo, shoo. Go back to Roger Vers padded playpen where you belong, and chat there about your funny scamcoin all you want. This is a forum for discussing Bitcoin.