Post
Topic
Board Development & Technical Discussion
Re: I predict a lot of strain on the Bitcoin network soon due to Mastercoin
by
bluemeanie1
on 14/11/2013, 09:36:06 UTC
a migration plan off Bitcoin to another dedicated chain.

Quote
FYI I think we can sponsor or co-sponsor some research into the scalability of Bitcoin itself. What are the current research problems that can increase Bitcoin Scalability? How can we support this effort?

Well this is another solution.  Make bitcoin so scalable that it doesnt matter.  However that is really hard.  Zero-trust offchain is one avenue, but its not clear how or if it can work; there maybe some 'crypto/computation physics' limits.  Unknown so far, but lots of people are interested to see if it could be done.  The existence of satoshi-dice didnt help as a catalyst - the scalability problem is known recognized and very hard, it didnt progress because we're at a technology limit unless and until someone can overcome it.

The problem as I see it is bitcoin has a scaling limit, like transactions per second, which it can support in full p2p bearer form.  It can be scaled but only at the cost of reducing its decentralization.  eg if block sizes go to 1GB, that counts me out of running a full node.  Its an issue because if you can only be a full node, with an OC3 line, most people will be pool mining without validating what they're mining, and then defacto control remains unavoidably central.  These will grow into large companies, be acquired etc.  And then become defacto policy points and they'd just as well sign contracts and stop mining.  OK so committed transactions can till prevent policy by making transactions opaque to miners, but it is not quite ideal itelf.

 and keep in mind that the so called 'big names' in Bitcoin actually favor this route because it's a scenario that can be capitalized on.  Thus we repeatedly hear solutions of this sort from those looking to commercialize various aspects of Bitcoin.  Even IBM has been hanging around lately.  Bitcoin is quickly morphing into a traditional payment network.


The other direction is that the minimum transaction value (implied by minimum fee) goes up, and the minimum bandwidth to be a full node stays p2p compatible.  But that implies bitcoin turns into a clearing network.  If its for large transactions its less interesting to users and will either disappear from lack of interest (remain as a whale speculator network?) or be co-opted and shaped by companies with a use for end-of-day clearing transactions - large exchanges, big payment processors.  All user traffic anyway would end up off-chain.  As the off-chain technology does not exist (and we dont know how to do it not for lack of trying), that means the off-chain technology will offer weak semantics: it will have need for central trust in offchain transaction servers, it will have risks of value seizure/account freezes, risks of the transaction server going out of business.  Probably 1 of 3 properties could be fixed, or maybe 2 of 3 (pick any two features conundrum style) if the business even care to try.  Many are "pragmatic" which is an ugly word.

 my system solves all these problems by eliminating PoW and instead granting the ownership of the chain to new kind of layout.  Any kind of assets can be traded and other financial features can be employed with no problems of scalability or cost of computing equipment.  You lose the so-called 'zero trust', gain performance, and keep the distributed nature of the block chain.  You don't have to do transactions 'off chain', everything gets fully committed very quickly.

 all these problems were entirely visible to me months ago, which led to the development of Confidence Chains.

 -bm