A discussion on block size \ stacker news ~bitcoin

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2600 sats \ 19 comments \ @anon1 1 Jun 2023 bitcoin freebie

Hello users of bitcoin. I wanted to get some opinions on my thoughts about block size.

Being able to self-custody is a very empowering property for the users of bitcoin.

I see Fedimint type systems being a major custody option in the future. It has very nice tradeoffs that allow anyone to use the lightning network without running their own node or having to pay any onchain fees and still have much better custody setups than current single party custody options. I think that most users of the future will rarely ever have to touch onchain for any payments.

However, I think that maintaining a block size that incentivizes self custody of substantial amounts of wealth as a huge positive for bitcoin.

At the current block size, around 16 UTXO per second is possible in ideal circumstances where transactions are aggregated (https://btc.network/estimate used segwit with 101 in and 101 outs for calculation). With a world population of 8 billion, this means that each person on earth could theoretically be able to own and spend a single UTXO once every about 16 years.

As block size goes up, it becomes more expensive for people to run nodes and cheaper for people to take self custody of their funds. In the current environment, I believe that 1 MB blocks are more than sufficient for the users of bitcoin. We have entities spamming the blockchain with transactions and we are still able to make onchain transactions for less that 10,000 sats in fees daily.

However, if the adoption of Bitcoin continues to grow, onchain fees could be much more expensive than they are today. At a certain point, I think that small increases to the block size could be beneficial to the users of bitcoin.

Deciding the level at which fees are too high is a very tricky problem and would require extremely high consensus among the users of Bitcoin. But if consensus were to happen, I think raising the block size by maybe .1 MB increments could be beneficial to making it possible for more people to take self custody of there "generation wealth".

I would love to hear other peoples opinions.

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31 sats \ 2 replies \ @jk_14 1 Jun 2023

Free market introduced between on-chain active users and passive users (stakeholders) - would keep equilibrium between them and effectively as low tx fee as possible in the post-subsidy era.

But it's not easy task when some Bitcoiners argue in fact, that lack of free market is good due to "Dogma of Satoshi full infallibility"...

10 sats \ 1 reply \ @anon1 OP 1 Jun 2023

In the bitcoin fee market, the supply is fixed at 1MB and demand is based on current user demand for block space. As demand increases, price for block space will go up. This is a good thing because the security model will heavily rely on high fees in the future.

Changing the supply of block space if mass consensus is reached among the bitcoin community does not break the free market of bitcoin fees, it just changes the supply side of the market.

10 sats \ 0 replies \ @jk_14 1 Jun 2023

I'm not talking about free market of bitcoin fees, i.e. between the active (on-chain) users alone I'm talking about missing free market between them - and the passive stakeholders aka free riders, in post-subsidy era.

21 sats \ 2 replies \ @shibe 1 Jun 2023

I think the goal is to have more than 1 user per UTXO. See eltoo or multiparty channels without eltoo: https://bitcoinops.org/en/newsletters/2023/03/29/. If these schemes could allow trustlessly adding more participants to Lightning, then it'd be a huge boost, both for convenience and also reducing on-chain usage.

But I don't think that LN completely eliminates the need for block space. Right now I have about 5 USD locked up for committment fees across 2 channels. Considering I only have a total of $11 in my wallet at the moment (of which $1.42 is locked up in local reserve, and $5 is for paying on-chain fees), that's a not-so-insignificant amount right now that I have to keep just in case I ever need to settle on-chain. You could imagine what would happen if fees go to $50 or $100 for example.

Similarly, if the dust limit gets higher, then small Lightning payments won't be trustless anymore.

If eltoo/channel factories fail at scaling Bitcoin to billions of users, then maybe it's time to increase the block size (or consider alternative L2s like Ark, although that's still in the discussion phase AFAICT).

10 sats \ 0 replies \ @jk_14 1 Jun 2023

You could imagine what would happen if fees go to $50 or $100 for example.

but, but: "Will always be somebody willing to mine your low fee tx. This is actually creating more pressure on the market." (@DarthCoin)

let them mine low fee txs, if the type is: closing of LN channel :)

0 sats \ 0 replies \ @anon1 OP 1 Jun 2023

Yes, I am excited to see how much on-chain usage can be reduced by multiparty channels and eltoo (if activated). Ark is an interesting idea, although Ark still has a pretty high onchain footprint the way I understand it depending on the frequency of coinjoin rounds (per Ark Service Provider).

I could see fees going to $500+ if Bitcoin were to have another 10x in adoption.

I've read about that issue with small transactions on lightning, but I don't think that it is too much of an issue because the attacker does not actually really get anything out of it, it just a grief they can perform. In lightning, node reputation is very important so it just seems like it would never make sense for the attacker. I'm not an expert though.

32 sats \ 1 reply \ @benthecarman 1 Jun 2023

The common man will probably not own their own utxos and thats okay

0 sats \ 0 replies \ @anon1 OP 1 Jun 2023

I agree that its okay, I just hope for a future of bitcoin where for a reasonable price, one can have full custody of their money :)

10 sats \ 1 reply \ @fiksn 1 Jun 2023

I totally agree block size will need to raise through time. It's just wrong to think of that as a scaling solution.

The protocol has this nice automatic difficulty adjustment that takes care of increasing compute performance, a shame there is no automatism to detect how big a lower-end hard drive is currently and adjust block sizes accordingly.

0 sats \ 0 replies \ @anon1 OP 1 Jun 2023

The problem with automatic adjustment of the block size is that we have no way of really knowing what the optimal block size is based on onchain data alone or by any metric. What the block size should be is really down to opinion the way I see it.

I think that targeting a block size in the future that keeps a regular onchain transaction cost at around 250 USD in today's value about right.

Onchain transactions should be expensive, just not too expensive.

10 sats \ 1 reply \ @l0k18 1 Jun 2023

There's some calculations of that in the Lightning white paper which gives an estimate of about 138mb to manage channels for every person on the planet.

I have recently discovered it is very easy to extend the storage of a BTRFS filesystem and turn it into any kind of RAID array. With two you can do JBOD or RAID0 for more space or RAID1 for failure tolerance, or 3 and also maybe Raid5, 4 to get RAID10.

I think we are coming to a time where the cost of storage and extending storage drop quite dramatically and if it's cheap enaugh to put a full node on literally every router then I guess we can increase the block size :D

I know that throughput-wise transaction handling is at least 2000/s on the slowest implementation, BTCD - bitcoin core is a lot faster. So, I don't think there is any problem looming. When the block size is needed to grow we are in a position to grow it without a lot of loss of decentralisation. I think at least doubling can happen within the next 10 years. Very likely will.

0 sats \ 0 replies \ @anon1 OP 1 Jun 2023

Yes, I agree over time the technical requirement for running a Bitcoin node have gotten so much cheaper. Nowadays I see you can get a 2TB ssd on Ebay for just $50, pretty crazy!

I still believe that block size should be kept as small as possible and that it is important that the blocks of the future are full in order to provide a sufficient security budget to miners.

10 sats \ 3 replies \ @DarthCoin 1 Jun 2023

Wow so much trouble and mentioning ONLY one time LN... You have much to learn, how things are going on.

How many LN nodes you were running? Which type of node you were running? Public or private? How many LN mobile nodes you were using? How many LN wallets you were using?

Bitcoin will scale to masses, with LN, not with each UTXO.

Here is a guide for you to think about https://darthcoin.substack.com/p/bitcoin-private-banks-over-lightning

0 sats \ 0 replies \ @rijndael 3 Jun 2023

We dont have enough onchain capacity for everyone to have their own channels. So we need some combination of channel factories, better batching, andother ways for people to share utxos.

That doesnt even address the liquidity scaling challenges with lightning.

Lightning is part of the solution, not the whole solution.

0 sats \ 1 reply \ @anon1 OP 1 Jun 2023

I know that lightning will scale bitcoin as a payment layer. I am worried about allowing users to be able to self custody their "generational wealth" for an attractive price.

Don't get me wrong, currently it is super cheap to custody your wealth. I just think that onchain fees could get extremely high in the future with enough adoption.

10 sats \ 0 replies \ @DarthCoin 1 Jun 2023

People should learn how to THINK LIKE A BANK, not just be your own bank...

onchain = is The Vault, the savings, the HODL, that you barely move it (only for opening/closing LN channels) LN = is The Payment Network, your spending pockets, your "commercial bank", day to day use.

https://i.postimg.cc/MTL2kvT0/3level-stash.jpg

0 sats \ 0 replies \ @rijndael 3 Jun 2023

A lot of people think storage is the main constraint. It’s actually the least important one.

bandwidth needed to IBD
validation time
block propagation time, especially between miners

Are all things we need to keep from growing out of control if we want to have a decentralized and permission-less system.

As more bandwidth becomes more available, and ZKPs start to help with things like the first two, we probably re-do the numbers at some point.

0 sats \ 1 reply \ @DeltaClimbs 1 Jun 2023

Yeah, it was a mistake to compromise, and would be good to make blocks smaller.

0 sats \ 0 replies \ @rijndael 3 Jun 2023

And have fewer channels?