path: root/2e/0147e0c9bf1921e71f3494bf64d0f4479df229

Received: from sog-mx-3.v43.ch3.sourceforge.com ([172.29.43.193]
	helo=mx.sourceforge.net)
	by sfs-ml-4.v29.ch3.sourceforge.com with esmtp (Exim 4.76)
	(envelope-from <jgarzik@bitpay.com>) id 1Z4K8U-0003jB-51
	for bitcoin-development@lists.sourceforge.net;
	Mon, 15 Jun 2015 02:28:30 +0000
Received-SPF: pass (sog-mx-3.v43.ch3.sourceforge.com: domain of bitpay.com
	designates 209.85.218.42 as permitted sender)
	client-ip=209.85.218.42; envelope-from=jgarzik@bitpay.com;
	helo=mail-oi0-f42.google.com; 
Received: from mail-oi0-f42.google.com ([209.85.218.42])
	by sog-mx-3.v43.ch3.sourceforge.com with esmtps (TLSv1:RC4-SHA:128)
	(Exim 4.76) id 1Z4K8S-0004oB-8N
	for bitcoin-development@lists.sourceforge.net;
	Mon, 15 Jun 2015 02:28:30 +0000
Received: by oial131 with SMTP id l131so16947112oia.3
	for <bitcoin-development@lists.sourceforge.net>;
	Sun, 14 Jun 2015 19:28:22 -0700 (PDT)
X-Google-DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed;
	d=1e100.net; s=20130820;
	h=x-gm-message-state:mime-version:in-reply-to:references:from:date
	:message-id:subject:to:cc:content-type;
	bh=cTJ5kZBJeDDoeM1gBKdfuVj0AZtlokcnYXQfui/KjD0=;
	b=K2YK6OcVudVVzjYtL+sy18Wwk9CDiaT9j19jM495U9QysT+6cmD98QwMNJyHetmlSh
	V4wTrmt1Dkb3/LmjmoAZfFmjVbcoTkEORG/ivoRteoIvAq/rtHkqLvmc5Z+KJYh4rvq/
	4jdrPs120AlgrJn98G6MUwcN1I0MKbSbJpCmSRgoKbhUScfxECleXQ889i/9ANosakVD
	XYYN3iQNx9PNp2cn20o1AV5mlCs6oB5Zc7R4m1bpNqYBrLoi7dB11TiVAYyb1QlhNDu2
	cTdT8uJLhQmq1OuAbyVcx0dAM3EjMHoceaoncZmt1SaE7y6ROUbtNnfKeInkHF98C90F
	wgSw==
X-Gm-Message-State: ALoCoQk0SugxfYHoCzCZsFqjHV9G5mov5GaliJDZT/gsSd2uZtFjQkeppfxv+OrO+IsWNfjOYuoa
X-Received: by 10.182.87.36 with SMTP id u4mr21697917obz.50.1434335302760;
	Sun, 14 Jun 2015 19:28:22 -0700 (PDT)
MIME-Version: 1.0
Received: by 10.202.108.149 with HTTP; Sun, 14 Jun 2015 19:28:02 -0700 (PDT)
In-Reply-To: <CALqxMTHrnSS9MGgKO-5+=fVhiOOvk12Recs11S0PcSUxQT1wdQ@mail.gmail.com>
References: <CALqxMTHrnSS9MGgKO-5+=fVhiOOvk12Recs11S0PcSUxQT1wdQ@mail.gmail.com>
From: Jeff Garzik <jgarzik@bitpay.com>
Date: Sun, 14 Jun 2015 22:28:02 -0400
Message-ID: <CAJHLa0Mj7kAz4=yrZo=+nvoV97rF_xAvHGt+A3D2qE3P16zKBw@mail.gmail.com>
To: Adam Back <adam@cypherspace.org>
Content-Type: multipart/alternative; boundary=089e013d0ddc35d1e9051885362b
X-Spam-Score: -0.6 (/)
X-Spam-Report: Spam Filtering performed by mx.sourceforge.net.
	See http://spamassassin.org/tag/ for more details.
	-1.5 SPF_CHECK_PASS SPF reports sender host as permitted sender for
	sender-domain
	-0.0 SPF_PASS               SPF: sender matches SPF record
	1.0 HTML_MESSAGE           BODY: HTML included in message
	-0.1 DKIM_VALID_AU Message has a valid DKIM or DK signature from
	author's domain
	0.1 DKIM_SIGNED            Message has a DKIM or DK signature,
	not necessarily valid
	-0.1 DKIM_VALID Message has at least one valid DKIM or DK signature
X-Headers-End: 1Z4K8S-0004oB-8N
Cc: Bitcoin Dev <bitcoin-development@lists.sourceforge.net>
Subject: Re: [Bitcoin-development] comments on BIP 100
X-BeenThere: bitcoin-development@lists.sourceforge.net
X-Mailman-Version: 2.1.9
Precedence: list
List-Id: <bitcoin-development.lists.sourceforge.net>
List-Unsubscribe: <https://lists.sourceforge.net/lists/listinfo/bitcoin-development>,
	<mailto:bitcoin-development-request@lists.sourceforge.net?subject=unsubscribe>
List-Archive: <http://sourceforge.net/mailarchive/forum.php?forum_name=bitcoin-development>
List-Post: <mailto:bitcoin-development@lists.sourceforge.net>
List-Help: <mailto:bitcoin-development-request@lists.sourceforge.net?subject=help>
List-Subscribe: <https://lists.sourceforge.net/lists/listinfo/bitcoin-development>,
	<mailto:bitcoin-development-request@lists.sourceforge.net?subject=subscribe>
X-List-Received-Date: Mon, 15 Jun 2015 02:28:30 -0000

--089e013d0ddc35d1e9051885362b
Content-Type: text/plain; charset=UTF-8

On Sun, Jun 14, 2015 at 5:23 PM, Adam Back <adam@cypherspace.org> wrote:

> Hi
>
> I made these comments elsewhere, but I think really we should be
> having these kind of conversations here rather than scattered around.
>
> These are about Jeff Garzik's outline draft BIP 100 I guess this is
> the latest draft:  (One good thing about getting off SF would be
> finally JGarzik's emails actually not getting blocked!).
>
> http://gtf.org/garzik/bitcoin/BIP100-blocksizechangeproposal.pdf
>
> may have changed since the original [1]
>
> Over the original proposal:
>
> 1. there should be a hard cap, not indefinitely growing.
>
>
In the latest draft there is an explicit 32MB ceiling now.

Users will need to opt into growth beyond 32MB via a 2nd hard fork.



> 2. there should be  a growth limiter (no more than X%/year)
>
>
As a general principle, this is an area of market disagreement, and should
not be our call.  Encoding this into software veers into personal opinion
about what economic policy should be.

That said  -- BIP 100, as a compromise, includes a growth limiter.  Abrupt
change (1MB -> 32MB!) is awful on markets.  Good policies include a
measured pace of transition from policy A to policy B.  It gives the
community time to assess system effectiveness - while also allowing free
market input.

In the long run I hope the cap is removed (see below), and the intention is
to -slowly- and -transparently- move from the tightly controlled limit to
something the free market and users are choosing.




> 3. I think the miners should not be given a vote that has no costs to
> cast, because their interests are not necessarily aligned with users
> or businesses.
>
> I think Greg Maxwell's difficulty adjust [2] is better here for that
> reason.  It puts quadratic cost via higher difficulty for miners to
> vote to increase block-size, which miners can profitably do if there
> are transactions with fees available to justify it. There is also the
> growth limiter as part of Greg's proposal. [3]
>
>
"paying with difficulty" has severe negative elements that will likely
cause it never to be used:
- complex and difficult for miners to reason
- fails the opportunity cost test - dollar cost lost losing the block race
versus value gained by increasing block size
- inherently unpredictable in the short term - user experience is that it's
possibly difficult to see a gain in utility versus the revenue you are
giving up
- REQUIRES informal miner collusion - probably less transparent than BIP
100 - in order to solve the who-goes-first problem.
- net result: tough sell

Paying bitcoins to future miners makes a lot more sense.  Initially I was a
fan of pay-with-diff, but freezing bitcoins (CLTV) or timelock'd
anyone-can-spend has much more clear incentives, if you want to go down
that road.

Problems with pay-to-increase-block-size:
- how much to pay?  You are inherently setting your growth policy on top of
bitcoin by choosing a price here.
- another who-goes-first problem

Anyway, there is a natural equilibrium block size that the free market and
user choice will seek.

Related:  There is a lot of naive "miner = max income = max block size"
reasoning going on, with regards to fees.  This is defining the bounds of
an economically scarce resource.  There are many reasons why a miner will
today, in the real world, limit their block size. WRT fee income, if block
size is too large the fee competition in the overall market is low-to-zero,
fee income rapidly collapses.  Then factor in price and demand elasticity
on top of that.

Quite frankly, there seems to be a natural block size equilibrium ceiling,
and I worry about miners squeezing the market by maximizing their fee
income through constrained block sizes and competition at the low end.
This is of course already possible today - miners may openly or covertly
collude to keep the block size low.














> I think bitcoin will have to involve layering models that uplift
> security to higher layers, but preserve security assurances, and
> smart-contracts even, with protocols that improve the algorithmic
> complexity beyond O(n^2) in users, like lightning, and there are
> multiple other candidates with useful tradeoffs for various use-cases.
>
> One thing that is concerning is that few in industry seem inclined to
> take any development initiatives or even integrate a library.  I
> suppose eventually that problem would self-correct as new startups
> would make a more scalable wallet and services that are layer2 aware
> and eat the lunch of the laggards.  But it will be helpful if we
> expose companies to the back-pressure actually implied by an O(n^2)
> scaling protocol and don't just immediately increase the block-size to
> levels that are dangerous for decentralisation security, as an
> interventionist subsidy to save them having to do basic integration
> work.  Otherwise I think whichever any kind of kick the can some 2-5
> years down the road we consider, we risk the whole saga repeating in a
> few years, when no algorithmic progress has been made and even more
> protocol inertia has set in.
>
> Adam
>
> [1] original proposal comments on reddit
>
> https://www.reddit.com/r/Bitcoin/comments/39kzyt/draft_bip_100_soft_fork_block_size_increase/
>
> [2] flexcap propoal by Greg Maxwell see post by Mark Freidenbach
>
> https://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07599.html
>
> [3] growth limited proposal for flexcap by Greg Maxwell
>
> https://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07620.html
>
>
> ------------------------------------------------------------------------------
> _______________________________________________
> Bitcoin-development mailing list
> Bitcoin-development@lists.sourceforge.net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>



-- 
Jeff Garzik
Bitcoin core developer and open source evangelist
BitPay, Inc.      https://bitpay.com/

--089e013d0ddc35d1e9051885362b
Content-Type: text/html; charset=UTF-8
Content-Transfer-Encoding: quoted-printable

<div dir=3D"ltr">On Sun, Jun 14, 2015 at 5:23 PM, Adam Back <span dir=3D"lt=
r">&lt;<a href=3D"mailto:adam@cypherspace.org" target=3D"_blank">adam@cyphe=
rspace.org</a>&gt;</span> wrote:<br><div class=3D"gmail_extra"><div class=
=3D"gmail_quote"><blockquote class=3D"gmail_quote" style=3D"margin:0 0 0 .8=
ex;border-left:1px #ccc solid;padding-left:1ex">Hi<br>
<br>
I made these comments elsewhere, but I think really we should be<br>
having these kind of conversations here rather than scattered around.<br>
<br>
These are about Jeff Garzik&#39;s outline draft BIP 100 I guess this is<br>
the latest draft:=C2=A0 (One good thing about getting off SF would be<br>
finally JGarzik&#39;s emails actually not getting blocked!).<br>
<br>
<a href=3D"http://gtf.org/garzik/bitcoin/BIP100-blocksizechangeproposal.pdf=
" rel=3D"noreferrer" target=3D"_blank">http://gtf.org/garzik/bitcoin/BIP100=
-blocksizechangeproposal.pdf</a><br>
<br>
may have changed since the original [1]<br>
<br>
Over the original proposal:<br>
<br>
1. there should be a hard cap, not indefinitely growing.<br>
<br></blockquote><div><br></div><div>In the latest draft there is an explic=
it 32MB ceiling now.</div><div><br></div><div>Users will need to opt into g=
rowth beyond 32MB via a 2nd hard fork.</div><div><br></div><div>=C2=A0</div=
><blockquote class=3D"gmail_quote" style=3D"margin:0 0 0 .8ex;border-left:1=
px #ccc solid;padding-left:1ex">
2. there should be=C2=A0 a growth limiter (no more than X%/year)<br>
<br></blockquote><div><br></div><div>As a general principle, this is an are=
a of market disagreement, and should not be our call.=C2=A0 Encoding this i=
nto software veers into personal opinion about what economic policy should =
be.</div><div><br></div><div>That said =C2=A0-- BIP 100, as a compromise, i=
ncludes a growth limiter.=C2=A0 Abrupt change (1MB -&gt; 32MB!) is awful on=
 markets.=C2=A0 Good policies include a measured pace of transition from po=
licy A to policy B.=C2=A0 It gives the community time to assess system effe=
ctiveness - while also allowing free market input.</div><div><br></div><div=
>In the long run I hope the cap is removed (see below), and the intention i=
s to -slowly- and -transparently- move from the tightly controlled limit to=
 something the free market and users are choosing.</div><div><br></div><div=
><br></div><div>=C2=A0</div><blockquote class=3D"gmail_quote" style=3D"marg=
in:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
3. I think the miners should not be given a vote that has no costs to<br>
cast, because their interests are not necessarily aligned with users<br>
or businesses.<br>
<br>
I think Greg Maxwell&#39;s difficulty adjust [2] is better here for that<br=
>
reason.=C2=A0 It puts quadratic cost via higher difficulty for miners to<br=
>
vote to increase block-size, which miners can profitably do if there<br>
are transactions with fees available to justify it. There is also the<br>
growth limiter as part of Greg&#39;s proposal. [3]<br>
<br></blockquote><div><br></div><div>&quot;paying with difficulty&quot; has=
 severe negative elements that will likely cause it never to be used:</div>=
<div>- complex and difficult for miners to reason</div><div>- fails the opp=
ortunity cost test - dollar cost lost losing the block race versus value ga=
ined by increasing block size</div><div>- inherently unpredictable in the s=
hort term - user experience is that it&#39;s possibly difficult to see a ga=
in in utility versus the revenue you are giving up</div><div>- REQUIRES inf=
ormal miner collusion - probably less transparent than BIP 100 - in order t=
o solve the who-goes-first problem.</div><div>- net result: tough sell</div=
><div><br></div><div>Paying bitcoins to future miners makes a lot more sens=
e.=C2=A0 Initially I was a fan of pay-with-diff, but freezing bitcoins (CLT=
V) or timelock&#39;d anyone-can-spend has much more clear incentives, if yo=
u want to go down that road.</div><div><br></div><div>Problems with pay-to-=
increase-block-size:</div><div>- how much to pay?=C2=A0 You are inherently =
setting your growth policy on top of bitcoin by choosing a price here.</div=
><div>- another who-goes-first problem</div><div><br></div><div>Anyway, the=
re is a natural equilibrium block size that the free market and user choice=
 will seek.</div><div><br></div><div>Related: =C2=A0There is a lot of naive=
 &quot;miner =3D max income =3D max block size&quot; reasoning going on, wi=
th regards to fees.=C2=A0 This is defining the bounds of an economically sc=
arce resource.=C2=A0 There are many reasons why a miner will today, in the =
real world, limit their block size. WRT fee income, if block size is too la=
rge the fee competition in the overall market is low-to-zero, fee income ra=
pidly collapses.=C2=A0 Then factor in price and demand elasticity on top of=
 that.</div><div><br></div><div>Quite frankly, there seems to be a natural =
block size equilibrium ceiling, and I worry about miners squeezing the mark=
et by maximizing their fee income through constrained block sizes and compe=
tition at the low end.=C2=A0 This is of course already possible today - min=
ers may openly or covertly collude to keep the block size low.</div><div><b=
r></div><div><br></div><div><br></div><div><br></div><div><br></div><div><b=
r></div><div><br></div><div><br></div><div><br></div><div><br></div><div><b=
r></div><div><br></div><div>=C2=A0</div><blockquote class=3D"gmail_quote" s=
tyle=3D"margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
I think bitcoin will have to involve layering models that uplift<br>
security to higher layers, but preserve security assurances, and<br>
smart-contracts even, with protocols that improve the algorithmic<br>
complexity beyond O(n^2) in users, like lightning, and there are<br>
multiple other candidates with useful tradeoffs for various use-cases.<br>
<br>
One thing that is concerning is that few in industry seem inclined to<br>
take any development initiatives or even integrate a library.=C2=A0 I<br>
suppose eventually that problem would self-correct as new startups<br>
would make a more scalable wallet and services that are layer2 aware<br>
and eat the lunch of the laggards.=C2=A0 But it will be helpful if we<br>
expose companies to the back-pressure actually implied by an O(n^2)<br>
scaling protocol and don&#39;t just immediately increase the block-size to<=
br>
levels that are dangerous for decentralisation security, as an<br>
interventionist subsidy to save them having to do basic integration<br>
work.=C2=A0 Otherwise I think whichever any kind of kick the can some 2-5<b=
r>
years down the road we consider, we risk the whole saga repeating in a<br>
few years, when no algorithmic progress has been made and even more<br>
protocol inertia has set in.<br>
<br>
Adam<br>
<br>
[1] original proposal comments on reddit<br>
<a href=3D"https://www.reddit.com/r/Bitcoin/comments/39kzyt/draft_bip_100_s=
oft_fork_block_size_increase/" rel=3D"noreferrer" target=3D"_blank">https:/=
/www.reddit.com/r/Bitcoin/comments/39kzyt/draft_bip_100_soft_fork_block_siz=
e_increase/</a><br>
<br>
[2] flexcap propoal by Greg Maxwell see post by Mark Freidenbach<br>
<a href=3D"https://www.mail-archive.com/bitcoin-development@lists.sourcefor=
ge.net/msg07599.html" rel=3D"noreferrer" target=3D"_blank">https://www.mail=
-archive.com/bitcoin-development@lists.sourceforge.net/msg07599.html</a><br=
>
<br>
[3] growth limited proposal for flexcap by Greg Maxwell<br>
<a href=3D"https://www.mail-archive.com/bitcoin-development@lists.sourcefor=
ge.net/msg07620.html" rel=3D"noreferrer" target=3D"_blank">https://www.mail=
-archive.com/bitcoin-development@lists.sourceforge.net/msg07620.html</a><br=
>
<br>
---------------------------------------------------------------------------=
---<br>
_______________________________________________<br>
Bitcoin-development mailing list<br>
<a href=3D"mailto:Bitcoin-development@lists.sourceforge.net">Bitcoin-develo=
pment@lists.sourceforge.net</a><br>
<a href=3D"https://lists.sourceforge.net/lists/listinfo/bitcoin-development=
" rel=3D"noreferrer" target=3D"_blank">https://lists.sourceforge.net/lists/=
listinfo/bitcoin-development</a><br>
</blockquote></div><br><br clear=3D"all"><div><br></div>-- <br><div class=
=3D"gmail_signature">Jeff Garzik<br>Bitcoin core developer and open source =
evangelist<br>BitPay, Inc. =C2=A0 =C2=A0 =C2=A0<a href=3D"https://bitpay.co=
m/" target=3D"_blank">https://bitpay.com/</a></div>
</div></div>

--089e013d0ddc35d1e9051885362b--