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Subject: Re: [bitcoin-dev] The need for larger blocks
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Planning for a hard forks which change the consensus rules (including
the blocksize limit) is something we can all agree is worthy of time and
effort.

However there is clearly not consensus sufficient today to deploy a hard
fork that changs the blocksize without there being serious and
potentially experiment ending consequences.

For a proposed hard fork to reach a level of consensus necessary to be
safe requires that there be a clear and self evident course of action.

That simply does not exist on the blocksize limit question.

On 06/26/2015 11:23 AM, Jeff Garzik wrote:
> Failure to plan now for a hard fork increase 6(?) months in the future
> produces that lumpy, unpredictable market behavior.
>
> The market has baked in the years-long behavior of low fees.  From the
> market PoV, inaction does lead to precisely that, a sudden change over
> the span of a few months.
>
> At a higher level, people look at bitcoin and see people delaying,
> waiting, dawdling until the barn is actually on fire before taking
> action to put out the fire.
>
> They see a system that is not responsive to higher level externalities
> of people & businesses making plans for the future.  Based on current
> proposal of change-through-inaction, businesses will simply shelve
> plans to use bitcoin and not bother putting those new users on the
> network.
>
> If you wait until the need to increase block size is acute, it is
> already too late.  (1) Businesses have permanently shelved plans to
> use bitcoin and (2) change at that point produces _larger_ disruption
> to the fee market.
>
> Hard forks require planning many months in advance.  Gavin's timing is
> sound, even though the Gavin/Hearn Bitcoin-XT antics were sub-optimal.
>
>
>
>
>
>
>
> On Fri, Jun 26, 2015 at 11:12 AM, Pieter Wuille
> <pieter.wuille@gmail.com <mailto:pieter.wuille@gmail.com>> wrote:
>
>     I am not saying that economic change is what we want. Only that it
>     is inevitable, independent of whether larger blocks happen or not.
>
>     I am saying that acting because of fear of economic change is a
>     bad reason. The reason for increase should be because of the
>     higher utility. We need it at some point, but there should be no rush.
>
>     I do understand that we want to avoid a *sudden* change in
>     economic policy, but I'm generally not too worried. Either fees
>     increase and they get paid, and we're good. But more likely is
>     that some uses just move off-chain because the block chain does
>     not offer what they need. That's sad, but it is inevitable at any
>     size: some uses fit, some don't.
>
>     -- 
>     Pieter
>
>     On Jun 26, 2015 7:57 PM, "Jeff Garzik" <jgarzik@gmail.com
>     <mailto:jgarzik@gmail.com>> wrote:
>
>         It is not "fear" of fee pressure.
>
>         1) Blocks are mostly not-full on average.
>
>         2) Absent long blocks and stress tests, there is little fee
>         pressure above the anti-spam relay fee metric, because of #1.
>
>         3) As such, inducing fee pressure is a delta, a change from
>         years-long bitcoin economic policy.  Each time we approach the
>         soft limit, Bitcoin Core increases the soft limit to prevent
>         "full" blocks.  Mike Hearn et. al. lobbies miners to upgrade.
>
>         (note - this is not an endorsement of these actions - it is a
>         neutral observation)
>
>         4) Inaction leads to consistent fee pressure as the months
>         tick on and system volume grows; thus, inaction leads to
>         economic policy change.
>
>         5) Economic policy change leads to market and software
>         disruption.  The market and software - notably wallets - is
>         not prepared for this.
>
>         6) If you want to change economic policy, that's fine.  But be
>         honest and admit you are arguing for a change, a delta from
>         current market expectations and behavior.
>
>         7) It is critical to first deal with what _is_, not what you
>         wish the world to be.  You want a fee market to develop. 
>         There is nothing wrong with that desire.  It remains a delta
>         from where we are today, and that is critically relevant in a
>         $3b+ market.
>
>
>
>
>
>
>
>
>         On Fri, Jun 26, 2015 at 7:09 AM, Pieter Wuille
>         <pieter.wuille@gmail.com <mailto:pieter.wuille@gmail.com>> wrote:
>
>             Hello all,
>
>             here I'm going to try to address a part of the block size
>             debate which has been troubling me since the beginning:
>             the reason why people seem to want it.
>
>             People say that larger blocks are necessary. In the long
>             term, I agree - in the sense that systems that do not
>             evolve tend to be replaced by other systems. This
>             evolution can come in terms of layers on top of Bitcoin's
>             blockchain, in terms of the technology underlying various
>             aspects of the blockchain itself, and also in the scale
>             that this technology supports.
>
>             I do, however, fundamentally disagree that a fear for a
>             change in economics should be considered to necessitate
>             larger blocks. If it is, and there is consensus that we
>             should adapt to it, then there is effectively no limit
>             going forward. This is similar to how Congress voting to
>             increase the copyright term retroactively from time to
>             time is really no different from having an infinite
>             copyright term in the first place. This scares me.
>
>             Here is how Gavin summarizes the future without increasing
>             block sizes in PR 6341:
>
>             > 1. Transaction confirmation times for transactions with
>             a given fee will rise; very-low-fee transactions will fail
>             to get confirmed at all.
>             > 2. Average transaction fee paid will rise
>             > 3. People or applications unwilling or unable to pay the
>             rising fees will stop submitting transactions
>             > 4. People and businesses will shelve plans to use
>             Bitcoin, stunting growth and adoption
>
>             Is it fair to summarize this as "Some use cases won't fit
>             any more, people will decide to no longer use the
>             blockchain for these purposes, and the fees will adapt."?
>
>             I think that is already happening, and will happen at any
>             scale. I believe demand for payments in general is nearly
>             infinite, and only a small portion of it will eventually
>             fit on a block chain (independent of whether its size is
>             limited by consensus rules or economic or technological
>             means). Furthermore, systems that compete with Bitcoin in
>             this space already offer orders of magnitude more capacity
>             than we can reasonably achieve with any blockchain
>             technology at this point.
>
>             I don't know what subset of use cases Bitcoin will cater
>             to in the long term. They have already changed - you see
>             way less betting transactions these days than a few years
>             ago for example - and they will keep changing, independent
>             of what effective block sizes we end up with. I don't
>             think we should be afraid of this change or try to stop it.
>
>             If you look at graphs of block sizes over time (for
>             example, http://rusty.ozlabs.org/?p=498), it seems to me
>             that there is very little "organic" growth, and a lot of
>             sudden changes (which could correspond to changing
>             defaults in miner software, introduction of popular
>             sites/services, changes in the economy). I think these can
>             be seen as the economy changing to full up the available
>             space, and I believe these will keep happening at any size
>             effectively available.
>
>             None of this is a reason why the size can't increase.
>             However, in my opinion, we should do it because we believe
>             it increases utility and understand the risks; not because
>             we're afraid of what might happen if we don't hurry up.
>             And from that point of view, it seems silly to make a huge
>             increase at once...
>
>             -- 
>             Pieter
>
>
>             _______________________________________________
>             bitcoin-dev mailing list
>             bitcoin-dev@lists.linuxfoundation.org
>             <mailto:bitcoin-dev@lists.linuxfoundation.org>
>             https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>
>
>
>
>
> _______________________________________________
> bitcoin-dev mailing list
> bitcoin-dev@lists.linuxfoundation.org
> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev


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  <body bgcolor="#FFFFFF" text="#000000">
    Planning for a hard forks which change the consensus rules
    (including the blocksize limit) is something we can all agree is
    worthy of time and effort.<br>
    <br>
    However there is clearly not consensus sufficient today to deploy a
    hard fork that changs the blocksize without there being serious and
    potentially experiment ending consequences.<br>
    <br>
    For a proposed hard fork to reach a level of consensus necessary to
    be safe requires that there be a clear and self evident course of
    action.<br>
    <br>
    That simply does not exist on the blocksize limit question.<br>
    <br>
    <div class="moz-cite-prefix">On 06/26/2015 11:23 AM, Jeff Garzik
      wrote:<br>
    </div>
    <blockquote
cite="mid:CADm_WcbQog_UCV=JPHyqTRxKbaGY7jedtHE_D8jJSe_thMg05w@mail.gmail.com"
      type="cite">
      <div dir="ltr">Failure to plan now for a hard fork increase 6(?)
        months in the future produces that lumpy, unpredictable market
        behavior.
        <div><br>
        </div>
        <div>The market has baked in the years-long behavior of low
          fees.  From the market PoV, inaction does lead to precisely
          that, a sudden change over the span of a few months.</div>
        <div><br>
        </div>
        <div>At a higher level, people look at bitcoin and see people
          delaying, waiting, dawdling until the barn is actually on fire
          before taking action to put out the fire.</div>
        <div><br>
        </div>
        <div>They see a system that is not responsive to higher level
          externalities of people &amp; businesses making plans for the
          future.  Based on current proposal of change-through-inaction,
          businesses will simply shelve plans to use bitcoin and not
          bother putting those new users on the network.</div>
        <div><br>
        </div>
        <div>If you wait until the need to increase block size is acute,
          it is already too late.  (1) Businesses have permanently
          shelved plans to use bitcoin and (2) change at that point
          produces _larger_ disruption to the fee market.</div>
        <div><br>
        </div>
        <div>Hard forks require planning many months in advance. 
          Gavin's timing is sound, even though the Gavin/Hearn
          Bitcoin-XT antics were sub-optimal.</div>
        <div><br>
        </div>
        <div><br>
        </div>
        <div><br>
        </div>
        <div><br>
        </div>
        <div><br>
        </div>
        <div><br>
        </div>
      </div>
      <div class="gmail_extra"><br>
        <div class="gmail_quote">On Fri, Jun 26, 2015 at 11:12 AM,
          Pieter Wuille <span dir="ltr">&lt;<a moz-do-not-send="true"
              href="mailto:pieter.wuille@gmail.com" target="_blank">pieter.wuille@gmail.com</a>&gt;</span>
          wrote:<br>
          <blockquote class="gmail_quote" style="margin:0 0 0
            .8ex;border-left:1px #ccc solid;padding-left:1ex">
            <p dir="ltr">I am not saying that economic change is what we
              want. Only that it is inevitable, independent of whether
              larger blocks happen or not.</p>
            <p dir="ltr">I am saying that acting because of fear of
              economic change is a bad reason. The reason for increase
              should be because of the higher utility. We need it at
              some point, but there should be no rush.</p>
            <p dir="ltr">I do understand that we want to avoid a
              *sudden* change in economic policy, but I'm generally not
              too worried. Either fees increase and they get paid, and
              we're good. But more likely is that some uses just move
              off-chain because the block chain does not offer what they
              need. That's sad, but it is inevitable at any size: some
              uses fit, some don't.</p>
            <span class="HOEnZb"><font color="#888888">
                <p dir="ltr">-- <br>
                  Pieter<br>
                </p>
              </font></span>
            <div class="HOEnZb">
              <div class="h5">
                <div class="gmail_quote">On Jun 26, 2015 7:57 PM, "Jeff
                  Garzik" &lt;<a moz-do-not-send="true"
                    href="mailto:jgarzik@gmail.com" target="_blank">jgarzik@gmail.com</a>&gt;
                  wrote:<br type="attribution">
                  <blockquote class="gmail_quote" style="margin:0 0 0
                    .8ex;border-left:1px #ccc solid;padding-left:1ex">
                    <div dir="ltr">It is not "fear" of fee pressure.<br>
                      <div><br>
                      </div>
                      <div>1) Blocks are mostly not-full on average.</div>
                      <div><br>
                      </div>
                      <div>2) Absent long blocks and stress tests, there
                        is little fee pressure above the anti-spam relay
                        fee metric, because of #1.</div>
                      <div><br>
                      </div>
                      <div>3) As such, inducing fee pressure is a delta,
                        a change from years-long bitcoin economic
                        policy.  Each time we approach the soft limit,
                        Bitcoin Core increases the soft limit to prevent
                        "full" blocks.  Mike Hearn et. al. lobbies
                        miners to upgrade.</div>
                      <div><br>
                      </div>
                      <div>(note - this is not an endorsement of these
                        actions - it is a neutral observation)</div>
                      <div><br>
                      </div>
                      <div>4) Inaction leads to consistent fee pressure
                        as the months tick on and system volume grows;
                        thus, inaction leads to economic policy change.</div>
                      <div><br>
                      </div>
                      <div>5) Economic policy change leads to market and
                        software disruption.  The market and software -
                        notably wallets - is not prepared for this.</div>
                      <div><br>
                      </div>
                      <div>6) If you want to change economic policy,
                        that's fine.  But be honest and admit you are
                        arguing for a change, a delta from current
                        market expectations and behavior.</div>
                      <div><br>
                      </div>
                      <div>7) It is critical to first deal with what
                        _is_, not what you wish the world to be.  You
                        want a fee market to develop.  There is nothing
                        wrong with that desire.  It remains a delta from
                        where we are today, and that is critically
                        relevant in a $3b+ market.</div>
                      <div><br>
                      </div>
                      <div><br>
                      </div>
                      <div><br>
                      </div>
                      <div><br>
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                    <div class="gmail_extra"><br>
                      <div class="gmail_quote">On Fri, Jun 26, 2015 at
                        7:09 AM, Pieter Wuille <span dir="ltr">&lt;<a
                            moz-do-not-send="true"
                            href="mailto:pieter.wuille@gmail.com"
                            target="_blank">pieter.wuille@gmail.com</a>&gt;</span>
                        wrote:<br>
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                                            <div>Hello all,<br>
                                              <br>
                                            </div>
                                            here I'm going to try to
                                            address a part of the block
                                            size debate which has been
                                            troubling me since the
                                            beginning: the reason why
                                            people seem to want it.<br>
                                            <br>
                                          </div>
                                          People say that larger blocks
                                          are necessary. In the long
                                          term, I agree - in the sense
                                          that systems that do not
                                          evolve tend to be replaced by
                                          other systems. This evolution
                                          can come in terms of layers on
                                          top of Bitcoin's blockchain,
                                          in terms of the technology
                                          underlying various aspects of
                                          the blockchain itself, and
                                          also in the scale that this
                                          technology supports.<br>
                                          <br>
                                        </div>
                                        I do, however, fundamentally
                                        disagree that a fear for a
                                        change in economics should be
                                        considered to necessitate larger
                                        blocks. If it is, and there is
                                        consensus that we should adapt
                                        to it, then there is effectively
                                        no limit going forward. This is
                                        similar to how Congress voting
                                        to increase the copyright term
                                        retroactively from time to time
                                        is really no different from
                                        having an infinite copyright
                                        term in the first place. This
                                        scares me.<br>
                                        <br>
                                      </div>
                                      Here is how Gavin summarizes the
                                      future without increasing block
                                      sizes in PR 6341:<br>
                                      <br>
                                      &gt; 1. Transaction confirmation
                                      times for transactions with a
                                      given fee will rise; very-low-fee
                                      transactions will fail to get
                                      confirmed at all.<br>
                                      &gt; 2. Average transaction fee
                                      paid will rise<br>
                                      &gt; 3. People or applications
                                      unwilling or unable to pay the
                                      rising fees will stop submitting
                                      transactions<br>
                                      &gt; 4. People and businesses will
                                      shelve plans to use Bitcoin,
                                      stunting growth and adoption<br>
                                      <br>
                                    </div>
                                    Is it fair to summarize this as
                                    "Some use cases won't fit any more,
                                    people will decide to no longer use
                                    the blockchain for these purposes,
                                    and the fees will adapt."?<br>
                                    <br>
                                  </div>
                                  I think that is already happening, and
                                  will happen at any scale. I believe
                                  demand for payments in general is
                                  nearly infinite, and only a small
                                  portion of it will eventually fit on a
                                  block chain (independent of whether
                                  its size is limited by consensus rules
                                  or economic or technological means).
                                  Furthermore, systems that compete with
                                  Bitcoin in this space already offer
                                  orders of magnitude more capacity than
                                  we can reasonably achieve with any
                                  blockchain technology at this point.<br>
                                  <br>
                                  I don't know what subset of use cases
                                  Bitcoin will cater to in the long
                                  term. They have already changed - you
                                  see way less betting transactions
                                  these days than a few years ago for
                                  example - and they will keep changing,
                                  independent of what effective block
                                  sizes we end up with. I don't think we
                                  should be afraid of this change or try
                                  to stop it.<br>
                                  <br>
                                </div>
                                If you look at graphs of block sizes
                                over time (for example, <a
                                  moz-do-not-send="true"
                                  href="http://rusty.ozlabs.org/?p=498"
                                  target="_blank">http://rusty.ozlabs.org/?p=498</a>),

                                it seems to me that there is very little
                                "organic" growth, and a lot of sudden
                                changes (which could correspond to
                                changing defaults in miner software,
                                introduction of popular sites/services,
                                changes in the economy). I think these
                                can be seen as the economy changing to
                                full up the available space, and I
                                believe these will keep happening at any
                                size effectively available.<br>
                                <br>
                              </div>
                              None of this is a reason why the size
                              can't increase. However, in my opinion, we
                              should do it because we believe it
                              increases utility and understand the
                              risks; not because we're afraid of what
                              might happen if we don't hurry up. And
                              from that point of view, it seems silly to
                              make a huge increase at once...<span><font
                                  color="#888888"><br>
                                  <br>
                                  -- <br>
                                </font></span></div>
                            <span><font color="#888888">Pieter<br>
                                <br>
                              </font></span></div>
                          <br>
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