
Controversy over increasing the Bitcoin block size resurfaces - anirgu
https://ihb.io/2015-05-04/news/hard-fork-bitcoin-17003
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danbruc
The common issues are kind of funny.

Transaction Fee Death Spiral: Bitcoin is advertised as a way to transfer money
at low costs but then you don't want transaction fees as low as possible?
Looks to me like you are not interested in a system with low transaction fees
but one to maximize your mining profits.

Centralization Death Spiral: The amount of data to keep around depends on the
number of transactions, not the block size. The larger block size only ever
matters if the smaller block size gets saturated. And then you either increase
the block size or you run a system that is constantly overloaded. Higher
demand will cause higher fees and may push a couple of transactions that are
not worth the costs out but in the long run you will make your users unhappy
if their transactions are not executed unless they throw a lot of fees at
them. And after all 1 TB per year is not exactly a huge amount of data.

Block Subsidy, Fees, and Blockchain Security: Bitcoin is by its very nature an
expensive system. Not sure what the current costs per transactions are but
they used to be on the order of $10 per transaction. None of the often
mentioned target audiences of Bitcoin - unbanked people in poor areas, people
looking for low transaction costs, micro payment services - is willing to pay
that once the block reward is gone. Then you face the choice - reduce the hash
rate or process more transactions, nothing else we reduce transaction costs.
Especially not more efficient and cheaper mining hardware in case you want to
maintain the security level because attackers will gain the same advances.

~~~
omginternets
>Centralization Death Spiral

Isn't this a non-issue in the long-run due to Moore's law? Even if
centralization happens in the short-run as a result of processing expenses,
everything is destined to become decentralized as processing power increases.

>Transaction fees

Could someone please explain why transaction fees are deemed necessary?

~~~
sp332
Transaction fees are paid to the miner who solves the block containing your
transaction. It's an incentive for the miner to include your transaction in
the block. Without fees, your transaction will get processed eventually, but
miners tend to put profitable transactions first.

Eventually, the block reward will be very small and transaction fees will be
the only profit miners make. So you're basically paying the miners to protect
the network by verifying the transactions.

~~~
wyldfire
> Without fees, your transaction will get processed eventually, but miners
> tend to put profitable transactions first.

IIRC this is only because some generous folks run miners willing to process
zero-fee transactions in order to clean them up and forgive those who probably
made the transaction fee too small in error. What if they decide to stop
upgrading their equipment to keep up with the difficulty?

~~~
sp332
There are a few of those, but also the default client behavior boosts the
priority of old transactions so they will be processed eventually. I would
guess that high-throughput miners responsible for the majority of hashing
power would have other priorities though, so the "default" config might cover
a minority of hashing power.

Edit: It's the age of the inputs to the transaction, not the age of the
transaction itself that counts. But it's possible to just wait until the
transaction inputs are old and then the transaction will go through.

