bitcoin-tx-size-limit.md

@Gavin Andresen says:

There is a non-voluntary, hard-to-change, 1,000,000-bytes-of-transactions-per-block limit that needs to be raised.

And there is… uhh, “vigorous”… debate over when and how to change it.

I wasn't aware this was up for change. I was surprised that Gavin says we need to change the block size cap. As Gavin is the lead dev, what Gavin says arguably goes and I hope he is making his decisions with the fullest possible information. thus my thoughts:

reasons to keep 1Mb limit unchanged

keynesian trap

If we increase the block size once we will probably do it again and again forever. This will blow up blockchain size unavoidably - every present and future user of Bitcoin will have to deal with these files. Including ppl in shitty situations who won't be able to afford a 10Tb hard drive

keep a high bar on value of information

Only put the highest value information into the blockchain.
psst that is the whole point of transaction costs and a limited block size
Remember, if Susy buys a candy with BTC the whole network bears the weight of remembering that transaction forever. multiply by all susy's, candy, and time

use derivative currencies instead

Use BTC as a backing for other digital cashes. Think SDR's. Let other transaction systems handle small transactions and only settle with BTC when necessary.

###Ripple Novel transaction network. Friend to friend value transfer and loans. irc freenode/#ripple

OpenTransactions

Enormous digital cash/contract library

####anyone can issue any asset contract which opens up interesting possibilities for trading: MMO currencies, non-monetary assets, physical goods traded across local meshnets

chaumian blinded cash

which I am told offers better anonymity than BTC

federated trust model

The philosophy of the software is based around separation of powers (issuers and transaction servers being separate entities) as well as the distribution of risk. For example, Asset accounts can be distributed across multiple servers, and asset types can be distributed across multiple issuers (via baskets.)

example

100 ppl create BTC equivalents, 90 are scams, the other 10 all have varying amount of use and trust. But most users trade with a basket currency that is comprised of equal parts of the 10 different cash types. Various exchangers convert between the OT assets (i.e. the basket currency) and external assets like BTC, USD, gAG.

####OT needs more ppl To bring it mainstream will need coders, beta testers, servers and time. And probably darknets.

irc freenode/#opentransactions

! Wild FREE MARKET appeared ! :-PLATO

Great-- you should do that, and make it wildly successful. We need a great solution for instant payments.

But the block size needs to increase soon, and it would be irresponsible to rely on a not-yet-proven technology like Ripple or OT when there is a much simpler, quicker-to-deploy solution.

@gavinandresen But there is a even simpler, quicker-to-deploy solution, which is to do nothing.

Hitting the block size limit is not a problem, it is a feature.

The block size does not need to increase because the users will find better ways to use the space in those blocks. (maybe ignoring known satoshidice addresses, maybe whitelisting charity addresses, certainly including tx that have a fee attached.)

"It's not a bug, it's a feature!" (you set me up for that @therealplato)

While instant transactions and some of the other features you mentions would be great to have, in terms of priority, I'm actually more for transparency than anonymity (which is what Bitcoin currently offers and why I will continue to support it as well as concentrate my coding efforts around it). I do find it interesting that you seem to have posted this before the infamous BCB #225430!

Of course a fix is in place as of 0.8.1 that requires no user-intervention or downgrading. I don't agree with your assessment about 9 in 10 "BTC-equivalents" being scams though; I see many of these transactions systems similar to what you are proposing. Some are scams, however most are flawed in some critical way or there simply isn't the development power behind them.

@tonyrayo

100 ppl create BTC equivalents, 90 are scams, the other 10 all have varying amount of use and trust.

I should clarify that I am describing asset types in a hypothetical Open Transactions marketplace, not 100 entirely new digital currency schemes.

So in my example 10 market movers (Gox, Balanced, Coinbase, whoever) would offer certificates representing OT asset types, backed by their reputations and a promise to redeem. Since OT allows anyone to create and issue assets I expect many attempts to abuse the system, e.g. someone might create an asset that represents a promise to pay the bearer principal plus interest in n days. Then he trades that certificate for harder assets (BTC, or GOX-USD, or whatever) and then absconds with the money.