Block size limit controversy

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Revision as of 19:24, 16 August 2015 by Taras (talk | contribs) (Taras moved page Blocksize debate to Block size limit controversy)
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See also: Scalability FAQ

Blocks are limited to 1MB in size. Miners can mine blocks up to the 1MB fixed limit, but any block larger than 1MB is invalid. This limit cannot be modified without a hard fork. To prevent Bitcoin from temporarily or permanently splitting into separate payment networks ("altcoins"), hard forks require adoption by nearly all economically active full nodes.

Arguments in favor of increasing the blocksize

  • More transactions per second
  • Off-chain solutions are not yet ready to take off the load from the main blockchain.

Unclear Arguments

  • Increased blocksize will leave space for extensions like Mastercoin, Counterparty, etc.
    • Neutral: Bitcoin competitors will have lower fees
    • Negative: Bitcoin full nodes are forced to use more resources that don't support Bitcoin
  • Small blocks eventually will require higher fees for fast confirmations.
    • Positive: It will no longer be cheap to spam transactions such as Satoshi Dice bets
    • Positive: Fees will not be zero. This is eventually a necessity in order to incentivize miners and secure the mining ecosystem
    • Negative: Bitcoin may look unattractive to new users with high fees
    • Negative: High fees may stop or reverse global adoption, investment, development, support and centralization[clarification needed]
    • Negative: Bitcoin users pay higher fees

Arguments in opposition to increasing the blocksize

  • A hard fork requires waiting for sufficient consensus.
  • Risk of catastrophic consensus failure[1][clarification needed]
  • An emergency hard fork that can achieve consensus can be deployed on a short time period if needed.[2]
  • Orphan rate amplification, more reorgs and double-spends due to slower propagation speeds.
  • European/American pools at more of a disadvantage compared to the Chinese pools[why?]
  • "Congestion" concerns can be solved with mempool improvements including transaction eviction.
  • No amount of max block size would support all the world's future transactions on the main blockchain (various types of off-chain transactions are the only long-term solution)
  • Fast block propagation is either not clearly viable, or (eg, IBLT) creates centralised controls.
  • A low blocksize limit encourages higher transactions fees to incentivize miners ("let a fee market develop")

Damage to decentralization

  • Larger blocks make full nodes more expensive to operate.
  • Therefore, larger blocks lead to less hashers running full nodes, which leads to centralized entities having more power, which makes Bitcoin require more trust, which weakens Bitcoins value proposition.
  • Bitcoin is only useful if it is decentralized because centralization requires trust. Bitcoins value proposition is trustlessness.
  • The larger the hash-rate a single miner controls, the more centralized Bitcoin becomes and the more trust using Bitcoin requires.
  • Running your own full node while mining rather than giving another entity the right to your hash-power decreases the hash-rate of large miners. Those who have hash-power are able to control their own hash power if and only if they run a full node.
  • Less individuals who control hash-power will run full nodes if running one becomes more expensive[3].

Entities positions

Positions below are based on a suggested fixed block size increase to 20MiB. Positions against these larger blocks do not necessarily imply that they are against an increase in general, and may instead support a smaller and/or gradual increase.

Entity Supports Larger Blocks Supports Hard Fork
Bitcoinpaygate No: "We do NOT support the blocksize increase"[4]
Bitrated No
"At this time, I oppose increasing the block size limit as per Gavin's proposal" - Nadav Ivgi (founder)[5]
GreenAddress No: "In our mind increasing the block size like this is just pushing the problem a little further at potentially unfixable costs."[6]
MPEx No[7]
Paymium No: "[allow] a sane transaction fee market to emerge, by letting the blocks actually fill-up." - CTO David Francois[8]
Neutral: "If [the niche of digital gold] is what Bitcoin users want, then they should keep the limit, and perhaps even decrease it. But if Bitcoin users want to be a payment system, then up it must go." - Vitalik Buterin (founder)[9]
F2Pool Neutral: "We do support bigger blocks and sooner rather than later. But we cannot handle 20 MB blocks right now. ... I think we can accept 5MB block at most."[10]
Armory Yes
"This *is* urgent and needs to be handled right now, and I believe Gavin

has the best approach to this." - CEO Alan Reiner[11]

BitcoinReminder Yes: " also supports 20MB blocks (or even more?"[12]
BitHours Yes: "We support @gavinandresen and his proposal for 20mb blocks"[13]
BitPay Yes
"Agreed (but optimistic this will be the last and only time block size needs to increase)" - CEO Stephen Pair[14] Yes: "We are supporting increasing #Bitcoin max block size to 20MB."[15]
"I'm strongly in favor of the block size cap increase to 20MB." - CEO Henry Brade[16]
"And I'm in favor of releasing a version with this change even with opposition." - CEO Henry Brade[17] Yes
"It is time to increase the block size. Agree with @gavinandresen" - CEO Peter Smith[18]
"Scaling #bitcoin is a big deal. Increase the block size." - Nic Cary[19]
Breadwallet Yes
"[...] in support of the Gavin's 20Mb block proposal." - CEO Aaron Voisine[20]
BTC Guild Yes
"Needs to happen, but needs future expansion built in at a reasonable rate." - Eleuthria[21] Yes: " will support the 20MB block size"[22]
CoinBase Yes: "Coinbase supports increasing the maximum block size"[23]
"Why we should increase the block size" - CEO Brian Armstrong[24]
Dr. Adam Back Yes: "For the record I am not aware of a single person who has said they do not agree with scaling Bitcoin. Changing a constant is not the hard-part. The hard part is validating a plan and the other factors that go into it. It's not a free choice it is a security/scalability tradeoff. No one will thank us if we "scale" bitcoin but break it in hard to recover ways at the same time." [25] No
"I strongly urge that we return to the existing collaborative constructive review process that has been used for the last 4 years which is a consensus by design to prevent one rogue person from inserting a backdoor, or lobbying for a favoured change on behalf of a special interest group, or working for bad actor" - Dr. Adam Back[26]
Kryptoradio Yes
"#Kryptoradio dev @zouppen supports 20MB block size in #bitcoin." - Joel Lehtonen[27]
OKCoin Yes: "OKCoin's tech team believes it's the right decision"[28]
Third Key Solutions Yes
"Gavin is right. The time to increase the block size limit is before transaction processing shows congestion problems." - CTO Andreas Antonopoulos[29]
Xapo Yes: "One meg is not enough: Xapo supports increasing the maximum block size" - CEO Wences Casares[30]
  2. How to raise block size in a short time, Peter Todd, Reddit /r/Bitcoin, 9 June 2015