Why Craig Wright is wrong about future storage costs for Bitcoin
I'm sorry to have to say this, but both sides of this debate have become far too politicized and engaged in name calling. I do lean toward SegWit and smaller blocks, for various reasons, but I have also tried to understand the case for bigger blocks and have also tried to understand why some think SegWit is a problematic implementation. As such, I have done some listening to the live feed (now recorded) of the Future of Bitcoin conference. There are some valid points made. But one claim by Craig Wright that I had to challenge is that storage will continue to double at the same speed as Bitcoin. Moore's Law is the observation that the number of transistors on a given area have been doubling roughly every 18 months. But this rate of growth is slowing down as the cost of miniaturization, and building the factories necessary, also seems to double in a similar amount of time, among other factors. Kryder's Law is an analogous observation that storage was doubling roughly every year (when the observation was initially made). However, the Kryder rate (of increase in storage per year) has been far slower than anticipated since about 2010. Several companies' business models have been disrupted by this change in projection to such a degree that some have gone out of business. As just one example of the many references to this slowing rate of growth, I cite the academic paper "The Economics of Long-Term Data Storage" (available at https://lockss.org/locksswp/wp-content/uploads/2012/09/unesco2012.pdf), since Craig Wright likes economic arguments. Moore's Law has been declared "dead" multiple times, but has almost always managed to surprise observers. Yet even transistor density growth is slowing down now. I believe that bigger blocks are inevitable, and a modest growth in block size is not a huge threat to Bitcoin's decentralization. However, it would be foolish to base our entire scalability approach on an assumption about storage growth that increasingly looks unrealistic. This does not even get into the rate of increase in network speeds, another scalability factor we must take into account. (See Nielsen's Law, still on track but not with as an aggressive a rate of growth as Moore's Law.) For these and other reasons, I think it is essential to explore other ways of scaling beyond brute size. I agree that staying at just 1MB raw block size every 10 minutes may be too limiting to Bitcoin's growth, even after a temporary reprieve given by SegWit. But expecting to jump to 8MB or even 32MB and then growing with no end in sight is also dangerous. TL; DR version: Storage growth is nowhere near fast enough to fit with Craig Wright's assumptions.
I support Gavin's plan. No one thinks it will kill Bitcoin, and Moore's law will slowly bring as back to today's equilibrium even with 20MB blocks. Moore's law is the fail-safe for the experiment.
I’ve been watching the Blocksize debate since Gavin first put out his initial proposal of an annual 50% increase many months ago. I made some initial comments at the time, but otherwise have just been watching from the sidelines. It is clear that bigger blocks will, all else being equal, put some squeeze on smaller miners and increase the cost of running a full node, both in hardware and bandwidth requirements. These factors can been seen as a centralizing force, and I understand why that concerns many of the top thinkers in Bitcoin Land. On the other hand, much of Bitcoin’s power comes from is large and vocal user base, and the bigger that user base gets, the harder it will be for governments to interfere. Remember a time when we were unsure if bitcoin users might be thrown in jail, only because they used, held, or mined bitcoin? Those days are over. Any security model needs to take threats into account, and pushing Bitcoin into mainstream use makes it politically and economically untenable for governments to attack or outlaw it. As it grows, the threat model changes, and the community will need to adjust the security ‘settings’ of the network. Rising blocks to 20MB will increase centralization pressures, but I have not seen any evidence that the network will be doomed. There have been plenty of arguments laid out that detail the nature of the centralization pressures, but no one has shown that bitcoin will stop functioning with slightly more centralization. There is a major force operating in favor of decentralization: Moore’s law (and all similar technological trends). While Gavin’s proposal is a one-time bump that will slightly increase some aspects of centralization, Moore’s law will slowly but surely work in the opposite direction, ultimately bringing us back to the same balance we have now, and then beyond, where even with 20MB blocks, running a full node will be cheaper than it is today. One specific concern that keeps being raised is that the number of full nodes is on the decline and is falling low enough to be of concern. My guess is the major driver of that trend is the plethora of alternative methods to send and receive BTC. Apparently many startups are not running full nodes to save on cost? It is hard to believe those costs they are trying to save on are the extra bandwidth and storage costs. More likely they are worried about uptime, security, having dedicated machines, and paying someone to manage the node. I’ve been running a full node, 1/2 time, for years, and the recent improvements have been great. When pruning gets implemented, it will be easier to recommend it to friends. Bitcoin Core should also have a built-in and easy to use bandwidth throttle. SPV and mobile data concerns with bigger blocks? If people care about privacy, they should run a full node at home and have it setup as an SPV server. A person’s phone would then be setup to communicate only with their own full node, with end-to-end encryption. I don’t think this is consumer-ready yet, but it will happen. A jump to 20MB max-block-size will not kill the decentralized nature of Bitcoin. It the experiment goes badly, and we see increasing and unhealthy centralization, the worst case would be waiting for a few years as the inevitable march of Moore’s law pushes us back to where we are now. We are in uncharted territory, and no one has a crystal ball. Bigger blocks may cause a bunch of problems, or they may significantly increase the capacity of the network without any ill-effects, and ultimately strenghten bitcoin as more users interact with the protocol directly, as opposed to using centralized services. My opinion is we should move to bigger blocks, because probably it will be good and fine, but if there are some issues, it will also end up being okay, with things getting better again as time and technology progress, thanks to Moore and ilk. I don’t question the motivations of most of the core devs. I’ve met many of them personally, and I doubt that financial gain is their main driver in life. I am, however, a little bit disappointed with the tone the debate has taken. Gavin has the respect and trust of a sizable portion of the Bitcoin community, and many share his desire for bigger blocks. I bet Gavin would settle for 10- or even 8 MB if the other core devs could, even reluctantly, sign off. A contentious hard fork and schism amongst the leadership is, IMHO, a far bigger risk than a 10x size increase in the largest possible block. I’m with Gavin on this one, though I do appreciate hearing the concerns of G. Maxwell, M. Corallo, P. Todd, A. Back, S.D. Lerner, P. Wuille, J. Garzik, and all the others who are thinking about this issue.
Why does the bitcoin protocol not incrementally increase block size, like already done with difficulty? Perhaps matched to Moore's law?
As storage capacity and compute speed increases over time why are blocks not incrementally being increased to keep pace? I don't fully get the technicalities and I'm trying to understand the schism over block size hard forks such as 2x. So far I'm pro core and don't like the idea of more centralisation/increased chance of censorship, but would a slow growth that matches global average hardware capabilities be a good or bad thing if it was possible? Edit: people are getting hung up on the Moores Law part rather than the essence of the question which is why block size was designed to be fixed rather than incrementally increasing from the outset, at a rate that tracked or was slightly less than average global increase in computing/storage/bandwidth. It's entirely irrelevant whether 'moores law' is that metric (and I regret the obfuscation). No need to point out I have reading to do either.
Satoshi: "[Bitcoin] never really hits a scaling limit." was based on assumption Moore's law would deliver 100x hardware performance every 10 years. Since 2008's i7-965 benchmark 5,860, today's fastest CPU (Xeon Platinum 8173M) is 28,860. Real world performance has shown 5x not 100x increase.
Therefore Satoshi's hypothesis has been proven invalid and we cannot rely on Moore's law as a scaling solution. Quote:
It never really hits a scale ceiling. If you're interested, I can go over the ways it would cope with extreme size. By Moore's Law, we can expect hardware speed to be 10 times faster in 5 years and 100 times faster in 10. Even if Bitcoin grows at crazy adoption rates, I think computer speeds will stay ahead of the number of transactions.
If Moore's law continues, when will bitcoin transactions stop being secure?
So the way I understand it is that Bitcoin relies on cryptographic algorithms to ensure that transactions are legit. Today it takes a very long time to break these algorithms so it is impractical. But given Moore's Law, computing power increases by a factor of ~1000 every 15 years (or 2 every 1.5 years as it's normally stated). Given all these considerations, how many years/decades will it take for it to be practical to break Bitcoin transactions?
Satoshi: "[Bitcoin] never really hits a scaling limit." was based on assumption Moore's law would deliver 100x hardware performance every 10 years. Since 2008's i7-965 benchmark 5,860, today's fastest CPU (Xeon Platinum 8173M) is 28,860. Real world performance has shown 5x not 100x increase. /r/btc
Moore’s Law states that transistors on a chip double about every two years. Here’s a chart with the same processors as the chart above but showing total transistor count instead of transistors per square millimeter. This is actually a better representation of how well Moore’s Law is doing. I again added a straight line by going from the bottom left dot to the top right dot on the chart: Moore’s law’) has a doubling time.” Typically, however, the rule applies to a technology’s computing power or capabilities. This is the first time Porto has noticed a technology’s price following Moore’s law. Since bitcoin’s inception, according to Porto, its price has doubled every eight months. Bitcoin price and Moore’s law. August 7, 2017 August 7, 2017 - by Bitcoin FYI. Bitcoin ATM. REUTERS/Bogdan Cristel. Bitcoin is trading at record highs on Monday, but the cryptocurrency may still be far from hitting its ceiling. It rallied 16.19% since July 31, despite last week’s fork that split it in two. It’s up 465% since last year. According to analysis by Dennis Porto, a bitcoin ... Moore’s observation is based on technological advances and applications of engineering not the price action of a commodity. But Bitcoin, unlike physical commodities and fiat currencies, is so intimately linked to the technology behind it. It’s instructive to see why people find it tempting to apply Moore’s Law to Bitcoin’s price. Why is Bitcoin linked to Moore’s law? From John McAfee to Warren Buffett, everyone seems to have an opinion on where Bitcoin is headed, with wildly differing views. With the current prolonged bear market, the skeptics do appear to be proven right in their verdict of Bitcoin.
Bitcoin Ben and Kevin Moore talk World Crypto Conference!!!
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