https://en.wikipedia.org/wiki/Embrace,_extend_and_extinguish

Bitcoin does what it says on the tin.  
It does it reliably, and without fail continuously for more than half a decade.

Maybe we will get to a point where it can do more, but this must not be at risk of failing to do what it does.
Many risks are insidious, and not well understood until too late so it is incumbent upon us now to at least address all those that are understood.

That's not a definition, that's the usual FUD.

Oh dear, it's "Off with their heads!" time again.  I'm sorry, Your Highness.

I should have realized there is no trade off between Layer 1 scaling and decentralization.  How silly of me!

Oops, I also should have realized adoption and efficiency (not resiliency) are the paramount goals of decentralized non-state sanctioned currency.

My extreme statist solution - which I see ultimately increasing scale across multiple systems

Current 10 minute blocks with 25BTC being mined

At next halving (2016)

1 minute blocks with 1.25 BTC being mined
Each block with 1MB limit
add Blockstream sidechain tech into code

**Equates to 10 minute blocks at 10MB with side chain capabilities mining 12.5 BTC**

This solution will allow on block transfers that will allow blocks to happen faster in real world transfers, with the reciever deciding how many confirmed blocks he feels safe with in a small amount of time, along with allowing much more transactions. - True P2P

By adding blockstream sidechain code they can integrate sidechains and ledgers as needed to assist in blockchain growth - even if this means introducing pegged coins to Bitcoin

This still allows a company like Coinbase to offer off the block transfers between user and a company like Overstock with the "Bitlicense" protecting your Coinbase held Bitcoins with "FDIC Bitlicense"

I think the "you" in the phrase "you never orphan your own blocks" needs to be thought about more carefully, but the point is valid that a block's propagation impedance [my (gamma x C)^-1 in the paper] is much less when the information is communicated across a miner's own hardware network compared to when the information is communicated to other miners. The paper spoke to this [albeit less than I should have in hindsight and I didn't explicitly talk about intra-miner communication] in the Conclusion and in End Note 13.  

I was actually working on an "Appendix B" to formalize my definition for tau(Q) by considering these details more rigorously, but the math become too complex and so I felt that such an analysis deserved a follow-up paper instead.  

In any case, my suspicion is:

(1) As long as information regarding the transactions in a solved block needs to be communicated between miners (and even within a miner's own network), the Shannon-Hartley limit will apply, orphaning cost will be non-zero, and the fee market will remain healthy.

(2) We will be able to show that any attempts to create a "mining cartel" that prevents outsiders from accessing the same "fast relay networks" as the cartel members will fail, as individual members will improve their profitability by "cheating" by providing access to non-members. [A point Erdogan mentioned earlier in this thread.]

(3) The results of the paper will hold "as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes."  [Satoshi White Paper]

https://en.bitcoin.it/wiki/P2Pool

The ideal was P2Pool mining by ~every wallet user.  The reality fell short of that.  Orphan blocks are killing p2pool, and bloated Gavinblocks may be the last nail in its coffin.

That's how you fail, not how you scale.  Let's try going in the other direction:


BIP 1337 (Keep Bitcoin Elite)

Shorter blocks waste computational resources, so PoW security decreases as block frequency increases.  Because variances multiply attacking forces, time is an ally of Nakamoto Consensus and an enemy of its adversaries.

As Bitcoin becomes more a (IE The Ultimate) settlement layer, block timing should be adjusted contingent on block size modifications.  Given the trade-offs involved, increases of max_blocksize will be married to proportional changes of block time/reward.  For example, if we double max_blocksize to 2MB, we necessarily double block time/reward as well.

The more important Bitcoin becomes, the more important is equal access to full node functionality.  If Bitcoin's Mother Of All Blockchains is the rule the world, everyone should be able to verify it.  Any other outcome violates Chaum's maxim regarding the danger of poorly designed e-cash and tyranny.

The point is to regulate the ambitions of the Gavinistas and their ambivalence about maintaining a diverse/diffuse/defensible/resilient network.  In business, this is called a poison pill ("A strategy used by corporations to discourage hostile takeovers").   

You don't ask questions because you want answers. Your questions are devices used to restate another persons argument in such a way that you can then make arguments against them which cannot be refuted. By doing this you are attempting to create the illusion that your arguments actually refute what the other person said (as opposed to your mischaracterisation of what they said).

As this is a generalisation, your immediate reaction is to then go away and discover a single incident where this did not happen, and then argue that because this didn't happen one time, it never happens.

You use the same pattern here, without a question.


[The exact names of the financial institutions aren't important] - Yes exact names are not important.

[only that their "sanity and honesty are ensured by the holy blockchain."] - you attempt to establish the credibility of this statement by contrasting it against the absurd.

This is a recurring theme, and it is the whole basis of your argument. You craft entire walls of text specifically designed to give the impression that you are of superior intellect, and that the other person is a buffoon. You think that by doing this you increase the legitimacy of your position. You do not.

This is the subtlety that you are missing: "Let each thing stand on its own merit"

This applies equally to LN Sidechains as it does to your own self.

Sometimes one is just plain wrong. Acknowledging this is more important than being right.

For example, your handwaving over full blocks. I likened them to Rome Burning for a very good reason. Full blocks and a constantly increasing mempool cause significant problems. Maybe you should look into it, its the thing that most concerned me and I think is the biggest motivation for making sure that full blocks don't happen.

Peter R's paper, demonstrating the block size is self limiting, puts a fork in it! (so to speak)

It isn't me that is trolling ICE. I post what I believe to be true, based on what I have read, and learned and understood. I think there is a difference between us though: I know I might be wrong, and if I am, I'll be fine about it.

Well done on your paper Peter, and timed for when most needed too.

I was thinking about that commonly mentioned point "not orphaning own blocks.." and I don't think that it warrants real concern, or wasting time figuring out transmission overhead within a single miner.
The empirical evidence is that mining is continuing to decentralize after an era of centralization. We know why the centralization occurred: invention of pool mining and ASIC development. Neither being block size related.
We also saw 3 pools reach 50% (Deepbit, Guild and Ghash) and each time the incentive of block rewards kept them honest.

I notice on the dev thread today that some people still consider $5 fees per tx feasible. Users will just avoid Bitcoin in that situation, and the total fees per block will remain small. Miners need more ecosystem growth to succeed, especially after the next halving. You have gone further than most to prove the way forward.

Very interesting post from Axel Merk... This is Gentlemen?  :

When volatility is low and asset prices rise, buyers are attracted that don’t fully appreciate the underlying risks. Should volatility rise, these investors might flee their investments, saying they didn’t sign up for this. Differently said, central banks have fostered complacency, but fear may well be coming back. At least as importantly, these assets are still risky, but have not suddenly become safe. When investors realize this, they might react violently. This can be seen most easily when darlings on Wall Street miss earnings, but might also happen when central banks change course or any currently unforeseen event changes risk appetite in the market.

Relevant with regards to my concern over a more severe correction is that it is complacency that drove the tech bubble to ever new highs in the nineties; and it was similar complacency that drove housing into the stratosphere ahead of 2008. Bubbles are created when investors have the illusion that there’s no or little risk with the strategy they are pursuing, bidding up asset prices.

http://www.zerohedge.com/news/2015-08-04/axel-merk-comes-out-bear