If Bitcoin would have bigger blocks we could not run our own nodes and verify transactions ourselves.
If we keep small blocks we (normal plebs) will not be able to transact on the base layer because fees will be too high, so there is no insensitive to run our own node.
Or what am I missing?
#asknostr
Or actors are stifling L1 to allow L2 to flourish
the majority of mining is done by plebs running nodes that maintain small block rules
UASF mechanisms that have been deployed several times depend on nodes signalling upgrade and these give good optics to anyone attempting to modify the consensus, even if it means they probably will fail
nodes that hold to old rules will not accept a chain built with new rules and these side chains will always obstruct the acceptance of a chain with new block rules in force by giving the miners holding to old rules plenty of time to out-mine the minority big blocker miners
and you can at minimum easily make outbound payments using LN if you have your own node
there simply is no clear need for bigger blocks, look at fee rates, only the expensive and artificial attempts to push this with ordinals ever caused congestion and even then, technically they are exploiting a weakness in the protocol, which will likely be patched up by the end of this year
bitcoin is already moving 18B$ worth of sats around *on chain* and lightning is moving even more around than that
disrupting the system with rule changes does not benefit the majority of users, it is entirely unnecessary, and thus the pleb node runner continues to be viable
Yet it remains true that even if fee's remain at the levels they are or even drop a bit, for most people on chain transactions will become too expensive.
When bitcoin hits £100,000,000, or 1sat/£, a tx which costs 5k sats will be 5k GBP equivalent and the majority will never do that.
Beyond a certain price point most people will only ever interact with bitcoin via layer 2/3 methods. For some it'll be a miracle if they ever save enough sats to even make an on chain transaction.
This point should be part of scaling discussions but I rarely see it mentioned.
What is the point of giving 8 Billion people their own UTXOs if they can’t afford to use them?
Because this is a large complex topic and even among some developers there has always been some degree of lack of understanding of economics. Being able to program software doesn't mean you understand the consequences of doing so. I think that's why it's often neglected.
on chain is still needed fairly regularly
i get paid for my job on a monthly basis on chain, it is more private and secure for me to do that on my own node
the amounts i push to my offramps are big enough to be still cheaper than if i were using other payment systems like paypal or wise or whatever (way cheaper than moneygram and WU that's for sure)
every time demand for on chain transactions rises new ways to reduce onchain data sizes continues to arise
btw, the fee rate is related to the exchange rate not to the satoshis themselves, that's part of the reason why the fees keep dropping also... bitcoin price goes up, margin goes down when denominated in sats
maybe after the halvening fees might at most double but when you consider how many transactions is in a block and if the fee rates go up to maintain the same DOLLAR value of blocks then ... it's still deflating... bitcoin on chain transactions are still cheap compared to most other money transfer services for small payments
the arguments for big blocks just don't match up with the needs of the network and its users
A tx now might cost 5k sats, which is approx £2.50.
At £5m per bitcoin, assuming the fee's remain stable, a 5k sat tx now costs the equivalent of £250.
At £50m per bitcoin that tx, again assuming fee's remain stable, £2500.
At that point noone outside of early adopters, business and large institutions are going to make on chain payments.
It's true, sats per vbyte can drop, and they can also rise. UTXO management can also reduce your exposure to higher fee's. But at some price point it doesn't matter what you do, ordinary people will be priced out of on chain transactions.
if you assume that nobody finds more ways to squeeze more transaction capacity out of the protocol then you are right, but history says otherwise
a lot of bitcoin transaction demand has moved to lightning, more than enough to keep on chain fees competitive with fiat market clearinghouse rates
Fiat market clearing house rates? I think we're talking about different things. If you assume transaction fee's in sats/vbyte are going to drop then maybe...but I doubt that. There'll be periods where it's lower, periods where it's higher, but there'll always be fee's and in £/sat terms, as the bitcoin price rises so does the cost of online transactions, which will price a majority out of on chain use.
yes, competition against fiat money transfer costs is very relevant
for all transactions on chain above about $1000 nominal exchange rate value the fee rates are close to 0.1%, and as you increase your tx size this overhead cost drops proportionally
a large majority of small transactions are now being done off chain with LN... i pay my VPS bill with btcpayserver... many businesses are adopting this easy to deploy system and this is bitcoin payment volume that never sees the chain in any substantial way
Okay we seem to be talking at cross purposes. My maths is right, that much I know absolutely, so I'll happily leave it there 😁
I'd prefer having small blocks and run my own pruned and archival nodes instead of cheaper fees. The fee market will always adjust based on demand but the larger blocks can potentially make it harder for me to run my own node.
Block size was increased with segwit and people still run nodes just fine.
The question should be what size block is consider big ? This way no need to argue more. Cuz those size block are needed, to much shat on memepools.
