Author: Jameson Lopp 2015-07-23 19:52:11
Published on: 2015-07-23T19:52:11+00:00
The debate over larger block sizes in Bitcoin has been ongoing for years, with arguments on both sides. Eric Lombrozo and Jameson Lopp recently discussed the issue, with Lopp arguing that larger block sizes do not actually scale the network but rather increase the load it can bear. Lombrozo agreed, noting that the cost of bearing this load must be paid for, and if we do not accept that computational resources are finite, the incentive model collapses and the security of the network will be at risk. Larger blocks support more transactions but also incur significant overhead in bandwidth, CPU, and space. Running a node in the network has real-world costs that cannot be ignored, and as resources become faster and cheaper, it may be acceptable to eventually increase block sizes. However, there is no established baseline for the acceptable performance/hardware cost requirements to run a node, leading to a need for further clarification from advocates. On the other hand, scalability proposals will still require larger blocks if mainstream usage is ever to be supported. The blockchain will primarily act as a dispute resolution mechanism for direct party-to-party contract negotiations, while the block size is about supply and demand of finite resources. As demand for block space increases, it can be addressed either by increasing computational resources (block size) or by increasing fees. However, for the former, there needs to be a way to offset the increase in cost by ensuring those who contribute said resources have an incentive to do so. Ultimately, both larger blocks and scalability proposals are necessary for the future of Bitcoin.
Updated on: 2023-06-10T03:14:36.389412+00:00