Author: Eric Lombrozo 2015-07-23 20:52:26
Published on: 2015-07-23T20:52:26+00:00
The mainstream usage of cryptocurrency will be enabled by direct party-to-party contract negotiation with the use of blockchain primarily as a dispute resolution mechanism. The block size is not about scaling but about the supply and demand of finite resources. To address the increasing demand for block space, we can increase computational resources or increase fees. However, to do the former, we need a way to offset the increase in cost by making sure that those who contribute said resources have an incentive to do so.Improvements in hardware and network infrastructure can also reduce costs, and there could be a model where resource requirements can be increased as technology improves. Currently, the computational cost of validation is growing much more quickly than the cost of computational resources is going down. Even with highly optimized block propagation, pruning, and signature validation, we are still many orders shy of being able to satisfy demand. To achieve mainstream adoption, we will have to pass through a period of quasi-exponential growth in user base until the market saturates or until the network resources run out.Running a node certainly has real-world costs that should not be ignored, and there are advocates who argue that Bitcoin should strive to keep it feasible for the average user to run their own node. My impression is that even most of these advocates agree that it will be acceptable to eventually increase block sizes as resources become faster and cheaper because it won't be 'pricing out' the average user from running their own node. If this is the case, we have a problem given that there is no established baseline for the acceptable performance/hardware cost requirements to run a node. Without having any common notion of what the "minimal target hardware" looks like, it is very difficult to discuss other things that depend on that.
Updated on: 2023-06-10T03:14:53.577078+00:00