sipa changed the topic of #bitcoin-wizards to: This channel is for discussing theoretical ideas with regard to cryptocurrencies, not about short-term Bitcoin development | http://bitcoin.ninja/ | This channel is logged. | For logs and more information, visit http://bitcoin.ninja
<frib>
kanzure, i think cryptocurrency should aim to scale globally one day, no?
<kanzure>
you've lost me, you're speaking gibberish now
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<gmaxwell>
frib: thats an oversimplification. E.g. you could 'realtime' observe the network but skip every Nth block to lower your bandwidth usage.
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<frib>
kanzure, i meant it reduces the size of the block chain but doesn't increase txns per second
<gmaxwell>
frib: that depends on what the limiting factor in transactions per second is.
<frib>
gmaxwell, for example?
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<gmaxwell>
frib: if scalability is more limited by ECC operations, MW doesn't help much. If it is more limited by storage it helps a lot. If it is most limited by bandwidth it helps an intermediate amount (especially if there are nodes that preaggregate transactions before handing them to miners))
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<frib>
gmaxwell, got it. btw what does ECC stand for?
<gmaxwell>
elliptic curve cryptography.
<frib>
gmaxwell, if MW can reduce storage as much as is said, what is preventing the possibility of allowing high numbers of transactions per second (i.e. on a global scale) ?
<frib>
which would eliminate the need for a sidechain
<kanzure>
storage isn't your bottleneck
<stevenroose>
gmaxwell, what do you think is currently the most constraining factor?
<frib>
kanzure, that's my question: What is the bottleneck where tps is concerned?
<kanzure>
perhaps this is a topic better for #bitcoin
<gmaxwell>
stevenroose: there isn't a most constraining factor-- some users one thing, another users another thing... and our goal is to maximize the user count.
<gmaxwell>
frib: I think your question actually doesn't make much sense. In Bitcoin one can achieve an arbritarily high number of transactions per second using techniques like payment channels. In MW you can achieve higher numbers of transactions per second using nodes that perform aggregation before handing tx sets to miners (and _maybe_ payment channels are also possible).
<gmaxwell>
frib: without using these things really high transaction rates can _never_ be achieved by any technology, because without these techniques you're left with a broadcast medium... which inherently has limited scaling (increasing the number of nodes directly increases the total amount of resources used by the system).
<stevenroose>
true. that's my primary concern about all those "we should put it on a blockchain" use cases
<stevenroose>
some people still think bitcoin or ethereum "is perfect for microtransactions"
<stevenroose>
it's horrible for microtransactions
<gmaxwell>
most of that stuff is just garbage. Blockchain is being used as a fill in for "digital signature" or "distributed database" or "timestamped audit trail".
<gmaxwell>
or "<random thing that existing systems do poorly>" -- which is where the microtransactions come from.
<stevenroose>
dont tell me.. I have to tell this to people at work on a weekly basis
<gmaxwell>
Paypal is bad at microtransactions. Bitcoin is unlike paypal. Bitcoin is good at microtransactions. Ironically, paypal's technology is superior for microtransactions. :)
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<fibonacci>
In line with the topic, Can someone answer why bitcoin transaction fees are a flat rate rather than having smaller transactions utilize a more cost effective network and larger transactions that are higher priority use the standard or higher mining fee?
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<sipa>
fibonacci: the fee is propertional to the resource consumption for the network, and larger transactions do consume more... but larger is measured in bytes, not in amount spent
<sipa>
there are good reasons for that... every transaction does get the same security, regardless of its value
<sipa>
furthermore, making larger amounts pay more would require disclosing what the amount actually is to the network... which is a pretty large privacy breach as it allows determining which addresses are change
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<gmaxwell>
fibonacci: if it wasn't clear from sipa's answer, they're not at all flat rate.
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<fibonacci>
Ahhh.. makes sense
<fibonacci>
Privacy complicates many things doesn't it..
<sipa>
and denial of service protection without identities
<sipa>
if we had identities, you could just limit the number of transactions per person
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<fibonacci>
So the network gets flooded by spam in other words?
<sipa>
well, the question is how to avoid that
<sipa>
and without identities, the only option is just limiting the global combined rate
<fibonacci>
I noticed a ton of tiny transactions that didn't seem logically for any good or service.. i see
<sipa>
which naturally leads to an economic balance where there is a market per resource usage
<sipa>
in bitcoin, the rule that currently has the limiting effect is bytes per block
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<sipa>
so a market appears where you bid for bytes
<fibonacci>
So the source of the spam is undeterminable with the anonymity precursor
<sipa>
right
<sipa>
everybody can create as many pseudonymous identities as they want
<fibonacci>
Obviously malicious though
<sipa>
i guess that too is in indirect effect of privacy requirements
<sipa>
it's hard to say whether it's malicious or not
<sipa>
only that there is a lot of it
<fibonacci>
I guess its plausibly another way to ensure anonymity fractionalizing the transaction
<fibonacci>
Its a shame it has to be such a disruptive influence on the utility of bitcoins network being caught in a dichotomous struggle between anonymity and fluidity.
<gmaxwell>
uh even without anonymity the same kinds of constraints exist. We live in a physical world with physical limits. You could be totally non-anonymous but you still can't have an infinite supply of transaction capacity-- you could just use things other than fees to arbritrate it-- e.g. a fair share per person, but that would arguably result in a less efficient allocation of resources. Or more likely
<gmaxwell>
people who wanted more txn would just buy access to other people's capacity allotment, and you'd be back to fees again but with a less efficient mechenism.
<sipa>
well much can probably be improved with second layers
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<sipa>
the whole world does not need to see every single movement of money
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<fibonacci>
Yea that makes sense. It's possibly a wasteful use of resources to publish in real time every single purchase of a candy bar. Does the network have any utilized means of tracking the general location of where a transactions originate?
<fibonacci>
-a
<fibonacci>
Or is that purged
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<fibonacci>
If you knew where the transactions originated in greatest quantuty. It seems logical to allocate regional hubs that handle local transactions, anonymize the data, and update the blockchain at scheduled low use intervals to avoid peak times where transactions flood the network. Long term implementation perhaps
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