The economics of sinking 20 MB Gavincoin blocks.

Since there still seems to be a handful of holdouts who disagree that a bigger blockchain is less secure and that the block size ain’t gonna increase any time soon, let’s do some math to further the point, shall we ?

Of the last six blocks mined in the last 41 minutes,i the average block size was 161.09 kB and the average number of transactions was 347. This wasn’t what was ideal, what it “should be” in order for Bitcoin to be the African Visa card “the community” dreams of, this is what it was. This is what the market decided.

Last 6 blocks Take a good hard look at what the people with the money to make decisions actually did, not what the people without the money thought they should do because reasons. In case you haven’t heard, this is how the world works today and going forward into the foreseeable future. Democratic socialism is dead, we’re just making the necessary funeral arrangements.

But back to the math. So you want spam-a-licious 20 MB blocks and some arbitrary number of transactions per second because you think that’s a meaningful measurement of anything. Fine. Let’s run the numbers and see what that’s going to cost you. Because yes, this decision bears costs, no matter what USGavin says and no matter what he or anyone else imagines to be a “free lunch“, there are expenditures implied by his proposal and consequences you may find undesirable flowing therefrom.

Currently, the Bitcoin blockchain is growing at a rate of ~1.2 GB every single month.ii Gavincoin’s 20 MB blocks would grow the size of its blockchain by 2.88 GIGABYTES PER DAY or 1.05 TERABYTES PER YEAR since they will be filled with essentially zero-feeiii spam transactions by design.

If you’re hosting your Gavincoin node on a VPS, you’re looking at costs in the order of $1,000 per year, or 50x what a Bitcoin node costs! Even if you’re running your Gavincoin node at home, and you want to buy 5 years of storage up-front, you’re looking at $300 for the hard drive and another $250 per year in additional Internet bandwidth capacity, which is again, about 50x more than you’re currently paying.

This little bit of math should make it completely, utterly, painstakingly obvious that imposing such costs on nodes (not miners now) will reduce the overall number of nodes in the network and fragilise the distributed model that makes Bitcoin the world-eater that it is. This weakness in the Gavincoin model can and will be exploited by state-level actors, those of us in Bitcoiniv who intend to enforce by any and all means the doctrine of scarcity until our dying breath, and of course those miners who want to protect their transaction fee revenue for down the road when the block reward dries up.

Gavincoin can and will be defeated because it’s meaningfully worse than the alternative, just as USD, “property values,” and whatever other unit of account you previously found to be useful can and will be defeated. Lesser options don’t overcome better options just for the saying so of “the people.”

What is this, the future ?

___ ___ ___

  1. Yes, the hashrate continues its upward ascent, indicating that it’s still sufficiently economical to mine Bitcoin at $200 per coin with a network hashrate of ~320 PH. []
  2. It’s worth noting that this increase isn’t hugely impacted by the block size because blocks are rarely full. This is the present state of affairs: even 1 MB blocks are rarely full.

    That an American is proposing a “pre-emptive strike” to prevent the consequences of some boogeyman is no coincidence, it’s de facto USG policy, lest we forget the sorry story of America’s lost decade in Iraq on account of their scapegoating Herr Saddam Hussein. Remember him ? the guy who didn’t actually have WMDs ? []

  3. Yes, larger blocks reduce the scarcity of space and therefore reduce the ability of miners to demand higher transaction fees. This is given that there’s no proportionate increase in demand for Bitcoin transactions, which is pretty reasonable given that a 20x increase in transaction volume on short notice is as likely as you becoming a good poker player in a similar time frame. []
  4. That is, those of Satoshi’s chain, and those who set its policy today. This obviously doesn’t include USGavin in any way whatsoever. []

27 thoughts on “The economics of sinking 20 MB Gavincoin blocks.

  1. […] Long story short, a “dried plum” is what everyone in the world knows as a “prune,” it’s just that the USians were pulling their usual “words equal reality” trick in a vain attempt to cater to the people. […]

  2. […] you’re led down the path to victory or defeat depends entirely on your ability to discern the wheat from the chaff. If this ability isn’t […]

  3. […] a little too big for their breeches deserve a good and proper whack. And a good and proper whack we shall oblige them. […]

  4. […] Bitcoin is arranged for reputation. That’s sorta exactly what the WoT is all about and why it’s so important. Now that we’ve removed physicality from business and removed physical recourse from contracts, all we have to go on is reputation. This makes Bitcoin in the WoT quite cooperative while the pretenders outside eat each other like crabs in a bucket, mostly to great lulz. […]

  5. […] know who, the incapable and willfully ignorant derp who tried to break Bitcoin with 20MB blocks and was sunk on the open seas of battle so badly that he never even found a fraction of a percentage of his mother’s friends to […]

  6. […] give it to ‘em ? I mean, if the most famous line in the film doesn’t make you think of USGavin’s death by a thousand derps, I don’t know what […]

  7. joshuad31 says:

    I have been considering Invertable Bloom Filters and set reconciliation as well as some of the blockchain pruning methods that are available and I don’t see your argument as having that much validity actually. If you want to be a global payment network you should act like one. Mike Hearn makes it clear that since there isn’t a simple way of determining what the market rate of fees should be this will cause a lot of retransmission / rebroadcasting of transactions which will just cause nodes on the network to crash.

    So can you reframe your argument in relation to Bloom filters, blockchain pruning and what Mike is saying about no way for SPV clients to determine what fees they should pay to get their transaction into the next block? If you are worried about the increase risk of centralization why not crowdfund for corporate infrastructure bitcoin full nodes.

    Bitcoin full nodes are a lot like the relationship between lighthouses and ships. A lighthouse is free to everyone but the people who pay for it. Its a public good yet someone has to pay for it to help ships not crash into the shore. So allow the market to use crowd funding assurance contracts allowing the community to vote with their own personal funds to fund decentralized full nodes.

    Your argument that larger blocks will of necissity lead to greater centralization shows a disdain for what the bitcoin community is capable of doing. It show a lack of faith in what we are capable of doing. Its equivalent to saying “since no one will build lighthouses lets limit shipping to daytime hours only even if the market wants to ship merchandise 24/7″

    My point is you don’t know that no one will build lighthouses. You just have absolutely no faith in the bitcoin community which is really irritating.

    ~J

    • J, thank you for taking the time to make such a lengthy comment. I’m going to relish every second of the forthcoming lambasting and I hope you take it to heart. You’re a fine example of a nobody who thinks they’re someone. So without further ado :

      I don’t see your argument as having that much validity actually.

      There’s no “you” to see or not see,, you see, no “you” to determine or not determine, to decide or not decide. It’s an illusion, man. You’re just another faceless spec in the roaring sea that is the pointless mob, clawing meekly at the edges of the taught controversy. This is worth keeping in mind.

      If you want to be a global payment network you should act like one.

      Bitcoin doesn’t want to be anything. Bitcoin is. And it’s acting just fine, in case you hadn’t noticed. The result is this : adapt or die.

      Mike Hearn makes it clear that since there isn’t a simple way of determining what the market rate of fees should be

      That’s not how markets work. Markets determine for themselves what’s best. One USG stooge riding around like a headless wooden marionette pretending he’s a real boy doesn’t and cannot possibly represent anything of consequence, much less the will of an entire market. Hearn isn’t even Janet Yellen. Not by a country mile. What is this, the dystopian future where nation states matter ?

      So can you reframe your argument in relation to Bloom filters, blockchain pruning and what Mike is saying about no way for SPV clients to determine what fees they should pay to get their transaction into the next block?

      No, I cannot “reframe my argument” in relation to blah blah. And neither can you. While I’m sympathetic to the plight of SPV client users, if their transactions keep getting bounced because their fees are set too low and can’t be altered by the software, I guess it’s time to upgrade to the full meal deal. Thems the breaks.

      If you are worried about the increase risk of centralization why not crowdfund for corporate infrastructure bitcoin full nodes.

      I don’t “crowdfund” because a) I’m not a scammer, and b) I have more than enough money to do as I damn well please.

      Your argument that larger blocks will of necissity lead to greater centralization shows a disdain for what the bitcoin community is capable of doing.

      My disdain for redditards and “the community” is no secret. These children, however, have absofuckinglutely nothing to do with Bitcoin anymore than weather reports for Alabama have to do with quantity of rain in the Amazon.

      It show a lack of faith in what we are capable of doing. Its equivalent to saying “since no one will build lighthouses lets limit shipping to daytime hours only even if the market wants to ship merchandise 24/7″

      Who could possibly have faith in the dirt on the shoe of Genghis Khan’s twice removed second cousin ?

      My point is you don’t know that no one will build lighthouses. You just have absolutely no faith in the bitcoin community which is really irritating.

      If anyone’s gonna “build lighthouses,” or build anything at all for that matter, it sure as fuck isn’t coming from broke-ass homeboys with no resources and no skillz. It can and will come from Bitcoin, The Most Serene Republic Of ~, but I don’t suppose you’d know anything about that.

      In any event, thanks for dropping by. I quite enjoyed that.

    • Cadbury says:

      Good response Joshua, I would ignore Pete, he doesn’t know what he’s talking about and sounds like a prick.

      In terms of IBF, it sounds like your referencing Gavin’s O(1) propagation work – this still needs tested and it relies on nodes memory’s pools to be closely synced – I worry that it may be vulnerable if malicious miners keep a transaction secret and then delay sending the transaction to nodes on the network once the block is produced to encourage stale mining.

    • “it sounds like you’re referencing Gavin’s O(1) propagation work – this still needs testing and it relies on nodes’ memory pools being closely synced”

      Your broken spelling and grammar being sufficiently indicative of a broken head, it’s little wonder that you think that I can just be ignored. GLHF with that.

      P.S. Are you the creme egg guy ?

  8. […] to the current blocksize, y'know, except for the detrimental security consequences and the assuredness of economic ruin, he is now accepting the error of his ways, at least in this one […]

  9. […] tyrannical technology, because they drew straight lines from here to infinity. Y’know, like gavincoin. This terrorist philosophy is summed up by Nathan […]

  10. […] I certainly appreciate that my calling out Gavincoin’s, Lanier’s, O’Brien’s and Bortzmeyer’s malicious idiocy is, in effect, […]

  11. […] D : “I have Agent B(itfinex) on hold.” Agent E : “Agents G(avin) and H(earn) are standing by awaiting your orders, sir. What shall I tell them […]

  12. […] fragile as fewer users could afford nodes as the costs of running a node increased exponentially exactly like they would for Gavincoin,vi and as a result Garzikcoin will be less valuable, opening up the economic opportunity for […]

  13. […] is sarcasm, folks, unlike USGavin‘s and USGarzik‘s deadpanned and straight-faced belief in the mystical power of an […]

  14. […] very highly concentratedviii : do you think we could’ve kept Bitcoin alive but by burying USGavin, USGarzik, et al. and their “community support” […]

  15. […] the old Foundation’s jig was up and their puerile pretenders to the throne were literally tripping over themselves to lie to Bitcoin users in an attempt to subvert this world-eating little project, the emerging […]

  16. […] enjoy mocking these idiots not only because I stand to personally profit from it – for Bitcoin is nothing if not a hedge […]

  17. […] a lifetime time ago in Bitcoin, likely before you were born, there was an altcoin called Gavincoin. It had 20 MB blocks. And in case you hadn’t heard, it failed to gain traction with users in […]

  18. […] flesh wounds inflicted on Gavin did just so happen to be administered on these very pages in both articles […]

  19. […] USGavin should be so honourable. [↩] […]

  20. […] know that MP killed Moore’s Law [and USGavin] good and proper when 61-year-old PhD economist Russ Roberts of Econtalk fame talked recently […]

  21. […] about Bitcoin, incidentally. Unfortunately, Russ’ weekly guest on that April 2011 episode was USGavin, who, with all his usual flair for mousy ineptitude, explained the technology so poorly that I […]

  22. […] exchanges pretend that the “price” is on any given day so much as it matters that Bitcoin cannot be diluted. Anyways, three parts down, one to […]

  23. […] of strain were already showing less than 24 hours into this “experiment” that “no one could’ve predicted,” namely the pretend “Network HashRate”iv had fallen by 5%. In three […]

  24. […] problem of digital identity, or how to circumvent Blockchain.info 2FA and e-mail authorisation 20. The economics of sinking 20 MB Gavincoin blocks. 21. Bitcoin is unfair. That’s the point and so it shall remain. 22. 21 Inc. and Comcast sitting […]

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