delvingbitcoin

Is it time to increase the blocksize cap?

Is it time to increase the blocksize cap?

Original Postby CubicEarth

Posted on: June 3, 2024 19:40 UTC

The discourse on Bitcoin's development philosophy reveals a deep-seated polarization stemming from historical disagreements over block size, known as the "blocksize war." This polarization has resulted in a prevailing advocacy for maintaining small block sizes within the Bitcoin network, underpinned by several arguments that exhibit notable contradictions.

Advocates for small blocks argue that the cost of running a node is paramount, overlooking the transaction costs to users. They claim that small blocks are essential for decentralization and censorship resistance, yet acknowledge that high transaction fees could restrict Bitcoin's use to large institutions and governments—the very entities from which censorship resistance is sought. Furthermore, there is a contention that initial blockchain download (IBD) times should be minimized, despite the exclusion of regular users from transactions due to high fees. Opponents of block size increase also argue incorrectly that smaller blocks would maximize fee revenue for miners, ignoring the existence of an optimal block size that balances revenue without being excessively large or small.

Critics of the current small-block philosophy further argue against the notion that such blocks enhance inclusivity by allowing individuals with poor internet access to run nodes. In reality, small blocks impose a hard limit on base chain access, effectively excluding a vast majority of potential users, contrary to the claim of promoting inclusivity by catering to those with subpar internet connections. Additionally, the debate is riddled with bad-faith arguments, including derogatory labeling of those favoring larger blocks and the dismissal of any block size increase due to persistent unmet demand, despite evidence suggesting that slightly larger blocks could indeed boost fee revenue up to a certain point.

The discussion around block size is not just confined to debates over theoretical impacts; there is a practical aspect to consider, such as the real-world effects on IBD time, bandwidth, and storage requirements, as well as the potential to accommodate more users on secondary layers like Lightning Network. An analysis of specific block sizes—8 MB, 16 MB, and 32 MB—is proposed as a means to ground the conversation in tangible outcomes, moving away from abstract arguments to a more evidence-based discussion. The underlying principle guiding this analysis is that blocks should be as large as necessary to ensure the safety and efficiency of the network, challenging the current conservative stance on block size within the Bitcoin community.