delvingbitcoin
Is it time to increase the blocksize cap?
Posted on: June 29, 2024 08:50 UTC
The primary concern with increasing block size within blockchain networks, particularly Bitcoin, is not related to the issue of persistent storage but rather focuses on the propagation time of new blocks across the network.
Large miners may exploit this by withholding blocks from smaller miners to orphan their blocks, thus effectively reducing their hashrate and participation in the network. This strategy could be employed intentionally or occur inadvertently among well-connected mining nodes, leading to a scenario where the larger the block size, the higher the likelihood of such incidents, which in turn pressures the network towards centralization. This progression towards centralization begins with well-connected mining nodes, evolves into colocated mining nodes, and eventually results in co-owned mining nodes.
Another significant point of contention stems from the requirement that every new block be transmitted to every other validator in the network. This necessity was first highlighted as an objection in the initial response to the original Bitcoin paper on the cypherpunks mailing list. The argument against increasing the block size is predicated on the premise that doing so would necessitate a proportional increase in the number of full nodes, thereby exponentially increasing the network's total bandwidth consumption—an outcome viewed as inefficient and counterproductive. The increased operational costs associated with larger block sizes, including bandwidth, must ultimately be borne by the network, contradicting the goal of efficiency and sustainability.
Despite these challenges, alternative methods of scaling Bitcoin have been explored and found viable without resorting to increased block sizes. For instance, the adoption of SegWit and the utilization of the Lightning Network (LN) demonstrate practical approaches to scaling that do not exacerbate resource consumption. These technologies have proven effective over the years and offer a more sustainable pathway by minimizing the onchain footprint, thus reducing resource use and offering savings that benefit end-users. Moreover, focusing on solutions like the Lightning Network—which restricts transaction visibility—rather than increasing public transaction capacity, aligns with the objective of reducing non-mining-related resource consumption while maintaining the security benefits derived from mining energy consumption.