How long do we have to fix the one megabyte block size?
Given all the drama around the block sizes increase in the Bitcoin community, it makes sense to ask the question of "What's the Rush?". Or better still, is there ...
What's up, party people? Chris DeRose here, Community Director of the Counter-party Foundation and today's videos are going to be shot from Hack Miami, here on South Beach. It's a regional hacking conference. There's all kinds of cool stuff going on so hopefully we'll get some nice backgrounds for you while I do my normal thing and answer your questions about Bitcoin. So this question was submitted to us by Pumpkin Feet. Pumpkin Feet, this one's for you. And his question was: When do we need to fix the one megabyte block size? So, let's discuss this.
Yeah, so for anybody who's been following Bitcoin at all recently, there's this big controversy over the block size. Gavin's been pushing this for a long time now and and for some people, it's really becoming this issue of, well, when do we have to fix this? This is a problem. This needs to be addressed. And so everyone's promoting their own solutions. There's a lot of stuff out there. Gavin's been really pushing for the 20 megabyte block size.
I know Peter Todd's has been very bearish on the 20 megabyte block size and the developers kind of go somewhere in between. But I think a lot of the developers are kind of, at the moment, at the time of this video, leaning towards leaving the one megabyte block size as is for the foreseeable future. How long is foreseeable and how long do we have to address this issue? Well, I have some of my opinions and I can share those. First and foremost, the block size has been constrained for a while now. We've really been running low on space for years. And you know this because you have to tip.
There's a limited resource there. The block sizes are, in fact, scarce and if you look at how the transactions are getting integrated these days, often you will find the transactions that have no tip are not getting included. And further, you also even have the option on most software, to increase the size of your tip. So I mean that right there tells you that, at some level, users are somewhat conscious about what it's costing them and what the trade-offs are and how the space is limited. Now if we do nothing for the foreseeable future it's probably fair to assume that those tips will get larger and larger. Personally, I think that's kind of a good thing on average.
I think that we're not probably making enough money on the mining side right now, if I had to guess, in terms of tips. Certainly we want to offset the block rewards over time, and one way to do that is make the space more limited, increasing the amount of tips that go on. But there's sort of this, like, black swan here on the horizon that is kind of new and that black swan is the Lightning Network and the Lightning Network paper. For those who haven't seen it, maybe we'll cover that in a separate video. The Lightning Network is a really ingenious way of settling transactions outside the block chain, for a large number of users, in high volumes, and only using the block chain space on an occasional level. Maybe once a month or something like that, in the case of any given Lightning Network.
Certainly much less often than once per transaction. So I think that with the Lightning Network now entering the debate, that might be a more sustainable direction for us, in the future as in terms as it relates to this limited block size issue. I could foresee that a lot of the wallet vendors, a lot of the miners and such accepting those changes sooner. It only requires soft forking, no hard forking. And also I just foresee there's a lot of enthusiasm around that in the market. And one of the reasons why there's so much enthusiasm around that solution is that, okay, let's say we increase it from 1 to 20 megabytes.
That only kicks the can down the road. We're all going to be here in another couple years asking the same question about when are we going to raise the 20 megabyte size limit? So, I think with the Lightning Network we have a more forward thinking plan. Now I will say, that as part of the Counter Party Project, it's probably in our interest to raise the block size a bit, probably. It's a little uncertain. As proposed, the Lightning Network doesn't go into work with the Counter Party. Could that change? Certainly.
So a lot of these things are up in the air. What needs to be seen, I think, what the other solutions are. But I don't think that there's any real impending doom here. I don't think there's any impending issues with letting the blocks, really continue at one megabyte. The tips will go up, the space will become limited, but people will be using it and facilitating transactions and some of the spam and some of the less important stuff, will just filter by the wayside. So I think that the one megabyte block size issue is kind of a non-issue, really.
I don't think it's a threat. I don't know when the blocks will be raised in size, if ever. I know that the proposals are sometime next year in mid-2016 or early 2016. It remains to be seen if that's going to happen. But I don't know. Maybe you have an opinion about something that I missed here in this debate and if so, why don't you leave it in the comments below? Why don't you tell us? What are your thoughts and maybe you have some more questions.
I don't know. What is Lightning Network, for example. Go ahead and ask me below and I'll add them to the list. I'll take care of your answers and, as always, you can follow me on Twitter at Derosetech. Peace out, party people.