Bitcoin Block Size: Getting Fatter, But Decrease Chatter Growing

Via the Segwit upgrade activated on Bitcoin in the fall of 2017, developers effectively raised the blockchain’s block size to around 2MB. Now, more …

Bitcoin Block Size: Getting Fatter, But Decrease Chatter Growing

February 15, 2019 by William Peaster0 Comment664 Views

The average daily size of a Bitcoin block temporarily hit 1.3MB, a new high. Yet with full nodes dwindling and the Lightning Network’s advance, some argue it’s time for a block size decrease. Skeptics of a decrease say there’s no urgency to move just yet. Others say: what’s the matter with a big fat block? For now, the debate’s on.

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Bitcoin Blocks Growing in Wake of Segwit Activation

Via the Segwit upgrade activated on Bitcoin in the fall of 2017, developers effectively raised the blockchain’s block size to around 2MB. Now, more than one year later, Bitcoin’s average daily block size has reached 1.3MB — a new high water mark for the chain.

The average daily Bitcoin block size reached 1.3MB on Feb. 12th. Image via BTC.com

That average daily size is now 300kb above the temporary 1MB limit that Bitcoin creator Satoshi Nakamoto first discreetly set in 2010.

And more than 40 percent of bitcoin transactions are now Segwit-spending payments, so a continued climb toward a 2MB average daily average looks to be in order.

Unless, that is, the Bitcoin block size is intentionally decreased. And the specter of that possibility is growing as chatter in the cryptoverse has increased anew around Bitcoin Core developer Luke Dash Jr.’s 2017 proposal to reduce the block size to 300kb — more than four times less than the 1.3MB daily average that was hit this week.

How Low Can We Go?

Talk of 300kb has arisen again after Dash Jr. put the feelers out this month regarding temporarily lowering the Bitcoin block size to that mark via soft fork later in 2019.

Dash Jr., arguing everyday users need to be able to easily run full nodes after the Bitcoin node count has dropped markedly in recent months, has suggested it’s time to reconsider a decrease to 300kb so that consumer devices are able to readily download the blockchain.

Another example: This patch would enforce a very simple softfork, reducing #Bitcoin block sizes to ~300k between Aug 1 and Dec 31. It demonstrates how one can make a truly TEMPORARY softfork.https://t.co/sukdk2zJpR

(DO NOT RUN THIS IN PRODUCTION EVEN IF YOU SUPPORT A UASF)

— Luke Dashjr (@LukeDashjr) February 7, 2019

“We need to reduce the block size just to have a realistic hope of it remaining feasible and becoming practical again,” the developer said recently.

Some, like Bitrefill CCO John Carvalho, have argued Dash Jr.’s position is a worthwhile one to consider, while others, like Lightning Labs Infrastructure Lead Alex Bosworth and Nic Carter of Castle Island Ventures, have suggested a dynamic block size could be an avenue to explore amid a change.

In any case, Dash Jr. has set off a new round of conversation in the cryptocurrency space, as another wave of Bitcoin block size debating has come into the fore again.

Skeptics Say Not So Fast

Those who are skeptical of a block size decrease either say 1) there’s no reason to act just yet, 2) the space saved would be marginal in the mid-term, and 3) it would be too contentious of a change right now.

Regarding the first point, the Lightning Network took major strides in 2018, but Bitcoin’s proposed scaling solution is still fledgling and thus far from being ready for mainstream throughput.

As for the second argument, skeptics contend the amount of on-chain space saved for the foreseeable future would be small and ask whether the drop in Bitcoin full nodes is from declining interest and a lack of requisite technical skills.

Thirdly, the Bitcoin block size debate reached a fever pitch in the fall of 2017 upon the Bitcoin Cash (BCH) split, and few in the cryptocurrency space are eager for such hostilities again if hostilities aren’t necessary.

And of course there are the big blockers, typified by Roger Ver, who argue that on-chain scaling is the best way forward for handling blockchain throughput. Naturally, they think going for smaller blocks is an utterly wrong way of approaching scaling.

There are critics who will highlight incentives, too. It’s second-layer scaling solutions like Lightning Network and Blockstream’s Liquid that stand to experience major boons if a block size decrease is enacted. Some stand to directly gain from smaller blocks accordingly.

Whatever happens going forward, there’s set to be no shortage of intrigue — for better or for worse.

What’s your take? Should the Bitcoin block size stay the same, increase, or decrease? Let us know in the comments section below.


Images via BTC.com, Pixabay

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Bitcoin Block Size Hits New Record As Key Indicator Shows BTC Price Reaching a Potential Bottom

Bitcoin is currently trading at $3,623, down .09% in the past 24 hours after trading between a high of $3,692 and a low of $3,608 since February 10, …

Bitcoin is currently trading at $3,623, down .09% in the past 24 hours after trading between a high of $3,692 and a low of $3,608 since February 10, according to data compiled by CoinMarketCap.

Binance Coin is the top gainer among the 10 biggest cryptocurrencies by market cap, up 5.23% at time of publishing. The rest of the market is mixed with Tron and Stellar up 2.56% and 3.35%, respectively, while XRP is down 1.5%.

Meanwhile, a key indicator shows Bitcoin may be reaching a long-term bottom. CoinDesk’s Omkar Godbole is highlighting a bullish MACD divergence in the price of BTC, but a move above $5,334 is necessary to confirm a long-term bullish reversal.

On Monday, the average block size of Bitcoin increased to 1.305 megabytes, surpassing previous records. Increases in block size suggest higher transaction volumes for Bitcoin.

Source: Blockchain.com

Although the average block size dipped by Wednesday to 1.111 MB, Blockchain.com recorded an increasing number of confirmed Bitcoin transactions at 354,483.

Source: Blockchain.com

Blocks record Bitcoin transactions, enabling record-keeping on the blockchain ledger.

According to data compiled by transactionfee.info, roughly 42.1% of Bitcoin transactions use segregated witness, or SegWit, a scaling solution that makes blocks on the blockchain smaller by reducing data from Bitcoin transactions.

Research released in September 2017 by cryptocurrency exchange BitMEX showed that the implementation of SegWit helped increase the block size. According to the report, SegWit adoption grew at a steady pace, coinciding with a large reduction in transaction fees.

“After the upgrade to SegWit in August 2017, although in a much slower fashion than many had hoped, the old 1MB blocksize limit is slowly starting to fade away,”

Despite the low-fee advantages, upgrading to SegWit is a major retrofit for certain crypto-related businesses.

In a recent ask-me-anything on Reddit, Tyler Winklevoss, co-founder of crypto exchange Gemini, explained why his team has delayed a SegWit rollout for Bitcoin.

“Our Bitcoin hot wallet was made before Segwit was but a twinkle in Pieter Wuille’s eye [Bitcoin Core developer aka SegWit lead]. It would be very tricky to retrofit Segwit into there. So we built a new hot wallet, from the ground up, with support for Segwit, transaction batching, Bech32 addresses, and all sorts of other goodies. We used that new system for Zcash, Litecoin, and Bitcoin Cash, which is why we’re already using both native and P2SH wrapped Segwit for Litecoin. We’re working on migrating Bitcoin to the new system, and it should be done in Q1.”

Developers continue to work on other Bitcoin scaling solutions, such as the Lightning Network, to spur mass adoption and enable users to spend Bitcoin like cash.

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Not Bitcoin Price, This Time Bitcoin Blocks Hit its All-Time High at 1.3 MB

Source: p2sh.info. This growth in Bitcoin block size has beaten Bitcoin Cash and Bitcoin SV into the ground as crypto enthusiast Kevin Rooke shared, …
Not-Bitcoin-Price-This-Time-Bitcoin-Blocks-Hit-its-All-Time-High-at-1-3-MB

After hitting the peak in December 2017 at $20,000 Bitcoin price might have taken a crash with a new all-time high not expected till 2021, however, according to the latest data provided by Blockchain.com, the daily average block size of Bitcoin has made a new record of 1.3 MB megabytes.

This record has been made possible by the continued demand for the network along with scaling solutions like Segregated Witness (SegWit).

Actually, the blocks mined, that is about every 10 minutes are now regularly bigger than 1 MB which was the limit that existed before SegWit was introduced in August 2017. Last year in July, BitMex research had shared,

“After the upgrade to SegWit in August 2017, although in a much slower fashion than many had hoped, the old 1MB block size limit is slowly starting to fade away.”

Making New Records

About three months back in December, Bitcoin block registered 1.2 MB in size and before that in July, the block size was 1.1 MB in size as shown in the chart below.

Bitcoin average block size 1-year chart, Source: Blockchain.com

Recently, SegWit adoption hit its all-time highs as well. In October 2018, it reached the top but followed a drop only to take another spike in adoption just a few days back.

Source: http://charts.woobull.com

With SegWit adoption rising, Bitcoin is continuously accommodating more transactions. This has been happening while the network fee has been hitting near all-time lows.

Meanwhile, off-chain transactions on Lightning Network are growing rapidly. Currently, the network capacity of lightning Network has reached 687.38 BTC, according to 1Ml.

Source: p2sh.info

This growth in Bitcoin block size has beaten Bitcoin Cash and Bitcoin SV into the ground as crypto enthusiast Kevin Rooke shared,

Bitcoin blocks are now 28x larger than BCH blocks, and 87x larger than BSV blocks.

Avg Block Size (Feb 12):

Bitcoin: 1.3 MB

Bitcoin Cash: 0.04 MB

Bitcoin SV: 0.01 MB

’Big Blockers’ couldn’t even do big blocks right… pic.twitter.com/Fcy6nxlgRZ

— Kevin Rooke (@kerooke) February 14, 2019

But Is it “Proof of Spam”?

However, the point worth noting here is the that the biggest contributor to this uptick in the block size is VeriBlock, whose share is about 20 percent as James Lopp shared,

“Source of the now-highest volume of OP_RETURN outputs has been identified as VeriBlock “proof of proof” miners. They are creating around 20% of all BTC transactions now. Seems inefficient to me; will be interesting to see if the incentives work long term.”

VeriBlock miners posted 783,000 transactions to Bitcoin’s blockchain in December and are on track for 1,500,000 in January. https://t.co/CdIflq8Htu

— Jameson Lopp (@lopp) January 5, 2019

This re-ignited the transaction or spam debate, as Lopp further shared,

“VeriBlock miners posted 783,000 transactions to Bitcoin’s blockchain in December and are on track for 1,500,000 in January.”

“I think if it pays the fee it’s not spam,” said developer Riccardo Casatta before adding, “however VeriBlock made about 1 million bitcoin tx with op_return from the 1st of December 2018, they call Proof of Proof but is it more Proof of Spam? Why more than one tx per block?”

Another Twist

Meanwhile, Bitcoin size debate has gotten another twist. Luke J. a Bitcoin developer, is writing code on the Bitcoin source code in order to reduce the block size to 300 kb. If it does happen, Lightning Network would be the primary beneficiary out.

Bitcoin (BTC), Ethereum (ETH), XRP (Ripple), and BCH Price Analysis Watch (Feb 15th)

Bored In The Bear Market? Here’s A Cool Chart On Bitcoin (BTC) Blockchain Fees Evolution

In order to reduce the fees paid by users, one of the proposed solutions was to implement Segregated Witness (SegWit). This software upgrade allows …
Bored-in-the-Bear-Market-Heres-a-Cool-Chart-on-Bitcoin-BTC-Blockchain-Fees-Evolution

What Do Bitcoin Fees Tell About The State Of The Bitcoin Blockchain?

Transaction fees are an important part of the Bitcoin (BTC) blockchain. Miners receive rewards for their work through block rewards and also the fees charged to users when they make a network transaction. At the moment, transaction fees make up around 4% of the total miner revenue per day. However, during the last years, there were moments in which fees spiked to almost $60.

In the last five years, the average fee per transaction is $1.63 with a median of $0.88. These fees are useful for transactions to get into blocks with 1 MB of space. That means that there are close to 1,800 transactions, with an average of 556 bytes per transaction. Each day, there are 144 blocks mined with 260,000 transactions processed per day.

Although most of the transactions are processed, there are some of them that are waiting for miners to approve them. These transactions are currently waiting in the mempool. Clearly, miners try to include the transactions with the highest possible fees to receive a larger reward as soon as they process the whole block.

During the bull run experienced by Bitcoin in 2017, the fees paid by users in the network grew exponentially. As demand for Bitcoin increased, not all the transactions could be processed, thus, there were individuals paying a premium fee to have their transactions processed faster than others.

This was very negative for the whole industry because processing a transaction could cost as much as $60. At that time, each Bitcoin was being transacted at $20,000 and other digital assets were reaching their all-time highs. The fees started to fall as soon as the price dropped from its record and the hype evaporated.

In order to reduce the fees paid by users, one of the proposed solutions was to implement Segregated Witness (SegWit). This software upgrade allows transactions to be smaller in size and allow blocks to process more transactions at a time. At the end of 2017, SegWit adoption was close to 10%, but now it increased to around 35% and in the future, the adoption rate could be even higher. With the implementation of SegWit, blocks can have up to 1.7 MB space without changing their real size of 1 MB.

In the future, with the implementation of the Lightning Network (LN), it might be possible for Bitcoin to reduce fees even more. This is very important for the market since it would allow the network to process more transactions with lower fees and faster.

Crypto market daily report – February 15, 2019

Bitcoin Cash ABC (BCHABC) remained at more or less the same level of around $121, whilst Bitcoin SV (BSV) lost a negligible 0.10% to trade at just …

The cryptocurrency markets appeared to be in positive mood on Friday at press time as the majority of coins were up by a considerable margin while other held on to their previous day’s price levels. Leaders of the pack in this respect were Binance Coin which was up by no less than 5% to the $9.33 level, whilst Stellar Lumens was also up by a similar amount to the $0.08 level.

Bitcoin Core (BTC) remained in the $3600-3620 levels but appeared to be well supported at that price range, although turnover was once again quite low at the $76 million mark – a far cry from the $200 million of the summer but even that was low compared to the heady days of late 2017. Litecoin (LTC) recovered from its mini slump on Thursday and was once again up by around 4% to the $43 level.

Other top 10 coins showed little movement although these at least held on to previous price levels. NEO was up by around 2% to flirt with the $8 level—again this is an almost surreal price range when a year ago this coin was trading at around $190. Bitcoin Cash ABC (BCHABC) remained at more or less the same level of around $121, whilst Bitcoin SV (BSV) lost a negligible 0.10% to trade at just over the $63 mark.

Coins with smaller market caps saw their price levels remain relatively the same, with Ethereum Classic (ETC) holding on to the $4.10 mark. TRON increased by around 2% to the $0.023 mark, whilst ONT posted a massive 10% spike to the $0.62 level – certainly an outlier although there was general positivity across the board. Cardano was up by a miniscule 1% to the 0.041 mark, whilst IOTA surged forward by 4% to the $0.27 level. WAVES kept steady at $2.57, whilst ZCASH was static at the $50 mark.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.

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