Explaining why big blocks are ‘bad’

I got in a discussion on Facebook yesterday with a number of my friends who are 'big blockers'. They are still my Facebook friends, legitimately. These are guys I have known for a long time and they hold classic big-blocker views. They aren't professional paid trolls. They just genuinely believe that big-blocks are harmless and see no problems with scaling on-chain.

I made my arguments to them and they were unwilling to accept any premise that I proposed.

I think it's a fair point that we should be able to better express our reasons for avoiding big-blocks on the main bitcoin blockchain.

Especially since part of the solution going forward might involve a big-block sidechain. If we think creating a big-block sidechain would be such a great idea, I think it's a fair point to ask if big-blocks are fine for a sidechain, why aren't they for the main network?

Yesterday, in my argument, my number one reason for avoiding big-blocks on the main network was that it would lead to governments regulating node operators.

The friends I spoke to literally had zero concerns about this.

Here are some of their comments:

  • "What government? These are global networks."
  • "Good luck stopping massive nodes in China, Korea, Japan, Russia, Switzerland, Iceland, Amsterdam, Netherlands, and even Mars."
  • "Why would all nodes be housed by businesses? And no, all businesses are NOT located in the US. Don't kid yourself. There is no global governmental control over businesses."
  • "Well, Bitcoin running on Raspberry Pis shouldn't worry then. just let DASH take the arrows of regulation WHEN it scales next year. if DASH succeeds, then maybe Bitcoin Core will finally admit the folly of their ways!"
  • "Do you keep forgetting we are talking about a whole planet? If they could regulate bitcoin or any other cryptocurrency they would have already. They can't. They don't have global control. And individually, nations risk overplaying their hand and exposing their tyrany and giving far more reason for the existence of a free market of currencies."
  • "$20K nodes is peanuts for thousands of Bitcoin millionaires who want Bitcoin to stay true to the original whitepaper! heck i will donate my $20K of Bitcoin if it means scaling beyond VISA! and i'm not even a Bitcoin millionaire!"
  • "Again, did you forget you are talking about an entire planet? What global gestapo is going to be employed to scour the planet for nodes?"
  • "They would regulate the nodes *right now if they had that kind of power."*
  • "But if and when that happens, the governments will be faced with stopping IOTA, EOS, and Ethereum running on PoS."
  • "In theory, Bitcoin, or something similar, can be recreated and implemented on top of Ethereum/Ethereum Classic and next generation blockchains like EOS. so good luck stopping cryptocurrencies!"
  • " You mean banksters run the old payment networks. I fail to see the significance of this fact. They are now obsolete and they cannot control this cryptocurrency revolution"

So, while I am encouraged by my friend's optimism, frankly this all sounds incredibly naive to me.

I am of the opinion, possibly wrong, that the only thing protecting bitcoin from more significant government intervention is that fact that the network is extremely lightweight and mobile. The fact that nodes consume relatively little bandwidth and can run on very low end machines makes the network much more resilient in the face of attack. In my view, it is largely for this reason the bitcoin network has survived to date.

I am of the opinion that if all bitcoin nodes ran on $20k machines sucking down massive, massive, amounts of bandwidth, these would be easy and soft targets for government regulators.

Even if governments of the world are ok with letting 'bitcoin the currency' survive, I do not think they will let it continue without AML/KYC and blacklists. I believe that as soon as there are clearly identifiable business entities running nodes they will regulate the shit out of them, on threat of fines and jail.

ISPs would shut down any normal joe-blow user from running nodes. The traffic would be easily identifiable. In fact, governments can simply pass laws regulating ISPs from allowing bitcoin traffic.

Maybe I'm a bit paranoid here, but I live in a nation that has jailed millions for a harmless plant. Every single attempt at creating an unregulated payment system in the past has ended up with either massive regulation (@see PayPal) or thrown people in jail (@see Liberty Reserve).

This notion that governments cannot and will not act in concert and co-operation to stop the supposed scourge of 'money laundering, terrorism funding, tax evasion, child pornography, human trafficking, and cybercrime' is completely naive.

I am of the opinion that we should keep the bitcoin network as small as possible; moving risky and experimental development to secondary layers which, if they go down, do not affect the core network or currency in any way.

Am I being too pessimistic here? Am I being too paranoid?

Is the threat of government control blown out of proportion? Does ETH, Dash, hundreds of cyrptos, and ICOs all prove 'we have already won'? and they can't do shit to us?

When two parties cannot even agree on what is at risk, I think this is the key disconnect on this debate.

Submitted July 07, 2017 at 12:01AM by jratcliff63367
via reddit http://bit.ly/2sOALYI

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