Re: Bitcoin P2P e-cash paper

>Satoshi Nakamoto wrote:
>> I’ve been working on a new electronic cash system that’s fully
>> peer-to-peer, with no trusted third party.
>>
>> The paper is available at:
>> http://www.bitcoin.org/bitcoin.pdf
>
>We very, very much need such a system, but the way I understand your
>proposal, it does not seem to scale to the required size.
>
>For transferable proof of work tokens to have value, they must have
>monetary value. To have monetary value, they must be transferred within
>a very large network – for example a file trading network akin to
>bittorrent.
>
>To detect and reject a double spending event in a timely manner, one
>must have most past transactions of the coins in the transaction, which,
> naively implemented, requires each peer to have most past
>transactions, or most past transactions that occurred recently. If
>hundreds of millions of people are doing transactions, that is a lot of
>bandwidth – each must know all, or a substantial part thereof.

Long before the network gets anywhere near as large as that, it would be safe
for users to use Simplified Payment Verification (section 8) to check for
double spending, which only requires having the chain of block headers, or
about 12KB per day. Only people trying to create new coins would need to run
network nodes. At first, most users would run network nodes, but as the
network grows beyond a certain point, it would be left more and more to
specialists with server farms of specialized hardware. A server farm would
only need to have one node on the network and the rest of the LAN connects with
that one node.

The bandwidth might not be as prohibitive as you think. A typical transaction
would be about 400 bytes (ECC is nicely compact). Each transaction has to be
broadcast twice, so lets say 1KB per transaction. Visa processed 37 billion
transactions in FY2008, or an average of 100 million transactions per day.
That many transactions would take 100GB of bandwidth, or the size of 12 DVD or
2 HD quality movies, or about $18 worth of bandwidth at current prices.

If the network were to get that big, it would take several years, and by then,
sending 2 HD movies over the Internet would probably not seem like a big deal.

Satoshi Nakamoto

15,190 total views, 23 views today

https://www.mail-archive.com/cryptography%40metzdowd.com/msg09964.html
  • Anon ymous

    Here Nakamoto gives the solution to the blocksize issue, he is advocating 694MB blocks
    It should be services, exchanges and pools that run full nodes, they have access to Gigabit internet speeds
    Heck fiber is widespread enough that regular users with access to Gigabit connection points can guarantee the decentralization of bitcoin and fast propagation times

  • Dan Gershony

    Satushi was very good in predicting technical outcomes, but even he couldn’t predict the human interference “the block size debate” perhaps it’s actually such a minor issue from a technical point.

  • Bronx

    “sending 2 HD movies over the Internet would probably not seem like a big deal.” Oh how right he was. It’s too bad that Blockstream has hijacked Bitcoin restricting usage for wider adoption.