Bitcoin Q&A: Scaling and "Satoshi's Vision" - YouTube

"In terms of storage, how big will the Bitcoin blockchain [become]? Please elaborate."

Well, I'm thinking [it will become] about this big. [Holds hands apart] It isn't possible to tell.

It very much depends on how the future of scaling optimizations in this environment play out,

how much of the traffic is on-chain versus off-chain, how the transaction data is optimized and compressed.

There are many exciting opportunities, including things like signature aggregation using Schnorr signatures,

MimbleWimble and other techniques that came out or were recently discovered just the last two years.

The Lightning Network is maybe five years old as a concept,

only three years old as a seriously studied concept, and a few months old as a practical application.

We have no idea how these things will bend the curve of growth in this system.

It depends on the [kind of] adoption [we see in] this technology, but how each additional [person],

each additional transaction, adds data to the blockchain.

Predictably, the Bitcoin blockchain will become pretty big [in size].

The good news is, storage and bandwidth [capacity] are also growing. The question is really about balance.

Can we keep the growth rate of blockchain data, specifically the initial blockchain download (IBD),

which is all the data you need to download in the very first instance to fully sync the chain.

Can we keep that within a manageable and affordable level so that many people can participate in...

running full nodes, without it purely becoming the domain of corporate data centers and miners?

It is important to maintain decentralization for [indpendent] validation of transactions.

Again, that is really a design decision. It is not possible [right now] to say how far it will go.

"Since Bitcoin is not efficiently used for micropayments, which was Satoshi's vision,

is the concept failing?"

"Why do we need second, third, or fourth layers on top of the Bitcoin blockchain...

for what was supposed to be done by design?"

"Should we move to altcoins?"

The follow-up question to that: "How is Bitcoin's blockchain better than other algorithms, like IOTA?"

"Why are we trying to fix scalability issues instead of using other technologies?"

"Is it just because of Bitcoin's huge adoption and miner support?" This is an interesting question.

One of the problems when people talk about scalability is, they tend to talk about it in isolation.

They talk about scalability, as just one aspect of the system. But optimizing scalability is not difficult.

Optimizing the scalability of a network, so it can [handle] millions of transactions per second, is totally possible.

It is very much possible. The problem is, you sacrifice other parts of the design [if you optimise badly].

The [easy] way to increase scalability massively is to centralize the network.

If you have more centralization, you can achieve much more scale.

But blockchains are particularly inefficient at doing things [fast] because they sacrifice...

scalability in order to achieve decentralization.

If you decide to sacrifice decentralization in some aspects of the network, such as mining, exchanges,

or wallets, then you can massively increase the scale of the network quite easily.

How do you achieve a Visa scale network [today]? Well, you can do it the way Visa did it.

You have one [company] as the validator: Visa. The problem with that model, however...

When you have a centralized network like that, the central validator would have enormous power...

to censor / pick and choose transactions, and act as a gatekeeper over the system.

Bitcoin was designed to remove that central point of failure.

It maximizes decentralization as much as possible. In order to do that, it sacrifices some scalability.

There is a lot of discussion about "Satoshi's original vision," and I feel that is a bit of appeal to authority.

Satoshi, whether one person or a team of people, were only humans and had a limited perspective...

on what this technology would ultimately become.

We are now almost ten years passed that "original vision" and a lot has changed.

We have learned about the scalability of blockchains, the global competition in mining,

and various other aspects of the system.

Satoshi, whoever they they were, was just a human. They were not a prophet, a saint, or a deity.

They did not have a magic crystal ball with which to predict the future [of Bitcoin].

While the original vision and design was remarkably prescient and predicted many things correctly,

that doesn't mean everything Satoshi ever said is correct,

or that everything Satoshi imagined Bitcoin would [become was] correct, achievable, or desireable.

Satoshi [could have] changed their mind when presented with new facts and evidence.

For example, one of the pillars of "Satoshi's vision was the idea of 'one CPU, one vote,'

that the processing of transactions in mining would be done in a very decentralized fashion...

allowing everyone with a CPU to mine independently and have equal participation in the network.

That is not how it played out. If you read what Satoshi wrote, they said they were quite dismayed...

with the rapid emergence of specialized hardware, application-specific integrated circuits (ASICs),

which caused enormous pressure for centralization of mining.

Blockchains are trying to optimize across three different axises: scalability, security, and decentralization.

When you try to optimize one of those, it might be at the expense of the other two.

The easiest way to maximize scalability is by damaging decentralization and security.

It is very difficult to optimize without making that trade-off.

A lot of alternative blockchains propose that there is "a simple and easy solution" to scalability.

Of course, what they don't reveal immediately is, that solution damages decentralization or security,

in some way [as a side-effect].

That is a trade-off they may be willing to make. It is an alternative approach to solving this problem.

But that is not the trade-off Bitcoin [will make]. Bitcoin prefers decentralization over scalability.

In order to achieve scale, while maintaining the security model and without reducing decentralization,

you must look at solutions that include second and third layers.

When somebody claims there is an easy and simple solution, if we only switch to...

this alternative consensus algorithm, mining scheme, currency and blockchain,

[saying that it] can achieve infinite scale without any compromises, they are lying.

You do need to make compromises; often, those compromises are just brushed aside.

The question is not "how to achieve scale?"

The question is, how do we achieve scale without sacrificing the decentralization?

Phil takes the exact opposite position in his question.

"Bitcoin is making substantial progress in the areas of:

transaction speed with the Lightning Network, privacy with CoinJoins and confidential transactions,

and smart contracts with Rootstock." what I need to shift all coins, then which might represent a less decentralized technology

"Would I still need to shift to altcoins, which might represent much less decentralized [systems]?"

It is not clear. Just as I said before, there are no magic answers that solve all possible problems.

I would say that also applies to Bitcoin.

Achieving [greater] transaction [speeds] and scalability with Lightning,

achieving privacy with CoinJoins and confidential transactions,

and achieving flexible, expressive smart contracts...

It may not be possible to achieve all three of those goals simultaneously.

If that is not possible, then the question is: which of those [will be primarily] optimized,

on the currency or blockchain that you choose to use?

These are choices that have side effects.

If you choose a blockchain that has very flexible and expressive smart contracts,

maybe you can't do that with the same level of security, robustness, and censorship-resistance as Bitcoin.

I am not yet persuaded that you can. We will need to find out [through time and testing].

In every one of these cases, there are design trade-offs. This area is like any other area of engineering.

It is a matter of deciding which trade-offs are worth making.

That choice [may] necessarily mean that you won't get some benefits of the other path you didn't choose.

If you choose to go down the path of flexible and expressive smart contracts, you may necessarily...

be closing the door on certain aspects of security and robustness, creating a larger attack surface.

You can't have both. I have talked about this extensively in one of my talks called "The Lion and the Shark,"

which is about divergent evolution and how you can be a top predator in one particular niche,

but when you specialize in one niche, you choose it over others and then you can't do both effectively.

Comparing different alt-chains that have made different design trade-offs...

It doesn't make sense to compare them directly against each other.

The real question is not "which is the best solution?" The question is, which is the best solution...

for my problem, and you must first define the problem.