Over the last month, there has been a lot of debate kicked up by proposals of Bitcoin luminaries Gavin Andresen and Mike Hearn to raise the block size limitin an effort to expand Bitcoin’s ability to scale.
There are a lot of arguments against the move. One is that larger blocks will require more bandwidth and better equipment to run nodes which may discourage smaller players from running nodes or mining operations.
The larger blocks will also take more time to transmit, which will create more orphaned blocks and provide an incentive for miners to artificially lower the block sizes that they produce to ensure that their blocks get recognized first.
Finally, there is the economic argument that if blocks become too big, then the competition for fees will get so low that they become economically negligible. Miners, so the argument goes, will have no incentive to mine and secure the network if fees, already low, become much lower.
I am sure that there are more, and more technical, arguments to be made, but after spending more than a month reading about this, I have to side with the ‘big block size’ crowd.
One of the first things I felt I needed to consider when coming to this choice was to answer the question, is Bitcoin a commodity or a currency. The answer, it seems to me, is both