Scaling solutions, advantages and disadvantages. I won't take a position on scaling options for a simple reason: I think we will do all of them. SegWit, second layer implements like Lightning Network, increasing the base block size with 4-8 Mb of capacity, Schnorr signatures, Spoonnet.
Scaling is not something that is solved once; scaling is a moving target, an aspiration. As you achieve each level of scale, that opens the door for new applications; solving current problems creates the opportunity for new problems. The internet has been failing to scale for 25 years.
Email, image attachments, audio, video, high-definition video, livestreaming, holographic virtual reality, etc. We have a system that allows for global transactions, without borders, a level of planetary scale immutability. As soon as we make it faster and cheaper, people will want to put _more_ data on the blockchain.
We will reach Visa scale and then surpass Visa scale on an exponential curve. We can never "fix" scaling. All we can do is hope to continue to fail to scale gracefully. Solutions that are technically sensible, maintainable, and don't violate the core principles of decentralisation. We can change the rules as often as we like, but we should not appoint rulers.
Transcript
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in regards to your speech and the scaling issue which out of the two primary solutions for you and sacred do you think is the best and also could you just explain the advantages and disadvantages in H1 so um I won't take a position on scaling options for a simple reason I think we will do all of them we will do um segwit segregated witness is an architectural change to the structure of a transaction that removes the signature from inside a transaction and places them in an extension of a transaction. It solves uh a number of problems including transaction malleability uh quadratic hashing which is a problem that occurs that can lead to denial of service. Um it allows for second layer implementation such as lightning network and other things like that. Um, and it extends the capacity of Bitcoin um, by at least a factor of two, possibly 2.7 based on some estimates depending on how many people use it.
We're going to do SegWit. It's a good tested solution. It's available today. I think it's going to happen before the end of the year.
I was more optimistic at the beginning of the year when it was first proposed and then it received a lot of push back. Um I am still optimistic that it will happen and then we will also increase the base block size and with segwits multiply that base block size increase by two at least and get 4 to 8 megabytes of capacity in Bitcoin and then we're going to implement store signatures and maybe a bunch of other technologies um spoonet uh which is a refactor ing of the block header to introduce some new capabilities and flexibilities into the system. Maybe flexible transactions. Um maybe uh different types of digital signature algorithms.
All of the above. Scaling is not something that is solved once. Scaling is a moving target. As you achieve each level of scale, that opens the door for new applications.
those applications immediately consume all of the available capacity that you just made available and the problem starts again. We've seen this. The internet has been failing to scale for 25 years. Oh, use that is full of spam.
What are we going to do now? Oh, let's scale up UUCP. Oh, email is impossible to route. It takes days to get it across the internet and the fees are so ridiculous.
Oh, we solved that. Oh, wait. Now everybody's using email. What?
Image attachments. How the hell are we going to route all of that? Oh, damn. They figured out image attachments.
Porn is flowing all over the network. HD porn PR audio. We can't do audio on the internet. Are you crazy?
We don't have the capacity for that. And that got upgraded. And then it was video. And then it was high def video.
And then it was Netflix and YouTube and everybody watching video on the internet. And as soon as we solve these problems, we create the opportunity for new problems. Because if you gave me 10 times the capacity on the internet right now all across the world as an internet engineer, what would I do? Use it instantly.
All of it. VR 360 4K streaming video to everyone of the muffin I'm eating in the cafe while mobile done. Gone. All of the capacity gone instantly, right?
And you give me 10x again and Oh, great. Fantastic. Holographic 3D VR simulations of entire worlds, virtual worlds being transmitted. Oh, by the way, download my AI.
It's only six pabytes. Don't you have good 25G service on your mobile? Scaling is something that is a moving target because scaling is an aspirational goal that engineers look at and say, "What more could we do if we had scale?" You have a system that allows you to do global transactions without borders that delivers a level of planetary scale immutability for every one of those transactions instantaneously. open to anyone in the world outside of the control of governments and banks.
It costs a dollar, maybe two. Boohoo. And we're going to make it cheaper and faster. And then as soon as we do, people will want to put more data on the blockchain and then more data on the blockchain.
And the rate of transactions will increase. And we will reach Visa scale. and 6 months later we will reach two times Visa scale because we're on an exponential curve and they're on a linear one and and one year later we're 10 times Visa scale and then we're talking about microp payments between internet of things devices that are buying priority access to a a traffic lane for an emergency vehicle by bribing the other cars to move the hell out of the way. Why not?
I can invent 10 other applications that would chew up all of the capacity of the Bitcoin network today. And that's what everybody's going to do. Scaling gets fixed by trying new pro, new solutions to each problem as they come along. And we will never fix scaling.
All we can hope to do is fail gracefully for 25 years just like the internet has. And if we do that, the world's our oyster, right? We get systems that are massive, scalable, and impact everybody's life, but we don't solve scaling. So, we're going to do all of the above.
And I'm a fan of anything that works, is technically sensible, is not disruptive, it's maintainable, um, and it doesn't violate some of the core principles of decentralization. It doesn't give power to anyone. We can change the rules as often as we like. We should not appoint rulers in order to do that.
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