Elon Musk Comes Out as Big Blocker

“BTC and ETH are pursuing a multilayer transaction system, but base layer transaction rate is slow and transaction cost is high.

There is merit in my opinion to Doge maximizing base layer transaction rate and minimizing transaction cost with exchanges acting as the de facto secondary layer.”

So says Elon Musk, the CEO of bitcoin holding Tesla, in an interesting statement that might give doge a value proposition beyond meme token.

Ever since BCH dwindled through the rankings, the narrative of crypto being used as an actual currency to buy your weekly shopping has dwindled with it.

However doge has overtaken BCH to rise to a top seven crypto, and Musk may now be giving it some foundation to carve out a market of sorts in peer to peer crypto-currency.

“This leads to centralization because running a node on a larger base layer requires more power and becomes too expensive for the everyday person to run. Eventually large cloud centres run and govern nodes. And we’re back at square one with Fiat and Fed Reserve,” is the typical small blockers response to the suggestion.

However both have tradeoffs and quite interestingly, a stringent small blocker, Udi Wertheimer, calls Musk’s proposal “actually reasonable.”

That illustrates the risk any bitcoin competitor faces on this front as bitcoin can just increase the blocksize, “maximizing base layer transaction rate.” Doge then goes back to a joke.

But there aren’t any plans to do so currently. However in the long run there is no choice because just keeping the blocksize small is not a solution to the problem of an ever growing history as the history, and thus the node size, does keep increasing just at a smaller rate.

Even currently running a bitcoin node on an ordinary laptop is out of reach for most because most ordinary laptops have 500GB total storage which would have to be fully utilized for the node.

That problem is only going to get worse, but there is an actual solution which bitcoin and eth devs are waiting to implement first before significantly expanding capacity.

The solution is checkpoints. This has the effect of setting the last block as the equivalent of the genesis block for history purposes, and then you archive the rest.

Bitcoin devs are working on implementing this cryptographically so that it is part of the protocol and is set by miners in a decentralized way. Nodes then can run on a laptop despite storage increasing by 100MB or even 1GB every ten minutes as history is archived now and then through the protocol setting the last block as a final block.

Node operators can then have the option of keeping the archive history or pruning it, with it unnecessary if you want to chain-split fork bitcoin.

New nodes bootstrapping on the network can then be sure they are getting the correct history because they can start from the finalized block, which is pretty much the same as currently starting from the genesis block.

The new ethereum 2.0 blockchain will have this checkpointing by stakers setting finality every 12 minutes, with previous history effectively indisputable, and thus history starts at the finalized block for verification purposes which is just the same as starting from the genesis block.

At that point there shouldn’t be much concern for increasing capacity as that wouldn’t increase the costs of running a node because finality would keep such costs static.

That’s if stakers let you however because lower capacity means higher on-chain fees, and so they may well be incentivized to increase transaction costs rather than minimizing them.

Ethereum will launch next month a mechanism that sets a base fee, which might change the incentives, but to what extent remains to be seen.

So the blocksize debate is still ongoing in many ways, just not vocal any longer, because there hasn’t quite been a solution implemented.

Dogecoin of course can try and implement one, but they would have competition. However they wouldn’t have competition currently if that is combined with narrating the actual use of doge as currency to buy things, including Teslas. Something that would make doge interesting.

Source: https://www.trustnodes.com/2021/07/09/elon-musk-comes-out-as-big-blocker