VeriBlock uses a lot of precious, limited Bitcoin block space as part of its business model, and not everyone is happy about it.
Calling the practice “spam,” developer Luke-Jr has proposed a reduction in the already small, capped block size of Bitcoin on Twitter.
Reducing the block size limit could rebalance this unfair advantage / bad incentive Segwit has created. https://t.co/p6nO4P0EW0
— Luke Dashjr (@LukeDashjr) September 17, 2019
Bitcoin transactions are inordinately expensive as it is due to the small block size, which some argue is a feature, rather than a bug. Others believe that while second-layer scaling solutions will eventually be necessary, a simple block size increase is in order.
Block Size Reduction, Rather Than Increase?
A block size increase would have a similar effect with VeriBlock’s “spam” transactions – the company, and everyone else, would pay less to send transactions. Bitcoin miners would be able to mine more transactions (which means more fees), and users would be able to more reliably use the Bitcoin blockchain.
The trade-off is that said blockchain would take up even more space. It already consumes hundreds of gigabytes for a standard “full” node – or a Bitcoin machine that maintains a complete record of Bitcoin transactions.
Bitcoin Cash proponents believed that this “space” concern was overblown, that miners – people who use specialized equipment to produce new Bitcoin blocks and relay transactions – could afford the hardware, and that the added space requirements wouldn’t slow the network down significantly.
Unfortunately, both Bitcoin Cash and Bitcoin SV are used less than Bitcoin, so a true test has yet to come.
Recently, Lightning Network, a scaling solution that doesn’t require the Bitcoin blockchain to greatly expand in size, had some serious security bugs.
The Race For Blockchain Space
Luke-Jr’s tweet sparked a discussion on Twitter about the nature of VeriBlock’s activity. After all, the company offers professional blockchain services – is it fair to call them “spammers”?
They are creating valid transactions and paying sufficient fees to be included in blocks. It is just as valid as any other transaction. When fees increase, they will have to be more careful with their use of space.
— Daniel (@dka218) September 17, 2019
Luke-Jr responded to this user by saying that a reduction in block size is a valid solution to the “problem.” In essence, Luke-Jr advocates making it too expensive for companies like VeriBlock to use Bitcoin.
However, a counter-argument might read that the same move could make Bitcoin too expensive for anyone to use.
Wherever you stand on block sizes, at some point usability has to matter for Bitcoin.
You see jevons paradox in action and come up with completely the opposite response?
If people want to use the chain *let them use the chain*. Chain space is a *product* not some limited resource. If prices are too high, produce more.
— Luke Sieber (@FatAngryBadger) September 18, 2019
Luke-Jr’s argument underlines a core element of crypto philosophy.
Is block space a product or a limited resource? If it’s the former, as the above Twitter user says, just create more; if it’s the latter, the only solution, as Luke-Jr and others advocate, is to make better use of what we already have.
There’s no telling whether it would be cheaper to use Bitcoin without VeriBlock requiring so much space every block. In all likelihood, some other service would fill the void.