Bitcoin : Untangling a few things about network consolidation and “too few nodes on the network to serve all users”

Bitcoin : Untangling a few things about network consolidation and “too few nodes on the network to serve all users”

I see this mentioned more and more even on this subreddit. The idea is that the network is at risk of having too few nodes running to serve all users and that there needs to be some external motivation to store the blockchain and propagate transactions.

Satoshi explained both very early on and throughout his later communications with the community that he expected there to eventually be only a few large hashing nodes incentivized to keep LAN farms of mining equipment or blockchain holding “client nodes”, in extension enabling SPV wallets (“client only mode”) for ordinary users.

The key word here is **_incentivized_**. Bitcoin relies only on market forces and requires no central planning — external or internal — of the network or prices regarding any of its key functions.

He approximated that the network would never reach more than a hundred thousand unidentified nodes, probably less, before it was no longer worth it for more to join in. At this new equilibrium, the network would instead start its consolidation.

>The current system where every user is a network node is not the intended configuration for large scale. That would be like every Usenet user runs their own NNTP server. **The design supports letting users just be users**.

The common worries over Pools, ASICs and not enough propagating or blockchain storing nodes in the network are thus completely overblown. Satoshi encouraged every step on this ladder of evolution. He mined more than anyone at the time, implemented multi-core mining, helped on gpu-mining and encouraged pooled mining. He even considered dropping the number of nodes on the network drastically by introducing “client only mode” (Simplified Payment Verification) as the standard mode of the Bitcoin reference software.

As you would know from carefully reading the whitepaper, SPV was fully capable of being implemented. No extra “fraud proofs” were actually necessary for it, even if they may have helped to increase security. The concept was incredibly simple and only relied on following proof of the longest chain with the most work (Proof of Work) rather than relying on conventional “trust”.

In may of 2010, Satoshi made it clear again on one of the old forums that

>SPV is not implemented yet, and won’t be implemented until far in the future, **but all the current implementation is designed around supporting it**.

Yet again, this makes clear that if someone suggests something like SegWit or any other new technology to be a necessity for Simplified Payment Verification to work, they are not getting the design (the paper) at all.

Now, all respect to various individuals like Jameson Lopp, Peter Todd and others on the subjects they generally know well; Code and developer standards. But they are not the engineers of a full blown peer to peer electronic cash system and they lack the economic understanding of how scaling a market based (peacefully hierarchical) system of sound money must work.

Further more, which is not in the slightest to suggest that the network would need it, there may still be other businesses than miners that run their own “idle” so called “client nodes” even though they do not mine. This is because large organizations with more frequent payments are likely to seek higher security whenever they can and if the price is right.

As it says in the design

>Businesses that receive frequent payments will probably still want to run their own nodes for more independent security and quicker verification.

But this is a “probability” and Bitcoin was not made to _depend_ on it at all.

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Author: fruitsofknowledge

Score: 33

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