As LTC gains in popularity, we might have a discussion about increasing the block size limit. Less blockchain space means higher transaction fees which can undermine the savings on storage and bandwith. The problem that we have right now is that we can’t change the block size limit without risking a fork. We could solve that problem by having a system to determine the next limit.
If we assume that a change in the avg fee means there’s a change in the demand for block space;
If we assume that the fee revenue is constant;
Then we can stabilize the fees with this equation:
next block size limit = (fee revenue / avg fee on the previous block - block size) / block occupancy rate + previous block size limit
We’ll explain the equation step by step.
Step 1:
(fee revenue / avg fee on the previous block
We calculate the amout of space that would have been provided at the previous price for the total amount that was paid on the last block.
Step 2:
Quantity supplied - block size)
We calculate the difference between the amount of space that was provided and the amount of space that would have been provided at the previous price.
Step 3:
/ block occupancy rate
We calculate the excess demand/supply in function of the block occupancy rate.
Step 4:
+previous block size limit
We adjust the limit for the next block.
A long term increase in the avg fee would lead to an increase in the block size limit, we could find an equilibrium between transaction fees and the block size limit.
The lightning network also has its limitations. It could be useful for some people but it looks like an utopian solution to a problem that doesn’t seem real to me.
If there’s a way to optimize the codes then I’m all for it. The block size limit could increase/decrease without any compromise to the network’s security (choosing a flat limit was probably a mistake).
Bankers won’t like the idea of a competing currency (a currency that could be used by a lot of people). We know for sure that hardware is improving over time and the internet is getting faster but mweb has not yet been demonstrated.
“Extension blocks create a side-chain like layer alongside canonical Litecoin blocks in which a miner will commit to the hash of an additional block of transactions. EBs shall define their own rulesets for what constitutes a valid transaction. These EBs must keep their own UTXO sets for use in verifying EB transactions.”
Banks didn’t create any currencies, they hold and transact currencies, like gold and fiat. They don’t become obsolete because State decided to print bills on papers, they adapted. If there are some “new kind of gold and silver - the digital ones” they will also be forced to adapt.
A new currency don’t change the very foundation of what a bank was made for. By now, banks from all over the world have crew dedicated to study and implement blockchain solutions. They will have there own vision of it, but bitcoin/litecoin are widely spread across the globe, have 10+ years of development and mining.
MWEB definitely solves a problem that affect a regular person and also banks. If you want to buy a cup of coffee, you don’t want to disclose to the coffee shop how many crypto do you own. A bank or an institution also don’t want to disclose how much do they own when they make a salary payment or any other kind of daily transaction. That’s why MWEB on Litecoin is a major feature.
Well, I guess we’ll see how it goes, but the idea of litecoin/bitcoin being used in the retail environment seems a bit silly. Plus, regardless of the MWEB upgrade, we are assuming that the current limit is the “right” limit when there’s no tangible evidence to prove that fact but we do know that the limit was arbitrarily chosen.