It really takes some twisted logic to paint BCH has a miner-friendly measure. It is unfriendly to miners in every way that matters, which is why miners have never achieved consensus on any of the large-block proposals so far.
Specifically, it:
- reduces the need for fees on transactions, as block space is no longer a sufficiently scarce resources
- makes orphaned blocks more likely, which means that the probability of losing a block that you already successfully mined is increased.
Although I'm a large-blocker myself, Segwit has one thing going for it, namely, fixing transaction malleability. For anyone who has to deal with bitcoin in bulk (any business using bitcoin, basically), malleability is a killer bug -- it makes it very hard to detect if your transactions have made it on to the network, and impossible to chain transactions together reliably. That's who benefits from Segwit, and it's a big benefit.
It also enables some off-chain solutions that are infeasible in a malleable-prone network.
The opposition to Segwit, in my opinion, stems mainly from the fact that it is complicated, and was given priority over the "clear and present" problem of blocks being full that had a simpler solution of hard-forking to increase block size. So it's being held up as a totem by the large-blocking crowd of the poor decisions of Core, and for alleged conflicts of interest around the off-chain solutions.
Other than the risk of a hard fork itself, the negative effects of a block size increase are so small as to be meaningless, for users and for miners.
> reduces the need for fees on transactions, as block space is no longer a sufficiently scarce resources
If bitcoin popularity grows, more transactions with lower per-tx fees will likely result in more total fees per block, compared to a world in which the block size is fixed and individual fees are higher. The induced demand will be a significant factor. This is fairly straightforward economics. This is a good thing by the way =)
Regarding orphan rates: I don't understand all of the gritty details, but I have seen some convincing explanations describing how, if block space isn't scarce, a miner's decision to include an additional tx is largely based on the likelihood that adding the tx will result in a block they find being "orphaned". So it is a self-regulating feedback loop of sorts. And as another poster said, it should affect all miner's equally, assuming they have a sufficiently sophisticated setup (low-latency, well-connected, etc).
For those don't know about orphan rates: An "orphaned" block is one that is wasted (and the reward thus lost). This happens when another miner finds a competing candidate block at a similar time and manages to propagate it more quickly through the network such that it is chosen by the majority as the next block.
> makes orphaned blocks more likely, which means that the probability of losing a block that you already successfully mined is increased
A higher orphan rate won't reduce miner profitability. Since everyone would experience the orphaning, the difficulty will stabilize at a lower level and profitability should be the same.
No, you don't have an orphaning problem on your own blocks, so it drives centralization.
This is exactly what happened when blocksize jumped from 100k to 250k: every small miner jumped to the largest pool (ghash.io) because they were seeing increased orphan rates, driving that pool over 50% of hashing power.
I don't actually see why that would happen. The chance of a block being an orphan is dependent upon the number of competing miners solving the block at the same time. Why would block size impact that at all?
Larger block size increases computation necessary to solve the block, so it is equivalent to increasing the difficulty. Another factor is that you might decide to wait longer to get more transactions in the block. This reduces your chance of solving the block, but increases your payback. I can't see how it could possibly increase the orphan rate because it increases the possible spread for solution time (some people will wait, while other won't). In other words, it should decrease the orphan rate.
I suppose block size increases the network latency for advertising solved blocks... but going from 100k to 250k every 10 minutes does not strike me as being particularly problematic.
Also, I'm trying to verify your claim and I can't see any evidence of it. It appears that different clients were using different block sizes for a long time. The maximum block size on the BTC network has been over 250K since 2013, according to [0]. Also take a look of this graph of orphaned blocks [1]. It seems to be highly variable between 2014 and 1016, but then lower since then. I see no evidence of a sudden increase in orphans. Clearly, having most of the hashing power in one miner will reduce orphans, but I just don't see a connection at all with blocksize.
> Larger block size increases computation necessary to solve the block
No, they're merkled, so it doesn't.
> I suppose block size increases the network latency for advertising solved blocks... but going from 100k to 250k every 10 minutes does not strike me as being particularly problematic.
Doesn't matter how often it is, I find a block, I mine the child immediately. You have to wait until you've received and validated the block. It's all about latency.
> Also, I'm trying to verify your claim and I can't see any evidence of it. It appears that different clients were using different block sizes for a long time. The maximum block size on the BTC network has been over 250K since 2013, according to [0]. Also take a look of this graph of orphaned blocks [1]
Yep, this is now ancient history. Mean blocksizes tend to mask what's really happening, but I recall the orphaning problem and ghash.io spike personally.
And blockchain.info's orphan block measurements are completely unreliable :(
Block size increase will further centralize mining (as you mentioned, it makes orphaned blocks more likely, especially for smaller/less well-connected miners) and is a linearly scaling solution to an exponential (?) scaling problem.
Specifically, it:
- reduces the need for fees on transactions, as block space is no longer a sufficiently scarce resources
- makes orphaned blocks more likely, which means that the probability of losing a block that you already successfully mined is increased.
Although I'm a large-blocker myself, Segwit has one thing going for it, namely, fixing transaction malleability. For anyone who has to deal with bitcoin in bulk (any business using bitcoin, basically), malleability is a killer bug -- it makes it very hard to detect if your transactions have made it on to the network, and impossible to chain transactions together reliably. That's who benefits from Segwit, and it's a big benefit.
It also enables some off-chain solutions that are infeasible in a malleable-prone network.
The opposition to Segwit, in my opinion, stems mainly from the fact that it is complicated, and was given priority over the "clear and present" problem of blocks being full that had a simpler solution of hard-forking to increase block size. So it's being held up as a totem by the large-blocking crowd of the poor decisions of Core, and for alleged conflicts of interest around the off-chain solutions.
Other than the risk of a hard fork itself, the negative effects of a block size increase are so small as to be meaningless, for users and for miners.