Developer Explains Bitcoin Classic’s Flexible Block Size

In Bitcoin Classic, the block size is no longer limited by rules set by software developers. It is set by you, the one running the software.

  This article explains how it works (set by the people running the software)

Block size

In Bitcoin, transactions are collected in blocks, and many blocks form a blockchain. The reason we use blockchain is because Bitcoin’s main innovation combines blockchain with proof of work to reach a global consensus on transactions.

The size of the blocks has nothing to do with this process, and we can see that over the life of Bitcoin, the blocksize has grown solely based on the needs of the network.

Miners have always been the ones to decide the block size, and they have always done so in a coordinated way. This is a natural consequence of Bitcoin’s rather elegant (economic) design.

1. When miners produce larger blocks, they can earn more transaction fee income.

2. Miners take on greater risks when their blocks are orphaned because they are too large.

3. Miners want to avoid emptying the memory pool with every block they mine, as this eliminates the overall need for users to pay transaction fees.

4. Miners want to make sure the mempool doesn’t backlog because users who don’t see their transactions confirmed will get disappointed and look for other ways to pay. This not only affects the price, but it actually affects the miners’ revenue as well.

This behavior in block size means that blocks will not become huge, and blocks will not remain small, both for a reason. Therefore, the block size will be moderate. The most appropriate block size depends entirely on the number of paying users and the state of the technology. In order to get the most profit from the system, miners have to find a market equilibrium for the block size. This market equilibrium is the best for all users of Bitcoin.

Bitcoin Classic will accept blocks generated by all other current node implementations, including Bitcoin Core, Bitcoin Unlimited. Blocks generated by Bitcoin Classic will be accepted by all other software, including Bitcoin Core, if the block size is less than 1MB, by Bitcoin Unlimited and other software, and will not be accepted by Bitcoin Core if the block size created is 1MB or larger.

Bitcoin Classic sets a user-selected (or default) blocksize limit in the coinbase message as "EB2", where the number is the number of megabytes accepted by this node.

Similarly, the handshake signal sent to the peer's user-agent string also has this annotation, so sites connected to all peers can know what ideas each supports.
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Workaround

Bitcoin Classic has removed the centrally scheduled 1MB maximum block size limit from its software, while providing miners and users with the tools to protect themselves from bad actors. We call this acceptance limiting.

The main change is that Bitcoin Classic nodes can now be manually configured to adjust to any block size limit.

First up is the new blocksizeacceptlimit configuration setting, which allows users to limit the size of blocks they accept from the network. For example, if a user sets blocksizeacceptlimit = 4.2, this means that any blocks over 4.2MB will be rejected as too large.

The old configuration option blockmaxsize remains unchanged, which is an option set by miners to determine the maximum size of blocks they create.

Another change is that Bitcoin Classic creates block templates for miners that put the blocksizeacceptlimit value in the coinbase comment. This has the effect that the miner's limit is stored in the blockchain accessible to everyone. Any miner can inspect the blockchain and figure out a safe blocksmaxsize setting that will make his block accepted by other miners. But ultimately we expect miners to have a global conversation about the blocksize they will use in whatever way works for them.

Other safety measures

With the introduction of elastic blocksize limits, which software developers no longer centrally plan for, but rather configure based on locality, we saw an opportunity to introduce an additional failsafe in the rare case where a node is set up slightly differently than the rest of the world.

This safety measure is still being worked on, and preliminary results show that the block size limit is somewhat flexible and difficult to interpret if more miners vote for this block size with their hash power. This makes the network stronger, allowing users and miners running Bitcoin Classic to recover and get back on the main chain in the rare case of finding a larger than expected block size.

It’s important to stress that this feature is possible due to the flexibility of the blocksize limit, but just because a situation that might always happen is now prevented doesn’t mean we believe a user-configurable blocksize limit will cause problems that need to be fixed.

This security measure is still under development and is described on Toms blog.