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There is a persistent debate in Bitcoin about increasing the capacity.

The popular idea seems to be to increase the blocksize from its current 1MB to push through more transactions per block. But this also risks forking the chain.

I think a much simpler idea would be to reduce the target time from 10 minutes to 5 minutes. This would make hashes less difficult (fewer leading zeros), and basically target 2 blocks per 10 minutes instead of just 1.

I'm confident there is some downside to this idea, or it would have caught on already. But I'm just not seeing it.

What is wrong with decreasing the target difficulty to increase Bitcoin's capacity?

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One problem is that lower block times mean an increased chance of forking, which makes head of the chain, and the system, less reliable.

Another problem is that it normally takes a block a few seconds to a minute to propagate across the network. Proportionally that time becomes a lot higher with a decreased block time, giving the original miner and miners with direct connections to them a more significant lead time.

Finally, it throws off the whole schedule of when Bitcoin will be released. New Bitcoins are set to be mined past the year 2100, that would be significantly sped up, changing a lot of existing assumptions about inflation and economic assumptions about scarcity of the currency. Since the change would have to be a hard fork it would be controversial both economically and technically.

  • Noob speaking here, but wanted to respond to Steve Ellis. Your final assumption says that the schedule for the release of bitcoins is thrown off. But say you half the block reward from 12.5 BTC to 6.75 BTC in response to reducing the block solving time (i.e. the difficulty) by half. Again, noob speaking here, but wouldn't that keep the original schedule on track while increasing transactions? – Jan Caerels Mar 26 '18 at 5:32

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