I understand this is a contentious question. Help me understand Why increasing block size increases the risk of centralization? I don't understand what Antonopoulos meant when he said few people can validate the blockchain when block-size is increased.

"If my block takes 11 minutes to validate, then i’m off the blockchain, which means fewer people can validate independently, which means the system becomes centralized. With which one of these increases, fewer people can participate in the validation process, fewer people can participate in storing the data, and fewer people can participate in being independent actors. We go from a system that is decentralized to a system that gradually gets more and more centralized,”

  • what is unclear to you friend ? – Karan Ahuja Dec 27 '17 at 12:08
  • How is increase in centralization and block-size related? Thanks! – Holmes Dec 27 '17 at 12:17

He seems to be saying that if the block is too big, he might need more time to validate it than the time the network takes to solve a new block. This would mean he loses time with every block, and therefore can't validate at all.

Bitcoin blocks are solved every 10 minutes on average. He suggests that if blocks take him 11 minutes on average to validate he would lose a minute every block, therefore he would be unable to validate every block, which defeats the purpose.

With the assumption block sizes will increase, I'm unconvinced this problem is even on the horizon. In answer to the question "how long does it take", this excellent answer refers only to seconds, not minutes. For validation to snowball into an 11 minutes long process, we'd have to willfully neglect it's long predicted coming. I doubt that would ever happen.

But that's an extreme example. In reality, going from 5 seconds to 15 seconds really seems insignificant at first, but it does have advantages for larger miners over smaller miners.

A significant portion of blocks are found within seconds of the previous block. If you found the previous block you can skip validation and begin working on the next block immediately. This means you will get lucky every now and then and shove the next block within a few seconds, allowing you to claim the reward and fees. Comparatively, if a different miner solves the next block within a few seconds, he will submit it without any transactions because he was still validating the previous one. Naturally, large miners find more blocks, so they are more likely to benefit from this.

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    Antonopoulos's example is extreme; validation cost doesn't nearly need to be at 11 minute minutes per block before there is a problem. Just needing a few seconds to validate and relay a block extra has very severe impact on the advantages of larger miners over smaller ones, for example. Furthermore bandwidth (especially low-latency censorship-resistant bandwidth) is not cheap in every part of the world, and disk space for the blockchain and UTXO set are increasingly worrying. – Pieter Wuille Dec 27 '17 at 15:53
  • @pieter How are larger miners benefited from a few seconds increase? – fredsbend Dec 27 '17 at 15:57
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    Because a significant fraction of blocks are found within a few seconds of the one before. A miner can always start working on top of a block they produced themselves, but other miners at least first need to validate the block another created. Therefore the previous block's miner always has a small but significant jumpstart. Since larger miners more frequently find blocks on top of their own blocks, this effect unfairly affects larger miners. – Pieter Wuille Dec 27 '17 at 15:59
  • @pieter Ah, yes, I see. Larger miners would have more opportunities to start new blocks without the need to validate the previous block (because it's their own block). This would give them a higher than 100% luck on average. I'll edit. – fredsbend Dec 27 '17 at 16:03
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    Since improved block propagation techniques like compact blocks have been adopted, this impact has been significantly reduced (but not removed). At this point the largest concern (IMO) about scaling is the speed of UTXO set growth. – Pieter Wuille Dec 27 '17 at 16:05

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