I understand that bitcoin has a fixed block size (1MB).
On the other hand, Etherenum does not seem to have a fixed gas limit.
(https://ethereum.stackexchange.com/questions/1106/is-there-a-limit-for-transaction-size/1110#1110)
What is the rationale that bitcoin block size is fixed unlike Etherenum?
What is the rationale that bitcoin block size is fixed unlike Etherenum?
The block size limit serves two purposes: to keep node operation costs low, and to create a fee market.
With a limited block size, there are only a limited number of transactions that can fit in a block and thus the blockchain grows linearly. This allows for blocks to have a limit on how much network bandwidth and disk space they take up, and also sets a limit on the computational work required to verify a block. Without these limits, blocks could be maliciously produced which are extremely large which take up large amounts of network bandwidth and disk space, and more importantly, potentially take down a node due to a large computational cost.
The limit not only helps with block relay, but also with syncing a new node for the same reasons as above. Comparing Bitcoin to Ethereum, you can sync a fully validating archival Bitcoin node in several hours on standard consumer hardware. It only takes up ~200 GB of disk space. Conversely, you cannot sync a fully validating archival Ethereum node on consumer hardware. Syncing one requires high end hardware (e.g. PCIe SSD) and the Ethereum blockchain also takes up over 1 TB of disk space.
The other reason for the block size limit is to create a fee market. Currently Bitcoin miners are paid through the block subsidy. However the block subsidy halves every 4 years and will quickly reach negligible amounts. In order to keep miners mining, we need to pay them in some other way, namely transaction fees. By having a block size limit, we can build a healthy fee market which organically grows over time so that by the time the block subsidy is negligible, there will be enough in transaction fees to cover the costs of mining.
