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According to Running Bitcoin - Bitcoin Wiki, timeout is described as following:

Specify connection timeout in milliseconds

To my understanding it would mean that if a response was expected, if not received in the specific time-range the client would drop connection.

A follow question is, would a node with a 15 second timeout hurt the coin network with a fast block-time of e.g. 45 seconds?

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The -timeout flag sets the amount of time to wait during an attempt to connect to a node. It defaults to 5000 ms. This is the connection to other peers on the network for syncing the blockchain, receiving and sending new transactions to the mempool, etc.

A follow question is, would a node with a 15 second timeout hurt the coin network with a fast block-time of e.g. 45 seconds?

Faster blocktimes mean that the network has less time to 1 - propagate transactions and 2 - validate them before the next block. This is definitely something to take into account when thinking about block times. A slower node (both in terms of network latency for syncing and cpu power for validation) may not be able to confirm new blocks fast enough, but the bigger problem is if a majority of the nodes are slow compared to the block time.

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No, the timeout setting has nothing to do with the block time.

The timeout applies when connecting to another node on the network. This connection is independent of blocks being mined.

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