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What Is the Economic Argument for Keeping the Block Size Limit Small?

The primary economic argument is to maintain decentralization. A small block size keeps the hardware and bandwidth requirements for running a full node low, allowing more individuals to participate in validation.

This decentralization is key to Bitcoin's security and censorship resistance. A small limit also forces the use of off-chain scaling solutions.

Why Is a Fixed Gas Limit per Block Necessary for Network Stability?
Why Is Decentralization Considered a Key Advantage of Algorithmic Stablecoins despite Their Risks?
What Is the Role of a ‘Full Node’ in Network Security?
What Is the ‘Block Size’ Debate in PoW?