I wonder whether Monero could have a 10 sec. block-time like Ethereum. I imagine that would be beneficial for near instant transactions. Why can they, and why can't we?

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I don't think so, and I'm not sure it would work out long term for ethereum either, although they plan to switch to proof-of-stake and implement sharding, both of which would possibly help.

Monero actually used to have a 60 second block time, and then in March of 2016 switched to a 120 second target time. There are several issues with a very fast block time, some general and some unique to Monero (or other coins using a slow to verify hash like cryptonight).

  1. The shorter the block time the more bloat you get for empty or nearly empty blocks. By forcing users to store empty blocks you are just wasting space basically. By increasing block time you should get more txs per block and therefore more efficiency. This probably becomes moot once a coin gets widely used, but that is basically only Bitcoin at this point.

  2. The shorter the block time the higher the probability of orphans. Ethereum deals with this using their uncle concept, which I believes rewards miners even if their block gets orphaned, but that concept doesn't exist in Monero. Monero's proof-of-work algorithm is also pretty slow to verify, so for very short block times this may become a factor that contributes to increasing the orphan rate even more.

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