Bitcoin – Potential Network Disruption on July 31st(bitcoin.org)
bitcoin.org
Bitcoin – Potential Network Disruption on July 31st
https://bitcoin.org/en/alert/2017-07-12-potential-split
380 comments
It is probably not possible to solve the scaling problems on-chain - a secure decentralized consensus on a global scale cannot be fast. Currently the bitcoin protocol processes about 7 transactions per second. Doubling the speed by doubling blocks will not make it much closer to the 50K transactions per second of a system like VISA. But it is probably possible to scale the transaction system off-chain - with https://lightning.network/ - which works like a protocol for writing and accepting checks. As far as I know Lightning is impossible or very hard without SegWit.
But with Lightning off-loading the bulk of transactions miners will lose a bit of their power - so maybe this is what makes them against it.
Another aspect of the riddle is that SegWit will eliminate ASICBoost - which is an optimization developed by one of the biggest ASIC miners producer - so he is probably also against it. There is also the thing that ASICBoost is probably patented - so it has a lot of opposition in the community.
Another aspect of the riddle is that SegWit will eliminate ASICBoost - which is an optimization developed by one of the biggest ASIC miners producer - so he is probably also against it. There is also the thing that ASICBoost is probably patented - so it has a lot of opposition in the community.
A counter-argument is that the Lightening work is a proprietary development outside of bitcoin core (lead by Blockstream) and the work is even patent-encumbered.
They state the ip is for defensive purposes only - however that is questionable given that anything they implement, automatically becomes prior-art. It is also contrary to the spirit and practice of the majority of crypto/alt projects.
It is unreasonable to attack miners for having interests, without disclosing that other interests may benefit from the current levels of network congestion that a skeptic would say are caused by having artificially small blocks.
They state the ip is for defensive purposes only - however that is questionable given that anything they implement, automatically becomes prior-art. It is also contrary to the spirit and practice of the majority of crypto/alt projects.
It is unreasonable to attack miners for having interests, without disclosing that other interests may benefit from the current levels of network congestion that a skeptic would say are caused by having artificially small blocks.
There's nothing proprietary about Lightening Network. Lightning network was started by a startup, who published the paper, there are several open source implementations of it, and to my knowledge there's no actual involvement of Blockstream. Blockstream has their own solution (that doesn't need segwit right now) called Liquid.
Liquid Network and Lightening Network are different things and work in a different ways. A new version of liquid that uses some of he lightening technology enabled by segwit is probably in Blockstreams plans... but there are multiple competing open source implementations of Lightening Network being worked on.
Please link to the patents on the lightening network. I don't think you can.
There is no current network congestion. Free transactions are clearing after awhile and very low fee transactions are clearing right away.
All of the congestion of the past 3 months was from a spam campaign being run by the people who claim "bitcoin doesn't scale without larger blocks" ignoring that Segwit increases block size AND increases efficiency in using that capacity.
Liquid Network and Lightening Network are different things and work in a different ways. A new version of liquid that uses some of he lightening technology enabled by segwit is probably in Blockstreams plans... but there are multiple competing open source implementations of Lightening Network being worked on.
Please link to the patents on the lightening network. I don't think you can.
There is no current network congestion. Free transactions are clearing after awhile and very low fee transactions are clearing right away.
All of the congestion of the past 3 months was from a spam campaign being run by the people who claim "bitcoin doesn't scale without larger blocks" ignoring that Segwit increases block size AND increases efficiency in using that capacity.
I referred to Blockstream and this is their patent front announcement,
> Today we are excited to announce some important steps we are taking on the patent front, why these defensive steps are necessary, and our hope that others will see merit in our approach and follow our lead.
...
> Our Patent Pledge assures developers and users of our technology that we will not sue them for patent infringement, provided they comply with the terms and conditions of our pledge...
https://blockstream.com/2016/07/19/blockstream-defensive-pat...
Edit: Here is a discussion of Blockstream's patent application for side car design,
> The application, submitted on 9th May and published earlier this week, outlines “systems and methods...for transferring an asset from a parent chain to a sidechain”.
http://www.coindesk.com/bitcoin-blockstream-patent-sidechain...
Here is blockstream talking about Lightening,
> Blockstream’s work on the Lightning protocol began two years ago with the intention of enabling new applications and developing new use cases that could help further the adoption of Bitcoin and related technologies
https://blockstream.com/2015/09/01/lightning-network.html
Also presumably if segwit activates then Liquid is no longer needed?
Edit: The relationship between Blockstream and Lightning is underscored, by the fact that the largest contributor to the specification is a Blockstream employee (Rustee Russell),
https://github.com/lightningnetwork/lightning-rfc/graphs/con...
> Today we are excited to announce some important steps we are taking on the patent front, why these defensive steps are necessary, and our hope that others will see merit in our approach and follow our lead.
...
> Our Patent Pledge assures developers and users of our technology that we will not sue them for patent infringement, provided they comply with the terms and conditions of our pledge...
https://blockstream.com/2016/07/19/blockstream-defensive-pat...
Edit: Here is a discussion of Blockstream's patent application for side car design,
> The application, submitted on 9th May and published earlier this week, outlines “systems and methods...for transferring an asset from a parent chain to a sidechain”.
http://www.coindesk.com/bitcoin-blockstream-patent-sidechain...
Here is blockstream talking about Lightening,
> Blockstream’s work on the Lightning protocol began two years ago with the intention of enabling new applications and developing new use cases that could help further the adoption of Bitcoin and related technologies
https://blockstream.com/2015/09/01/lightning-network.html
Also presumably if segwit activates then Liquid is no longer needed?
Edit: The relationship between Blockstream and Lightning is underscored, by the fact that the largest contributor to the specification is a Blockstream employee (Rustee Russell),
https://github.com/lightningnetwork/lightning-rfc/graphs/con...
It is worth mentioning that the EFF endorsed Blockstream and this sort of "defensive patent"
https://www.eff.org/deeplinks/2016/07/blockstream-commits-pa...
> proprietary development
No, it is not only open source but a healthy mailing list with a lot of interested parties.
> lead by Blockstream
No, Poon and Dryja are not employed by the company Blockstream. The latter seems to be more focused on their sidechain solutions.
> the work is even patent-encumbered
No, there is nothing to suggest this. Patents have to be public at some point.
No, it is not only open source but a healthy mailing list with a lot of interested parties.
> lead by Blockstream
No, Poon and Dryja are not employed by the company Blockstream. The latter seems to be more focused on their sidechain solutions.
> the work is even patent-encumbered
No, there is nothing to suggest this. Patents have to be public at some point.
The 'lightning network' has been one of the promised solutions 'coming soon' for many years now. Except, no-one has solved all its problems yet. There remain difficult issues to do with routing of transactions, and some horrible money-losing behaviour if users don't stay online to protect their channels from being looted. On top of that, there's not enough space on the blockchain to allow everyone to open & close a payment channel anyway.
There are already working implementations of lightning on litecoin which can route transactions.
lighting is designed to be able to farm out channel enforcement to other nodes on the network to prevent cheating while preserving privacy.
lighting does require more block space to operate globally than is available. It still scales better than bitcoin though.
lighting is designed to be able to farm out channel enforcement to other nodes on the network to prevent cheating while preserving privacy.
lighting does require more block space to operate globally than is available. It still scales better than bitcoin though.
I'm really tired of hearing the "increasing the block size won't suffice"-argument. Yes, increasing blocks to 10 MB won't give us VISA-scale, but it will allow Bitcoin to serve TEN TIMES AS MANY USERS! I can't believe how many otherwise intelligent people fail to see that this is desirable. It's like driving your car at 10 km/h per hour on the high-way and refusing to increase your speed because that would still not make you as fast as a rocket.
Increasing the block will solve the problem until the new size is not enough, which will be very soon. A larger block means a larger blockchain, and the nice thing about the blockchain is that you can download the entire thing. With a larger block it will outpace the storage advances and will not be downloadable for the average user, which means that only specifically equipped entities such as miners will be able to have a copy of it, and that is a big problem.
10x the transactions is not much at all. The comparison with the VISA network is not a valid one - with micropayments the volume could be 100x or 10000x - we should be able to accommodate it.
The only solution is to begin handling transations off-chain. But the problem is that there is no one good proposal for it. Until it is clear how off-chain transactions work, we will keep seeing this sort of stuff.
10x the transactions is not much at all. The comparison with the VISA network is not a valid one - with micropayments the volume could be 100x or 10000x - we should be able to accommodate it.
The only solution is to begin handling transations off-chain. But the problem is that there is no one good proposal for it. Until it is clear how off-chain transactions work, we will keep seeing this sort of stuff.
> With a larger block it will outpace the storage advances and will not be downloadable for the average user
This has nothing to do with the block size. The size of the chain is proportional to the number of transactions. Whether those are sliced-and-diced into small blocks or large ones is completely irrelevant to how big the chain is. The only thing the block size influences is how many transactions can be mined in one block, i.e. the rate at which transactions can be processed.
This has nothing to do with the block size. The size of the chain is proportional to the number of transactions. Whether those are sliced-and-diced into small blocks or large ones is completely irrelevant to how big the chain is. The only thing the block size influences is how many transactions can be mined in one block, i.e. the rate at which transactions can be processed.
If you don't change the rate of block creation - then the rate of blockchain growth is proportional to the block size. If you increase blocks - then the blockchain will grow faster. This is kind of obvious.
But yeah - the size of the blocks does depend on the number and size of transactions and if you don't have transactions to fill up the block in full (i.e. so that its size is just under the maximal block size) - then the transactions will be the limiting factor.
But yeah - the size of the blocks does depend on the number and size of transactions and if you don't have transactions to fill up the block in full (i.e. so that its size is just under the maximal block size) - then the transactions will be the limiting factor.
No. If a block is 10MB, you might as well keep spamming the blocks to centralize the node operation when the storage starts to require TBs.
Why do you think Satoshi's gave it an artificial 1MB limit if it didn't matter?
Why do you think Satoshi's gave it an artificial 1MB limit if it didn't matter?
Huh? That makes no sense at all.
I have no idea why Satoshi chose a 1MB limit. Probably for the same reason he chose a 21M BTC limit on the total number of bitcoins that can be mined: both are arbitrary numbers that he pulled out of a hat. But the next time I see him I'll be sure to ask.
I have no idea why Satoshi chose a 1MB limit. Probably for the same reason he chose a 21M BTC limit on the total number of bitcoins that can be mined: both are arbitrary numbers that he pulled out of a hat. But the next time I see him I'll be sure to ask.
probably more to it than a hat. She's more clever than that
There are easy ways to deal with block chain size, many of which are in use already.
The only proposals on the table for off chain storage add profiteering middle men to the system. I'd rather pay for storage.
The only proposals on the table for off chain storage add profiteering middle men to the system. I'd rather pay for storage.
> With a larger block it will outpace the storage advances and will not be downloadable for the average user, which means that only specifically equipped entities such as miners will be able to have a copy of it, and that is a big problem.
This is eventually going to be a problem sooner or later regardless. The fundamental decentralization of Bitcoin depends on everyone having the whole blockchain. Any sort of "checkpointing" mechanism inherently relies on trusting authoritative nodes about network state, at which point it's no longer decentralized.
(However this is somewhat of a distinction without a difference. In practice you are trusting the nodes on the network anyway - the network is authoritative because everyone agrees to treat it as authoritative. If everyone agrees to trust some other blockchain as "the real truth" then you can either accept the new authoritative network or be on your own chain that nobody else accepts - which is what happened to Ethereum after the DAO hack.)
This is a fundamental limit to the Bitcoin model and will have to be addressed sooner or later. The data is already past ~100 GB (and totally incompressible) and that's with blocks so small that the network is choking due to lack of capacity. This is only a few years' worth of records, what does the big picture look like in 20 years?
Segwit is absolutely mandatory to allow interfacing other chains in a secure manner. Pretty much everyone agrees transaction malleability is a huge design flaw (apart from some Chinese farms which are abusing it via AsicBoost).
What I specifically have a problem with is the way both sides have drawn arbitrary lines here. It's not SegWit or a larger block, we can have both. And in fact the Core proposal does include a larger block, on a surface level this dispute is over how much bigger it should be (the Unlimited devs want a much larger block right away). Again, pretty much everyone agrees that transaction malleability needs to be fixed except that group of miners.
On a deeper level it's about a power struggle between the Bitcoin Core devs and the Bitcoin Unlimited devs, and between the various factions of miners.
This is eventually going to be a problem sooner or later regardless. The fundamental decentralization of Bitcoin depends on everyone having the whole blockchain. Any sort of "checkpointing" mechanism inherently relies on trusting authoritative nodes about network state, at which point it's no longer decentralized.
(However this is somewhat of a distinction without a difference. In practice you are trusting the nodes on the network anyway - the network is authoritative because everyone agrees to treat it as authoritative. If everyone agrees to trust some other blockchain as "the real truth" then you can either accept the new authoritative network or be on your own chain that nobody else accepts - which is what happened to Ethereum after the DAO hack.)
This is a fundamental limit to the Bitcoin model and will have to be addressed sooner or later. The data is already past ~100 GB (and totally incompressible) and that's with blocks so small that the network is choking due to lack of capacity. This is only a few years' worth of records, what does the big picture look like in 20 years?
Segwit is absolutely mandatory to allow interfacing other chains in a secure manner. Pretty much everyone agrees transaction malleability is a huge design flaw (apart from some Chinese farms which are abusing it via AsicBoost).
What I specifically have a problem with is the way both sides have drawn arbitrary lines here. It's not SegWit or a larger block, we can have both. And in fact the Core proposal does include a larger block, on a surface level this dispute is over how much bigger it should be (the Unlimited devs want a much larger block right away). Again, pretty much everyone agrees that transaction malleability needs to be fixed except that group of miners.
On a deeper level it's about a power struggle between the Bitcoin Core devs and the Bitcoin Unlimited devs, and between the various factions of miners.
Well - increasing the block size is not costless - it is not just pushing the gas pedal a little more like in your example.
What is the cost? I would assume it is consolidation of mining power since larger block size makes it even less likely for smaller players to be able to verify new blocks in real time.
But isn't mining power already consolidated?
But isn't mining power already consolidated?
The cost is, with 8MB blocks, 95% of nodes that validate consensus will be excluded (unable to keep up or become too costly to run) within 6 months - as per BitFury's (heavily invested Bitcoin mining company) research on bigger blocks: http://bitfury.com/content/5-white-papers-research/block-siz...
Without full nodes validating consensus, miners can (will) force protocol changes (eg. change 21,000,000 coin limit) on users, effectively changing the decentralized leaderless attributes to a centralized dictatorial less-efficient PayPal. At this moment, bigger blocks mean a less-free (as in speech) bitcoin.
Without full nodes validating consensus, miners can (will) force protocol changes (eg. change 21,000,000 coin limit) on users, effectively changing the decentralized leaderless attributes to a centralized dictatorial less-efficient PayPal. At this moment, bigger blocks mean a less-free (as in speech) bitcoin.
What's the cost? It was 36MB originally and it has been reduced to 1MB as a temporary measure to limit spam.
The cost is that larger blocks have difficulty crossing the great firewall of china and mining is already centralized there.
I have seen this myself with a production blockchain and blocks that were less than 1mb. Increasing the size increases this effect and gives Chinese miners and artificial advantage.
Plus there's no congestion on the network right now. There's not a scaling problem. It was spam.
Further, segwit increases block size and efficiency so there's no reason to not activate it.
This whole issue isn't about scale, core is still ahead of the curve on what's needed to scale, it's about control, and disabling ASICBOOST and keeping transaction fees high.
I have seen this myself with a production blockchain and blocks that were less than 1mb. Increasing the size increases this effect and gives Chinese miners and artificial advantage.
Plus there's no congestion on the network right now. There's not a scaling problem. It was spam.
Further, segwit increases block size and efficiency so there's no reason to not activate it.
This whole issue isn't about scale, core is still ahead of the curve on what's needed to scale, it's about control, and disabling ASICBOOST and keeping transaction fees high.
'The great firewall of china' isn't someone manually inspecting every byte that enters and leaves china, it can manage more than a 1mb transaction just fine. And, even if the delays were more than minuscule, how does it favour one side over the other? Both sides have the same delay.
Plus there's no congestion on the network right now. There's not a scaling problem. It was spam.
Woohoo! No need for anyone to do anything then. Remind me again why everyone is trying to scale bitcoin?
Plus there's no congestion on the network right now. There's not a scaling problem. It was spam.
Woohoo! No need for anyone to do anything then. Remind me again why everyone is trying to scale bitcoin?
You don't even seem to understand what we are talking about (not 1mb transactions) and you're flat out wrong. I have direct experience with a p2p network that I have built, and the problems getting blocks between nodes on opposite sides of the "Great Firewall of China". Really any engineer with an understanding of that system and P2P networks should understand why.
Everyone is trying to scale bitcoin because bitcoin is growing dramatically... that doesn't mean that the "full blocks" and "high fees" we saw recently weren't due to spam.
Please logic.
Everyone is trying to scale bitcoin because bitcoin is growing dramatically... that doesn't mean that the "full blocks" and "high fees" we saw recently weren't due to spam.
Please logic.
> The cost is that larger blocks have difficulty crossing the great firewall of china and mining is already centralized there.
Ironically, this has actually become a real Byzantine Generals problem. Guess Bitcoin can't actually solve that problem in the real world.
From what I understand, China isn't too keen on the whole endeavor since it circumvents their (stringent) capital controls. What happens if they turn the baleful eye of their deep packet inspection onto the Bitcoin network? (serious question)
(Background for those who don't know: encryption/etc don't work against the Great Firewall, it knows what a given type of connection "looks like" in terms of packets/activity, so it can identify (eg) a VPN session even if it's "wrapped" or "tunneled" across some other protocol. They use a massive amount of machine learning hardware to profile connections in realtime to pick out "suspicious" activity and those connections will be dropped after a few moments. It's not impossible to run arbitrary connections through the firewall but it's very difficult and getting harder all the time.)
Ironically, this has actually become a real Byzantine Generals problem. Guess Bitcoin can't actually solve that problem in the real world.
From what I understand, China isn't too keen on the whole endeavor since it circumvents their (stringent) capital controls. What happens if they turn the baleful eye of their deep packet inspection onto the Bitcoin network? (serious question)
(Background for those who don't know: encryption/etc don't work against the Great Firewall, it knows what a given type of connection "looks like" in terms of packets/activity, so it can identify (eg) a VPN session even if it's "wrapped" or "tunneled" across some other protocol. They use a massive amount of machine learning hardware to profile connections in realtime to pick out "suspicious" activity and those connections will be dropped after a few moments. It's not impossible to run arbitrary connections through the firewall but it's very difficult and getting harder all the time.)
Pushing the gas peddle is not costless either. It costs gas.
This thread is about bitcoin, not ethereum.
I think the car analogy is not quite correct. A car is able to dynamically change its velocity, bitcoin can't easylie do that. It would be much better to find a genereal solution that fix that problem altogether, instead of finding a solution that works for the next few years and might require future forks.
There is rarely a silver bullet, and I don't see one in the case of Bitcoin. Even if lightning network (which is what everyone who does not see the need for a block-size increase points to) was available today, we would need larger blocks to reach VISA-scale. The responsible thing to do is to increase the blocks as early as possible while we still are in "beta".
The most compelling argument I know of against bigger blocks is that the big blockers have started putting Craig Wright (Nakamoto Dundee) forward as, like, any sort of expert.
>I can't believe how many otherwise intelligent people fail to see that this is desirable.
If there were no technical and economic tradeoffs to increasing the blocksize then yes, it would hard to see how otherwise intelligent people could oppose it. Everybody loves a free lunch. But there are tradeoffs, which you conveniently omit, which are giving those otherwise intelligent people pause, rightfully so.
If there were no technical and economic tradeoffs to increasing the blocksize then yes, it would hard to see how otherwise intelligent people could oppose it. Everybody loves a free lunch. But there are tradeoffs, which you conveniently omit, which are giving those otherwise intelligent people pause, rightfully so.
If you believe that Bitcoin needs to scale up far beyond 10x the current size, then it's like driving your car at 10km/h per hour on the highway and refusing to increase your speed because you're trying to get to the moon and going faster in your car won't help in the least.
Can you not simply do a small math?
Currently at 160GB or something with 1MB block, what storage do you think a node will require with 10MB block in the next 5 years when the usage will be growing?
Currently at 160GB or something with 1MB block, what storage do you think a node will require with 10MB block in the next 5 years when the usage will be growing?
It seems to me that the otherwise-intelligent people are seeing the appropriate analogy as refusing to learn to run fast because they're trying to buy a car. Yes, most humans are capable of running faster and for longer distances than they currently can, with training. But training is a lot of work, and if your long-term goal is to go much faster than any human is known to be able to run, it's not clear that training is your best approach.
There are some new attempts being made without using a blockchain but still reaching the same level of consensus or finality. They are usually based on DAOs (directed acyclic graphs - not to be confused with The DAO Organization). A good introduction is this paper: Blockchain-Free Cryptocurrencies:
A Framework for Truly Decentralised Fast Transactions -
https://eprint.iacr.org/2016/871.pdf It was previously discussed on HN here: https://news.ycombinator.com/item?id=14730354
The acronym for directed acylic graphs is DAG, not DAO. That's also an incredibly vague thing to be "based on" and seems more like an appeal to "impressive technical sounding name that actually happens to be extremely trivial and something people learn about in a first year undergraduate mathematics course".
DAG and not DAO of course... The mathematical description is straightforward however the implementation (for example mining fee distribution) seems fairly complicated and loses a lot of the beauty of a blockchain. AFAIK Iota is the first serious attempt at running such a crypto currency.
The 7 TPS claim is an apples-to-oranges comparison.
You must remember that Bitcoin transactions are "settled" in that 7 TPS timescale, whereas VISA transactions are merely "recorded" in their 50K TPS rate.
In reality, it generally takes a minimum of 15 days for your VISA transaction to "settle" with your bank account. Thereby the true TPS rate is orders of magnitude lower for VISA.
You must remember that Bitcoin transactions are "settled" in that 7 TPS timescale, whereas VISA transactions are merely "recorded" in their 50K TPS rate.
In reality, it generally takes a minimum of 15 days for your VISA transaction to "settle" with your bank account. Thereby the true TPS rate is orders of magnitude lower for VISA.
The numbers are about throughput. Bitcoin has 7 TPS throughput and VISA has 50K TPS (peak) throughput.
With regard to latency bitcoin is still worse in practical applications - because VISA confirms a transaction immediately even if as you write it settles after 15 days - while bitcoin more or less settles after and an hour - but the first confirmation you get only after about 10 minutes.
With regard to latency bitcoin is still worse in practical applications - because VISA confirms a transaction immediately even if as you write it settles after 15 days - while bitcoin more or less settles after and an hour - but the first confirmation you get only after about 10 minutes.
So everyone quits making transactions for a week while Visa catches up? Or does there backlog increase indefinitely? OR do they have to settle at the same rate as record, just delayed? I'm guessing the last one...
A better question would be what 50K TPS means. Does it mean on average, or at peak, or etc.
Obviously in any case it will be faster than Bitcoin.
Obviously in any case it will be faster than Bitcoin.
Bandwidth is not the same thing as latency.
You're comparing latency to throughput. Visa intentionally has slow latency, to reduce fraud, which is a major problem with Bitcoin. Visa has excellent throughput, beating the pants off of Bitcoin, which is another major problem with Bitcoin.
Even if you spread Visa's transactions evenly over time, the 100 billion transactions per year [1] that they perform would be a couple orders of magnitude higher than what bitcoin can support (~3000 TPS)
[1] https://usa.visa.com/dam/VCOM/download/corporate/media/visa-...
[1] https://usa.visa.com/dam/VCOM/download/corporate/media/visa-...
I think you mean to use a total transaction number for bitcoin, rather than a per-second number, to compare to Visa.
If we use the 7 TPS number that people seem to be using (even though the real number I think is slightly lower), then we end up with 220,752,000 transactions in a year; three orders of magnitude less than Visa.
If we use the 7 TPS number that people seem to be using (even though the real number I think is slightly lower), then we end up with 220,752,000 transactions in a year; three orders of magnitude less than Visa.
If your mouth is sewn shut, it doesn't matter that much how fast you can digest food.
So how many transactions does each system fully settle in a month?
Well it takes a longer time to settle but the settledPerSecond is still 50k.
Bandwidth != Latency
Bandwidth != Latency
I don't understand how you know it can't be fast.
I think proof of work mining is extremely wasteful. But once it is in place, you can sign a merkle tree of any size. You can add as many transactions as you want. The problem is that the ledger has to grow and grow. It would be nice if something was developed where you didn't need to keep the whole history.
I think proof of work mining is extremely wasteful. But once it is in place, you can sign a merkle tree of any size. You can add as many transactions as you want. The problem is that the ledger has to grow and grow. It would be nice if something was developed where you didn't need to keep the whole history.
The problem there is that Lightning Network is as yet vaporware.
While I agree that only increasing block size forever (or simply removing the size limit) doesn't seem reasonable in the long run, are we sure that segwit and the off-chain scaling solutions proposed today will really solve the long-term scaling issues of BTC?
All the practical "here's how lightning's going to work" papers I've read so far leave me very skeptical. Here's an example: http://diyhpl.us/wiki/transcripts/scalingbitcoin/hong-kong/o...
The Q-and-A at the end in particular is interesting:
>Q: On the last slide, one of the assumptions was 3 channels per person. Assuming payment channels wouldn't be useful for retail sales, because you don't want to buy a coffee just to open immediately. Is that correct?
>A: Joseph might expand on this. Let's say you buy a coffee. You're probably buying a coffee only once, right? Well, maybe the coffee is $5, and you put $50 into the channel and leave it open. Then someone else comes to the coffee shop and she does the same thing. But she has a channel with the grocery store. There's me, coffee shop, Alice, grocery store, they all have channels. When I go to the grocery store next time, I don't have to open a channel. Payments are routed.
>Q: It sounded like everybody would have to open new channels.
>A: I am guessing the mean is going to be 3, but it will probably be an exponential distribution. Most people will probably have 1 channel, and then some might have 100s of channels open.
I don't know about you but while on paper that might work I still see a lot of hand waving, guesswork and rather unsubstantiated assumptions. Why would I decide to "lock" $50 worth of Bitcoins when I buy a $5 coffee? What's the incentive for me to do this? Where does this estimate of 3 come from exactly, I see it repeated everywhere but I can't find the maths behind it?
Here's an interesting attempt at simulating a real-scale ligtning network (why aren't there more of these? Aren't we talking about a $40bn market cap currency here?): https://hackernoon.com/simulating-a-decentralized-lightning-...
The simulation is rather unrealistic and I'm not sure how to interpret its conclusions. It seems to kinda work but there are issues:
>133,401 micropayments were attempted and 3461 (2.6%) of these failed. For successful payments the median number of hops was 19 and the median total fees were 2 bits (0.000002 btc) or 32% of the value transferred.
Now it could be caused by a bad simulation rather than a real issue with Lightning network, but frankly I can't tell at this point.
I don't have a horse in this race but as seen from the outside it all looks a bit rushed and amateurish. I don't know the whole story though, maybe I'm just poorly informed.
All the practical "here's how lightning's going to work" papers I've read so far leave me very skeptical. Here's an example: http://diyhpl.us/wiki/transcripts/scalingbitcoin/hong-kong/o...
The Q-and-A at the end in particular is interesting:
>Q: On the last slide, one of the assumptions was 3 channels per person. Assuming payment channels wouldn't be useful for retail sales, because you don't want to buy a coffee just to open immediately. Is that correct?
>A: Joseph might expand on this. Let's say you buy a coffee. You're probably buying a coffee only once, right? Well, maybe the coffee is $5, and you put $50 into the channel and leave it open. Then someone else comes to the coffee shop and she does the same thing. But she has a channel with the grocery store. There's me, coffee shop, Alice, grocery store, they all have channels. When I go to the grocery store next time, I don't have to open a channel. Payments are routed.
>Q: It sounded like everybody would have to open new channels.
>A: I am guessing the mean is going to be 3, but it will probably be an exponential distribution. Most people will probably have 1 channel, and then some might have 100s of channels open.
I don't know about you but while on paper that might work I still see a lot of hand waving, guesswork and rather unsubstantiated assumptions. Why would I decide to "lock" $50 worth of Bitcoins when I buy a $5 coffee? What's the incentive for me to do this? Where does this estimate of 3 come from exactly, I see it repeated everywhere but I can't find the maths behind it?
Here's an interesting attempt at simulating a real-scale ligtning network (why aren't there more of these? Aren't we talking about a $40bn market cap currency here?): https://hackernoon.com/simulating-a-decentralized-lightning-...
The simulation is rather unrealistic and I'm not sure how to interpret its conclusions. It seems to kinda work but there are issues:
>133,401 micropayments were attempted and 3461 (2.6%) of these failed. For successful payments the median number of hops was 19 and the median total fees were 2 bits (0.000002 btc) or 32% of the value transferred.
Now it could be caused by a bad simulation rather than a real issue with Lightning network, but frankly I can't tell at this point.
I don't have a horse in this race but as seen from the outside it all looks a bit rushed and amateurish. I don't know the whole story though, maybe I'm just poorly informed.
The simulation starts with each user having 14 channels open - seems like quite a strong assumption for a serious test (starting with 0 channels for each user and then randomly opening new ones would be much more interesting). After a talk by one of the lightning devs I also got the impression that they are betting that several hubs with thousands of channels would quickly emerge - due to the fee gained by running a channel. Needless to say this would undo quite a bit of the decentralized nature of bitcoin.
the incentive is that after you lock $50 in Bitcoins you get to spend $50 eventually for the same transaction fee
so if the transaction fee is $0.50, you get to transact at 1% cost
if you paid $0.50 for each coffee it would be 10%
so if the transaction fee is $0.50, you get to transact at 1% cost
if you paid $0.50 for each coffee it would be 10%
Seems like a good deal for the coffee shop (you don't have to pay for the Visa fee and you get some free customer retention on top of it all) but as a customer what do I gain from that, practically speaking? The only thing I can think of is low fees if I'm traveling abroad. But if the fees are really very low then your incentive becomes void, I won't bother putting $50 in the coffee shop if it only saves me $0.001 in fees.
Can you really imagine how this would work IRL?
"-Here you go sir, that'll be $32 please."
"-OK, I'm paying it Bitcoins... Oh, you don't have an open channel, I'm going to create one... Mmh, but how much to I put in? Let's say $100, I'll probably buy here again next week. But will that be enough? What if my total is just above that next time? I'll have to pay the fee twice. I guess I'll just make sure not to go over $100."
"-We also accept cash, Visa and MasterCard sir."
Again, maybe it can work, it just feels so "theoretical" so far, I haven't seen anybody paint a convincing picture of a what a "Bitcoin as Visa replacement" world would look like concretely.
Can you really imagine how this would work IRL?
"-Here you go sir, that'll be $32 please."
"-OK, I'm paying it Bitcoins... Oh, you don't have an open channel, I'm going to create one... Mmh, but how much to I put in? Let's say $100, I'll probably buy here again next week. But will that be enough? What if my total is just above that next time? I'll have to pay the fee twice. I guess I'll just make sure not to go over $100."
"-We also accept cash, Visa and MasterCard sir."
Again, maybe it can work, it just feels so "theoretical" so far, I haven't seen anybody paint a convincing picture of a what a "Bitcoin as Visa replacement" world would look like concretely.
You missed a really important feature of lightning. If you have a channel open with Starbucks, and Starbucks has a channel open to Wal-Mart, and Wal-Mart has a channel to $local_bank, which has a channel to $local_store, then you can use your Starbucks channel to pay $local_store.
It's much better than a Starbucks app.
It's much better than a Starbucks app.
Good point, but then again how this complex routing will be implemented in practice remains a bit foggy and highly experimental: http://bitfury.com/content/5-white-papers-research/whitepape...
And while this is an important feature of lighting, it's not actually a "feature" when compared to Visa or MasterCard and the centralized banking system from the point of view of the user. Ideally this should all be hidden away from the average customer.
People won't want to worry about graph theory when paying for a sandwich at a gas station. Existing payment solutions still wins hands down 99% of the time when it comes to convenience even if we imagine a "perfect" lightning network. I really have a hard time imagining what would drive a mainstream adoption of bitcoin over the current status-quo.
And while this is an important feature of lighting, it's not actually a "feature" when compared to Visa or MasterCard and the centralized banking system from the point of view of the user. Ideally this should all be hidden away from the average customer.
People won't want to worry about graph theory when paying for a sandwich at a gas station. Existing payment solutions still wins hands down 99% of the time when it comes to convenience even if we imagine a "perfect" lightning network. I really have a hard time imagining what would drive a mainstream adoption of bitcoin over the current status-quo.
Users don't need to worry about routing when they connect to the internet, though in fact the computer is making 10+ hops for any given connection.
Lightning will work the same way. Nobody needs to worry about graph theory, they can just generally assume that the graph is fully connected, and that their software will be able to find a path from A to B.
Lightning will work the same way. Nobody needs to worry about graph theory, they can just generally assume that the graph is fully connected, and that their software will be able to find a path from A to B.
The internet is not decentralized the way Bitcoin is. Actually I'd argue that the internet is more like the modern banking system: you have big corporations (ISPs, Google, Facebook, Netflix, Amazon...) interconnecting to provide a service to users in exchange for money. They have a vested interest in making sure the network actually works, at least for them. If you want to use the Visa payment system you need a bank account, if you want an internet connection you need an ISP. Bitcoin has nothing like that.
What will be bitcoin's "ISPs"? Who makes sure the graph remains connected and usable? Who invests in the "infrastructure", making sure channels remain well balanced? Some say that Lightning will be self-balancing through a clever set of incentives, but that's again extremely experimental and untested.
Also note the big "net neutrality" thing going on in the US right now. What will prevent big players from teaming up and interconnecting with each other to facilitate transactions while leaving out the rest?
I don't have the answers to any of these questions, maybe it's just FUD. I'm just surprised that bitcoin is a couple of weeks from making such a huge jump into the unknown. It's extremely interesting to be sure, but I feel like some people are going to get severely hurt if this whole thing comes crashing down.
What will be bitcoin's "ISPs"? Who makes sure the graph remains connected and usable? Who invests in the "infrastructure", making sure channels remain well balanced? Some say that Lightning will be self-balancing through a clever set of incentives, but that's again extremely experimental and untested.
Also note the big "net neutrality" thing going on in the US right now. What will prevent big players from teaming up and interconnecting with each other to facilitate transactions while leaving out the rest?
I don't have the answers to any of these questions, maybe it's just FUD. I'm just surprised that bitcoin is a couple of weeks from making such a huge jump into the unknown. It's extremely interesting to be sure, but I feel like some people are going to get severely hurt if this whole thing comes crashing down.
>Bitcoin has nothing like that.
I don't see a reason that exchanges couldn't take on the role of ISP/bank in this situation. Essentially you have an account with 1500 BTC at an exchange, and you say that you want to put 500BTC into a lightning network. Then the bank centralizes itself in the lightning network graph by making connections with other large banks and some major companies.
Of course what we've just done is recreated the modern centralized payment processing scheme on top of the bitcoin network (ie. a mom and pop shop connects to square connects to BoA has my money which doesn't actually exist anywhere, and they make ledger changes and top up later).
You might even be able to make such a system work with no additional transaction fees. But I'm not sure of that.
I don't see a reason that exchanges couldn't take on the role of ISP/bank in this situation. Essentially you have an account with 1500 BTC at an exchange, and you say that you want to put 500BTC into a lightning network. Then the bank centralizes itself in the lightning network graph by making connections with other large banks and some major companies.
Of course what we've just done is recreated the modern centralized payment processing scheme on top of the bitcoin network (ie. a mom and pop shop connects to square connects to BoA has my money which doesn't actually exist anywhere, and they make ledger changes and top up later).
You might even be able to make such a system work with no additional transaction fees. But I'm not sure of that.
>Users don't need to worry about routing when they connect to the internet
God I wish this was still true. The internet is so fragmented now I have to have IPs in different nations for a unified experience.
God I wish this was still true. The internet is so fragmented now I have to have IPs in different nations for a unified experience.
Why not just use Stellar or Ripple at this point? That's exactly what it was designed to solve. And it has the benefit of being able to use, you know, real currencies. So you can go to your coffee shop, instantly spend $5, and be done without having to worry about what the price of a bitcoin (or in this case, lumen) is.
Meanwhile in real world I already have a channel that's open to everyone.
It's called a credit/debit card.
It's called a credit/debit card.
More likely you just have 1BTC in an open connection to a company that specializes in strong connections to the LN, such as bitpay or coinbase.
> Can you really imagine how this would work IRL?
Yes. This is basically the exact user experience of the Starbucks app, and it's a fine experience.
You pre-pay an amount, have a balance open, transactions reduce that balance, and you occasionally need to reload your balance with another credit card transaction.
Which is to say I don't think this is an intractable problem if there is good software with good user experiences to help out.
All that said, I'm not current on the block-size vs SegWit debate, so my analogy could be flawed.
Yes. This is basically the exact user experience of the Starbucks app, and it's a fine experience.
You pre-pay an amount, have a balance open, transactions reduce that balance, and you occasionally need to reload your balance with another credit card transaction.
Which is to say I don't think this is an intractable problem if there is good software with good user experiences to help out.
All that said, I'm not current on the block-size vs SegWit debate, so my analogy could be flawed.
But Starbucks is the perfect use case for this Lightning scenario, it's a frequent purchase for a relatively small amount. Basically anywhere where a "voucher" system like this starbucks app exists lightning could probably fit with minor disturbance.
Now take amazon, take that small shop on the street where you go twice a year because it's super expensive but it's also opened very late, take your car mechanic, take that guy on ebay you're buying a pair of socks from, take that restaurant in Berlin during your vacation where you'll probably never go back. Will you be willing to "pledge" 10 times the amount while buying there? And if not won't the fee be dissuasive? What's in it for me?
And won't that create negative side effects for competition? For instance if a new coffee shop opens next to Starbucks with your system I have an incentive to keep going to Starbucks since it already has an open channel (exactly what the Starbucks app is about, except I'm paying for it, not Starbucks), so effectively it makes it harder for newcomers to compete. Same thing for, say, amazon vs. some random ebay seller. The more popular a shop, the more likely it'll be to have an open channel pending. Isn't that going against the "completely decentralized currency" ethos? What good is it that the currency is decentralized if I can effectively only use it with a limited number of companies?
It would be pretty amusing to me to see the cyberpunk libertarian cryptocurrency turn into a glorified Costco membership.
Now take amazon, take that small shop on the street where you go twice a year because it's super expensive but it's also opened very late, take your car mechanic, take that guy on ebay you're buying a pair of socks from, take that restaurant in Berlin during your vacation where you'll probably never go back. Will you be willing to "pledge" 10 times the amount while buying there? And if not won't the fee be dissuasive? What's in it for me?
And won't that create negative side effects for competition? For instance if a new coffee shop opens next to Starbucks with your system I have an incentive to keep going to Starbucks since it already has an open channel (exactly what the Starbucks app is about, except I'm paying for it, not Starbucks), so effectively it makes it harder for newcomers to compete. Same thing for, say, amazon vs. some random ebay seller. The more popular a shop, the more likely it'll be to have an open channel pending. Isn't that going against the "completely decentralized currency" ethos? What good is it that the currency is decentralized if I can effectively only use it with a limited number of companies?
It would be pretty amusing to me to see the cyberpunk libertarian cryptocurrency turn into a glorified Costco membership.
And if all my purchases are to unique vendors, I gain nothing?
I have been being told all along that the 7TPS limit is just an artificially-imposed limit and it's only there because the devs don't actually know what would happen if they (say) doubled it... was this a lie?
Surely Hacker News understands exponents enough to see that doubling the size does get us to Visa-like 50k transactions in only 16 doubles.
surely HN understands exponents enough to notice that 1MB * 2^16 = 64GigaBytes.
Yes. And how many applications actually have to store the block chain?
I am rather stunned that the entire global bitcoin network, with its colossal combined computing power, and staggering electricity consumption, is only capable of sustaining 7 tps.
The level of inefficiency here is mind-boggling. Surely this must be one of the least efficient, least environmentally-friendly computing ventures ever?
The level of inefficiency here is mind-boggling. Surely this must be one of the least efficient, least environmentally-friendly computing ventures ever?
I can imagine a situation where the transactions are of such a big value that even the 7 transactions per second are enough to pay for the whole system sustenance. But yeah the system currently burns resources on a level comparable to gold mining (https://medium.com/@zby/proof-of-work-8d8265def194) - but it is much less useful than gold (for value store).
Forgive my ignorance, but hasn't the historical value store of bitcoin eclipsed that of gold?
Yes and no. 1 Bitcoin is worth more than an ounce of gold ($2340 Bitcoin to $1215 ounce of gold). But the value of all outstanding Bitcoin vs all mined gold is much lower ($39 billion all Bitcoin to $8 Trillion all gold).
What are you really asking about? What is historical value store of bitcoin? The value stored in bitcoin is still orders of magnitude less than that stored in gold.
Sure the exchange rate of bitcoin has grown much - but it does not make it better value store now, rather the opposite.
Sure the exchange rate of bitcoin has grown much - but it does not make it better value store now, rather the opposite.
It is too early to judge. A good store of value probably shouldn't increase in value 3-10x each year. If I were to put $1000USD in gold today, I could be fairly sure that in 30 years it will still be worth, at least, $500USD. If I were to do the same with bitcoin, I have no idea what would even happen in 5 years.
This is only layer1 (like IP in the networking world). Wait until layer2 comes (Lightning Network, TumbleBit), then we will reach the scalability levels we need for the entire planet to use the same blockchain.
But, but, but...... IP is on Layer 3 ;.;
OSI Model: http://www.webopedia.com/quick_ref/OSI_Layers.asp
OSI Model: http://www.webopedia.com/quick_ref/OSI_Layers.asp
Err, each layer on top of IP slows down traffic, not speeds it up. The extra overhead and retransmits result in less useful data being transferred with each packet.
Perhaps not the best example to use.
Perhaps not the best example to use.
Depends on what you mean by speed doesn't it? Segmentation via additional layers certainly speeds up the network as a whole. I thought the ability to scale via adding additional layers is why SDN took off.
The keyword is wait.
Waiting. Since 2011.
Waiting. Since 2011.
I'm also surprised to learn this, quite disappointed too.
It's weird because people will argue about how bitcoin is safe because you can trust it, but it seems it's safer to pay for a centralized service and trust such a service because it's administered by very competent people with a high level of scrutiny.
If you look globally, that would mean bitcoin is much, much more expensive. It is just some kind of cool toy for people who hate the federal reserve.
It's weird because people will argue about how bitcoin is safe because you can trust it, but it seems it's safer to pay for a centralized service and trust such a service because it's administered by very competent people with a high level of scrutiny.
If you look globally, that would mean bitcoin is much, much more expensive. It is just some kind of cool toy for people who hate the federal reserve.
The colossal compute power goes up when more fiat enter the system and traders speculate the price up. It is a security mechanism, not a throughput mechanism
> colossal combined computing power
It's colossal because of the sliding difficulty. The block period is a big portion of why the transaction rate is what it is.
It's colossal because of the sliding difficulty. The block period is a big portion of why the transaction rate is what it is.
That's right, the reward for mining a block doesn't change just because you put more effort into it, and the difficulty adjusts to keep the rate approximately the same over time. The only reason it takes so much power to mine is there are so many people competing for the same limited prize.
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> However, any changes require consensus from the miners who create Bitcoins and process transactions, and because it's not in their best incentive to do anything to reduce those transaction fees, no change has received majority consensus.
This is an unfortunate misunderstanding on the part of the miners, and the math is really simple: imagine a network on top of Bitcoin, e.g. lightning.network, which can process 10 million transactions off-chain and settle it on the Bitcoin blockchain using only a single transaction. Imagine if every one of those 10 million off-chain transactions paid just 0.01 cent in fees... this would earn the payment processor $1000, which can only be realized by publishing a Bitcoin transaction, in competition with everyone else making a lot on off-chain fees. The result is that off-chain profits (in the form of fees) would allow off-chain payment processors to pay huge blockchain fees, because they can deduce it from the profit they've made on off-chain fees. Nothing, in my opinion, will increase Bitcoin fees more than layer 2 protocols creating more users and transactions (because fees are paid per off-chain transaction).
The point some miners are missing is that one billion off-chain transactions each paying a 0.01 cent fee is more profitable than 2,000 on-chain transactions paying $1 each. And if everyone is able to earn $100,000 in fees by publishing a single Bitcoin transaction, this must push up Bitcoin fees, since people will be competing on getting into the chain with the bidding power from their earned profits.
This is an unfortunate misunderstanding on the part of the miners, and the math is really simple: imagine a network on top of Bitcoin, e.g. lightning.network, which can process 10 million transactions off-chain and settle it on the Bitcoin blockchain using only a single transaction. Imagine if every one of those 10 million off-chain transactions paid just 0.01 cent in fees... this would earn the payment processor $1000, which can only be realized by publishing a Bitcoin transaction, in competition with everyone else making a lot on off-chain fees. The result is that off-chain profits (in the form of fees) would allow off-chain payment processors to pay huge blockchain fees, because they can deduce it from the profit they've made on off-chain fees. Nothing, in my opinion, will increase Bitcoin fees more than layer 2 protocols creating more users and transactions (because fees are paid per off-chain transaction).
The point some miners are missing is that one billion off-chain transactions each paying a 0.01 cent fee is more profitable than 2,000 on-chain transactions paying $1 each. And if everyone is able to earn $100,000 in fees by publishing a single Bitcoin transaction, this must push up Bitcoin fees, since people will be competing on getting into the chain with the bidding power from their earned profits.
I think what the miners are afraid of, is that the power of the bitcoin network, leaves their hands and fall into the hands of second layer operators. At the same time, a higher blockchain size would make it less profitable for small miners, to mine bitcoin. Bitfury recently released an analysis, that predicts that 95% of current miners, would find mining to be unprofitable at blocksize of 8MB. This would further centralize profits and power over the protocol, with the big datacenter miners.
> Bitfury recently released an analysis, that predicts that 95% of current miners, would find mining to be unprofitable at blocksize of 8MB.
I don't understand this. Due to what would 95% of current miners find mining unprofitable at 8MB blocks?
I don't understand this. Due to what would 95% of current miners find mining unprofitable at 8MB blocks?
8mb blocks would mean that the bitcoin blockchain, would grow by 35 gigabyte a month. Compare this to the total blockchain size of about 120gb right now. This increases the cost of mining, by requiring miners to keep up on harddisk space. This cost can be amortized, as you can scale your processing independently of your harddisk space, making it even more profitable to mine for big investors, than smaller fish.
There's an old idea that solves the storage issue completely - utxo commitments.
Literally the only real throughput limit is end user's download bandwidth, which means 500MB blocks or so for 10Mbps download. Spv clients are fine for those unfortunate to have monthly limits.
>making it even more profitable to mine for big investors, than smaller fish.
Both storage and bandwidth are utterly insignificant cost items in a mining operation.
Literally the only real throughput limit is end user's download bandwidth, which means 500MB blocks or so for 10Mbps download. Spv clients are fine for those unfortunate to have monthly limits.
>making it even more profitable to mine for big investors, than smaller fish.
Both storage and bandwidth are utterly insignificant cost items in a mining operation.
>This increases the cost of mining, by requiring miners to keep up on harddisk space
miners typically mine in pools. so they don't need to download the blockchain because the pool is doing it for them.
miners typically mine in pools. so they don't need to download the blockchain because the pool is doing it for them.
That's a much more informative post than the link, and yet, I still don't really understand all the jargon.
But it also reinforces for me just how not ready for primetime BTC is, and it makes me think the appreciation over the past year is truly insane.
But it also reinforces for me just how not ready for primetime BTC is, and it makes me think the appreciation over the past year is truly insane.
Bitcoin doesn't need to be prime time at all. Almost no banking services, outside of checking accounts and index funds, are "ready for prime time" and yet banking services is a huge market.
Fair point, but that still leaves a burden of proof to show what niche Bitcoin fills and how much that should be worth. It has to become a major pillar of either consumer spending or the financial system to justify its value.
Don't get me wrong, I think the concept is brilliant. I just don't see how nearly 10x value was created in about a year.
Don't get me wrong, I think the concept is brilliant. I just don't see how nearly 10x value was created in about a year.
I would guess that the market value of Bitcoin will sink a bit due to the muddiness of this announcement. Which suggests that a centralized party (Bitcoin.org) has a great effect on Bitcoin after all, despite its appeal of being a decentralized currency.
The demand for something like BTC is clearly there though.
How many individuals/7B is there?
You skipped the option that's closest to consensus! SegWit2x has industry support and has a short enough window to lock-in before the Aug 1st UASF
EDIT: Quick reference https://medium.com/@wintercooled/the-road-to-segwit-activati...
EDIT: Quick reference https://medium.com/@wintercooled/the-road-to-segwit-activati...
Though it has industry support, it does not have user support, because it does not have a working, tested implementation released. With less than 3 weeks until the fork triggers, I highly doubt they are going to get substantial user adoption by the time the fork triggers.
One of the most amazing properties of Bitcoin is that it's completely user driven. When it comes to the fundamental consensus rules, no amount of hashrate or corporate agreements can force a change onto the userbase. It's a system that intentionally resists central control. Any changes need to start with userbase support, and I'm just not seeing that with Segwit2x.
If I am wrong, I will find out soon enough.
One of the most amazing properties of Bitcoin is that it's completely user driven. When it comes to the fundamental consensus rules, no amount of hashrate or corporate agreements can force a change onto the userbase. It's a system that intentionally resists central control. Any changes need to start with userbase support, and I'm just not seeing that with Segwit2x.
If I am wrong, I will find out soon enough.
How do you define user support?
All the definitions I heard are able to be manipulated easily:
-The/r/bitcoin consensus? Is mainly in existence because of censorship
-User wallets online? Can be easily created with AWS instances
-Bitcoin core? Who decides these bunch of people are in charge to represent all users and not a bunch of other developers?
One obvious alternative is to let Bitcoin follow economic incentives: Bitcoin miners gain Bitcoin, so they have a vested interest that their income is and stays valuable. Thus why not let the miners decide. This is also the only place where you can't influence/manipulate Bitcoin easily.
All the definitions I heard are able to be manipulated easily:
-The/r/bitcoin consensus? Is mainly in existence because of censorship
-User wallets online? Can be easily created with AWS instances
-Bitcoin core? Who decides these bunch of people are in charge to represent all users and not a bunch of other developers?
One obvious alternative is to let Bitcoin follow economic incentives: Bitcoin miners gain Bitcoin, so they have a vested interest that their income is and stays valuable. Thus why not let the miners decide. This is also the only place where you can't influence/manipulate Bitcoin easily.
User support is really easily measured in the event of a split and really hard to measure before the split.
Quite simply, the coin price indicates support. After the split, there will be two versions of the Bitcoin network with independent prices. A non zero price indicates non-zero support, and as long as it's at least 25% of the original price, it'll probably be okay.
A high price indicates high support.
In the long term, the hashrate follows the price. Miners will mine the coin with the highest price, because they can't afford any other option. Electricity is expensive.
Quite simply, the coin price indicates support. After the split, there will be two versions of the Bitcoin network with independent prices. A non zero price indicates non-zero support, and as long as it's at least 25% of the original price, it'll probably be okay.
A high price indicates high support.
In the long term, the hashrate follows the price. Miners will mine the coin with the highest price, because they can't afford any other option. Electricity is expensive.
So you say mining of Bitcoin only follows the market value?
Isn't it at least to a large degree the other way round? That market value is following based on what is the most mined chain? If there's a split and 80% of mining power switches to one branch. Then the 20% branch loses a lot of utility for at least some time. It now has five times slower transactions until difficulty gets adjusted(or you change the proof of work of bitcoin, which itself can be precarious). And now to a minor degree the minority chain has also less safety (less hashing power).
Meanwhile why should anyone buy or send Bitcoins at the point of a split? There's a real chance that one branch will die and then you can lose the coins. The best strategy is probably to wait. So the market at least is in some way inhibited during a split.
On the other hand I'd argue miners of the minority chain have a lot of pressure to change branches. Market is not yet a good indicator only hashing power and they'll lose money if they don't continue to mine on the more profitable chain. Their safest bet is to change chains. Also they know that other miners of the minority chain think probably similarly. That's why imo in Bitcoin history every fork/split was resolved very quickly and a branch "won".
Isn't it at least to a large degree the other way round? That market value is following based on what is the most mined chain? If there's a split and 80% of mining power switches to one branch. Then the 20% branch loses a lot of utility for at least some time. It now has five times slower transactions until difficulty gets adjusted(or you change the proof of work of bitcoin, which itself can be precarious). And now to a minor degree the minority chain has also less safety (less hashing power).
Meanwhile why should anyone buy or send Bitcoins at the point of a split? There's a real chance that one branch will die and then you can lose the coins. The best strategy is probably to wait. So the market at least is in some way inhibited during a split.
On the other hand I'd argue miners of the minority chain have a lot of pressure to change branches. Market is not yet a good indicator only hashing power and they'll lose money if they don't continue to mine on the more profitable chain. Their safest bet is to change chains. Also they know that other miners of the minority chain think probably similarly. That's why imo in Bitcoin history every fork/split was resolved very quickly and a branch "won".
For the august 1th date user support for segwit2x does not matter at all. If the miners that agreed to run this software stick to it, they will start signaling bit4 on 21th July, when they reach 80% hashrate it will orphan non segwit blocks (kinda like bip148 but with miner support) and at the same time signal bit1 to lock in segwit which by then if that works has enough hashrate to overcome the 95% threshold to activate it. No user support at all needed for this.
Only the 2x part of segwit2x will need user adoption, but that comes 3 months after segwit has activated (next round of drama, long on popcorn)
Only the 2x part of segwit2x will need user adoption, but that comes 3 months after segwit has activated (next round of drama, long on popcorn)
User support means nothing. Users have to either accept the way that the system works, persuade the miners to change their ways, or switch to another coin whose systems they prefer.
Certainly, the last of those options seems to be popular recently.
Certainly, the last of those options seems to be popular recently.
Unlike the UASF timebomb, SegWit2x won't activate unless there's 80%+ support, so it's not going to trigger a fork. (Well, technically it will, but if activated the non-SegWit2x rump will quickly be reduced to irrelevance.)
There's currently 86.5% support.
That's 86.5% miners signalling to signal support. Segwit2x is still yet to have a working and tested implementation.
Would you support something which has not been fundamentally tested?
Would you support something which has not been fundamentally tested?
> Segwit2x is still yet to have a working ...
https://github.com/btc1/bitcoin
> ... and tested implementation.
It will go online on the testnet tomorrow
https://github.com/btc1/bitcoin
> ... and tested implementation.
It will go online on the testnet tomorrow
> It will go online on the testnet tomorrow
It seems rather premature to call it working before it gets properly tested. And three weeks is a woefully short time to test something like this, fix any issues that are found, and then re-test.
It seems rather premature to call it working before it gets properly tested. And three weeks is a woefully short time to test something like this, fix any issues that are found, and then re-test.
The testnet is already online since a few weeks now.
But according to the segwit2x timeline this step should come tomorrow if they are still on track:
July 14 - Agreement Participants Install and Test Milestone
July 14 - Agreement Participants Install and Test Milestone
https://en.bitcoin.it/wiki/Segwit_support
None of the core developers support segwit2x.
None of the core developers support segwit2x.
A big part of Bitcoin's entertaining in-fighting is due to the 'core' developers having a mindset that conflicts with many other people. Some speculate that this is because a large number of devs are paid by Blockstream, who have financial incentives to keep bitcoin congested so that their paid-for products (like their lightning implementations) have more value.
I have no bitcoins, so I have no real preference in what happens. But watching politics destroy a 'decentralised' currency is good entertainment :)
I have no bitcoins, so I have no real preference in what happens. But watching politics destroy a 'decentralised' currency is good entertainment :)
That "Bitcoin is currently suffering from significant scaling problems" is the topic of debate.
SegWit was not created toward the end of increasing the blocksize, it was created to fix transaction malleability along with various other improvements. That it arranges the partitioning of witness data from transaction data to sort-of not count against the block size was a bonus, especially since a lot of dubious attempts at forking to a larger block size we're being given decent backing in terms of funds.
The point of fixing transaction malleability is that it allows for more robust smart contracts that depend on transaction validity. Once you enable these smart contracts, you start scratching at the surface of scaling methods that shift risk to the willing participants. As every Bitcoin transaction must be validated by every Bitcoin node, the entire network must inherit the risk of attempting to satisfy demand for transactions. Not just in terms of hardware requirements, but also in terms of the viability of paying for security of the network against a diminishing block creation subsidy.
The maintainers of Core, and plenty of other people in the Bitcoin community, see the scarcity of block space as a positive and as an inevitability. It's a positive in that it provides the incentive for security as the subsidy gets reduced, and inevitable as any 'spare' space in blocks can incentive superfluous transactions. There's plenty of development on the front of moving bitcoins between other chains with different consensus rules that would allow for better scaling, and for better development and testing of solutions that could eventually make their way to the main blockchain.
I'm personally of the opinion that once you allow for the transfer of bitcoins to and from second order chains, that Bitcoin can essentially enter a version freeze.
SegWit was not created toward the end of increasing the blocksize, it was created to fix transaction malleability along with various other improvements. That it arranges the partitioning of witness data from transaction data to sort-of not count against the block size was a bonus, especially since a lot of dubious attempts at forking to a larger block size we're being given decent backing in terms of funds.
The point of fixing transaction malleability is that it allows for more robust smart contracts that depend on transaction validity. Once you enable these smart contracts, you start scratching at the surface of scaling methods that shift risk to the willing participants. As every Bitcoin transaction must be validated by every Bitcoin node, the entire network must inherit the risk of attempting to satisfy demand for transactions. Not just in terms of hardware requirements, but also in terms of the viability of paying for security of the network against a diminishing block creation subsidy.
The maintainers of Core, and plenty of other people in the Bitcoin community, see the scarcity of block space as a positive and as an inevitability. It's a positive in that it provides the incentive for security as the subsidy gets reduced, and inevitable as any 'spare' space in blocks can incentive superfluous transactions. There's plenty of development on the front of moving bitcoins between other chains with different consensus rules that would allow for better scaling, and for better development and testing of solutions that could eventually make their way to the main blockchain.
I'm personally of the opinion that once you allow for the transfer of bitcoins to and from second order chains, that Bitcoin can essentially enter a version freeze.
> That "Bitcoin is currently suffering from significant scaling problems" is the topic of debate.
I find it hard to see how anyone could reasonably dispute it. Transactions were fast and cheap-to-free until mid-2015, when the blocks filled. Since then transactions have been slow and expensive.
I find it hard to see how anyone could reasonably dispute it. Transactions were fast and cheap-to-free until mid-2015, when the blocks filled. Since then transactions have been slow and expensive.
And yet the people who maintained the protocol and scaled transaction throughput while it grew to tens of billions of dollars in value largely dispute it. If SegWit could activate without a hostile takeover, it would be much easier to demonstrate why there are no scaling issues.
A lot of ignorant people want to throw the baby out with the bath water though, so ultimately we're probably going to have two chains, one that does it the way the talent in the community says it should be done, and another that shifts responsibility around to a few scaled entities. My money is not on the latter.
A lot of ignorant people want to throw the baby out with the bath water though, so ultimately we're probably going to have two chains, one that does it the way the talent in the community says it should be done, and another that shifts responsibility around to a few scaled entities. My money is not on the latter.
It's like they went to Solomon and said "so, shall we cut the kid in half vertically or horizontally?" waving big knives around. Their plan is to use the halves of the corpse to beat each other to death.
this is no longer true. blocks are not filling and mempool is clearing:
https://www.reddit.com/r/Bitcoin/comments/6hzw6c/010_satoshi...
it looks like some faction was spamming the network with transactions to create a false sense of urgency about the need to scale.
https://www.reddit.com/r/Bitcoin/comments/6hzw6c/010_satoshi...
it looks like some faction was spamming the network with transactions to create a false sense of urgency about the need to scale.
They most definitely were. It should also be noted that most transactions already occur off-chain at exchanges.
Bitcoin may not scale well, but it is the capacity problems that lead to high fees. These are two different things and it is important to not conflate the two.
Scalability has improved somewhat during the past two years and most developers believe it is time to increase capacity as well. The question you refer to is how to increase capacity, within the scaling constraints.
I understand the ambition to be neutral in a contentious issue but one must be careful as not to spread misinformation. "Discarding less useful data" is not how segwit works at all. Segwit does away with the fixed blocksize and uses instead a flexible block size of up to four times the previous fixed limit.
The discarding you refer to is the backwards compatible aspect of segwit where it can communicate with older nodes that do not implement this feature by not sending them the data. It is not discarded and a supermajority of the network must use the full larger blocks in order for this to be secure. It is merely a transition method to allow for upgraded and non-upgraded nodes to briefly share the same network.
So what you refer to are two methods for larger blocks. One must be upgraded with a flag day where everyone upgrades or you lose money, and one allows for a transition with a certain amount of backwards compatibility.
It is also misleading to describe this as two "sides". The sides are mostly within social media. The technical debate has been had and there was overwhelming consensus among the developers that the backwards compatible way should be deployed first.
If the technology takes off and solutions such as Lightning prove viable, most developers agree that the non-witness part of the blocks probably needs to be upgraded as well.
Scalability has improved somewhat during the past two years and most developers believe it is time to increase capacity as well. The question you refer to is how to increase capacity, within the scaling constraints.
I understand the ambition to be neutral in a contentious issue but one must be careful as not to spread misinformation. "Discarding less useful data" is not how segwit works at all. Segwit does away with the fixed blocksize and uses instead a flexible block size of up to four times the previous fixed limit.
The discarding you refer to is the backwards compatible aspect of segwit where it can communicate with older nodes that do not implement this feature by not sending them the data. It is not discarded and a supermajority of the network must use the full larger blocks in order for this to be secure. It is merely a transition method to allow for upgraded and non-upgraded nodes to briefly share the same network.
So what you refer to are two methods for larger blocks. One must be upgraded with a flag day where everyone upgrades or you lose money, and one allows for a transition with a certain amount of backwards compatibility.
It is also misleading to describe this as two "sides". The sides are mostly within social media. The technical debate has been had and there was overwhelming consensus among the developers that the backwards compatible way should be deployed first.
If the technology takes off and solutions such as Lightning prove viable, most developers agree that the non-witness part of the blocks probably needs to be upgraded as well.
Capacity is scaling from the user perspective. If it costs $5 to send $5 worth of bitcoin because of transaction congestion and it's only processing a tiny fraction of what a single US credit card network does, the entire system is not scaling, regardless of how many nodes are running it.
Users don't care about scaling at all. They care about capacity only indirectly.
Scaling is something developers care about, but in the nascent field of cryptocurrencies there probably no single solution.
It should be noted that with your credit card example, however, that credit card networks charge a percentage of the funds transferred while in the case of Bitcoin it is instead a fixed fee. Should you instead have said that it costs $5 to send $5000 it would have been equally true but sounded quite different.
That Bitcoin as it is described in the whitepaper doesn't scale to even a single US credit card network should be obvious to any reasonably informed reader. That every participant in the network store everyone else's transactions forever has its limitations. Does that mean the technology is useless? No, it means the use case is different from credit cards.
It seems possible to build payment systems on top of Bitcoin that fills those use cases, and sidechains and payment channels are research along those lines. But just as crypocurrencies were a theoretical possibility twenty years ago, one should not expect working products too soon. It's not like there is a shortage of payment solutions in the meantime. For end users, credit cards offer a negative cost, so even then we should not expect the use cases to be identical.
Scaling is something developers care about, but in the nascent field of cryptocurrencies there probably no single solution.
It should be noted that with your credit card example, however, that credit card networks charge a percentage of the funds transferred while in the case of Bitcoin it is instead a fixed fee. Should you instead have said that it costs $5 to send $5000 it would have been equally true but sounded quite different.
That Bitcoin as it is described in the whitepaper doesn't scale to even a single US credit card network should be obvious to any reasonably informed reader. That every participant in the network store everyone else's transactions forever has its limitations. Does that mean the technology is useless? No, it means the use case is different from credit cards.
It seems possible to build payment systems on top of Bitcoin that fills those use cases, and sidechains and payment channels are research along those lines. But just as crypocurrencies were a theoretical possibility twenty years ago, one should not expect working products too soon. It's not like there is a shortage of payment solutions in the meantime. For end users, credit cards offer a negative cost, so even then we should not expect the use cases to be identical.
> it costs $5 to send $5 worth of bitcoin
Not that this is a whole lot better, but the cost is $1.48 for fastest confirmation time, and $0.42 if a delay of 15-300 minutes is acceptable to you.
Source: https://bitcoinfees.21.co/
Not that this is a whole lot better, but the cost is $1.48 for fastest confirmation time, and $0.42 if a delay of 15-300 minutes is acceptable to you.
Source: https://bitcoinfees.21.co/
How is this supposed to be competitive with the real world?
Paypal transactions, Swish (Sweden), etc. etc. are instant and often with zero fees.
Paypal transactions, Swish (Sweden), etc. etc. are instant and often with zero fees.
There are many situations where it is a significant improvement:
* Fee is not dependent on amount of money you're sending. You can send $200M worth of Bitcoin to a company in China and it will only cost you $1.50, try doing that with a wire transfer.
* Transactions are "final": after 3-6 confirmations you can have a great degree of confidence it won't get reversed
* Compared to Western Union or MoneyGram, it's still faster and cheaper
But in its current state, bitcoin is definitely not a replacement for your Visa card when buying groceries at the store. Maybe Lightning will change that though.
* Fee is not dependent on amount of money you're sending. You can send $200M worth of Bitcoin to a company in China and it will only cost you $1.50, try doing that with a wire transfer.
* Transactions are "final": after 3-6 confirmations you can have a great degree of confidence it won't get reversed
* Compared to Western Union or MoneyGram, it's still faster and cheaper
But in its current state, bitcoin is definitely not a replacement for your Visa card when buying groceries at the store. Maybe Lightning will change that though.
1. I don't want to spend $200M worth of Bitcoin to a company in China. Something tells me that when you're ready to send that amount of money, bank fees do not even register in the expenses.
2. So, if transactions cannot be reversed, and I erroneously send money, or am tricked into sending money, I can't get it back?
3. So, BitCoin wins only when compared to Western Union and MoneyGram. Oh, what an achievement.
In it's current state bitcoin isn't a replacement for anything, really
2. So, if transactions cannot be reversed, and I erroneously send money, or am tricked into sending money, I can't get it back?
3. So, BitCoin wins only when compared to Western Union and MoneyGram. Oh, what an achievement.
In it's current state bitcoin isn't a replacement for anything, really
As a BTC amateur, trying to approach it from an ordinary user's perspective, all I know is I used to be able to set whatever fee I wanted and wait a few hours and things would get through, and now I have to play some sort of game of chicken with the network, guessing whether my transaction will ever be processed unless I pay as large a fee as possible.
I've used the fee prediction engines to try to avoid low fees and still ended up waiting eight days for a transaction to process. I gave up on it during that week, only for it to go through after I paid another way.
I don't really get the debate, I mean maybe implement the solutions from both sides at once? I don't care, my local solution is to just avoid it as a payment network for now. That's its own kind of vote I guess...
I'm sure there will be a camp arguing that I just wasn't smart enough, with the corollary that UX as a discipline coddles whiners like me.
Maybe so.
The game theory of fees and congestion is still interesting, with miners always interested in an incrementally more painful network for users, until the tragedy of the commons hits and it collapses.
Bitcoin has a first mover advantage, which led to some network effects increasing its popularity. Miners are extracting some rents from that popularity right now. But there may be a weird game theory here, where users are driven to prefer newer bitcoin clones with smaller (less secure) networks, simply because the fees demanded are far lower and (more importantly) more predictable. Price volatility of newer networks is a major a downside, but there's an equilibrium. Everything has a price, even volatility/stability. If you're doing one transaction and not storing value, then your risk on a new network is bounded by how long it takes you to get money in or out of the network and process the transaction. BTC will bleed off support, under some values of: BTC fee, BTC tx processing time, processing time variation, velocity in and out of smaller network, and volatility of smaller network. (This might be asymptotic and leave BTC the leader though, no guarantees.)
While creating a lot of confusion about long term coin viability, these forces could provide a useful equilibrium on power consumption, a downward force on how much power we want validating transactions. I've been worried about the power cannibalism scenario, where BTC becomes a payments standard but we're racing to commit all new power generation simply to verifying the network. But power use puts a floor on tx fees, and users with available alternatives put a ceiling on them, so... maybe we won't build a dyson sphere dedicated only to powering one payment network after all.
I've used the fee prediction engines to try to avoid low fees and still ended up waiting eight days for a transaction to process. I gave up on it during that week, only for it to go through after I paid another way.
I don't really get the debate, I mean maybe implement the solutions from both sides at once? I don't care, my local solution is to just avoid it as a payment network for now. That's its own kind of vote I guess...
I'm sure there will be a camp arguing that I just wasn't smart enough, with the corollary that UX as a discipline coddles whiners like me.
Maybe so.
The game theory of fees and congestion is still interesting, with miners always interested in an incrementally more painful network for users, until the tragedy of the commons hits and it collapses.
Bitcoin has a first mover advantage, which led to some network effects increasing its popularity. Miners are extracting some rents from that popularity right now. But there may be a weird game theory here, where users are driven to prefer newer bitcoin clones with smaller (less secure) networks, simply because the fees demanded are far lower and (more importantly) more predictable. Price volatility of newer networks is a major a downside, but there's an equilibrium. Everything has a price, even volatility/stability. If you're doing one transaction and not storing value, then your risk on a new network is bounded by how long it takes you to get money in or out of the network and process the transaction. BTC will bleed off support, under some values of: BTC fee, BTC tx processing time, processing time variation, velocity in and out of smaller network, and volatility of smaller network. (This might be asymptotic and leave BTC the leader though, no guarantees.)
While creating a lot of confusion about long term coin viability, these forces could provide a useful equilibrium on power consumption, a downward force on how much power we want validating transactions. I've been worried about the power cannibalism scenario, where BTC becomes a payments standard but we're racing to commit all new power generation simply to verifying the network. But power use puts a floor on tx fees, and users with available alternatives put a ceiling on them, so... maybe we won't build a dyson sphere dedicated only to powering one payment network after all.
> maybe implement the solutions from both sides at once
HERETIC
No really, this is exactly what Segwit2x is doing, but it is still heresy for the UASF camp.
HERETIC
No really, this is exactly what Segwit2x is doing, but it is still heresy for the UASF camp.
Not at all. Segwit2x is a compromise that's fine by me. Activate segwit then increase block size. It will result in some increase of miner centralization, but not to the extent that 32MB blocks like Bitmain wants would.
Answer me this-- if it's opposition is UASF, why did bitmain, after Segwit2X got so much support, announce they were going to hard fork anyway?
https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip14...
The Bip148 crowd is happy with Segwit2X because it effectively activates the UASF represented by Bip-148. We don't really care which of the BIP mechanisms is used to activate segwit if segwit is (And I think they are changing 148 to activate along with Segwit2x so there's no split in the support between the two.)
Answer me this-- if it's opposition is UASF, why did bitmain, after Segwit2X got so much support, announce they were going to hard fork anyway?
https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip14...
The Bip148 crowd is happy with Segwit2X because it effectively activates the UASF represented by Bip-148. We don't really care which of the BIP mechanisms is used to activate segwit if segwit is (And I think they are changing 148 to activate along with Segwit2x so there's no split in the support between the two.)
Fee estimation is an impossible task. There's never any guaranteed fee that will get your transaction accepted.
Imagine there's 11 people waiting at a bus stop, and the next bus that arrives has 10 spare seats. There's no pricing model that will allow all 11 people on to that bus, regardless of how much the people want to pay, or even how you rate the users. So it goes with bitcoin.
Imagine there's 11 people waiting at a bus stop, and the next bus that arrives has 10 spare seats. There's no pricing model that will allow all 11 people on to that bus, regardless of how much the people want to pay, or even how you rate the users. So it goes with bitcoin.
Or,
Any distributed payment network will asymptotically approach unusability over time.
Otherwise miners are leaving cash on the table.
Any distributed payment network will asymptotically approach unusability over time.
Otherwise miners are leaving cash on the table.
I'd argue the other way. They didn't get involved in this mess and are just warning their users about possible disruption. What you wrote is your point of view which people might agree or disagree with.
The article doesn't state what the issue is though. You probably knew immediately if you've kept up with it, but as someone interested in Bitcoin but not having followed these developments it was like the BBC telling me to lock my doors and close the curtains, but not saying why.
> any changes require consensus from the miners who create Bitcoins and process transactions, and because it's not in their best incentive to do anything to reduce those transaction fees
Can you explain how this jives with miners supporting Segwit2X, which brings both segwit and bigger blocks?
Can you explain how this jives with miners supporting Segwit2X, which brings both segwit and bigger blocks?
The opposing and (IMHO) ultimately greater pressure is that it's also in miners' best interest to keep Bitcoin alive and successful. It took a long time to hammer out SegWit2x and it's still not certain that it's going to work.
You would think so, but I think that they think they have enough hash power to take over the whole thing. They may be right. They are clearly making a power grab and opposing Segwit2X: https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip14...
Segwit2X would activate effectively Bip148, though it was originally a proposal to use a different mechanism it is acceptable enough that Core is happy to have segwit activated that way.
Segwit2X would activate effectively Bip148, though it was originally a proposal to use a different mechanism it is acceptable enough that Core is happy to have segwit activated that way.
I think you missed the key issue. Mining is largely centralized under the control of Bitmain, both via pools and indirectly via miners they have sold (which in the past have had backdoors). They profit from using an exploit called ASICBOOST.
Segwit will disable ASICBOOST as a side effect of improving the protocol. Therefore, BitMain has been launching FUD campaigns and numerous attempts to propose alternative software to stop segwit (XT, BU, BTC1, BTCABC etc.)
Segwit2X is a compromise-- but Bitmain does not like it because it activates segwit.
So BitMain has announced they plan to do a forcible Hard Fork of Bitcoin, splitting off into another chain, that they will privately mine-- and they intend to neutralize segwit on it.
They have publicly complained that segwit offers lower fees for transactions that use less resources.
The entire conflict (including the "scaling problems" which have recently been proven to be due to spam driving up transaction costs) is Bitmain attempting to increase and protect their near monopoly.
Please be aware that their fork, which will have nearly unlimited block size will increase their monopoly. Due to the great firewall of china, large blocks have trouble getting transmitted, so whenever a chinese miner finds a block, when the blocks are very big, they have a significant competitive advantage in finding the next block. Thus simply activating a spam campaign (which they have been doing the past 3 months or so already) will allow them to centralize mining in china because the chinese miners will start getting 2-3 blocks ahead. Further on their hard fork they can easily lower the difficulty and get many blocks ahead while private mining (but make it look like the difficulty is higher) -- admittedly a speculation but given their past exploits and announced plans to engage in further shady behavior I would not be surprised.
Here's the blog post where they announce their (very sketchy) hard fork: https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip14...
Segwit will disable ASICBOOST as a side effect of improving the protocol. Therefore, BitMain has been launching FUD campaigns and numerous attempts to propose alternative software to stop segwit (XT, BU, BTC1, BTCABC etc.)
Segwit2X is a compromise-- but Bitmain does not like it because it activates segwit.
So BitMain has announced they plan to do a forcible Hard Fork of Bitcoin, splitting off into another chain, that they will privately mine-- and they intend to neutralize segwit on it.
They have publicly complained that segwit offers lower fees for transactions that use less resources.
The entire conflict (including the "scaling problems" which have recently been proven to be due to spam driving up transaction costs) is Bitmain attempting to increase and protect their near monopoly.
Please be aware that their fork, which will have nearly unlimited block size will increase their monopoly. Due to the great firewall of china, large blocks have trouble getting transmitted, so whenever a chinese miner finds a block, when the blocks are very big, they have a significant competitive advantage in finding the next block. Thus simply activating a spam campaign (which they have been doing the past 3 months or so already) will allow them to centralize mining in china because the chinese miners will start getting 2-3 blocks ahead. Further on their hard fork they can easily lower the difficulty and get many blocks ahead while private mining (but make it look like the difficulty is higher) -- admittedly a speculation but given their past exploits and announced plans to engage in further shady behavior I would not be surprised.
Here's the blog post where they announce their (very sketchy) hard fork: https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip14...
>Segwit will disable ASICBOOST
Incorrect. It would make 'stealth' ASICBoost mining improbable but still possible overall.
> Therefore, BitMain has been launching FUD campaigns.
Substantiate your claim.
> proven to be due to spam
Show it. Just show it already. Its a transparent blockchain but no one can show this spam, identify how it is malicious, show where it is coming from.
Show the spam already. Like ASICBoost its an invisible horror used to terrorize people into supporting your narrative. This is not very nice.
Incorrect. It would make 'stealth' ASICBoost mining improbable but still possible overall.
> Therefore, BitMain has been launching FUD campaigns.
Substantiate your claim.
> proven to be due to spam
Show it. Just show it already. Its a transparent blockchain but no one can show this spam, identify how it is malicious, show where it is coming from.
Show the spam already. Like ASICBoost its an invisible horror used to terrorize people into supporting your narrative. This is not very nice.
Btc noob: What's wrong with asicboost? Is it just because it's patented?
It's an exploit that gives a miner a way to boost profits, but in order to do so, they have to mine empty blocks, which is bad for bitcoin because the purpose of miners is to build blocks with transactions in them.
This is the main narrative being pushed by Blockstream and Core who are afraid of loosing control over the main Bitcoin reference client, beware.
> I think you missed the key issue. Mining is largely centralized under the control of Bitmain, both via pools and indirectly via miners they have sold
False, bitcoin mining has never been as decentralized as it is now: https://coin.dance/blocks
> Segwit2X is a compromise-- but Bitmain does not like it because it activates segwit.
False, they are signaling Segwit2X and have been open to support segwit (except the arbitrary discount).
> So BitMain has announced they plan to do a forcible Hard Fork of Bitcoin, splitting off into another chain, that they will privately mine-- and they intend to neutralize segwit on it.
As per your own link, this is a plan against the UASF fork.
> They have publicly complained that segwit offers lower fees for transactions that use less resources.
And instead they back bigger blocks and flexible transactions which would give them even lower fees? If your statement was true then they wouldn't do that.
> The entire conflict (including the "scaling problems" which have recently been proven to be due to spam driving up transaction costs) is Bitmain attempting to increase and protect their near monopoly.
No, it is because Blockstream and Core wants to retain control. Do they support Segwit2X even when 90+ of all miner power signals it? No.
Segwit as a soft fork is a crappy implementation and reduces the security of Bitcoin. See:
https://medium.com/the-publius-letters/segregated-witness-a-...
Flexible Transactions is a superior proposal:
https://zander.github.io/posts/Flexible_Transactions/
> I think you missed the key issue. Mining is largely centralized under the control of Bitmain, both via pools and indirectly via miners they have sold
False, bitcoin mining has never been as decentralized as it is now: https://coin.dance/blocks
> Segwit2X is a compromise-- but Bitmain does not like it because it activates segwit.
False, they are signaling Segwit2X and have been open to support segwit (except the arbitrary discount).
> So BitMain has announced they plan to do a forcible Hard Fork of Bitcoin, splitting off into another chain, that they will privately mine-- and they intend to neutralize segwit on it.
As per your own link, this is a plan against the UASF fork.
> They have publicly complained that segwit offers lower fees for transactions that use less resources.
And instead they back bigger blocks and flexible transactions which would give them even lower fees? If your statement was true then they wouldn't do that.
> The entire conflict (including the "scaling problems" which have recently been proven to be due to spam driving up transaction costs) is Bitmain attempting to increase and protect their near monopoly.
No, it is because Blockstream and Core wants to retain control. Do they support Segwit2X even when 90+ of all miner power signals it? No.
Segwit as a soft fork is a crappy implementation and reduces the security of Bitcoin. See:
https://medium.com/the-publius-letters/segregated-witness-a-...
Flexible Transactions is a superior proposal:
https://zander.github.io/posts/Flexible_Transactions/
FlexTrans are far more crappy and far far less tested than segwit. It introduces its own weird format that nobody uses, that's sort-of-XML-but-binary (I mean, the authors said to themselves "I like XML so much I want it in a binary protocol") - and problems with types of formats is exactly where the various maleability problems come from! Which was reason for the segwit in the first place!
I am not for UASF and I think it's moronic (since it will lead to chainsplit and user confusion); segwit is fine though and FlexTrans are not a serious contender
I am not for UASF and I think it's moronic (since it will lead to chainsplit and user confusion); segwit is fine though and FlexTrans are not a serious contender
> and problems with types of formats is exactly where the various maleability problems come from! Which was reason for the segwit in the first place!
You obviously have no idea what the maleability problem is and you didn't read and understand the linked articles.
You obviously have no idea what the maleability problem is and you didn't read and understand the linked articles.
Do enlighten us. Please be very detailed. Don't just link to some random article from a non-technical propagandist like you have been. Explain it.
Segwit does fix malleability, and this is critical for bitcoins future, for many reasons.
Segwit does fix malleability, and this is critical for bitcoins future, for many reasons.
The article contains a technical explanation... Don't be lazy and dismissive. It also explains that Segwit fixes the malleability and that Flexible Transactions also does (but in a non hacky way), so what is your point?
My point is that you don't understand what you are talking about and are feeding us FUD based bullshit. And you have failed to give an explanation when called on it, just linking to someone else (also ignorant) as "proof".
You oppose Segwit2x AND BIP-148, but you like Segwit?
Segwit2x is sort-of-OK for me frankly.
I don't like the part where they rush to implement everything as fast as possible. And from apart (and I don't follow Segwit2x that much), the changeset seems too big from bitcoind.
And they say openly they plan hard-fork, not this UASF where the S is not really that S and is almost guaranteed to result in a split and confusion.
They signal Segwit in a compatible way, so it's OK. Just the timeline is crazy.
I don't like the part where they rush to implement everything as fast as possible. And from apart (and I don't follow Segwit2x that much), the changeset seems too big from bitcoind.
And they say openly they plan hard-fork, not this UASF where the S is not really that S and is almost guaranteed to result in a split and confusion.
They signal Segwit in a compatible way, so it's OK. Just the timeline is crazy.
This is not a narrative, this is the technical facts. You're pushing a narrative.
Bitcoin mining has never been as centralized as it is right now with one man controlling over %70 of the hash rate via multiple pools. Many of those pools are just the same player operating under different names.
Segwit2X is in fact a compromise, and I linked to a blog post where Bitmain complains about it. They want to "activate segwit" but what they call segwit is not really segwit. The UAHF article I linked to is not Segwit2X it is a new hard fork they propose because they don't like Segwit2X. If they actually supported it they could just let it activate.
They back a solution that gives them more control over the network and higher fees, not lower fees. You think they will give lower fees but you're uninformed about the current fee situation.
Blockstream doesn't have control. You're pushing an uninformed narrative that makes Blockstream out as some sort of evil corporation--- the reality is block stream employees are a minority of core, core development is done in the public eye (unlike even Segwit2X and certainly any of Bitmains's hacks, like BU which was closed source for awhile before people just gave up on it.)
You keep talking as if the miners are supposed to be in control, as if that's right. It's not. Bitcoin was designed to be a balance, and the only error satoshi made was not realizing that his PoW was vulnerable to ASICs, which have resulted in centralization. You act as if there are a lot of miners and they are the bitcoin community, they are not, they are the minority. Alas they have spent a lot of money to dupe people like you into thinking they are the good guys.
Your articles are non-technical nonsense full of FUD written by people who do not understand the bitcoin code.
Here's the real threat to bitcoin-- people who are not developers are easily mislead by conspiracy theories backed up by thousands of shills posting this kind of crap narrative.
Thanks for the down vote, too bad you didn't have a technical argument.
The great firewall of china is not going away. The centralization threat is real. Segwit is the most tested code put out by core... and a whole lot better than the shitshow of alternatives we've seen put out by those who are trying to take over bitcoin.
Bitcoin mining has never been as centralized as it is right now with one man controlling over %70 of the hash rate via multiple pools. Many of those pools are just the same player operating under different names.
Segwit2X is in fact a compromise, and I linked to a blog post where Bitmain complains about it. They want to "activate segwit" but what they call segwit is not really segwit. The UAHF article I linked to is not Segwit2X it is a new hard fork they propose because they don't like Segwit2X. If they actually supported it they could just let it activate.
They back a solution that gives them more control over the network and higher fees, not lower fees. You think they will give lower fees but you're uninformed about the current fee situation.
Blockstream doesn't have control. You're pushing an uninformed narrative that makes Blockstream out as some sort of evil corporation--- the reality is block stream employees are a minority of core, core development is done in the public eye (unlike even Segwit2X and certainly any of Bitmains's hacks, like BU which was closed source for awhile before people just gave up on it.)
You keep talking as if the miners are supposed to be in control, as if that's right. It's not. Bitcoin was designed to be a balance, and the only error satoshi made was not realizing that his PoW was vulnerable to ASICs, which have resulted in centralization. You act as if there are a lot of miners and they are the bitcoin community, they are not, they are the minority. Alas they have spent a lot of money to dupe people like you into thinking they are the good guys.
Your articles are non-technical nonsense full of FUD written by people who do not understand the bitcoin code.
Here's the real threat to bitcoin-- people who are not developers are easily mislead by conspiracy theories backed up by thousands of shills posting this kind of crap narrative.
Thanks for the down vote, too bad you didn't have a technical argument.
The great firewall of china is not going away. The centralization threat is real. Segwit is the most tested code put out by core... and a whole lot better than the shitshow of alternatives we've seen put out by those who are trying to take over bitcoin.
You're repeating your arguments without any technical arguments yourself.
You repeat the mistakes as outlined in this article:
https://medium.com/@johnblocke/decentralization-fetishism-is...
> They back a solution that gives them more control over the network and higher fees, not lower fees. You think they will give lower fees but you're uninformed about the current fee situation.
How so? Because bigger blocks will give lower fees than Segwit only.
> Blockstream doesn't have control. You're pushing an uninformed narrative that makes Blockstream out as some sort of evil corporation--- the reality is block stream employees are a minority of core, core development is done in the public eye (unlike even Segwit2X and certainly any of Bitmains's hacks, like BU which was closed source for awhile before people just gave up on it.)
The censorship in those channels are well documented.
> You keep talking as if the miners are supposed to be in control, as if that's right. It's not.
You don't understand the point of PoW in Bitcoin.
> You act as if there are a lot of miners and they are the bitcoin community, they are not, they are the minority.
Doesn't matter. And btw, you think UASF is the majority? Because they are not.
> Your articles are non-technical nonsense full of FUD written by people who do not understand the bitcoin code.
Where are the technical arguments against these supposed "non technical FUD pieces"? You provide none.
You repeat the mistakes as outlined in this article:
https://medium.com/@johnblocke/decentralization-fetishism-is...
> They back a solution that gives them more control over the network and higher fees, not lower fees. You think they will give lower fees but you're uninformed about the current fee situation.
How so? Because bigger blocks will give lower fees than Segwit only.
> Blockstream doesn't have control. You're pushing an uninformed narrative that makes Blockstream out as some sort of evil corporation--- the reality is block stream employees are a minority of core, core development is done in the public eye (unlike even Segwit2X and certainly any of Bitmains's hacks, like BU which was closed source for awhile before people just gave up on it.)
The censorship in those channels are well documented.
> You keep talking as if the miners are supposed to be in control, as if that's right. It's not.
You don't understand the point of PoW in Bitcoin.
> You act as if there are a lot of miners and they are the bitcoin community, they are not, they are the minority.
Doesn't matter. And btw, you think UASF is the majority? Because they are not.
> Your articles are non-technical nonsense full of FUD written by people who do not understand the bitcoin code.
Where are the technical arguments against these supposed "non technical FUD pieces"? You provide none.
> How so? Because bigger blocks will give lower fees than Segwit only.
Who profits from high fees? Core? No. Miners. BitMain is very adamant about not wanting low fees. The idea that Segwit, which quadruples block size and offers a fee discount is an attempt to keep fees high is absurd on the face of it.
>And btw, you think UASF is the majority? Because they are not.
You're convincing me that you're operating from a script and have no technical knowledge of the situation.
Segwit2X IS a UASF.
> And btw, you think UASF is the majority? Because they are not.
Segwit2x is the majority of signaling right now. (Though it's a fake out because Bitmain plans a hard fork.)
Your personal attacks and failure to address the technical issues speak for themselves, so I have not quoted them, nor responded.
Who profits from high fees? Core? No. Miners. BitMain is very adamant about not wanting low fees. The idea that Segwit, which quadruples block size and offers a fee discount is an attempt to keep fees high is absurd on the face of it.
>And btw, you think UASF is the majority? Because they are not.
You're convincing me that you're operating from a script and have no technical knowledge of the situation.
Segwit2X IS a UASF.
> And btw, you think UASF is the majority? Because they are not.
Segwit2x is the majority of signaling right now. (Though it's a fake out because Bitmain plans a hard fork.)
Your personal attacks and failure to address the technical issues speak for themselves, so I have not quoted them, nor responded.
Uh I'm obviously referring to BIP148 when I say UASF, but way to argue with semantics.
> BitMain is very adamant about not wanting low fees.
Yet Bitmain supports larger blocks, you're not making sense.
> Your personal attacks and failure to address the technical issues speak for themselves, so I have not quoted them, nor responded.
What personal attacks? Sure, continue dismiss it as "FUD" or "non-technical people".
> BitMain is very adamant about not wanting low fees.
Yet Bitmain supports larger blocks, you're not making sense.
> Your personal attacks and failure to address the technical issues speak for themselves, so I have not quoted them, nor responded.
What personal attacks? Sure, continue dismiss it as "FUD" or "non-technical people".
It's not semantics when you're talking about different activation mechanisms... that you think it is proves to me you don't really understand what's going on.
I point out a contradiction in Bitmains position and you say that means I'm not making sense? Once again, you are arguing that your ignorance somehow trumps the facts.
And of course, you resorting to insults is all the proof I could have needed.
Go educate yourself. Start at bitcoin.org
I point out a contradiction in Bitmains position and you say that means I'm not making sense? Once again, you are arguing that your ignorance somehow trumps the facts.
And of course, you resorting to insults is all the proof I could have needed.
Go educate yourself. Start at bitcoin.org
>This is not a narrative, this is the technical facts. You're pushing a narrative.
Then you immediately launch into narrative, one that avoids detailing how Jihan doesn't control the hashrate. Individual buyers and operators of Bitmain's mining hardware do. You are attributing things in plainly incorrect ways.
>Bitcoin mining has never been as centralized as it is right now with one man controlling over %70 of the hash rate via multiple pools.
Nothing about the owners or the choices they can make with their hashrate. All some narrative about "evil Jihan."
Then you immediately launch into narrative, one that avoids detailing how Jihan doesn't control the hashrate. Individual buyers and operators of Bitmain's mining hardware do. You are attributing things in plainly incorrect ways.
>Bitcoin mining has never been as centralized as it is right now with one man controlling over %70 of the hash rate via multiple pools.
Nothing about the owners or the choices they can make with their hashrate. All some narrative about "evil Jihan."
I didn't avoid dealing with your lie, I stuck to the truth.
A neutral response would probably not use the phrasing 'muddle through' with regards to the solution endorsed by most of the technical experts in the Bitcoin space.
----
Right now there are 3 implementations of Bitcoin in the wild, and each of the 3 will react differently to different network events. The network is essentially splitting apart, with each fragment driven by a different faction.
If you don't know what the different factions are, you probably don't need to. Its needlessly involved, highly political, and full of echo-chambers and shouting matches.
What happens largely depends on how much support each faction has. Unfortunately, there's no real way to measure how much support each faction has until the fork actually occurs. Each faction thinks that its the largest by a significant margin, and thinks that the other factions have used underhanded techniques to bolster their visible support.
When the rubber meets the pavement, we will know though. If the network splits into three pieces, likely the coin price for each piece will move around violently, and one portion of the network will probably end up with a much higher coin price than the other parts. Or maybe it'll be an even three-way split, which will make things in the Bitcoin world very confusing.
----
As a huge Bitcoin fan, I hate to say this, but if you aren't clued into the various events, and you can't name the three factions or explain the beliefs of each, you should just stay away for a while. If you get pulled into the split without knowing what's going on, you are very likely to lose money. There will certainly be opportunists trying to take advantage of the situation, and you, being ignorant of the situation, will be the one who gets taken advantage of.
----
If you do know what's going on, you can name the factions, etc, then what you should do is pretty simple. When the split happens, sell all of your coins on the forks that you disagree with, and use the resulting money to buy coins on your preferred fork.
----
For anyone who cares, my alignment is with the status quo. I feel great animosity towards the hardfork faction (confusingly called Segwit2x), precisely because they have forced a situation where people who don't know what's going on are able to get hurt. They have also repeatedly, repeatedly, ignored very sound advice from the technical experts of the industry.
The UASF faction (confusingly, a 'pro Segwit' and 'anti Segwit2x' faction) has my spiritual support, but I don't think they have the numbers behind them to make a difference. I don't think running the UASF software is the right move.
I personally believe that overwhelmingly, the vast majority of people who use Bitcoin are probably largely unaware of what is happening, and are running the status-quo software (confusingly, the 'Segwit' software, or the 'Bitcoin-core' software). I'm guessing when the forks all happen, it'll be pretty dominantly vanilla Bitcoin with the highest price, and then a few weeks later it'll all be a bad memory, and nothing will have happened at all.
I guess we'll find out.
----
Right now there are 3 implementations of Bitcoin in the wild, and each of the 3 will react differently to different network events. The network is essentially splitting apart, with each fragment driven by a different faction.
If you don't know what the different factions are, you probably don't need to. Its needlessly involved, highly political, and full of echo-chambers and shouting matches.
What happens largely depends on how much support each faction has. Unfortunately, there's no real way to measure how much support each faction has until the fork actually occurs. Each faction thinks that its the largest by a significant margin, and thinks that the other factions have used underhanded techniques to bolster their visible support.
When the rubber meets the pavement, we will know though. If the network splits into three pieces, likely the coin price for each piece will move around violently, and one portion of the network will probably end up with a much higher coin price than the other parts. Or maybe it'll be an even three-way split, which will make things in the Bitcoin world very confusing.
----
As a huge Bitcoin fan, I hate to say this, but if you aren't clued into the various events, and you can't name the three factions or explain the beliefs of each, you should just stay away for a while. If you get pulled into the split without knowing what's going on, you are very likely to lose money. There will certainly be opportunists trying to take advantage of the situation, and you, being ignorant of the situation, will be the one who gets taken advantage of.
----
If you do know what's going on, you can name the factions, etc, then what you should do is pretty simple. When the split happens, sell all of your coins on the forks that you disagree with, and use the resulting money to buy coins on your preferred fork.
----
For anyone who cares, my alignment is with the status quo. I feel great animosity towards the hardfork faction (confusingly called Segwit2x), precisely because they have forced a situation where people who don't know what's going on are able to get hurt. They have also repeatedly, repeatedly, ignored very sound advice from the technical experts of the industry.
The UASF faction (confusingly, a 'pro Segwit' and 'anti Segwit2x' faction) has my spiritual support, but I don't think they have the numbers behind them to make a difference. I don't think running the UASF software is the right move.
I personally believe that overwhelmingly, the vast majority of people who use Bitcoin are probably largely unaware of what is happening, and are running the status-quo software (confusingly, the 'Segwit' software, or the 'Bitcoin-core' software). I'm guessing when the forks all happen, it'll be pretty dominantly vanilla Bitcoin with the highest price, and then a few weeks later it'll all be a bad memory, and nothing will have happened at all.
I guess we'll find out.
> Right now there are 3 implementations of Bitcoin in the wild
Make that 4...
https://www.bitcoinabc.org/
Make that 4...
https://www.bitcoinabc.org/
My view is that SegWit is a bandaid, not a cure: while it would give Bitcoin some breathing room, it doesn't fix the underlying constraints and is not alone going to solve scaling, hence "muddle through".
That's a not very informed view. Segwit involves segwit, but a very large number of previously pending enhancements that needed a soft fork to activate (core is conservative about any kind of fork) It has dramatic scaling capability due to segwit, it allows lightening network and other solutions to be built on BTC, and in fact, in my opinion will be the last scaling solution BTC ever needs because it will enable unlimited scaling via off chain and side chain transactions.
You can characterize a blocksize increase too with those exact words. Calling one a "muddle" and not the other appears anything but neutral.
> When the split happens, sell all of your coins on the forks that you disagree with, and use the resulting money to buy coins on your preferred fork.
Or keep all the forked coins in case you are wrong ?
Or keep all the forked coins in case you are wrong ?
If you are keeping all the forked coins, you probably don't have a strong ideological opinion. It's not about being 'wrong' in this case, it's about ideological alignment. If you follow my advice, you will more or less end up with the same amount of money as you started with, regardless of where the prices of the coins end up (as long as you wait through the early volatility stages).
If you aren't ideologically aligned, holding onto all forks is a perfectly sane choice.
If you aren't ideologically aligned, holding onto all forks is a perfectly sane choice.
Profit trumps ideology even when you hold strong views.
For example, in this experiment small payments for correct and "don't know" responses sharply diminished the gap between Democrats and Republicans in responses to "partisan" factual questions.
http://www.nber.org/papers/w19080
For example, in this experiment small payments for correct and "don't know" responses sharply diminished the gap between Democrats and Republicans in responses to "partisan" factual questions.
http://www.nber.org/papers/w19080
Choosing to be on the minority chain is not less profitable than choosing to be on the majority. If you sell your majority coins, you will sell them for majority price. As a result, you will end up owning more minority coins than you had originally, though the US dollar value should be about the same.
Profit comes from knowing how the markets will move before they do (and performing arbitrage), not from owning the asset that has the greatest market cap.
Profit comes from knowing how the markets will move before they do (and performing arbitrage), not from owning the asset that has the greatest market cap.
> sell all of your coins on the forks that you disagree with
How would you do this in practice? Most exchanges probably won't code in the ability to sell on multiple chains.
How would you do this in practice? Most exchanges probably won't code in the ability to sell on multiple chains.
Were the scaling problems not predicted or known in the original design?
They were known since the beginning, but for any complex problem it takes time to explore the solution space and hone in on the best (or least bad) solutions.
Has anyone got a link to a neutral article summarizing the POVs and the players involved? I'm still confused as to many of the details, e.g. what /r/btc advocates if not SegWit.
So this all sounds pretty scary and gloomy, so why is BTC/USD trading up $86.00 in the last 24 hours? Shouldn't it be getting hammered? Is this a buying opportunity then?
Those issues have been known for a while so it's no surprise they haven't affected the price in the last 24 hours. Explaining Bitcoin's price movements is a bit like astrology but this guy probably lifted some spirits today: https://media.giphy.com/media/8cTtn78RkOAk8/giphy.gif
There's a lot of shady movement going on in both BTC and ETH right now. We're seeing pretty violent swings. I'm guessing this is a symptom of the uncertainty. We'll likely see a downtrend overall in the next few weeks. Daily movements are day by day.
The 24 hour upswing may be another bull trap masking the bearish trend that has taken hold for the last month, which has hit the entire crypto market and sent some market caps down over 50%. The BTC scaling crisis has been a known factor for even longer than that and may have precipitated a runup in other coins that directly preceded this downtrend.
Because the OP is FUD, not a well-founded concern. The network has already overwhelmingly decided on a scaling solution. https://coin.dance/blocks
[deleted]
I think this is the most neutral and the best description so far of what's going on with Bitcoin.
So whilst the chain is split, am I correct to assume you can spend your money twice?
Yes, if you can find a place to spend your coins that accepts the old chain, and another place that accepts the new chain.
thanks
This will go down as a massive failure in governance. The Bitcoin core guys have completely created this situation by taking a hard liner stance based on a non issue. Committing to a 2 megabyte hard fork 2+ years ago would have averted this situation and kept control within the core dev team. Now we see miners taking a stance because SegWit doesn't necessarily benefit them. Further payment channels and other off chain scaling haven't really been tested or materialized, and the SegWit code itself is a series of changes to the fundamentals of Bitcoin without requiring a hard fork. In other words it is overly engineered to avoid having to have real consensus.
Further the almost rabid attacks against a 2mb increase are bordering on complete insanity. No serious software engineer would say that an additional 1 megabyte of traffic every 10 minutes is a problem in any way. Instead we are stuck with a proportional increase in bandwidth and processing to support segwit and a minor increase in block size, which is through some convoluted logic preventing centralization. This whole thing is a power grab, plain and simple.
Now the alternative implementations are racing to complete something the miners will agree with, the sole purpose being to wrest control away from the "Bitcoin core" development group which has made some a complete mess of governance. Anyone who invested in Blockstream has to seriously be scratching their heads and wondering why they are killing the golden goose over some ideological bs instead of making what is really a trivial change. I think at this point they have screamed so loudly for so long that back tracking would reveal them to be hypocritical in the extreme. To couch this whole debate as a rallying cry against centralized interests instead of a corporate power grab is completely absurdist.
Further the almost rabid attacks against a 2mb increase are bordering on complete insanity. No serious software engineer would say that an additional 1 megabyte of traffic every 10 minutes is a problem in any way. Instead we are stuck with a proportional increase in bandwidth and processing to support segwit and a minor increase in block size, which is through some convoluted logic preventing centralization. This whole thing is a power grab, plain and simple.
Now the alternative implementations are racing to complete something the miners will agree with, the sole purpose being to wrest control away from the "Bitcoin core" development group which has made some a complete mess of governance. Anyone who invested in Blockstream has to seriously be scratching their heads and wondering why they are killing the golden goose over some ideological bs instead of making what is really a trivial change. I think at this point they have screamed so loudly for so long that back tracking would reveal them to be hypocritical in the extreme. To couch this whole debate as a rallying cry against centralized interests instead of a corporate power grab is completely absurdist.
As an outsider, I find it especially amusing that cryptocurrencies are supposed to make it so that users don't have to live with the politics surrounding traditional currency.
It's unfortunate but as a consensus driven system it is much different structurally than say Linux. I can fork the Linux code and run my own version and nobody cares and it still has utility (for me), but Bitcoin as a whole requires a lot of different parties to agree on the code they run for it to be effective. I'm undecided as to whether that is a fatal flaw or a feature.
I think blockchains are more practical for a few traders who meet around a Buttonwood Tree (permissioned) than they are for the public.
The reason we got so far before blockchains were invented was that you've never get a paper in a CS conference if you built a distributed system that did not increase it's ability to handle more workload AT ALL when you add more nodes.
If 5 parties that don't trust each other 100% share a blockchain they get a lot of benefit from that. Upping that 5 to 500 or 5000 does not increase the value proportionately. That is, blockchains don't scale.
The reason we got so far before blockchains were invented was that you've never get a paper in a CS conference if you built a distributed system that did not increase it's ability to handle more workload AT ALL when you add more nodes.
If 5 parties that don't trust each other 100% share a blockchain they get a lot of benefit from that. Upping that 5 to 500 or 5000 does not increase the value proportionately. That is, blockchains don't scale.
Well, they do scale. It's just a question or how much they scale. A practical perspective says we don't need to scale to VISA levels right now, we just need to slowly increase the block size to encourage adoption and new users while keeping fees low, while additional scale measures are explored and integrated. Bitcoin's proof-of-work is susceptible to centralization risks independent of the block size. The nodes that are doing validation for light clients are important, but don't need to store the entire blockchain to do that validation and so are largely limited by compute and bandwidth. If we slowly increase bandwidth requirements on a reasonable schedule we can continue to grow Bitcoin's base for years. Is it reasonable to expect we can handle 24 megabyte blocks in 6 years? There are other ways to handle scale that are less complicated than Segwit. This entire thing might fall under extremely premature optimization.
Certainly some thought/think that, but I don't think it was every correct to do so. What it does, is it makes the politics around money more explicit.
You might use a crypto with a fixed monetary supply, with fungible tokens, with permanent fixed inflation, etc. etc. The difference is that there's a choice and a market for these tokens.
There's also the notion that nation states wield a great deal of power through currencies, and that removing this power from nations may be desirable.
Anyone who thought that Bitcoin wouldn't be political, however, was badly missing the mark. All one has to do is see the intense ideological motivations for holding Bitcoin that many have.
For many, the consensus-generating nature of the network is the real interesting part about it.
You might use a crypto with a fixed monetary supply, with fungible tokens, with permanent fixed inflation, etc. etc. The difference is that there's a choice and a market for these tokens.
There's also the notion that nation states wield a great deal of power through currencies, and that removing this power from nations may be desirable.
Anyone who thought that Bitcoin wouldn't be political, however, was badly missing the mark. All one has to do is see the intense ideological motivations for holding Bitcoin that many have.
For many, the consensus-generating nature of the network is the real interesting part about it.
[deleted]
Well put and 100% correct in my opinion. I feel like everybody's starving and there are hundreds of free hamburgers sitting right in front of them and core is blocking everybody from grabbing them while yelling "Don't eat those or you'll all die of heart attacks some day!!!"
My understanding is that SegWit allows companies to insert themselves as middle men in the system who provide fast transactions.
This is probably exactly what will happen, because the chain will not be able to support transactions directly in quantity, and so we end up with a plethora of middle men who are responsible for opening and maintaining payment channels. That scales pretty well, but a hybrid solution is probably best. Moores law and all that.
Moore's law and all that?
I think many recognize the value of federated 2nd layer solutions. Most are willing to accommodate some reasonable changes to the protocol to permit this. I think many would prefer a hard-fork 'cleaner' SegWit, but the softfork may have to do.
The real issue, I think, is that the main chain must remain a practical option for those that value it. Discovering the 'fair' cost for this while maintaining a secure network is very much an open question, and ultimately the source of all the controversy.
Personally I'd like to see unlimited block sizes, where txn fees and block orphan risk reach an equilibrium, but it's very difficult to say whether this would create unworkable centralization pressure.
The real issue, I think, is that the main chain must remain a practical option for those that value it. Discovering the 'fair' cost for this while maintaining a secure network is very much an open question, and ultimately the source of all the controversy.
Personally I'd like to see unlimited block sizes, where txn fees and block orphan risk reach an equilibrium, but it's very difficult to say whether this would create unworkable centralization pressure.
[deleted]
I was always under (false?) impression Blocksize Increase opposition was due to hardcoded ASIC miners deployed by the majority of big players.
All this "unconsensus" is weird to me given that PoW was created to fix just that. I don't understand how can any other group of people decide what should happen other than the miners. After all, anybody can be a miner. Anything other than that just doesn't make it decentralized anymore.
If you trust the developers, exchanges or even users to make decisions, then why not just make a BitcoinSQL where the servers are controlled by these groups?
Mining specifically allows for this not to happen. one-CPU-one-vote as per Satoshi's paper. No matter the rules of the protocol, the chain with most work is the one that most people agreed upon. This seems to me the only true democratic solution and I don't understand how anything else is possible.
With regards to fees being to high and miners actually liking that, that's bullshit, because miners (which are also users!) care about the health of the entire system. If something like SegWit will bring many more users, that's a win for them.
Let's not forget that anybody can be a miner! Miners aren't just these chinese groups of people. It's the only true democratic way of reaching consensus - anything else is really not a way to reach trustless consensus in my opinion.
If you trust the developers, exchanges or even users to make decisions, then why not just make a BitcoinSQL where the servers are controlled by these groups?
Mining specifically allows for this not to happen. one-CPU-one-vote as per Satoshi's paper. No matter the rules of the protocol, the chain with most work is the one that most people agreed upon. This seems to me the only true democratic solution and I don't understand how anything else is possible.
With regards to fees being to high and miners actually liking that, that's bullshit, because miners (which are also users!) care about the health of the entire system. If something like SegWit will bring many more users, that's a win for them.
Let's not forget that anybody can be a miner! Miners aren't just these chinese groups of people. It's the only true democratic way of reaching consensus - anything else is really not a way to reach trustless consensus in my opinion.
> anybody can be a miner
That is false, nowadays.
> Let's not forget that anybody can be a miner!
Even if you repeat a lie a thousand times, it's not going to become true :) Bitcoin's mining algorithm is so simple that mining industry has specialized too much, and now the best technology for it is ASICs. You cannot mine (or rather, it's nowhere near profitable) if you don't have access to this kind of hardware.
And of course, claiming that anybody can have access to this hardware is very very debatable. The best indicator of how this is not accessible by everybody is how centralized this industry is nowadays (just look at the correlation between ASIC manufacturers and owners of mining pools).
That is false, nowadays.
> Let's not forget that anybody can be a miner!
Even if you repeat a lie a thousand times, it's not going to become true :) Bitcoin's mining algorithm is so simple that mining industry has specialized too much, and now the best technology for it is ASICs. You cannot mine (or rather, it's nowhere near profitable) if you don't have access to this kind of hardware.
And of course, claiming that anybody can have access to this hardware is very very debatable. The best indicator of how this is not accessible by everybody is how centralized this industry is nowadays (just look at the correlation between ASIC manufacturers and owners of mining pools).
Why is it false? I didn't say "mining is profitable". I just said anybody can do it, and that's the key. Just like anybody can seed torrents without any incentive, or just like Tor nodes exist without any incentive.
Expanded a bit my answer.
IMVHO, ASIC hardware provides such a huge efficiency boost that even if everybody in this planet ran a mining raspberry pi, the ASIC manufacturers would maybe still own more than 51% of the hashrate.
IMVHO, ASIC hardware provides such a huge efficiency boost that even if everybody in this planet ran a mining raspberry pi, the ASIC manufacturers would maybe still own more than 51% of the hashrate.
Not maybe, definitely. A first-gen pi can mine at 200KH/s [1], and a 3rd gen pi is roughly 10x faster in cpu tests [2].
At 2 MH/s per pi, times 7 billion people, you get a paltry 14 petahashes/s. That's a hair over 0.2% of the network...
You'd need three trillion raspberry pis to get half the network. Good luck with that!
[1] https://en.bitcoin.it/wiki/Non-specialized_hardware_comparis...
[2] http://lifehacker.com/how-the-raspberry-pi-3-benchmarks-agai...
At 2 MH/s per pi, times 7 billion people, you get a paltry 14 petahashes/s. That's a hair over 0.2% of the network...
You'd need three trillion raspberry pis to get half the network. Good luck with that!
[1] https://en.bitcoin.it/wiki/Non-specialized_hardware_comparis...
[2] http://lifehacker.com/how-the-raspberry-pi-3-benchmarks-agai...
Thanks so much for that analysis! My mind was not that irrational then when making that guess :)
I think they mean it is true in the same sense that "anyone can be president of the US" is true, e.g. true in theory, but in practice, it requires significant wealth which most do not have. I would have worded it differently than calling it a "lie" though (since it technically isn't).
But since "everyone being a miner" doesn't solve anything (even if everybody decides to donate their electricity without getting profits), since the ASIC manufacturers would still control the majority of the network, then any argument based on that analysis is moot already. (Yeah sorry I should not have said "lie" but just "infeasible" and "useless".)
> And of course, claiming that anybody can have access to this hardware is very very debatable. The best indicator of how this is not accessible by everybody is how centralized this industry is nowadays (just look at the correlation between ASIC manufacturers and owners of mining pools).
Even if you repeat a lie a thousand times, it's not going to become true :)
https://coin.dance/blocks
Where is the centralization?
Also, the issue isn't as much ASICs as it is the free electricity in China.
Even if you repeat a lie a thousand times, it's not going to become true :)
https://coin.dance/blocks
Where is the centralization?
Also, the issue isn't as much ASICs as it is the free electricity in China.
> Where is the centralization?
If there was no centralization, people would still be profitable doing solo mining. Most of the pools these days are pools because they own huge mining datacenters already (not because they have a lot of miner-users).
If there was no centralization, people would still be profitable doing solo mining. Most of the pools these days are pools because they own huge mining datacenters already (not because they have a lot of miner-users).
That's not how we should see decentralization, "lacking a central point of control" is a better definition. What you're arguing for is the mining to be distributed.
https://medium.com/@johnblocke/decentralization-fetishism-is...
https://medium.com/@johnblocke/decentralization-fetishism-is...
Effectively 4 people, when they agree, completely control bitcoin. That's more centralized than the US dollar.
That's like saying Thomas W. Farley controls 21 trillion dollars worth of companies.
Pools do not control hash power, they merely organize it. That's not to say they don't play a major role in the politics of Bitcoin clients and rules, but to say they 'completely control' Bitcoin is wholly incorrect. These sorts of hyperbolic statements greatly degrade the quality of discourse on centralization.
Pools do not control hash power, they merely organize it. That's not to say they don't play a major role in the politics of Bitcoin clients and rules, but to say they 'completely control' Bitcoin is wholly incorrect. These sorts of hyperbolic statements greatly degrade the quality of discourse on centralization.
Thomas W. Farley is so far from the same thing, I can only assume your being intentionally disingenuous. It's much closer to talking about the CEO of hedge fund, and they frankly do have massive amounts of control.
However, in this case the Chinese government can take over these data centers on a whim. You can argue it's a different story when it's spread across a million basements, but highly centralized hashing power is easy to either take over or take offline.
However, in this case the Chinese government can take over these data centers on a whim. You can argue it's a different story when it's spread across a million basements, but highly centralized hashing power is easy to either take over or take offline.
Centralization is not a bool variable: true|false. There are degrees to it. Of course I'm not claiming that bitcoin mining is centralized (100%), but it's definitely not very decentralized.
Of course, as argued in the linked article. But I don't agree that it's very centralized as it is now, which is the context I responded to:
> The best indicator of how this is not accessible by everybody is how centralized this industry is nowadays
> The best indicator of how this is not accessible by everybody is how centralized this industry is nowadays
If Antpool, BTC.top, F2Pool, and Bixin conspire, they control 51% of the mining power. There is the oligarchy aka centralization.
Pools are not miners. Pools can only make decisions that the miners will tolerate, and historically miners have recognized the dangers even of pool centralization.
There is very little friction to changing pools.
There is very little friction to changing pools.
That's the four biggest pools (to get a consistent > 50% it might not even be enough) who need to collude. That's not very centralized. Of course the situation could be better, but it's still in a good place imo. It's better than it has been historically for example when a single pool (GHash.IO) approached 50% by itself.
The whole point is that the miners within the pool can change to other pools if they want to!
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> I don't understand how can any other group of people decide what should happen other than the miners.
You are missing one of the key economic components of Bitcoin. Mining costs a lot of money. Nobody mines for free or at a loss, because 'at a loss' means to the tune of hundreds of millions of dollars.
Miners unquestionably mine the chain that has the highest block reward. Historically, hashrate has always been a function of $hardware_efficiency * $block_reward. If the block reward goes down, hashrate goes down (except where hardware efficiency is increasing fast enough to compensate). This is a lot more visible in the altcoin world, where miners can easily jump from coin to coin, and do as the coins fluctuate in value.
So what determines the price of the coin? Well, supply and demand. If people don't like your fork, there will be low demand, and your fork will have a low coin price. This will result in low hashrate, because miners aren't going to be willing (or even capable) of mining your fork at a loss.
Consensus ends up being fundamentally driven by the economics, and the economics follow the userbase.
You are missing one of the key economic components of Bitcoin. Mining costs a lot of money. Nobody mines for free or at a loss, because 'at a loss' means to the tune of hundreds of millions of dollars.
Miners unquestionably mine the chain that has the highest block reward. Historically, hashrate has always been a function of $hardware_efficiency * $block_reward. If the block reward goes down, hashrate goes down (except where hardware efficiency is increasing fast enough to compensate). This is a lot more visible in the altcoin world, where miners can easily jump from coin to coin, and do as the coins fluctuate in value.
So what determines the price of the coin? Well, supply and demand. If people don't like your fork, there will be low demand, and your fork will have a low coin price. This will result in low hashrate, because miners aren't going to be willing (or even capable) of mining your fork at a loss.
Consensus ends up being fundamentally driven by the economics, and the economics follow the userbase.
I don't think any of that is a contradiction to the main claim that 'miners control the network'.
The very fact that miners are beholden to the economics is the key innovation in Bitcoin. It's the magic of the whitepaper.
> The incentive may help encourage nodes to stay honest. If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth.
It is precisely because miners have a vested interest in the economics of Bitcoin that they control the network. That's the magic behind 'Nakamoto consensus'.
> They vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this consensus mechanism.
The very fact that miners are beholden to the economics is the key innovation in Bitcoin. It's the magic of the whitepaper.
> The incentive may help encourage nodes to stay honest. If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth.
It is precisely because miners have a vested interest in the economics of Bitcoin that they control the network. That's the magic behind 'Nakamoto consensus'.
> They vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this consensus mechanism.
> one-CPU-one-vote
"He who has the chips, makes the rules."
The problem with your understanding is two-fold: first, "one CPU, one vote" sounds very egalitarian, but in practice it just means people buy vote share and therefore control.
The second is the idea that democracy is a perfect consensus system. That's only true if nobody agrees to fork.
No social contract is written in stone (despite millennia of efforts to do so).
"He who has the chips, makes the rules."
The problem with your understanding is two-fold: first, "one CPU, one vote" sounds very egalitarian, but in practice it just means people buy vote share and therefore control.
The second is the idea that democracy is a perfect consensus system. That's only true if nobody agrees to fork.
No social contract is written in stone (despite millennia of efforts to do so).
PoW does not "fix" consensus. It orders transactions. That is the only thing it can do, but it is an important thing as the well defined ordering of transactions globally is the only thing that can prevent double spending. Miners are paid to do this.
How the software functions is the subject of the old-fashioned open source project. This is also the weak spot. If you want to increase the number of available Bitcoins, your first step is to convince all developers on the project.
How the software functions is the subject of the old-fashioned open source project. This is also the weak spot. If you want to increase the number of available Bitcoins, your first step is to convince all developers on the project.
> I don't understand how can any other group of people decide what should happen other than the miners.
How about Bitcoin owners instead? Your vote is proportional to how much you have.
How about Bitcoin owners instead? Your vote is proportional to how much you have.
One of the things that was confusing to me is the U in UASF. It's not a user actived soft fork, its certain miners vs other miners.
Understanding a UASF requires understanding where hashrate comes from. Bitcoin is very clever in that hashrate costs money, and not just a little money, it costs a lot of money.
Which chain has more work is approximately saying 'which chain destroyed the most value in electricity'. The proof of work powering bitcoin costs hundreds of millions of dollars per year.
Nobody burns hundreds of millions per year for free. They do it because you receive Bitcoins as payment, and then you can go sell those Bitcoins to pay your electricity and hardware bills.
That means you have to be able to find someone willing to buy them. A UASF is a bunch of users saying 'we'll never buy your coins unless you follow our fork'. If only a few users say this, it's no big deal, and the miners can decide to listen to them, or they can decide not to bother.
But if 2/3rds of the userbase all agree to enforce the UASF, the miners suddenly are going to have a lot of trouble selling their non-UASF coins. Enough trouble that they probably can't pay their electricity bills. Even worse for the miners, the UASF chain has a high block reward, so they know that if they do mine the UASF chain, they actually will be able to pay their bills. And if a competing miner does it, that competing miner will have much higher margins, higher profits, and will be able to out-invest you when it comes to buying more hashrate.
Scariest of all, if the UASF chain ends up with more work than the non-UASF chain, the non-UASF chain gets completely obliterated, and its full transaction history is reversed, and all the blocks you mined as a miner are destroyed. So even if the UASF doesn't seem to have majority support, it's really bad for you as a miner and as a user if it ever eventually does gain majority support. So when the UASF has a lot of traction, really the safest move is to join the UASF, because at least then your coins aren't at risk of being eliminated entirely.
Which chain has more work is approximately saying 'which chain destroyed the most value in electricity'. The proof of work powering bitcoin costs hundreds of millions of dollars per year.
Nobody burns hundreds of millions per year for free. They do it because you receive Bitcoins as payment, and then you can go sell those Bitcoins to pay your electricity and hardware bills.
That means you have to be able to find someone willing to buy them. A UASF is a bunch of users saying 'we'll never buy your coins unless you follow our fork'. If only a few users say this, it's no big deal, and the miners can decide to listen to them, or they can decide not to bother.
But if 2/3rds of the userbase all agree to enforce the UASF, the miners suddenly are going to have a lot of trouble selling their non-UASF coins. Enough trouble that they probably can't pay their electricity bills. Even worse for the miners, the UASF chain has a high block reward, so they know that if they do mine the UASF chain, they actually will be able to pay their bills. And if a competing miner does it, that competing miner will have much higher margins, higher profits, and will be able to out-invest you when it comes to buying more hashrate.
Scariest of all, if the UASF chain ends up with more work than the non-UASF chain, the non-UASF chain gets completely obliterated, and its full transaction history is reversed, and all the blocks you mined as a miner are destroyed. So even if the UASF doesn't seem to have majority support, it's really bad for you as a miner and as a user if it ever eventually does gain majority support. So when the UASF has a lot of traction, really the safest move is to join the UASF, because at least then your coins aren't at risk of being eliminated entirely.
> So even if the UASF doesn't seem to have majority support, it's really bad for you as a miner and as a user if it ever eventually does gain majority support. So when the UASF has a lot of traction, really the safest move is to join the UASF, because at least then your coins aren't at risk of being eliminated entirely.
Yes, but that is only if UASF gets a significant portion of the miners to switch.
This is also why Bitmain has publicly announced the UAHF, to hard fork away from the original chain, to avoid this possible scenario.
Yes, but that is only if UASF gets a significant portion of the miners to switch.
This is also why Bitmain has publicly announced the UAHF, to hard fork away from the original chain, to avoid this possible scenario.
The U in UASF means anyone who runs a full Bitcoin node, irregardless of whether they're mining or not.
Hi!
I don't have much time right now, because I am at work, but maybe later I either post more or a better link.
To be very short: Bitcoin has not been thought to give miners all the power. In the contrary, their main function is timestamping the transactions! And not much more. Full nodes (or hopefully in the not too distant future advanced-spv-nodes) that should be run by many people (at least the conomic important ones, like exchanges, ...) do also verify the correctness and reject miners if they lie or don't behave in the economically-majority intended way! Miners are there so that we know what we (full nodes) should verify (and not blindly believe). Without miners we would not know which blocks to verify (there would be near infinite opinions/blocks). Miners make the choice what to verify just smaller, it doesn't make it automatically the truth.
Here a comment that shows that it was written from day 1 like this in the whitepaper:
https://www.reddit.com/r/Bitcoin/comments/6hefd8/comment/diy...
(not the best link, but ok for now. And of course economic majority is not a clear thing, but that doesn't mean that miner alone have the power. Beside miner there are the exchanges, the users, the api-providing companies, ... often grouped in 4 categories if you look at videos from Andreas Antonopoulos)
I don't have much time right now, because I am at work, but maybe later I either post more or a better link.
To be very short: Bitcoin has not been thought to give miners all the power. In the contrary, their main function is timestamping the transactions! And not much more. Full nodes (or hopefully in the not too distant future advanced-spv-nodes) that should be run by many people (at least the conomic important ones, like exchanges, ...) do also verify the correctness and reject miners if they lie or don't behave in the economically-majority intended way! Miners are there so that we know what we (full nodes) should verify (and not blindly believe). Without miners we would not know which blocks to verify (there would be near infinite opinions/blocks). Miners make the choice what to verify just smaller, it doesn't make it automatically the truth.
Here a comment that shows that it was written from day 1 like this in the whitepaper:
https://www.reddit.com/r/Bitcoin/comments/6hefd8/comment/diy...
(not the best link, but ok for now. And of course economic majority is not a clear thing, but that doesn't mean that miner alone have the power. Beside miner there are the exchanges, the users, the api-providing companies, ... often grouped in 4 categories if you look at videos from Andreas Antonopoulos)
To me, hashing power is not the process by which the outcome will be decided.
IMHO, the percentage of technical signalling will not even matter that much.
Two chains will get created quite quickly. And some BTC holders will try to take advantage of the situation.
Since transactions can get replayed on the other chain (and copying them from one chain to the other brings a stability advantage) the technical way things are going to occur is double-spending to different adresses.
... Which means services supporting different chains will be pitted against each other.
Users will empty out one wallet at the same time to one exchange on a chain they don't support, and to another address they control on the chain they support. In cashing out on the exchange, they will crash the market value of that chain.
... Which brings me to: exchanges should start signalling support and come to a consensus pretty quickly, in their own interest. They don't want to be the exchange everybody cashes out on.
Questions abound:
* Have they started signalling it?
* What software are they running?
* If you hold some BTCs: are you planning to double spend?
* How are you going to proceed?
* Which chain do you support, and how many BTC do you possess?
TL;DR: There will be a run. Exchanges will determine the outcome.
IMHO, the percentage of technical signalling will not even matter that much.
Two chains will get created quite quickly. And some BTC holders will try to take advantage of the situation.
Since transactions can get replayed on the other chain (and copying them from one chain to the other brings a stability advantage) the technical way things are going to occur is double-spending to different adresses.
... Which means services supporting different chains will be pitted against each other.
Users will empty out one wallet at the same time to one exchange on a chain they don't support, and to another address they control on the chain they support. In cashing out on the exchange, they will crash the market value of that chain.
... Which brings me to: exchanges should start signalling support and come to a consensus pretty quickly, in their own interest. They don't want to be the exchange everybody cashes out on.
Questions abound:
* Have they started signalling it?
* What software are they running?
* If you hold some BTCs: are you planning to double spend?
* How are you going to proceed?
* Which chain do you support, and how many BTC do you possess?
TL;DR: There will be a run. Exchanges will determine the outcome.
Why do you think that being the exchange used for cashing out is a bad position to be for an exchange? My understanding is, exchanges earn money on commissions, so the more volume they get, the better, and cashing out sure is some volume. Those speculators who buy BTC on the wrong chain -- sure, they will take a hit on that. But the exchange itself will still get their commission just fine. Am I missing something here?
You are actually right. It is not the exchange that would be affected, provided they haven't taken positions in their own markets.
Exchanges should make it pretty clear on which chain they will be operating, still.
I don't think trying to process transactions on both chains would be the right move.
Exchanges should make it pretty clear on which chain they will be operating, still.
I don't think trying to process transactions on both chains would be the right move.
Well, it's not the first fork in the world, ethereum's fork was pretty big (ETH vs ETC). As far as I can see, exchanges just treat both sides of the fork as two completely separate currencies (which, in fact, they are).
> I don't think trying to process transactions on both chains would be the right move.
Why is that? Wouldn't this be the most profitable approach for an exchange?
Why is that? Wouldn't this be the most profitable approach for an exchange?
[deleted]
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If I had an exchange I would be sure to check on all forks whether certain coins have been used before allowing processing. Since all forks are known, this is probably how they're going to avoid double-spending.
Ok just another proof that bitcoin can definitely not be compared to gold. Or maybe it could?
"After the event you might end up with gold or lead it all depends if your banker believe in transmutation or not (and if transmutation is actually achievable which will be determined by the best alchemists of the kingdom that need to agree together).
So all in all the guild of merchants recommend that you don't accept gold as a payement on the last day before new moon (and for a few day after that), because you wil not be able to tell if you are getting real gold or lead during that period.
Well to be honest it won't technically be lead you would get but forked gold, a gold that could be gold but isn't until the alchemists say so. But you shall still be able to use it in a limited way with people who believe in the same alchemists dissidents.
It's totally normal if it's sound complicated, it's magic after all!"
"After the event you might end up with gold or lead it all depends if your banker believe in transmutation or not (and if transmutation is actually achievable which will be determined by the best alchemists of the kingdom that need to agree together).
So all in all the guild of merchants recommend that you don't accept gold as a payement on the last day before new moon (and for a few day after that), because you wil not be able to tell if you are getting real gold or lead during that period.
Well to be honest it won't technically be lead you would get but forked gold, a gold that could be gold but isn't until the alchemists say so. But you shall still be able to use it in a limited way with people who believe in the same alchemists dissidents.
It's totally normal if it's sound complicated, it's magic after all!"
If you are comparing cryptocurrency exchanges with the real world transactions, stuff like this could have happened quite often in the old times. There is the story of the man working cast away for years with little connection with the rest of the world. After he comes back to a town he finds out that the king has changed, so all the notes and coins he has accepted as salary over the years are useless.
In reality, our banking system is much more chaotic than what the end-user sees it because central authorities are keeping the whole system together. and their authority is just what all of us believe in. Now, some people, for better or worse, started believing in something new.
In reality, our banking system is much more chaotic than what the end-user sees it because central authorities are keeping the whole system together. and their authority is just what all of us believe in. Now, some people, for better or worse, started believing in something new.
A little remark - those central authorities have men with guns to enforce their authority (given that governments are backing centralized system as for now)
Although it's hard to make people believe in the value of money they think is worthless -- even with guns. Otherwise we wouldn't have had this many hyper-inflations throughout history. (Nevertheless many governments do not accept this fact and try -- and fail -- again and again.)
Lets say that you buy a bunch of gold and put it in a fortress.
Nobody can steal your gold, but lets say the entire world gets together at once, and decides that gold is worthless and that they are moving over to lead as the new currency. But they are keeping the name "gold". Everyone now uses the name "gold" to refer to what was previously known as "lead".
Your pile of "real gold" wasn't stolen, but it may as well have been, because now it is just a bunch of heavy, worthless, shiny, rocks. (yes, yes, there are industrial uses, but the price is way way higher than what industry justifies alone)
And it really doesn't matter that you are strenuously arguing about how this "new gold" is actually lead, because nobody cares about your opinion.
That is a similar enough analogy to how bitcoin forks work.
Nobody can steal your gold, but lets say the entire world gets together at once, and decides that gold is worthless and that they are moving over to lead as the new currency. But they are keeping the name "gold". Everyone now uses the name "gold" to refer to what was previously known as "lead".
Your pile of "real gold" wasn't stolen, but it may as well have been, because now it is just a bunch of heavy, worthless, shiny, rocks. (yes, yes, there are industrial uses, but the price is way way higher than what industry justifies alone)
And it really doesn't matter that you are strenuously arguing about how this "new gold" is actually lead, because nobody cares about your opinion.
That is a similar enough analogy to how bitcoin forks work.
Except you get the same amount as leas as you have gold. In fact, now you have gold and lead. One will turn out to be a storage for value.
It doesn't matter how well you protect your gold, you can never protect its value, since this will be diluted if someone else brings a lot of gold to market. That's what happened during the ~1700s: lots of gold was brought to market because of world travel and disrupted local economies. Bitcoin prevents this by automatically adjusting difficulty. Asteroid mining can make gold useless, while Bitcoin would continue to function unless SHA256 is broken. I'm not saying Bitcoin is better or worse than gold, just that they both have advantages and disadvantages when compared.
>> you can never protect its (gold's) value, since this will be diluted if someone else brings a lot of gold to market... Bitcoin prevents this by automatically adjusting difficulty.
It doesn't prevent it. If everyone decides to sell BTC now (including the big whales owning the major portion), it's price in USD will fall, too. How is this different?
It doesn't prevent it. If everyone decides to sell BTC now (including the big whales owning the major portion), it's price in USD will fall, too. How is this different?
If everyone decides to sell now the price will tank. But then people will decide that Bitcoin is now "cheap" and the price will increase.
What I meant was that newly mined gold can cause extremely large flows into the market (much more than all the whales dumping at once), which is what happened ~300 years ago. Gold had large geographic differences in the difficulty of mining it, which Bitcoin solves through adjusting difficulty.
This is late FUD, a last minute whine by the owners of "bitcoin.org" aka core. The discussion over scaling has been happening for many months and consensus has actually just been reached in the last couple weeks. 85% of the mining power is signalling for segwit2x, and if this continues it will lock in before Aug 1st completely avoiding the scary situation talked about in the post.
Does this mean that you could end up holding on to bitcoins that don't have anymore value? Or are you fine if you just wait for the longest chain to emerge and don't do any transactions until then?
You're fine if you wait for the longest chain to emerge.
Not sure why people are downvoting you, you are objectively correct. segwit2x is at over 85%. https://coin.dance/blocks
I'm guessing the downvotes were a response to the tone of the post, not the actual content.
Though, the content itself is incorrect as well. Consensus has been achieved by the miners and by a few major payment processors, but not by the userbase. Blockchains though are very resistant to moves by major players, and even the miners being at 85% are not enough to force fundamental changes like this into the network if the users do not actively want to participate in the changes.
Note the wording there. The users have to opt-in to a change like this. It's opt-in, not opt-out. I'm very doubtful that software which is not even out in the wild yet is going to be able to get a majority of users to opt-in within a 3 week timeline.
We will know soon enough for sure.
Though, the content itself is incorrect as well. Consensus has been achieved by the miners and by a few major payment processors, but not by the userbase. Blockchains though are very resistant to moves by major players, and even the miners being at 85% are not enough to force fundamental changes like this into the network if the users do not actively want to participate in the changes.
Note the wording there. The users have to opt-in to a change like this. It's opt-in, not opt-out. I'm very doubtful that software which is not even out in the wild yet is going to be able to get a majority of users to opt-in within a 3 week timeline.
We will know soon enough for sure.
What type of power has the user base on the blockchain?
Coins only have value if people accept them as valuable. The userbase ultimately decides whether or not they would accept payment via a certain coin.
If the userbase is not interested in a coin, it will not matter how much hashrate is behind the coin, or how many figureheads try to prop it up. That coin will not have value.
If the userbase is not interested in a coin, it will not matter how much hashrate is behind the coin, or how many figureheads try to prop it up. That coin will not have value.
I imagine an user who gets some coins and he will say fuck it, I keep them. Aaaand the coins have value.
It's a bad idea to downvote one of the only correct posts in the entire thread (at that time) because of its tone.
Bitcoin consensus is definitionally achieved by miner PoW. Yes, they are beholden to market pressure from users, but saying that concensus is "by the user base" is misleading. I'm using the terminology from the bitcoin white paper
Bitcoin consensus is definitionally achieved by miner PoW. Yes, they are beholden to market pressure from users, but saying that concensus is "by the user base" is misleading. I'm using the terminology from the bitcoin white paper
> This means that any bitcoins you receive after that time may later disappear from your wallet or be a type of bitcoin that other people will not accept as payment.
Can you imagine the uproar if Visa said the same thing? It would be totally unthinkable.
Bitcoin can get away with this type of "disruption" because it's not really being used for anything other than a speculative vehicle.
Can you imagine the uproar if Visa said the same thing? It would be totally unthinkable.
Bitcoin can get away with this type of "disruption" because it's not really being used for anything other than a speculative vehicle.
> Can you imagine the uproar if Visa said the same thing? It would be totally unthinkable.
No, that's exactly what Visa says, they call it chargeback. That's why it is hard to buy bitcoins with bank cards.
No, that's exactly what Visa says, they call it chargeback. That's why it is hard to buy bitcoins with bank cards.
Yes, and you can dispute it, by contacting your them/your bank.
Who do I call if bitscoins just evaporate from my wallet thanks to this fork?
Who do I call if bitscoins just evaporate from my wallet thanks to this fork?
If a government outlaws a currency and you sold your house for that currency, who could you possibly call?
Bitcoins transacted before July 31 WILL stay in your wallet. They are not going to evaporate any time soon.
Bitcoins transacted before July 31 WILL stay in your wallet. They are not going to evaporate any time soon.
And this is not was I was replying to. Gp was comparing this to a chargeback.
But now that you bring up governance, bitcoin is essentially being steered by a handful of mining pools, not by loosely knit community of private individuals :)
But now that you bring up governance, bitcoin is essentially being steered by a handful of mining pools, not by loosely knit community of private individuals :)
Decentralized currency comes with its own strengths and weaknesses. The tech is still in its infancy. Take it or leave it.
Then seems to me it's on its deathbed, not in its infancy. A handful of Chinese mining pools will decide which fork retains any value...so much for decentralization.
You are conflating Bitcoin with decentralized currency.
Visa is only a payment network. Bitcoin is both a currency and a payment network.
If you as a business accept(ed) Visa payments in Zimbabwe's currency in 2008, or Venezuelan bolivars over the last few years, you absolutely can have its value disappear from you.
If you as a business accept(ed) Visa payments in Zimbabwe's currency in 2008, or Venezuelan bolivars over the last few years, you absolutely can have its value disappear from you.
> you absolutely can have its value disappear from you.
This is not a fair representation of what the article says. It doesn't only say that coins you've received may lose value, it says that there's no guarantee the network will recognize the contents of your wallet in the future.
A more accurate analogy would be me handing you a crisp $100 bill which you place in your wallet, and tomorrow when you go to retrieve it, it has vanished into thin air.
Even a turd of a currency like ZWD won't materially vanish. You just have to spend it as quickly as possibly after you receive it, while it still holds value.
This is not a fair representation of what the article says. It doesn't only say that coins you've received may lose value, it says that there's no guarantee the network will recognize the contents of your wallet in the future.
A more accurate analogy would be me handing you a crisp $100 bill which you place in your wallet, and tomorrow when you go to retrieve it, it has vanished into thin air.
Even a turd of a currency like ZWD won't materially vanish. You just have to spend it as quickly as possibly after you receive it, while it still holds value.
I think you're misunderstanding the situation the article is describing then.
In that unlikely but possible scenario: Your wallet would have received coins on Chain A, but the majority of the network now favors Chain B and as a result is ignoring Chain A.
You still have the private key to coins and can spend them on Chain A. It's just problematic because they're on a chain fewer people value. Fewer, but not zero. They will still have some value, just less, and will be able to be sold out of band for coins on Chain B if desired.
This has already happened with Ethereum [1]. Each chain has its own exchange rate.
> Even a turd of a currency like ZWD won't materially vanish. You just have to spend it as quickly as possibly after you receive it, while it still holds value.
The ZWD's rate of inflation was at one point at 79,600,000,000% [2]. We are getting pretty abstract if we're going to debate how close that is to materially vanishing.
[1] http://www.coindesk.com/ethereum-classic-explained-blockchai... [2] https://en.wikipedia.org/wiki/Zimbabwean_dollar#Withdrawal_o...
In that unlikely but possible scenario: Your wallet would have received coins on Chain A, but the majority of the network now favors Chain B and as a result is ignoring Chain A.
You still have the private key to coins and can spend them on Chain A. It's just problematic because they're on a chain fewer people value. Fewer, but not zero. They will still have some value, just less, and will be able to be sold out of band for coins on Chain B if desired.
This has already happened with Ethereum [1]. Each chain has its own exchange rate.
> Even a turd of a currency like ZWD won't materially vanish. You just have to spend it as quickly as possibly after you receive it, while it still holds value.
The ZWD's rate of inflation was at one point at 79,600,000,000% [2]. We are getting pretty abstract if we're going to debate how close that is to materially vanishing.
[1] http://www.coindesk.com/ethereum-classic-explained-blockchai... [2] https://en.wikipedia.org/wiki/Zimbabwean_dollar#Withdrawal_o...
Worthless as they may be, they are already collectors items. Who's going to care about a failed chain's unspent coins in 50 years time?
Also, you can use ZWD notes as kindling. :)
Also, you can use ZWD notes as kindling. :)
That's incorrect, Bitcoin is used in many places for critical applications, and I'm sure that those people are very frustrated by the situation. I know that I am.
We are doing a hardware presale using Bitcoin, and we're going to have to stop accepting Bitcoin at that time (it's a cryptocurrency miner, 90% of our sales are in Bitcoin), and that's going to hurt us.
This whole situation is frustrating.
We are doing a hardware presale using Bitcoin, and we're going to have to stop accepting Bitcoin at that time (it's a cryptocurrency miner, 90% of our sales are in Bitcoin), and that's going to hurt us.
This whole situation is frustrating.
Isn't "any [money] you receive [...] may later disappear" actually pretty common with credit card chargebacks?
This is such a silly argument. Chargebacks are for the protection of the consumer against a business. They're GREAT if you're a consumer. Why would it be in my benefit as a bitcoin user to have no recourse for fraudulent transactions?
Chargebacks usually have some form of review/dispute process as well. What's bit-coin's process for disputing the disappearance of my wallet's contents because of this fork?
I dunno about you but debit and credit card terminal failures are rather typical around Black Friday like situations.
If you hold Bitcoin then you need to think about getting hold of your private keys or using a non custodial wallet like https://strongcoin.com
If the network splits there will 1 or 2 new types of Bitcoin.
If the exchanges decide to support the new types of Bitcoin you will be able to sell your holding on the new chains whilst still keeping coins on the main Bitcoin chain.
But to do this you need to manage your own private keys.
If the network splits there will 1 or 2 new types of Bitcoin.
If the exchanges decide to support the new types of Bitcoin you will be able to sell your holding on the new chains whilst still keeping coins on the main Bitcoin chain.
But to do this you need to manage your own private keys.
https://github.com/bitcoin-dot-org/bitcoin.org/commit/9ddfa8...
Alerts: BIP148/92: change title over objection
Note: I object to this change, which I think makes the alert
less clear, less forceful, and degrades alert usability.Ladies and gentlemen, we give you the most amazing stable scalable global tech of the future
Do any significant number of people genuinely take Bitcoin to be the future of currency at this point?
> Do any significant number of people genuinely take Bitcoin to be the future of currency at this point?
No one is betting that the current version of Bitcoin is the future of currency. They are betting that the version of Bitcoin that exists in 20 or 30 years is the future of currency.
No one is betting that the current version of Bitcoin is the future of currency. They are betting that the version of Bitcoin that exists in 20 or 30 years is the future of currency.
Many people simply believe there is a need for a digital censorship resistant currency like physical cash.
I don't think it'll replace currencies, but I think it will serve a purpose as a means to transfer value when authorities don't want you to transfer value.
Not saying if this is a good or bad thing, but it is a real value proposition.
I don't think it'll replace currencies, but I think it will serve a purpose as a means to transfer value when authorities don't want you to transfer value.
Not saying if this is a good or bad thing, but it is a real value proposition.
It's also useful if you want to buy something online and don't want it showing up on your Credit Card statement.
For this use-case there is a better solution - GNU Taler [1]. It doesn't invent its own coins but works with existing currencies.
[1]: https://taler.net/en/
[1]: https://taler.net/en/
For me, the lightning network is the obviously right solution, bringing more decentralization and totally removing the need for global consensus. Why it is not that popular, I don't know.
Because LN has been vaporware since it's been announced, claiming to solve all the problems but have yet to done so. On chain scaling has also been shunned in favor of LN but it's still far from ready.
You talk about decentralization but it's not shown, and may not even be possible, how the LN should work without relying on centralized hubs.
You talk about decentralization but it's not shown, and may not even be possible, how the LN should work without relying on centralized hubs.
> Why it is not that popular, I don't know.
because using sha256 for proof of work was a mistake - it's too easily implemented in specialised hardware.
now mining power is centralising and small groups can manipulate blockchain policies in their own interest.
bitcoin should PoW-chain to a memory-hard hashing algorithm.
because using sha256 for proof of work was a mistake - it's too easily implemented in specialised hardware.
now mining power is centralising and small groups can manipulate blockchain policies in their own interest.
bitcoin should PoW-chain to a memory-hard hashing algorithm.
this post feels like propoganda. prior bitcoin upgrades have gone much smoother and when they do go wrong the community banded together to spread the right information. albiet the userbase was likely a lot smaller back then.
If the soft fork goes through, the Chinese miners are going to attack the chain.
If the soft fork fails, Core developer Luke-Jr said they'd change the Proof of Work algorithm and possibly create an altcoin (or bitcoin if enough follow).
This is like a Russian Roullete situation. The gun's loaded, all signs point to neither side conceding. It's the cypherpunks vs the corporate miners (plus some former devs and very credible people).
If the soft fork fails, Core developer Luke-Jr said they'd change the Proof of Work algorithm and possibly create an altcoin (or bitcoin if enough follow).
This is like a Russian Roullete situation. The gun's loaded, all signs point to neither side conceding. It's the cypherpunks vs the corporate miners (plus some former devs and very credible people).
No, Luke is saying that if chinese miners attack the chain and are successful, then the core chain will need to change PoW (otherwise with a minority of hash power it will take al long time for difficulty to adjust.)
There are three factions here-- Segwit2X and Core, who both want segwit, and Bitmain which does not want segwit and which has threatened a forcible hard fork into a bitcoin that has unlimited block size-- and they are even talking about doing an ICO and things like that:
https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip14...
There are three factions here-- Segwit2X and Core, who both want segwit, and Bitmain which does not want segwit and which has threatened a forcible hard fork into a bitcoin that has unlimited block size-- and they are even talking about doing an ICO and things like that:
https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip14...
https://www.reddit.com/r/Bitcoin/comments/6msyk5/comment/dk4...
And Luke's subsequent comment said if enough followed then it could still be called bitcoin.
Also Maxwell said he'd quit if BIP148 fails. If the soft fork fails, bitcoin will be something different.
And Luke's subsequent comment said if enough followed then it could still be called bitcoin.
Also Maxwell said he'd quit if BIP148 fails. If the soft fork fails, bitcoin will be something different.
I think the proper analogy is that it's a Mexican Standoff, not Russian Roulette.
Bitcoin.org definitely has a position. I wouldn't be surprised if they were pro-UASF, even though it appears there's consensus behind an alternative.
That said- this is a legit notice and is probably good advice. This is a contentious upgrade.
That said- this is a legit notice and is probably good advice. This is a contentious upgrade.
The consensus is behind Segwit2X which IS a UASF. The original UASF proposal is BIP-148 and Segwit2X uses a different mechanism (BIP-9 and 91? I think) but those differences are implementation details that Bitcoin.org doesn't the a problem with.
The Segwit2X and Core factions agree on Segwit. Core doesn't like later doing a 2MB hard fork, but most of us think it's a reasonable compromise. There won't be a lot of complaining.
The real threat is Bitmain which wants to do its own hard fork, that will NOT be compatible with Segwit, which they intend to mine privately and which will have unlimited block size:
https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip14...
That's what the original post is about. That fork is very dangerous.
The Segwit2X and Core factions agree on Segwit. Core doesn't like later doing a 2MB hard fork, but most of us think it's a reasonable compromise. There won't be a lot of complaining.
The real threat is Bitmain which wants to do its own hard fork, that will NOT be compatible with Segwit, which they intend to mine privately and which will have unlimited block size:
https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip14...
That's what the original post is about. That fork is very dangerous.
The community is deeply divided on this issue though. Earlier network problems were non-contentious.
it could even be guerrilla marketing by trading exchanges...
Doubtful. Aside from bitcoin.org's history, if it were, you'd expect more exchanges announcing UASF / legacy / SegWit2x trading pairs.
hard to price unless a fork actually occurs.
if a fork like ETH/ETC happens, exchanges do benefit.
True. Guess I'm surprised Kraken et al haven't already announced that they'll support all chains, though? I guess they're all quietly prepping in case more than one chain is viable.
Can someone give me some context on what is causing this?
It's called User Activated Soft Fork or UASF for short. It could end up being nothing but it's worth noting the date.
There are currently two main ideas on how to scale Bitcoin. One camp is the called Bitcoin Unlimited and it's a proposal that allows the miners to adjust the block size as needed.
The other idea is called Segregated Witness or Segwit. This is a change in the way bitcoin transactions are counted towards the 1MB per block limit. It will allow slightly more transactions per block but also adds functionality that could allow other types of transactions. Those will be useful in some situations, e.g. paying the same entitiy many times over the course of the relationship.
Some people in the Segwit camp are tired of waiting so they are attempting to force the issue without the support of most miners. The date they picked is Aug 1.
Since very few miners support this move, it's not likely to succeed in my opinion, but nobody knows for sure.
There are currently two main ideas on how to scale Bitcoin. One camp is the called Bitcoin Unlimited and it's a proposal that allows the miners to adjust the block size as needed.
The other idea is called Segregated Witness or Segwit. This is a change in the way bitcoin transactions are counted towards the 1MB per block limit. It will allow slightly more transactions per block but also adds functionality that could allow other types of transactions. Those will be useful in some situations, e.g. paying the same entitiy many times over the course of the relationship.
Some people in the Segwit camp are tired of waiting so they are attempting to force the issue without the support of most miners. The date they picked is Aug 1.
Since very few miners support this move, it's not likely to succeed in my opinion, but nobody knows for sure.
> Some people in the Segwit camp are tired of waiting so they are attempting to force the issue without the support of most miners. The date they picked is Aug 1.
I don't understand why the bitcoin.org page sounds so alarmist. If the miners are not in on it why would some special Bitcoin blockchain (with alternative rules) matter, since miners could easily DoS this chain, if they wanted to, in case they don't support it?
Anyone can create their own chain with non-agreed-upon-rules (e.g. testnet3 or regtest), but that's just not Bitcoin precisely because it's practically ignored by miners (like a UASF).
Are bitcoin.org, themselves, supporters of this UASF?
I don't understand why the bitcoin.org page sounds so alarmist. If the miners are not in on it why would some special Bitcoin blockchain (with alternative rules) matter, since miners could easily DoS this chain, if they wanted to, in case they don't support it?
Anyone can create their own chain with non-agreed-upon-rules (e.g. testnet3 or regtest), but that's just not Bitcoin precisely because it's practically ignored by miners (like a UASF).
Are bitcoin.org, themselves, supporters of this UASF?
Kinda, they could DoS the UASF chain, but then the UASF chain could respond by doing a proof of work hard fork.
If the community is behind it, then a POW change would render the 10s/hundreds of millions of dollars in mining equipment worthless.
So the real question is whether or not the UASF side has the support of the community or economic majority.
If the community is behind it, then a POW change would render the 10s/hundreds of millions of dollars in mining equipment worthless.
So the real question is whether or not the UASF side has the support of the community or economic majority.
You mean proof of stake? Is there a working implementation of proof of stake yet? I thought it was mostly theoretical and academic at the moment.
[deleted]
No, I meant proof of work.
You change the proof of work algorithm so that the existing miners can't use their fancy Bitcoin miners, and it becomes profitable to mine with GPUs instead.
You change the proof of work algorithm so that the existing miners can't use their fancy Bitcoin miners, and it becomes profitable to mine with GPUs instead.
algorand is academic at this point with evaluation on ec2. Though the paper is available and an implementation will be following.
Peercoin is one of the first working proof of stake implementations that has been running for close to 5 years now.
Peercoin is one of the first working proof of stake implementations that has been running for close to 5 years now.
There are a few altcoins using Proof of Stake already
> Are bitcoin.org, themselves, supporters of this UASF?
Yes.
Yes.
There are 2 competing proposals on how to scale up bitcoin/blockchain and this is the day that the community/miners have to decide what side they will continue using: https://bitcoinmagazine.com/articles/countdown-segwit-these-...
I still don't get it. As long as a reasonable majority of hashing power stays on one chain, there shouldn't be any symptoms except increased confirmation times.
The bitcoin.org page says:
> Do not trust any payments you receive after Tue Aug 01 2017 02:00:00 GMT+0200 (CEST) until the situation is resolved. No matter how many confirmations the new payment says it has, it can disappear from your wallet at any point up until the situation is resolved.
Which I don't understand, unless miners are actively trying to make this happen (by mining on two different chains with roughly the same hashing power). According to the paper[1], as long as at least 20% of the hashing power is honest, 11 confirmations should be final (in 99.9% of cases)
[1] https://bitcoin.org/bitcoin.pdf (page 8)
The bitcoin.org page says:
> Do not trust any payments you receive after Tue Aug 01 2017 02:00:00 GMT+0200 (CEST) until the situation is resolved. No matter how many confirmations the new payment says it has, it can disappear from your wallet at any point up until the situation is resolved.
Which I don't understand, unless miners are actively trying to make this happen (by mining on two different chains with roughly the same hashing power). According to the paper[1], as long as at least 20% of the hashing power is honest, 11 confirmations should be final (in 99.9% of cases)
[1] https://bitcoin.org/bitcoin.pdf (page 8)
The doomsday scenario is that Bitcoin forks for a long period of time, but then one fork down the road, crashes in value to worthlessness.
There is nothing that prevents 2 forks from existing for an indefinite amount of time, just look at ethereum and ethereum classic.
The question of the year is whether one side will suddenly crash down to a price of 0.
There is nothing that prevents 2 forks from existing for an indefinite amount of time, just look at ethereum and ethereum classic.
The question of the year is whether one side will suddenly crash down to a price of 0.
No, that's not correct. In the case of the UASF, something very frightening is possible.
If the UASF has majority economic support (unlikely) and also the miners do not support it, initially the UASF side will be behind, and there will be multiple chains. There will be the UASF chain and the normal chain.
But since the UASF has more support, it'll have more block reward, and eventually it'll have more hashrate behind it. It'll eventually catch up to the other chain, pass the other chain, and then...
The other chain completely implodes, and stops existing. Yes, that's actually what happens, and why if you are a miner, you should be afraid of the UASF. You lose basically everything if the UASF ends up with more hashrate, and the UASF is eventually guaranteed to have more hashrate if it has a higher coin price.
----
Basically, your doomsday scenario dramatically understates the worst-case scenario.
If the UASF has majority economic support (unlikely) and also the miners do not support it, initially the UASF side will be behind, and there will be multiple chains. There will be the UASF chain and the normal chain.
But since the UASF has more support, it'll have more block reward, and eventually it'll have more hashrate behind it. It'll eventually catch up to the other chain, pass the other chain, and then...
The other chain completely implodes, and stops existing. Yes, that's actually what happens, and why if you are a miner, you should be afraid of the UASF. You lose basically everything if the UASF ends up with more hashrate, and the UASF is eventually guaranteed to have more hashrate if it has a higher coin price.
----
Basically, your doomsday scenario dramatically understates the worst-case scenario.
>The other chain completely implodes, and stops existing.
Are you sure? If I'm not wrong, this isn't that much different from Ethereum/Ethereum Classic situation.
Ethereum Classic's price is no where near Ethereum's but it is still maintaining a good position - 5th by Market Cap and 3rd by 24hr volume.
You are saying the ALL of the mining power will eventually move over, but what if it doesn't the miners (85% of whom support Segwit2x) stay on the non-UASF fork?
UASF Bitcoin will be very weak, so I can't expect what would happen, but I'm just saying its not so simple.
Are you sure? If I'm not wrong, this isn't that much different from Ethereum/Ethereum Classic situation.
Ethereum Classic's price is no where near Ethereum's but it is still maintaining a good position - 5th by Market Cap and 3rd by 24hr volume.
You are saying the ALL of the mining power will eventually move over, but what if it doesn't the miners (85% of whom support Segwit2x) stay on the non-UASF fork?
UASF Bitcoin will be very weak, so I can't expect what would happen, but I'm just saying its not so simple.
> Ethereum Classic's price is no where near Ethereum's but it is still maintaining a good position - 5th by Market Cap and 3rd by 24hr volume.
ETC's price is being pumped up (some more context can be found on /r/ethereum), in some cases by taking advantage of newcomers looking to get into the ETH craze, helped by the fact that the Ethereum Foundation doesn't seem interested in maintaining ownership how the word "Ethereum" is used. There's no real technological innovation or developer interest in ETC.
ETC's price is being pumped up (some more context can be found on /r/ethereum), in some cases by taking advantage of newcomers looking to get into the ETH craze, helped by the fact that the Ethereum Foundation doesn't seem interested in maintaining ownership how the word "Ethereum" is used. There's no real technological innovation or developer interest in ETC.
I didn't really find any proper reason as to how it is being pumped. Just about ETC misleading people into buying it. Any links?
>There's no real technological innovation or developer interest in ETC.
I mean, ETC guys can just push all of the new developments in ETH to their code. The codebase is the same. There probably won't be any original developments in ETC, but they don't really need much to stay on par with ETH.
>There's no real technological innovation or developer interest in ETC.
I mean, ETC guys can just push all of the new developments in ETH to their code. The codebase is the same. There probably won't be any original developments in ETC, but they don't really need much to stay on par with ETH.
Barry Silbert/Coindesk are quite pro-ETC and anti-ETH, just to name two examples.
Here's an intro (google around for more): https://www.reddit.com/r/ethtrader/comments/6d62td/the_story...
https://medium.com/@charlescmackay/barry-silbert-and-the-cos...
Not saying ETH is perfect, far from it, but ETC is a pumped up scam for sure. They're using "Ethereum" in the name to fool newbies, likely propping up the price at current levels. I seriously doubt anyone know is knowledgable/not in on the scam really invests in a coin that is identical to ETH but none of the leadership, community or dev interest.
Here's an intro (google around for more): https://www.reddit.com/r/ethtrader/comments/6d62td/the_story...
https://medium.com/@charlescmackay/barry-silbert-and-the-cos...
Not saying ETH is perfect, far from it, but ETC is a pumped up scam for sure. They're using "Ethereum" in the name to fool newbies, likely propping up the price at current levels. I seriously doubt anyone know is knowledgable/not in on the scam really invests in a coin that is identical to ETH but none of the leadership, community or dev interest.
Let me get this out of the way: While I admire the contributions by the Ethereum Foundation and wish them all the best, I think the hard fork shouldn't have been done. I think letting the money get away would show that they actually mean the 'code is law' statement that was thrown around (Note that I have till date never owned ETH or ETC and probably won't in the near future)
Now that that's out the way, let me say the cognitive dissonance in that post is palpable. Words are conveniently placed so spin the situation into something else.
r/Bitcoin is shown to be the culprit here, just because they are the ones with the most subs and poking fun at ETH. The reality was every other altcoin community was doing the exact same thing. I was watching everything closely when as it unfolded. I can link you posts from other subreddits if you want.
>The Ethereum community stuck together, worked together, and fought back. Successfully
This is false. Quite a few of the ETH community fought for not forking. No one wants to lose money, so who wouldn't want to fork. Many vocal people invested quite a bit of their funds so it is completely understandable.
The irony here is, even the 'rogue hackers' were probably part of the ETH community. Who else would know the codebase so well? The phrase 'stuck together' is false.
>Barry Silberts co-owned exchange "Poloniex" raced to be the first exchange to start trading the coin of this old chain (ETC)
Looks like something a smart person would do. I would also capitalize on trades that people will make with ETC. You've immediately got twice the volume therefore double the fees that can be collected. This is clearly a good business decision. Doing that before other exchanges means more fees collected!
>ETC is an Attack against Ethereum
That's a bold claim. I don't see any 'attack'. Any person with half a brain can see which one is the original ETH. It is a fork, so calling it an attack is dramatic.
>It's a technological attack, and a monetary scam
Big words. I don't see any technology being used to attack ETH. Just people mining the coin they support.
>If you have bought, or holding, or still planning to buy ETC, be ready to get hit by some nasty surprises down the road ( on those days - and I can already foresee a few - I will be linking everyone back to this thread right here, as a reminder).
Now who sounds like they are spreading FUD?
-------------------
While Poloniex was made out to be the perpetrator, it has only 5% of the 24hr transaction volume. So pointing fingers at the Poloniex person was baseless and foolish.
I believe in a bright future for ETH and will probably get into it, but falsifying events is a great way to show others that the community can't self-police and is an echo chamber.
Now that that's out the way, let me say the cognitive dissonance in that post is palpable. Words are conveniently placed so spin the situation into something else.
r/Bitcoin is shown to be the culprit here, just because they are the ones with the most subs and poking fun at ETH. The reality was every other altcoin community was doing the exact same thing. I was watching everything closely when as it unfolded. I can link you posts from other subreddits if you want.
>The Ethereum community stuck together, worked together, and fought back. Successfully
This is false. Quite a few of the ETH community fought for not forking. No one wants to lose money, so who wouldn't want to fork. Many vocal people invested quite a bit of their funds so it is completely understandable.
The irony here is, even the 'rogue hackers' were probably part of the ETH community. Who else would know the codebase so well? The phrase 'stuck together' is false.
>Barry Silberts co-owned exchange "Poloniex" raced to be the first exchange to start trading the coin of this old chain (ETC)
Looks like something a smart person would do. I would also capitalize on trades that people will make with ETC. You've immediately got twice the volume therefore double the fees that can be collected. This is clearly a good business decision. Doing that before other exchanges means more fees collected!
>ETC is an Attack against Ethereum
That's a bold claim. I don't see any 'attack'. Any person with half a brain can see which one is the original ETH. It is a fork, so calling it an attack is dramatic.
>It's a technological attack, and a monetary scam
Big words. I don't see any technology being used to attack ETH. Just people mining the coin they support.
>If you have bought, or holding, or still planning to buy ETC, be ready to get hit by some nasty surprises down the road ( on those days - and I can already foresee a few - I will be linking everyone back to this thread right here, as a reminder).
Now who sounds like they are spreading FUD?
-------------------
While Poloniex was made out to be the perpetrator, it has only 5% of the 24hr transaction volume. So pointing fingers at the Poloniex person was baseless and foolish.
I believe in a bright future for ETH and will probably get into it, but falsifying events is a great way to show others that the community can't self-police and is an echo chamber.
Yes I'm sure, this is an expert opinion. Ethereum and Etherum Classic follow separate, incompatible rules. If Etherurm Classic were ever to pass Ethereum in value, nothing dramatic would happen.
If we end up with Bitcoin and BitcoinSW, and BSW is the minority (like Etherum Classic), we'd have a situation like today. Except, if BSW were to ever catch up to Bitcoin in total work, when it passed Bitcoin (51% hashrate is enough to cause this), it would obliterate the original chain, and become the only chain.
This property is why we gave it a new name (UASF).
If we end up with Bitcoin and BitcoinSW, and BSW is the minority (like Etherum Classic), we'd have a situation like today. Except, if BSW were to ever catch up to Bitcoin in total work, when it passed Bitcoin (51% hashrate is enough to cause this), it would obliterate the original chain, and become the only chain.
This property is why we gave it a new name (UASF).
It doesn't actually delete the other chain, in all Wipeout scenarios, despite what everyone is saying
Nodes can continue to follow it if they feel like it, and change their code.
There is nothing that stops someone from saying "yes, this chain has less proof of work, but I don't care".
You could argue that this would cause the old chain the be less valuable, but the old chain doesn't literally get deleted from people's hard drives in all scenarios.
The Wipeout scenario is overhyped, because of how nodes can choose to follow the old chain if they feel like it.
IE, old nodes would effectively be soft forking by adding a check point onto the old chain.
Nodes can continue to follow it if they feel like it, and change their code.
There is nothing that stops someone from saying "yes, this chain has less proof of work, but I don't care".
You could argue that this would cause the old chain the be less valuable, but the old chain doesn't literally get deleted from people's hard drives in all scenarios.
The Wipeout scenario is overhyped, because of how nodes can choose to follow the old chain if they feel like it.
IE, old nodes would effectively be soft forking by adding a check point onto the old chain.
There's been a debate (the "scaling debate") raging in the Bitcoin community for years. It's been especially bad the past two. I'll skip the details, but essentially two different visions for Bitcoin's growth have emerged.
Both sides have proposed ways forward, only to be rejected by the community. A large number of companies and miners in the space came together recently in New York to agree on a compromise. The New York Agreement (NYA) was to combine two of the proposals- Segregated Witness, a soft-fork that provides some new features and a modest capacity increase, and a 2-MB hardfork.
In response, extremists on the "small-blocker" side have declared that they'll likely force a chain-split on August 1st via a so-called "use-activated soft-fork".
Now it's time to see what the market thinks :)
Both sides have proposed ways forward, only to be rejected by the community. A large number of companies and miners in the space came together recently in New York to agree on a compromise. The New York Agreement (NYA) was to combine two of the proposals- Segregated Witness, a soft-fork that provides some new features and a modest capacity increase, and a 2-MB hardfork.
In response, extremists on the "small-blocker" side have declared that they'll likely force a chain-split on August 1st via a so-called "use-activated soft-fork".
Now it's time to see what the market thinks :)
As someone with a basic Comp Sci understanding of crypto currencies could someone explain to me why there is a scalability problem? I thought one of the primary benefits of Bitcoin was that higher transaction fees will attract more miners and ergo the transactions can be processed at a higher rate. Why won't this problem be resolved naturally? Tinkering with the block size makes sense to me as a way to crank through more transactions per mined block, but again, why is it even a problem? The mining power is just not there?
The mining power doesn't matter in that case, as the network adjusts to whatever mining power is there.
The limitation is in the protocol, or rather, its current implementation with the 1MB blocksize limit. It was originally implemented to make growth a little more predictable in the beginning, nothing else. Satoshi himself said that it's only to prevent spam, which was at a time before growth, when it wasn't obvious yet how well the self regulation with TX fees works.
After Satoshi disappeared, other people took over the development, and disagreements over how to continue began. What was mostly a technical argument at one point, became a political argument after Blockstream formed, which had taken investments from banks and had most of the core developers under them.
These then not only pushed for other means of scaling than just removing the blocksize cap, but also actively pushed against that, which split the community in half.
Now we have people who (very simplified) just want the blocksize cap increased, and others who support the scaling methods of Blockstream, namely segwit and, down the road, lightning.
This endless debate with both parts of the community calling the other's solution unsafe is what is currently crippling Bitcoins potential.
The limitation is in the protocol, or rather, its current implementation with the 1MB blocksize limit. It was originally implemented to make growth a little more predictable in the beginning, nothing else. Satoshi himself said that it's only to prevent spam, which was at a time before growth, when it wasn't obvious yet how well the self regulation with TX fees works.
After Satoshi disappeared, other people took over the development, and disagreements over how to continue began. What was mostly a technical argument at one point, became a political argument after Blockstream formed, which had taken investments from banks and had most of the core developers under them.
These then not only pushed for other means of scaling than just removing the blocksize cap, but also actively pushed against that, which split the community in half.
Now we have people who (very simplified) just want the blocksize cap increased, and others who support the scaling methods of Blockstream, namely segwit and, down the road, lightning.
This endless debate with both parts of the community calling the other's solution unsafe is what is currently crippling Bitcoins potential.
The scale problem exists because of two things:
1) currently, only about 6 blocks can be verified by the network per hour. That is fixed, any faster and the difficulty rises. Any slower and the difficulty declines. With the current code in use, it will always be about 6 blocks per hour.
2) currently, blocks are limited to 1MB in size. This means that only a certain number of transactions can be processed per block (apx 1200 to 2500).
Thus, only 24 * 6 * #txns_per_block => 170k to 350k transactions can be processed per day. It doesn't matter how many computers are verifying new blocks in the blockchain. This is an... issue.
Note, a "transaction" is moving BTC from one wallet to another wallet.
1) currently, only about 6 blocks can be verified by the network per hour. That is fixed, any faster and the difficulty rises. Any slower and the difficulty declines. With the current code in use, it will always be about 6 blocks per hour.
2) currently, blocks are limited to 1MB in size. This means that only a certain number of transactions can be processed per block (apx 1200 to 2500).
Thus, only 24 * 6 * #txns_per_block => 170k to 350k transactions can be processed per day. It doesn't matter how many computers are verifying new blocks in the blockchain. This is an... issue.
Note, a "transaction" is moving BTC from one wallet to another wallet.
Thanks, I forgot about the automatic increase/decrease in difficulty as miners come and go. Why won't increasing the transactions per block scale forever? I see lots of people saying it's not a permanent solution. Is the SegWit stuff basically just going to allow for 'meta-transactions' so that you can create a faster overlay network as a sort of clearing house?
There is plenty of mining power. The simple answer to your question is that everyone who wants to change bitcoin has a poltical agenda they are angling to satisfy.
What strategy is the best for small investors ? Moving the money into altcoins or just pulling completely back ? Should we expect a soar on altcoins (e.g litecoin, ripple, antshares a.k.a neo) ?
Pretty easy. Pull all of your coins into a wallet you control (like bitcoin-core, running on your own computer), and then just ride through the storm. For some amount of time, there may be 2 or 3 versions of Bitcoin that are active, but if you use this strategy you'll own all of your coins on all the versions.
So, as long as the combined value of every version is approximately around the value of the original version, you haven't lost any money.
Then, wait for the dust to settle, sell the coins for the versions you don't like, buy coins for the versions you do like, and then resume using Bitcoin like you had originally.
The altcoin market is pretty upside down right now, even more than Bitcoin is. It's probably less safe to move to an alt than it is to just ride through the bitcoin storm.
So, as long as the combined value of every version is approximately around the value of the original version, you haven't lost any money.
Then, wait for the dust to settle, sell the coins for the versions you don't like, buy coins for the versions you do like, and then resume using Bitcoin like you had originally.
The altcoin market is pretty upside down right now, even more than Bitcoin is. It's probably less safe to move to an alt than it is to just ride through the bitcoin storm.
I have a few coins in a copay wallet, which is a BIP32 wallet. Does that mean that wallet is under my control and my coins are safe?
If you are the only one with access to the secret key, then you control the coins. If someone else has the secret key (or keys), then they control the coins.
I believe copay is okay from a brief glance, but I honestly can't tell if they give the keys to Bitpay for backup or not.
The safest wallet is bitcoin-core, though there are plenty of reasonably safe options.
I believe copay is okay from a brief glance, but I honestly can't tell if they give the keys to Bitpay for backup or not.
The safest wallet is bitcoin-core, though there are plenty of reasonably safe options.
I used bitcoin-core before, but I wanted to switch to a more light-weight wallet, and one which is based on BIP32. At that time copay looked like the best option. And because it's BIP32, I should be able to transfer the wallet to another compatible implementation without any problems.
The million dollar question. If you look back at what the Ethereum split did for the market, maybe it'll give you some ideas.
Remember though- if you don't have any Bitcoin under your own control (non-custodial wallet) you might not be able to trade between chains if there's a split. There are only two exchanges with announced pairs AFAIK- BitFinex and ViaBTC both have futures contracts set up.
Remember though- if you don't have any Bitcoin under your own control (non-custodial wallet) you might not be able to trade between chains if there's a split. There are only two exchanges with announced pairs AFAIK- BitFinex and ViaBTC both have futures contracts set up.
I actually moved to altcoins already but just curious if I should move out completely.
Don Stewart of Haskell fame and former head of computer-something at HSBC is a lot smarter than me. He seems not terribly impressed by the potential. I'm out (never got in), but do what you will. https://twitter.com/donsbot/status/879782911607791616 https://twitter.com/donsbot/status/879804988708540416
But, eh, if crypto ever completely replaces raw mineral as a trading mechanism, I guess there's still 200x potential there. https://howmuch.net/articles/worlds-money-in-perspective
But, eh, if crypto ever completely replaces raw mineral as a trading mechanism, I guess there's still 200x potential there. https://howmuch.net/articles/worlds-money-in-perspective
> "Be wary of storing your bitcoins on an exchange or any service that doesn’t allow you to make a local backup copy of your private keys."
I know a couple people who have some bitcoin on Coinbase and aren't too comfortable moving it to a local wallet (Coinbase is just easier for them, they don't have to worry about the security of their personal computer).
Does Coinbase allow making a local backup of private keys? I'm thinking they might not, but maybe they do.
I know a couple people who have some bitcoin on Coinbase and aren't too comfortable moving it to a local wallet (Coinbase is just easier for them, they don't have to worry about the security of their personal computer).
Does Coinbase allow making a local backup of private keys? I'm thinking they might not, but maybe they do.
When ETH split Coinbase chose one fork and allowed you to transfer your other ETH out.
Here's part of the warning message on bitcointalk [1]:
1. Ensure that you have no BTC deposited with a Bitcoin bank or other trusted third-party before Aug 1. If there's no technical way for you to export the private keys for your BTC, then that BTC is at risk. Some Bitcoin banks may assure you that they'll definitely keep your BTC safe, but I absolutely wouldn't trust them.
2. Do not send transactions or trust received transactions starting 12 hours before Aug 1 at midnight UTC, and continue this until you hear the "all clear" from several trustworthy sources. For example, I will post a forum news item if everything is OK, or if everything is not OK and action is required.
[1] https://bitcointalk.org/index.php?topic=2017191.0
1. Ensure that you have no BTC deposited with a Bitcoin bank or other trusted third-party before Aug 1. If there's no technical way for you to export the private keys for your BTC, then that BTC is at risk. Some Bitcoin banks may assure you that they'll definitely keep your BTC safe, but I absolutely wouldn't trust them.
2. Do not send transactions or trust received transactions starting 12 hours before Aug 1 at midnight UTC, and continue this until you hear the "all clear" from several trustworthy sources. For example, I will post a forum news item if everything is OK, or if everything is not OK and action is required.
[1] https://bitcointalk.org/index.php?topic=2017191.0
I wish there was a concise way to explain what is going on, but there really isn't. I'm going to do my best though.
Bitcoin is a consensus system. This means that the goal is to have everyone believe the exact same thing at all times. Bitcoin achieves this by having everyone run identical software which is able to compile a list of transactions, and from there decide what money belongs to which person.
As you can imagine, it's a problem if you have $10, and Alice believes she owns that $10, Bob believes he owns that same $10, and Charlie believes that the money was never sent to either of them. These three people can't interact with eachother, because they can't agree on who owns the money. Spending money has no meaning here.
In Bitcoin, there are very precise rules that define how money is allowed to move around. These rules are identical on all machines, and because they are identical for everyone on the network, nobody is ever confused about whether or not they own money.
Unfortunately, there are now 3 versions of the software floating around (well... there are more. But there are only 3 that seem to have any real traction right now, though even that is hard to be certain about). Currently, all versions of the software have the exact same set of rules, but on August 1st, one of those versions of the software will be running a different set of rules. So, depending, people may not be able to agree on the ownership of money. If you are running one version, and your friend is running another, your friend may receive that money, or they may not. This is of course a bad situation for both of you, and its even worse if you are working with automated systems, because an automated system likely has no idea that this is happening, and it may have no way to fix any costly mistakes.
It gets worse. The version of the software that is splitting off actually has the power to destroy the other two versions of the software. I don't know how to put this in simple terms either.
In Bitcoin, it is possible to have multiple simultaneous histories. As long as all of the histories are mathematically correct (that is, they follow all of the formal rules of Bitcoin), you know which history is the real history based on how much work is behind it. The history with the most work wins. If the history is illegal, you ignore it no matter how much work is behind it.
So, this troublemaker version of the software (the UASF version) has a compatible set of rules with the other 2 versions. Basically, everything that it does, the other versions see as valid. So if its history is the longest, the other versions will treat that history as the one true history. The thing is, this troublemaker version of the software is stubborn, and so even if the histories of the other two versions have more work, it'll ignore them and focus only on its own version of history.
So, the dramatic / problematic situation happens if the UASF software initially has less work in its history. What'll happen is a split, and two different versions of Bitcoin will exist at the exact same time. But then, if the UASF software ends up with more work after some period of time (days, weeks, etc.), the other versions of the software will prefer its version of history over their own.
Basically, what happens there is that entire days, or weeks, etc. of history get completely obliterated. The UASF history becomes canonical, and the histories built by the other versions all get destroyed. Miners lose all of their money, people who accepted payments lose those payments, people who made payments get those payments back. Basically a lot of chaos where people end up losing probably millions and millions of dollars.
----
I hope that helps. This whole situation is screwed up, and really the best thing to do is to put your coins in a cold wallet (one that you control, not an exchange), and then just not send or receive any coins for a few weeks. Let the dust settle, and then resume using Bitcoin once its clear that the turmoil is over.
----
The most likely situation here is that nothing interesting happens at all. My personal opinion is that the vast majority of people who matter in Bitcoin aren't even paying attention to the drama, and something dramatic is really only possible if the majority of Bitcoin users opt-in to doing something. I don't think that's the case at all, which means essentially nothing interesting is going to happen.
But, I could be wrong. There's a non-zero chance that something very unfortunate happens, and there's a pretty easy way to isolate yourself: don't send or receive any Bitcoins starting July 31st, and don't resume until it's clear that the storm has passed. It'll likely take less than a week to come to a well-defined conclusion.
Bitcoin is a consensus system. This means that the goal is to have everyone believe the exact same thing at all times. Bitcoin achieves this by having everyone run identical software which is able to compile a list of transactions, and from there decide what money belongs to which person.
As you can imagine, it's a problem if you have $10, and Alice believes she owns that $10, Bob believes he owns that same $10, and Charlie believes that the money was never sent to either of them. These three people can't interact with eachother, because they can't agree on who owns the money. Spending money has no meaning here.
In Bitcoin, there are very precise rules that define how money is allowed to move around. These rules are identical on all machines, and because they are identical for everyone on the network, nobody is ever confused about whether or not they own money.
Unfortunately, there are now 3 versions of the software floating around (well... there are more. But there are only 3 that seem to have any real traction right now, though even that is hard to be certain about). Currently, all versions of the software have the exact same set of rules, but on August 1st, one of those versions of the software will be running a different set of rules. So, depending, people may not be able to agree on the ownership of money. If you are running one version, and your friend is running another, your friend may receive that money, or they may not. This is of course a bad situation for both of you, and its even worse if you are working with automated systems, because an automated system likely has no idea that this is happening, and it may have no way to fix any costly mistakes.
It gets worse. The version of the software that is splitting off actually has the power to destroy the other two versions of the software. I don't know how to put this in simple terms either.
In Bitcoin, it is possible to have multiple simultaneous histories. As long as all of the histories are mathematically correct (that is, they follow all of the formal rules of Bitcoin), you know which history is the real history based on how much work is behind it. The history with the most work wins. If the history is illegal, you ignore it no matter how much work is behind it.
So, this troublemaker version of the software (the UASF version) has a compatible set of rules with the other 2 versions. Basically, everything that it does, the other versions see as valid. So if its history is the longest, the other versions will treat that history as the one true history. The thing is, this troublemaker version of the software is stubborn, and so even if the histories of the other two versions have more work, it'll ignore them and focus only on its own version of history.
So, the dramatic / problematic situation happens if the UASF software initially has less work in its history. What'll happen is a split, and two different versions of Bitcoin will exist at the exact same time. But then, if the UASF software ends up with more work after some period of time (days, weeks, etc.), the other versions of the software will prefer its version of history over their own.
Basically, what happens there is that entire days, or weeks, etc. of history get completely obliterated. The UASF history becomes canonical, and the histories built by the other versions all get destroyed. Miners lose all of their money, people who accepted payments lose those payments, people who made payments get those payments back. Basically a lot of chaos where people end up losing probably millions and millions of dollars.
----
I hope that helps. This whole situation is screwed up, and really the best thing to do is to put your coins in a cold wallet (one that you control, not an exchange), and then just not send or receive any coins for a few weeks. Let the dust settle, and then resume using Bitcoin once its clear that the turmoil is over.
----
The most likely situation here is that nothing interesting happens at all. My personal opinion is that the vast majority of people who matter in Bitcoin aren't even paying attention to the drama, and something dramatic is really only possible if the majority of Bitcoin users opt-in to doing something. I don't think that's the case at all, which means essentially nothing interesting is going to happen.
But, I could be wrong. There's a non-zero chance that something very unfortunate happens, and there's a pretty easy way to isolate yourself: don't send or receive any Bitcoins starting July 31st, and don't resume until it's clear that the storm has passed. It'll likely take less than a week to come to a well-defined conclusion.
Does anyone know how Coinbase is going to handle this?
The problems described in this post are unlikely to happen. There is an attempt to split ("fork") the network scheduled for August 1. The people forking will force activation of a new feature, Segwit, while the non-forkers won't. However, the non-forkers are currently planning to activate Segwit as part of a compromise plan before the deadline. If this compromise happens as planned, there will be no need to force-activate Segwit with a fork, and so no fork will happen on August 1.
Frankly, even if the compromise solution fails and the fork does happen on August 1, it will be a complete non-event. Bitcoin.org is biased as they are affiliated with people who support the August 1 fork, and so they're attempting to publicize it. However, the fork has practically zero support from Bitcoin miners or exchanges. On Aug 1 the vast majority of miners and exchanges will stay with the current network. Without significant miner support the forked network will run extremely slowly, and it will be vulnerable to several kinds of attacks. Without exchange support the forked network will not have economic value, and will quickly become irrelevant.
Although August 1 will likely not be a problem either way, there is another date that will. Around the end of October, another proposal to fork the network is scheduled, and this one is supported by miners and exchanges. What will happen then is much more murky. It will become clearer as the date approaches.
Frankly, even if the compromise solution fails and the fork does happen on August 1, it will be a complete non-event. Bitcoin.org is biased as they are affiliated with people who support the August 1 fork, and so they're attempting to publicize it. However, the fork has practically zero support from Bitcoin miners or exchanges. On Aug 1 the vast majority of miners and exchanges will stay with the current network. Without significant miner support the forked network will run extremely slowly, and it will be vulnerable to several kinds of attacks. Without exchange support the forked network will not have economic value, and will quickly become irrelevant.
Although August 1 will likely not be a problem either way, there is another date that will. Around the end of October, another proposal to fork the network is scheduled, and this one is supported by miners and exchanges. What will happen then is much more murky. It will become clearer as the date approaches.
You're misunderstanding the issue. Core / Bitcoin.org don't have a problem with Segwit2X which is a UASF like Bip-148 which core supports. (It uses a different BIP and is slightly different but it's perfectly find with all of us.)
The threat is that BitMain, the controller of a very large amount of hashing power, something like %70 is threatening a hard fork into their own, non-segwit chain:
https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip14...
The threat is that BitMain, the controller of a very large amount of hashing power, something like %70 is threatening a hard fork into their own, non-segwit chain:
https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip14...
Sorry, that's completely wrong. "UAHF" is even less likely to happen and gain adoption than UASF. BitMain does not directly control all of the hash power of people using their miners and cannot successfully fork by themselves, plus again they would have no support from exchanges.
Core absolutely does not support Segwit2x, because of the hard fork later. If they do, why don't they merge it and end this standoff?
Core absolutely does not support Segwit2x, because of the hard fork later. If they do, why don't they merge it and end this standoff?
If the community soft-forks as you say, then this will be disastrous since corporate miners will not be onboard and the forked chain will be vulnerable to attacks which could result in UASF chain's demise.
The UASF chain's demise would not be disastrous at all, it would simply be the status quo. Bitcoin would continue as normal.
I wrote this in case anyone wants more information: https://smsprivacy.org/bip148-uasf
Should be a bit more informative than TFA.
Should be a bit more informative than TFA.
Naw, this isn't about Segwit2x, it's about the hard fork bitmain wants to do:
https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip14...
I'm pretty sure the announcement on bitcoin.org is about the BIP148 UASF.
I haven't kept up with Bitcoin tech for awhile. Hopefully the following questions are relevant here:
1. What percentage of Bitcoin's PoW belongs to Bitmain?
2. Are the drivers for Bitmain's hardware free-as-in-freedom?
3. Is mining hardware in the same class as Bitmain's manufactured anywhere in the world other than China?
Edit: Bonus question: If all cutting edge hardware tends to be developed and manufactured in one particular spot in one particular nation state, and if Bitcoin mining efficiency now depends mainly upon the manufacture of newer, more powerful hardware, does that change any of the implicit assumptions made in the Bitcoin whitepaper? (Esp. considering that same nation state has put a hard speed limit on all data moving in/out its borders.)
1. What percentage of Bitcoin's PoW belongs to Bitmain?
2. Are the drivers for Bitmain's hardware free-as-in-freedom?
3. Is mining hardware in the same class as Bitmain's manufactured anywhere in the world other than China?
Edit: Bonus question: If all cutting edge hardware tends to be developed and manufactured in one particular spot in one particular nation state, and if Bitcoin mining efficiency now depends mainly upon the manufacture of newer, more powerful hardware, does that change any of the implicit assumptions made in the Bitcoin whitepaper? (Esp. considering that same nation state has put a hard speed limit on all data moving in/out its borders.)
follow-up thread was posted over here, https://news.ycombinator.com/item?id=14788663
I obviously don't understand this at all. I thought it was distributed and that that was the whole point.
It is distributed, and that is the whole point. The difficulty lies in being unable to force anyone to do anything, so any change to the protocol runs the risk of bitcoin splitting two incompatible halves. Changes like these have happened in the past without too much trouble, but these days there's more money and politics involved, so it's wait-and-see as to the outcome. Worst case bitcoin will permanently split into Bitcoin A and Bitcoin B. In practice I think it's fairly unlikely.
Just suspend your trading near the date until this kerfuffle sorts itself out and you should be fine.
Just suspend your trading near the date until this kerfuffle sorts itself out and you should be fine.
What time zone is "GMT+0100 (IST)" supposed to be?
India Standard Time is something like GMT+5.
India Standard Time is something like GMT+5.
That would be the time zone configured on your device. In this case, Irish Standard Time. Which, unlike the American nomenclature for time zones, is a Daylight Saving Time time zone (Ireland uses GMT outside of DST).
Note that the page has "2017/08/01 00:00 UTC" in the source, but uses a "Localize dates" JavaScript function to change that to your configured time zone.
Note that the page has "2017/08/01 00:00 UTC" in the source, but uses a "Localize dates" JavaScript function to change that to your configured time zone.
Irish Summer Time I would guess.
Good, good. Bitcoin will fall, and eth will become king.
Terribly uninformative. I'm actually surprised the coin is trading as high as it is considering all the uncertainty. I expected a greater freak out from technologically inapt investors/speculators.
What is the max tx/s speed? Still no consensus???
With segwit, you can use http://lightning.network. Lightning network gives you essentially unlimited transaction speed.
Which doesn't actually exist yet, and doesn't solve the problem even theoretically:
https://medium.com/@jonaldfyookball/mathematical-proof-that-...
https://medium.com/@jonaldfyookball/mathematical-proof-that-...
The blog author and you need to learn about lighting network and graph theory.
Edit: responses to the specific "proof" you linked
https://medium.com/@murchandamus/i-have-just-read-jonald-fyo...
https://medium.com/@murchandamus/some-subsidiary-points-on-l...
Edit: responses to the specific "proof" you linked
https://medium.com/@murchandamus/i-have-just-read-jonald-fyo...
https://medium.com/@murchandamus/some-subsidiary-points-on-l...
That's just a lot of hand-waving, if the author is so confident about his rebuttal he should be able to provide a model for it. This person did at least attempt to simulate something along the lines of an ideal LN, which showed that micropayments do not do very well at all due to the combination of fees accrued at each hop:
https://hackernoon.com/simulating-a-decentralized-lightning-...
This thread on the same story discusses other issues with LN proposals, one that stands out to me is how routing is going to work if all nodes are perfectly equal - routing on the internet relies on a hub model, seems likely that a decentralised routing protocol adds even more complexity and resource requirements.
https://news.ycombinator.com/item?id=14759965
The trouble of course is that LN is just a bunch of proposals right now, each promising to fix all of Bitcoin's issues without removing all of its unique features. When it actually exists then I'll revisit, but until then I'll treat it as another piece of vapourware.
https://hackernoon.com/simulating-a-decentralized-lightning-...
This thread on the same story discusses other issues with LN proposals, one that stands out to me is how routing is going to work if all nodes are perfectly equal - routing on the internet relies on a hub model, seems likely that a decentralised routing protocol adds even more complexity and resource requirements.
https://news.ycombinator.com/item?id=14759965
The trouble of course is that LN is just a bunch of proposals right now, each promising to fix all of Bitcoin's issues without removing all of its unique features. When it actually exists then I'll revisit, but until then I'll treat it as another piece of vapourware.
>
The trouble of course is that LN is just a bunch of proposals right now,
There are multiple implementations of the spec.
There are multiple implementations of the spec.
[deleted]
What is the disruption?
Why is this happening?
Why is this happening?
Some good answers in sibling comments https://news.ycombinator.com/item?id=14758661
This looks like FUD. As I recall, the owners of Bitcoin.org are mad that their exact proposed scaling solution didn't go through.
85+% of miners are signaling support for segwit2x, so it's extremely unlikely that there will be any disruption. https://coin.dance/blocks
85+% of miners are signaling support for segwit2x, so it's extremely unlikely that there will be any disruption. https://coin.dance/blocks
Bitcoin is currently suffering from significant scaling problems, which lead to high transaction fees. Numerous proposals to fix the scaling issue have been proposed, the two main camps being "increase the block size" and "muddle through by discarding less useful data" (aka Segregated Witness/SegWit). However, any changes require consensus from the miners who create Bitcoins and process transactions, and because it's not in their best incentive to do anything to reduce those transaction fees, no change has received majority consensus.
In an attempt to break this deadlock, there is a "Bitcoin Improvement Proposal #148" (BIP148) that proposes a User-Activated Soft Fork (UASF) taking effect on August 1, 2017. Basically, everybody who agrees to this proposal wants SegWit to happen and (here's the key part) commits to discarding all confirmations that do not flag support for SegWit from this date onward. If successful, this will fork Bitcoin, because whether a transaction succeeded or not is going to depend on which side of the network you believe.
However, BIP148's odds of success look low, as many of the largest miners out there led by Bitmain have stated that they will trigger a User-Activated Hard Fork (UAHF) if needed to stop it. Specifically, if UASF appears successful, instead of complying with SegWit, they'll start mining BTC with large blocks instead: https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip14...
Anyway, it all boils down to significant uncertainty, and unless you've got a dog in the race you'll probably want to refraining from making BTC transactions around the deadline or purchasing new BTC until the dust settles down.
And an important disclaimer: this is an extremely contentious issue in the Bitcoin community and it's really difficult to find info that's not polarized one way or the other. Most notably, Reddit's /r/bitcoin is rabidly pro- BIP148 and /r/btc is equally rabidly against it. Here's one reasonably neutral primer: https://bitcoinmagazine.com/articles/bitcoin-beginners-guide...