I still hope that they listen to reason and increase bitcoin’s ability to scale. We are all held hostage by a tiny cabal of developers that think they know what is best and want bitcoin to have a perversely small block size and pitiful 7 transactions per second top speed.
Lightning protocol addresses that. You can make millions of transactions per second [1]. Quite a lot of crypto sites are already supporting it and wallet support is increasing too [2].
It's sound engineering. Like in other systems by composing layers you can achieve the advantages of each component while addressing their costs, without creating insurmountable complexity... "have your cake and eat it too".
Particularly, the central Bitcoin system is a global broadcast medium-- necessarily for its security. Global broadcast is inherently somewhat limited in its scalability (though less than some assume). Other layers effectively add "transaction switching" to Bitcoin, radically improving scalablity and performance with their own costs which are good trade-offs for their applications.
As far as the status quo of traditional finance... If you're happy with the status quo! Use it!
(I'm going to assume you don't mean the status quo of Bitcoin--because 28kb/sec isn't something only large entities can keep up with, it adds up over time-- but even cumulatively its managable)
You could recreate the status quo of centralized finance with Bitcoin, but it wouldn't be obviously better: at least systems like visa and paypal are purpose build to do what they do. Bitcoin takes on a lot of costs and tradeoffs to achieve decenteralization.
Bitcoin was created to be money that existed above and outside of the vulgarities of immediate human politics, just like how strong encryption made it effectively impossible for some sysadmin to just read your files based on some excuse.
I think having that option in the world is extraordinarily valuable.
It's laughably bad engineering to try to solve the scaling issue of the base layer by adding another layer on top. It's like you'd try to solve a throughput problem of IP by layering TCP or HTTP on top.
But this is the logic of one of the main devs who championed the "fee market" idea of Bitcoin[0], that high fees are required for Bitcoin to function. And who in 2017 celebrated when fees were around $50.[1]
2nd layer avoids bloating the ledger. Once limits of 2nd layer are being explored, you can make adjustments to 1st layer with information about how that'll improve 2nd layer throughput. This is like arguing that we shouldn't have in-memory caches, we should just have faster disks
The article you're linking is an extremely dishonest anonymous hit piece that distorts history to manipulate the audience.
The design of Bitcoin where security is supported by fees to get into blocks is established in the Bitcoin whitepaper and has been in the software since day one.
Contrary to the claims of the article the term "fee market" was introduced and promoted by Jeff Garzik-- rather than people opposing him as the article claims. (Fee market is kind of a bad term, the correct term would be blockspace market, but it actually made sense in the original usage which was about wallets paying 'fees at market rates').
> The answer is lies in the free market. Move transaction fees away from hardcoded limits, and towards something more dynamic, with economic feedback between merchants, users and miners. ... Also introduced is an anti-spam rule that avoids relaying transactions whose value is below that of the transaction fee required to send it. This rule self-adjusts over time, as the "tx fee required to send" changes over time. In a dynamic fee market, it might change a lot.
> 2010-11-19 20:55:42 <jgarzik> eventually we'll all be paying TX fees, sooner or later. and competition to get -some- fee (at lower prices) versus no fee kicks in.
> 2011-02-28 04:13:57 <jgarzik> amiller: it's inevitable that fees will be required. nobody should be assuming bitcoin transactions are / will always be free.
> 2011-03-01 20:32:21 <jgarzik> fees are inevitable
> 2011-03-10 22:14:34 <jgarzik> I think TX fees are a great feedback
system; a healthy attribute of bitcoin.
> 2011-11-07 22:43:12 <gavinandresen> Lolcust: yes, but I worry because transaction fees are broken right now-- clients and miners really need more flexibility to let fees go where the market decides, instead of us guessing what the right fees are.
> 2012-10-11 17:01:27 <jgarzik> gmaxwell: I think storage and network
will be cheap enough that any non-zero fees will be interesting to
miners
> 2013-03-16 00:47:40 <gavinandresen> So: I have no idea what the right answer for fees is. We need to create a market between miners and users, and let the fees go where they belong.
> 2013-03-17 21:12:04 <jgarzik> TD: Satoshi obviously wanted fees to
support the system long term. If there is no scarcity, there are no
fees.
And people being willing to pay substantive fees to use Bitcoin is absolutely something to celebrate, Bitcoin's long term security is completely dependent on fee income. Getting a non-trivial part of the rewards from fees is a basic validation of the concept.
> 2013-03-17 21:12:44 <jgarzik> TD: The current situation, where block
subsidy dominates other incentives, clouds thinking on block size
> 2013-08-12 17:59:33 <jgarzik> auctions make me want replace-by-fee :)
> 2014-05-12 15:13:22 <gavinandresen> hearn: fee cap, meaning what? Fees need to be a market, and rise or fall based on supply and demand for block space
> 2014-08-15 12:37:53 <jgarzik> Merge this useful change, and next will come the call to remove block size limit altogether, which will throw a nuclear bomb onto any nascent fee market.
> 2014-08-15 12:38:37 <jgarzik> All the VCs and execs want an infinite
block size limit. It's a sad fixation.
TCP wasn't build on IP because it wasn't scalable. It was build on it because it was.
But that aside, calling Lightning on BTC a second-layer is a bit misleading: Lightning data is not encapsulated in BTC data, more like the other way around; so Lightning is more like layer 0 and BTC layer 1 in that model. (That's also not entirely correct either but much closer)
> At the start, TCP handled both datagram transmission and routing, but as the protocol expanded, other researchers started to recommend that these two functions be split into layers.
> One of these researchers, Jonathan Postel of the University of California’s Information Sciences Institute and an editor for the Request of[sic] Comments (RFCs) which is a document series capturing the development of the Internet.
> Postel has stated:
> “We are screwing up in our design of Internet protocols by violating the principle of layering”
> Basically, the monolithic design of TCP would soon become inflexible and unable to scale efficiently. Therefore TCP was split into two protocols, TCP & the Internet Protocol (IP).
It’s not sound engineering whatsoever, it actually is horrible engineering especially when the base layer is congested - Engineers and developers who are far more proficient than you have already chimed in on this, including Vitalik the creator of Ethereum, who also firmly supports the path to scale Bitcoin Cash is taking:
That’s not the status quo at all. You can buy a raspberry pi 4, a 1TB SSD, and have a perfectly functional bitcoin node, and lightning node and BTCPAY server all in one for close to $200.
Secondly, Lightning isn’t “additional complexity” fir bitcoin— it’s taking complexity and putting it where it belongs— at the platform layer.
TCP/IP doesn’t get faster by making packets bigger. Same with bitcoin. And the application layer should be kept separate from the transport layer.
On-chain scaling does not prevent that. In fact, it reduces complexity by removing the Lighting requirement.
Tangent: I would not recommend running lightning on such hardware. State is local to the node, unlike with on-chain scaling. That implies you need server-grade (read: redundant) hardware.
> TCP/IP doesn’t get faster by making packets bigger.
Technically larger MTUs can increase performance somewhat by reducing per-packet overheads... but the effect marginal and not that enormous with good nics and drivers.
Right, because no nic vendor was ever retarded enough to purposely cripple their product by restricting throughput to thousandths of actual potential theoretical physical capacity at the driver level like you and your toxic coterie did. In fact nobody has ever been this stupid in the entire industry period that I can think of except that coterie.
Good thing for you it's in the interests of extremely rich and powerful people to see that your sabotage is well supported, and good thing for the rest of the world you have a containment chain where your stupidity is restricted from bleeding over to the rest of them, and every single other chain appears to be completely mercifully free of your idiotic philosophy.
I can answer part of that question. You can't make it much more frequent because the amount of time for the difficulty has to be balanced against propagation time for blocks or else you will have lots of forks. Probably you can make it work, but there are a fair number of assumptions in the Bitcoin protocol about this and it would probably be better to start a new coin if you want to do that. The 10 minute update was chosen specifically to avoid common network partition events.
As for block size, it's been ages since I looked into this stuff at all (and I've only ever watched out of the corner of my eye), but my impression is that the block size is currently limited for relatively arbitrary reasons. I don't think there is actually a lot of resistance to increasing the size sometime. It's just that the developers want to limit the size now to guide development in certain ways.
And really, as far as I'm concerned that's totally fair. If you don't like it, fork the coin. Or start a new one. Or stick with Bitcash. The developers are in control because that's the whole point -- to guide development in the way that they think will work best. Not everybody is going to agree. So what?
I think the only reason people get upset is because of the ludicrous amount of potential money on the line. And again: if you are controlling that ludicrous amount of potential money, you are able to vote with your feet -- to the extent that you can convince other people with ludicrous amounts of potential money to follow suit. If all that insane speculation and fraud were to vacate Bitcoin, the developers could happily code away and there would be nobody left to complain.
Let's face it. If we believe that there are billions of dollars tied up in BTC, the owners of that coin could easily afford to hire programmers to fork the protocol. They don't do it because the politics of doing so is essentially impossible. Most people want to stick with the dev group. Again, I'm left with saying, so what?
> You can't make it much more frequent because the amount of time for the difficulty has to be balanced against propagation time for blocks or else you will have lots of forks.
The same problem also limits block size, since large blocks take longer to propagate.
But that's why Ethereum went with GHOST, which was originally proposed for Bitcoin. Instead of choosing the block with the most hashpower behind it, you choose the block with the most hashpower in the entire tree after it, so that forks contribute to a block's security. The original paper calculated that this allowed both faster blocks and higher throughput, and it's the reason Ethereum has 15-second blocks.
Indeed; the market has clearly chosen to prefer optimizing for low cost of full system validation (running a full node) over lost cost of transacting (cheap block space.)
Lightning also requires funds recipients to monitor their channels continuously, to make sure they're not closed early with obsolete balances. At least you can pay someone to do that for you.
Hardly, because building LN on the 1MB base layer is like building a pyramid upside down, it's unstable and creates more problems than it was meant to solve.
Lightning was supposed to make tx fees low right? Well it technically has, but it also introduced the following problems that Bitcoin never had:
- LN requires that both sender and receiver be online at the same time to transact. This never existed on Bitcoin.
- If you're an LN merchant accepting payments, you must periodically topoff your side of the channel...just so you can keep accepting money. This problem never existed on Bitcoin. I can have an empty address on Bitcoin and receive any amount of money without any limits.
- In Lightning when making a transactions you must always reserve the current Bitcoin onchain miner fee, so that if either channel party wants to close the channel it'll get accepted and mined by a Bitcoin miner. Well when Bitcoin fees hit $3 a few months ago, 60% of the Lightning network capacity was locked up in miner fees lol... defeating the purpose of microtransactions and the LN network
- In Bitcoin my coins can only be stolen if I leak my private key. Well for LN your money can be stolen simply by not being online to monitor your money. In addition to stealing your LN private keys, a bad user can attempt to steal your funds when you're offline. Which is why LN requires a 3rd party service called Watchtowers to watch over your funds. Way more complicated than Bitcoin
- The unsolvable routing problem. A good chunk of LN transactions will fail simply because the routing is weighted and chanes constantly. Compare that to Bitcoin's gossip network which doesn't require any weighted routing. FYI weighted routing is currently a mathematically unsolved problem.
- LN is centralizing around LNbig.com At one point LNBig.com had over 70% of the entire LN network capacity. LN will continue to centralize around these big hubs, because they can offer cheap connections and low fees than a regular peer can. Welcome to Bank of America LN Hub TM.
- With Bitcoin I can keep my money in a cold wallet. With LN it's either a hot wallet or cold wallet and I must close all my channels and pay the Bitcoin onchain fee just to close it. You're literally choosing betwen low fees OR security with Lightning, where as with Bitcoin you have both.
- Both creators of Lightning Drya and Poon have publically stated LN was never meant to be a scaling solution for Bitcoin and show many problems that will simply never be solved. Like the race condition when a big hub closes and hundreds of users all attempt to race to transmit their transaction to miners.
- In the Lightning whitepaper, LN requires AT LEAST 133MB+ blocks for global adoption for LN to work without congestion... And Blockstream blocked a minor 2MB increase. So good luck.
So congrats to Lightning, for "solving" 1 problem and creating 12 new ones.
There's many more, but these are the ones easily digestable by users without going into the deeper technical problems with LN. There's a reason Lightning is always 18 months away from completion....for 5.5 years now. While Bitcoin Cash just works.
> - Both creators of Lightning Drya and Poon have publically stated LN was never meant to be a scaling solution for Bitcoin
[citation needed]
The initial presentation of the paper was titled "SF Bitcoin Devs Seminar: Scaling Bitcoin to Billions of Transactions Per Day". If we didn't mean it to help scaling, what was it meant to be?
[note: am one of the authors]
> LN requires that both sender and receiver be online at the same time to transact. This never existed on Bitcoin.
Correct, but this is clearly stated in its whitepaper and is one of the tradeoffs to get massively more txs and privacy.
> If you're an LN merchant accepting payments, you must periodically topoff your side of the channel...just so you can keep accepting money. This problem never existed on Bitcoin. I can have an empty address on Bitcoin and receive any amount of money without any limits.
Correct, but you can also move those funds to other channels you have already opened. Also, loop-in and loop-out are coming. Also, receiving multiple bitcoin transactions on a single UTXO is a privacy hit for all involved.
> In Lightning when making a transactions you must always reserve the current Bitcoin onchain miner fee, so that if either channel party wants to close the channel it'll get accepted and mined by a Bitcoin miner. (...)
You need to if you don't plan to aggregate your settlement and opening txs, or aggregate those transactions with others. All if that tech is still coming.
> In Bitcoin my coins can only be stolen if I leak my private key. Well for LN your money can be stolen simply by not being online to monitor your money. (...)
This is your first statement rewritten. I will not address it again.
> The unsolvable routing problem. (...)
And yet, the vast majority of transactions on the LN proceed without a problem, and further improvements like AMP will further reduce the number of failed fees. Another option is to make an on-chain transaction.
> LN is centralizing around LNbig.com (...)
Like bitcoin was centralizing around Satoshi's mining farm in the first year of Bitcoin? LN is at infancy stage, and has a hard cap on what amount of BTC you can open a channel with.
> With Bitcoin I can keep my money in a cold wallet. With LN it's either a hot wallet or cold wallet and I must close all my channels and pay the Bitcoin onchain fee just to close it. You're literally choosing betwen low fees OR security with Lightning, where as with Bitcoin you have both.
Besides the fact that bitcoin will still be there, all of these points are explained as part of the network. I don't understand why you are harping about these sorts of issues when the whitepaper or easily found literature about LN clearly state these issues. Also; don't forget that LN doesn't have to be the only second layer on Bitcoin. I can imagine banks building a second layer walled garden with the feature of settling onchain. Heck, this could be made in less than a year, and would basically give every user in the world the option to buy bitcoin. They would however need to have the right volume of BTC available, so it would be utterly devastating to those vested in fiat (which is why they aren't doing it yet).
> Both creators of Lightning Drya and Poon have publicly stated LN was never meant to be a scaling solution for Bitcoin and show many problems that will simply never be solved.
Drya is, to my knowledge still very positive on LN, don't know about Poon though.
> In the Lightning whitepaper, LN requires AT LEAST 133MB+ blocks for global adoption for LN to work without congestion (...)
With the then current code, and the then current block size. Block size has increased with Segwit. Taproot will further increase capacity. Channel factories are a thing thought of after publishing the white paper, etc.
> While Bitcoin Cash just works.
Bitcoin Cash works. I agree. It's miners will keep raising the block size and spammers will keep filling those blocks to make the ghost towm seem inhabited. Then, users will slowly stop their BCH full nodes because it becomes a bother to keep them online. After that, it will centralize to a small set of players that will be able to change the consensus rules to their wish. Is that the decentralized peer-to-peer money you wanted? This attack vector is a considerably more important threat than reduced adoption will ever be.
> And yet, the vast majority of transactions on the LN proceed without a problem, and further improvements like AMP will further reduce the number of failed fees. Another option is to make an on-chain transaction.
Oh that's funny. While you're right that payments failing for not finding a route is a big problem, it's not even the real problem with routing.
The problem is for LN to function at scale, it have to centralize around a few big hubs. Because otherwise routing is impossible, and transactions will fail.
Decentralized routing is an intractable problem, and LN have to choose between centralization and scaling.
Because LN is seeing barely any usage at all. The routing problem will bite as soon as it tries to scale.
Definitely not true.
As I previously mentioned in this thread, lightning has over $6 billion USD in liquidity, nearly 11,000 nodes and tens of thousands of transactions every day: https://news.ycombinator.com/item?id=21980404
According to a recent study, the privacy properties of the lighting Network are weak.
The problem with lightning privacy is that to get good privacy you need more than about 2 hops. The problem is that every hop locks up money equal to the amount transferred: increasing the cost of the transaction.
The study also finds that the LN is currently subsidized, and based on the capital costs alone, fees should be comparable to on-chain (BTC) transactions. BCH transactions are currently subsidized as well, but not to the same extent (I estimate 3cents/kB would pay for processing and storage).
> Then, users will slowly stop their BCH full nodes because it becomes a bother to keep them online.
Why do you assume BTC/LN will improve scalability properties but not BCH? On-chain capacity can be optimized over time without increasing the average cost for running a node.
Ha! Another empty prediction that we'll happily call you out on once it expires. Remember when you predicted that Bitcoin would completely cease to exist by the end of 2019? https://twitter.com/lopp/status/1211707215620530176
> Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second.
The small scale of bitcoin increases the cost of transactions, making it less useful as a currency and more useful as an investiment. Perhaps it was made this way by design.
The creator actually suggested that it could scale fine if they increased the block size and mentioned future miner farms in 2010.
However, it would make sense that exchanges and credit-card-like institutions would want to keep bitcoin unscalable for the foreseeable future and stall scalable development.
Hal Finney, one of the main developers of PGP and Bitcoin's first user wrote in 2010:
> I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash. Most Bitcoin transactions will occur between banks, to settle net transfers. Bitcoin transactions by private individuals will be as rare as... well, as Bitcoin based purchases are today.
That sort of view was well known and understood by others in early 2011 when (now former) Bitcoin developer Gavin Andresen had recently started he wrote of the future:
> I bet there will be alternative, secure-and-trusted, very-high-speed network connections between major bitcoin transaction processors. Maybe it will just be bitcoin transactions flying across the existing Visa/MasterCard/etc networks (I have no idea what their transaction clearing/processing networks look like or how they work).
Or, look at other discussions early in Bitcoin's life-- and instead of quoting myself from back then, I'll show that these views were broadly understood:
> 2010-12-09 02:14:28 <gavinandresen> jgarzik: that seems like a bad idea; I have a niggling feeling in the back of my head that the optimal bitcoin-like system would have even smaller blocks/transactions than current bitcoin....
> 2011-07-15 03:42:22 <jgarzik> moa7: it is presumed by many that a future bitcoin (if successful) will involve a secondary layer that can handle higher volumes, microtransactions, etc.
> 2012-09-09 20:00:32 <jgarzik> gmaxwell: I am against changing block size, FWIW. I think the market will properly intervene, bitcoin will reach a steady state where all blocks are 1MB, and the best bidding gets block placement. SatoshiDICE and other data apps automatically
solve themselves, once 1MB is normal.
> 2012-09-09 20:00:48 <jgarzik> I think I will be overruled, but that is my position.
> 2012-09-09 20:03:24 <jgarzik> bitcoin exists _because_ of certain constrained limits. money creation is one of them. block space is another.
> 2012-09-09 20:03:35 <jgarzik> that is a fundamental constraint; messing with it massively changes the economics
There are plenty of tough trade-offs in Bitcoin and reasonable people can have no end of a disagreement about them. But these discussions, mostly from before any credit card company ever heard of Bitcoin-- show that a nuanced understanding existed all along.
Disagree if you like, but the conspiracy theories are an insult to everyone's intelligence borne out of a malicious and dishonest rewriting of Bitcoin's history pushed on by court decreed fraudsters like Craig Wright. You have plenty of alternatives-- if they're better then they should stand on their own without the abuse and deceptive FUD.
> Bitcoin users might get increasingly tyrannical about limiting the size of the chain so it's easy for lots of users and small devices.
He was talking about people like you. He didn't advocate for a centrally planned block limit. Stop trying to twist his words.
Gavin Andresen and Jeff Garzik are well known big blockers so stop trying to imply otherwise. At least here I won't get censored by theymos like on r\bitcoin and bitcointalk.
> He didn't advocate for a centrally planned block limit.
I don't know about 'centerally planned' but he hardcoded a limit into the consensus rules.
> Gavin Andresen and Jeff Garzik are well known big blockers so stop trying to imply otherwise.
That's the point. And I a pointing out that they said all these things in 2010-2014-- as you can see some of the quotes (esp from Jeff) are quite emphatic. I could quote a lot more.
The narrative a lot of people are transmitting about Bitcoin is untrue, and by showing the diversity of these views going WAY back from people who later tried to push through changes I think makes that point pretty well.
The counter argument to this is that the white paper refers to Bitcoin as “a peer to peer electronic cash system.” If high fees force users to centralized, custodial second layers, then it ceases to operate as peer to peer cash. It becomes Venmo.
It might be prudent to note that "cash" has meaning in the context of electronic payment research, going all the way back to DigiCash in the 90s. That system required a trusted third party to operate, but it was still cash in the sense that it is a transfer of value, not debt. The way most payment systems operate is that they are settled at a later date (in some cash equivalent). In that sense, credit card payments as well as Venmo are layer 2 solutions.
Bitcoin has decentralized non-custodial second layers.
But if they didn't-- which would be sad-- your logic doesn't follow: Is the USD not cash because paypal exists and is widely used?
Venmo is venmo. Venmo adoption Bitcoin as a currency on their platform would not turn Bitcoin into venmo. It would just create another option for using Bitcoin-- one with it's own positive and negative trade-offs.
There is a balance. The system is not very valuable at the extremes of resource usage or limited capacity, like many other systems.
Don't worry Greg, we will get to you in due time. It's always interesting how you love to cherry pick and take things out of context. Then this was always your motive.
The reference you like to quote about my wanting to limit the size of the blockchain is of course completely out of context. The creation of overlay networks allows bitcoin to act as a single reference source while also having different quorum systems that act independently. You will note that I did not say I would get increasingly piratical regarding the block size. Rather, I note in December 2010 just before I left the public development of bitcoin fact that users of bitcoin were getting rather tyrannical. I do understand that you failed to complete your education, but to help increase your erudition, this is a reference to others seeking to objectively restrict something that should not be restricted in the way that you're proposing.
Eric Vorhees, Garzik and others like you wanted a system that could not be controlled. Unfortunately for you, you chose a project, bitcoin, that is highly resistant as it scales to your type of shenanigans.
Yes, I do understand that having a system outside of government control helps with your side projects such as selling malware, ransomware and other projects that have are generally tainted feel. However, you will find that bitcoin isn't good for this.
I do wonder if you pointed out to anyone that the entire purpose of having a Merkel tree is scaling. In fact, if you take the basic structure of bitcoin and limited to 1 MB blocks, the entire need for a Merkel tree is obfuscated. Where you have limited numbers of transactions, a simple index would do. But then, you are not seeking to educate people about bitcoin are you...
Unfortunately for you, lots of things have been happening in the background. You never understood a single percent of what bitcoin was about. I don't blame you for this, I don't think you're smart enough to understand why I created bitcoin or even the origins of any of the parts or components. You're a great troll. You're also a useful idiot. In separating out the fools you have allowed me to finally manage to take bitcoin to where it needed to be. It was never EGold or any of the other anarchist systems that you wished to create.
Did you forget that I said the protocol was set in stone? No, I don't think you did. But then, you have a habit of taking things out of context, twisting them, outright lying. The problem you seem to not understand is that you haven't stopped anything. The time you figure it out I will have a patent on everything needed to scale blockchains. Then again, you will bitch and complain and say it's not fair. But a public yet but we have it a target of 1,000 patents (in total) this month and the pipeline will take me to 2,500 papers this year.
It is a real shame, well not really, that you're going to have to watch is all you have tried to corrupt falls apart around you this year. Have a nice life Greg, I wonder what rock you're going to crawl under next time ?
Blockstream (Which funds Core developers) was funded by AXA Strategic Ventures with about $80Million in two rounds.
Digital Currency Group, which has investment in a lot of Bitcoin companies has a controlling interest from MasterCard.
That alone does not prove anything, but Bitcoin (BTC) failed to scale. When fees hit $50/transaction, with weeks long confirmation times, most companies backed by DGC failed to switch to the upgraded version of Bitcoin (BCH). This was despite BCH being a drop-in replacement, while Segregated Witness (the BTC upgrade) was not.
Part of the reason nobody switched to BCH was a major marketing push to strip Bitcoin Cash of the name "Bitcoin", and to frame it as a "scam" with "air-dropped tokens" you can "claim". (It was just a direct blockchain copy at fork time).
The truth is that BCH forked from BTC after 4 years of obstructionism. We forked just in time: because the huge transaction backlog on BTC happened within months of the fork. The result was an entirely predictable result of failing to scale.
> When fees hit $50/transaction, with weeks long confirmation times, most companies backed by DGC failed to switch to the upgraded version of Bitcoin (BCH). This was despite BCH being a drop-in replacement, while Segregated Witness (the BTC upgrade) was not.
The upgraded version of Bitcoin is the version that holds consensus among its users. Bitcoin Cash never held that position, and probably never will. Calling it "Bitcoin (BCH)" shows your bias.
> Part of the reason nobody switched to BCH was a major marketing push to strip Bitcoin Cash of the name "Bitcoin", and to frame it as a "scam" with "air-dropped tokens" you can "claim". (It was just a direct blockchain copy at fork time).
If I were to run a direct blockchain copy of Bitcoin and change some arbitrary rule (such as making the difficulty readjust every 2000 blocks), that does not a bitcoin make. I would be running a dead chain nobody uses. If I were to argue the change and everyone follows my chain and runs my code, only then would it be Bitcoin, since it carries consensus.
> The truth is that BCH forked from BTC
Correct. You forked off, and aren't bitcoin. The 2017Q4 spike in transaction fees was probably due to a number of separate issues and misconfigurations, such as wallet fee estimation being mostly broken, users feeling FOMO and wanting in at any price, and transactions not optimally filling the space alotted to them (which SegWit partially fixed, as designed).
Don't listen to him. The whining about small blocks is just a narrative BCH folks want to push. Yes, it's true that currently bitcoin blockchain processes about 7 transanctions per second. But mempool is almost empty, 1sat/byte transactions go into next block - there really isn't any pressure to make blocks bigger right now. No emergency. And making blocks bigger comes with a big risk of spammers, so if we have other alternatives, we should take them. By the time people need much more than 7 transactions per second lightning will be fully usable, so there really isn't any problem.
That is the price to pay for decentralization. That said, further optimizations will increase the number of transactions per block, and second layer solutions can scale bitcoin to a vastly larger size.
No we are not. Lots of devs, miners and businesses got together and forked to BCH.
The only thing holding up BTC price is Tether, it will fail and Ethereum and BCH will lead the space. The rest is pretty much bullshit because Ethereum and BCH together can almost do anything.
Clarifications (this comment perpetuates some common misconceptions):
- A single bitcoin "transaction" can actually have thousands of inputs and thousands of outputs. So energy "per transaction" or "transactions per second" is not analogous to a typical monetary transaction.
- Bitcoin does not compete with literal credit card transactions (although some use it like that today). I'd compare Bitcoin on-chain transactions with how nation-states settle their central-bank ledgers with gold. Gold is the best comparison to Bitcoin because trading in hard gold is "final". Credit card transactions happen on a higher level in the financial stack. As does cash. As do bank transfers. All of these bubble down into interbank transfers that eventually settle on the base layer of central banks. So compared to shipping and securing gold, Bitcoin is quite cheap!
* Pasted and modified from an earlier comment I made on HN.
> Bitcoin does not compete with literal credit card transactions
That's, like, just your opinion. For a lot of people it competes just fine.
> Credit card transactions happen on a higher level in the financial stack. As does cash
How so? As far as settlement is concerned, a cash transaction is pretty much exactly like a bitcoin transaction (and quite unlike a credit card transaction).
>That's, like, just your opinion. For a lot of people it competes just fine.
Until it doesn't. A payment network is graded on how it handles disputes, not regular transactions. Bitcoin can't do refunds or chargebacks, making it rife for fraud.
Sure, you can implement escrow, but then it's no longer competitive like GP said.
Still limited to 1 000 000 bytes per 10 minutes and then some for segwit which was a unnecessary hack job that actually makes blocks bigger without much added throughput.
In Bitcoin the block size limit was eliminated and replaced with a block weight limit which better reflects the long term operating costs for node. The raw 'size' of transactions inherently is becoming less meaningful in the long term with things like transaction compression and compact encodings.
The weight limit doesn't map perfectly to any size limit because its limiting different things, this evening most blocks have been about 1.3 MB.
Probably technically true, but, it is just a part of the dishonest language-shell-game to fool people into thinking BTC can really scale to become a real peer-to-peer electronic cash for the world's people. 1.3 MB is still tiny! Pretending a small difference matters is so disingenuous.
Yes this is true because Bitcoin core plays by the speed of the weakest link.
It's not true for Bitcoin Cash which plays by the "if your node is not making you money why are you running it"
When we upgrade every 6 months or useless nodes just get stuck on the old chain forever and that's it.
Last upgrade there was one miner who upgraded one block to late and lost about 1000 USD. That miner will be the first to run the new software in may.
We had a hacker who got a smart card to get Bitcoin cash to work like a credit card without needing to be online.
Bitcoin cash tx are instant and take on average about 2 seconds to spread to about 1999 out of 2000 mempools.
They settle on the chain on average 10 minutes.
Credit card tx also take a couple of seconds but much longer to settle.
Right now BCH can not yet scale like Visa but we already have the capacity to compete with paypall.
Satoshi's design works at scale but only when you don't delete point 6 from the whitepaper which is "Simple Payment Verification"
Core tries to make you belief the whitepaper was written without points 6 and 7.
7 is how to make the blockchain smaller by pruning it using merkle trees.
Nobody does that yet because storing 200 GB for 10 years is super cheap.
But 6 and 7 are ESSENTIAL in the design to scale.
Core completely ignores them or says: Well SPV is not 100% secure there for it's insecure and should not be used.
Gmax does this with everything, he flips it to extremes.
Meanwhile right now on LN there is couple of hundred thousand dollars that is very easy to steal from non technical people.
1) you find people that want to open a channel with you. These people go online to post their ip addresses and open ports on /r/bitcoin. These posts are encouraged on /r/bitcoin.
2) You open a channel with them for like 100 USD in BTC.
3) You push the balance to their side of the channel by using a swap side that accepts both LN and other coins.
4) You sell this 100 USD for another coin.
5) You publish an old state.
6) You do this to nodes you monitor using nmap to see if they go offline on a regular basis for longer then nlocktime.
7) You can't lose money on this, only win with people that should not be running LN but are.
There is like 6 million USD locked up in LN and about 10% is for grabs.
8) The victims have nowhere to go because if they post about it on their channels they get called stupid and banned and their post deleted.
9) People are already doing this but the victims are still not speaking out. They just belief it was their own fault and move on. Meanwhile the watchtower software is not there yet and if a node does not go offline for nlocktime you can easily DDOS that node for 144 blocks and you doubled your money.
If you read the bitcoin core release notes going back at least the past 5 years, and look at the road map, every release and every planned addition has improved scalability— many of them very significant improvements.
The “bitcoin doesn’t scale” trope is a claim made by people who tried to take over bitcoin (Eg Roger Ver, Craig Wright, the S2X cabal) generally with their own personal benefit as the motive.
Unfortunately, even here in HN, most commenters gave t been reading the release notes.
But you should. Core is very accessible, and the release notes of bitcoin are the developer equivalent of Warren Buffett’s letters to shareholders.
Lightning Network is not peer to peer which is what most of us signed up for with bitcoin. I don’t want centralized middlemen and their channels, might as well use a bank at that point. Lightning Network isn’t simple and elegant, it is a convoluted mess. The peer to peer foundation of bitcoin is literally in the title of the white paper from Satoshi.
You're missing the keyword 'network'. If you're routing a payment across the lightning network, then it is technically not peer to peer. You send a payment to the next hop in the route, then they send a payment to the following hop, and so on.
As you said, any two parties are able to open (and close) a channel. However, these actions require an on chain transaction, and your funds are locked until you close the channel. Unless you're going to be exchanging many transactions in a short period of time with your peer, you would be better off creating transactions directly on chain.
I won't get into this here, but the lightning 'network' has its own set of scaling problems, which imo are much worse than that of the bitcoin network itself.
Torrents also go through network, but we call them peer-to-peer. I think you don't understand what peer-to-peer means. It means you don't need central authority, a central node that would handle the connections, match them together. And that is true for Lightning, torrents, and all other things we call peer-to-peer.
> You send a payment to the next hop in the route, then they send a payment to the following hop, and so on.
It's not technically a payment at that point, since the payments is atomic end to end. But yes, you send a message your peer, which sends it to another peer, which sends it to another peer...
Comparing the lightning network with a bank is totally incorrect. Your funds cannot be seized and the middlemen privacy aspect is very similar to the Tor network. I don't think there is a better way of solving a decentralized payment system.
Tor is a privacy nightmare; not sure what the situation is currently but at one point the US government ran something like 10% of the exit nodes. This is how a lot of the "dark web" operators got caught until folks caught on and switched up their opsec.
Wikipedia is often notoriously convoluted for technical topics though.
I read the Lightning paper and found it simple enough to understand (conceptually at least) how the channels are opened, updated, closed, and penalized. Of course the actual implementation is a more complicated and nuanced than what the paper covers.
You have no idea what lightning transaction volume is, for all you can tell I'm currently making 1000 transactions per second in a loop between a set of lightning wallets. :)
Because lightning is actually relatively scalable it doesn't broadcast every action to everyone.
You have to pre-setup a connection to others that you know and hope they know someone that knows someone that has a connection to the person you are trying to buy from.
This is how the design of lightning network incentivises mega hubs that know most people. So if facebook made a big hub with all its users it would work smoothly.
Also: You can not receive payments if the computer/wallet that hosts your lightning node is not online. Not super smooth.
The system has routing, and it turns out that it doesn't take much for the probability of a graph to be connected with low average diameter. See: The six degrees of kevin bacon.
If lightning doesn't work for a particular payment, you can simply make a payment without using it, potentially by splicing out funds from one of your channels.
Yes, Lightning has trade-offs. You have to be online (though there is ongoing research into changing that), and some moderately complex software had to be written to create it.
But in return you get get massive efficiency increases and instant irreversible payments.
For the transactions that it's intended, I think for these are pretty good trade-offs... though if you don't like them you're free to not use it.
> though if you don't like them you're free to not use it.
No true: due to limited block space on the base-layer.
I am not convinced you get any efficiency increase with the LN: just more difficult capacity planning because everything is suddenly so hard to measure.
Sending a payment, whether on the first or second layer, will take a certain amount of: bandwidth, processing and storage.
Even if fewer nodes are involved with each transaction, the LN seems to rely on a lot of message passing; beyond what a simple broadcast on the base layer requires.
Even is we assume the processing and storage requirements are equal: it will be more expensive on the LN. On the base layer, your data is protected from Byzantine faults by having each node verify the transactions as they come in. With the LN, state is local to each node. That implies you need redundant hardware to protect against Byzantine faults. I have been migrating my machines to ECC RAM and redundant storage: it is not cheap. What I save on hardware costs by buying old servers I pay in extra power use.
The above paragraph did not even mention the capital requirements of maintaining a Lightning node.
> Even if fewer nodes are involved with each transaction, the LN seems to rely on a lot of message passing; beyond what a simple broadcast on the base layer requires.
Today sending a transaction communicates 10 messages for each of ~100k nodes in the network. Once its confirmed, that transaction will additionally be sent once to every new host to join the network, forever.
Lightning sends a couple of messages back and forth among the nodes directly involved in the transaction... maybe 4. (The average shortest path length is about 2.8 currently).
So the marginal communication cost for a transaction is literally hundreds of thousands times lower-- even ignoring the cost to future nodes joining the network-- and this advantage grows as the number of nodes increases.
Lol, no LN does not solve almost anything. It will be good for some centralized and KYC-rich uses by businesses and their customers. It will not make BTC into a real peer-to-peer electronic cash for the world's people.
Among the "Bitcoins", only Bitcoin Cash is keeping that dream alive.
So having a “currency” (its not really; is an asset) being controlled by an unaccountable “Tony cabal of developers” instead of a central bank is better how exactly?
It's good you don't understand it, because it wouldn't be better. It be much worse, because as unaccountable as central banks can be they'd be more accountable than that.
But that simply isn't how Bitcoin works. Bitcoin developers have no such authority. People with no special power beside respect and goodwill, write software on their own as they're free to do just are you're free to do. Other people voluntarily chose to run it. If people don't run it, it's completely inert. They cannot force anyone to run it. Subject to the limitations of public review, they cannot make hidden changes. The software has no automatic updates, and the developers have a long history of being extremely vigorously opposed to automatic updates.
Because whatever effect the software has on the network could only be slowly realized as it's deployed (short of something like a crash bug or an RCE or similar) there is ample time for the public to review a new version -- even if they chose to ignore the open development process -- and sound the alarm against running it if they judge it to be adverse.
If you don't like software put out by one developer, you can run software from another. You could create your own (or pay someone to do it) from scratch. You could run an old version. You could take a version you don't like and make modifications until you do...
Moreover, the biggest community of developers in Bitcoin makes their software all free software, develops it on public lists/websites/irc channels, and has taken considerable efforts to maintain compatibility with other software specific to maximize your ability to choose to not run it without feeling too much conflict or hesitation-- You can happily go take Bitcoin 0.8 from 2013 or and years old copy of knots or a number of other forks or alternative implements... start it up and it will sync and come to consensus with the network. (I wouldn't necessarily recommend running something that old exposed to the internet-- due to vulnerabilities-- but you could and it would work fine.)
I would say your freedom is like your freedom with free software, but it isn't quite: If almost everyone else chooses to run something incompatible you can still keep running your original, but you might find yourself on a separate currency from everyone else. Since money gains it's value from network effects you might fine that less than ideal. But that's the limit, and it's also why the Bitcoin community is cautious with incompatible changes-- essentially never having intentionally made one. Faults in version prior to 0.8 make them self-incompatible, unfortunately. If you want to run a version prior to 0.8 and come to consensus with the network today you'd have to patch a database handling bug in it.
I think this is better. It's certainly very different properties than a trusted third party, and even if you're not sure it's clearly better-- perhaps you can agree that diversity and choice is useful and that you're better off for having the opportunity to use it should the need arise.
Yeah let's increase block size without a way to control the precedent of size increase so only a very select few groups have the compute power to mine. Yay centralization
"I still hope that they listen to reason and increase bitcoin’s ability to scale. We are all held hostage by a tiny cabal of developers..."
No... we're not.
There are bitcoin nodes which didn't follow the 1MB block size and "segwit" or "dsv" nonsense .... they just use the protocol rules from the original bitcoin.
To say bitcoin scales just great is an understatement. It scales so well it will consume _everything_
Big blocks are probably easier to censor and harder to use for people who only have low-spec equipment/networks.
Vulnerability to censorship vs limited on-chain scaling -- pick your poison. Censorship-resistance and on-chain scaling are both good things, but one picks a priority.
You or someone else can always go BCH if you like big blocks and the BTC devs are not going to stop you.
Only if they get extremely big, and the clients cannot handle them.
> to use for people who only have low-spec equipment/networks.
These people should use light wallets or SPV wallets, which is what we already use on mobile phones.
> Vulnerability to censorship vs limited on-chain scaling -- pick your poison.
Only Siths deal with absolutes. This is a false choice.
Small blocks, and large fees, also have a centralizing effect on the network as small miners gets priced out as the transaction fees removes a larger fraction of their income.
And miner decentralization is the most important type of centralization there is, because that's what provides censorship resistance and network security.
With Segregated Witness (SegWit) enabled on July 21, 2017, the Bitcoin block size has been increased by approximately 1.6 - 2 times. So the TPS should be increased correspondingly.
Bitcoin already scaled on the Bitcoin Cash chain all whilst Bitcoin Core dev payroll was taken over by Blockstream co and Chaincode Labs co who's vested interest lies in limiting the core protocol to sell side-chain tech. The market still trades BTC as Bitcoin because of the strong branding and censorship in various online communities.
All that doesn't matter as P2P Electronic Cash is doing well on BCH.
Absolutely, there is no good reason for private entities who take over an open source project and limit it for private interests when a major chunk of people reject it.
The allegation of "take over" is both dishonest misinformation and a really abusive attack. The people you're accusing of taking Bitcoin over have been there essentially all along, -- long before you ever heard of it. The concerns about the trade-offs with block size have also been with Bitcoin all along: as a look into the history shows, https://news.ycombinator.com/item?id=21977347
Sorry, the real attack was by the group led by Adam Back who himself dismissed Bitcoin initially before having a VC fund him to cater to his plan http://cashbleed.com/
Following which scare tactics ensued which broke the block size increase agreements of 8MB Hong Kong Agreement when Adam himself flew to the meeting overnight(as an individual) to attack the agreement, then when a 2MB NYA agreement was finalized and signed by the groups of miners, again the small blockers attacked it in favor of SegWit, that Bitcoin wouldn't survive a hardfork upgrade even though it had upgraded several times in the past.
The really abusive attack was when those same people removed Gavin Andresen's commit access when he had been leading Bitcoin development alongside Satoshi and testing large block clients on the side.
On-going abusive attacks when discussing about pros/cons of small blocks in r/Bitcoin and DDoS on large block nodes since Bitcoin XT, Bitcoin Classic, Bitcoin ABC..
The concerns about the trade-offs with block size have been there for a long time indeed, and we've come a long way with optimizing transactions and still keeping fees low while accessing the ledger via Bitcoin Cash VS forcing transactions to layer 2 side-chains via Bitcoin Core.
The new "owners" of BTC will not let it grow. BTC was intentionally captured and development-centralized to stop it from being able to scale and become peer-to-peer electronic cash for the world's people.
No, the block size must remain small. I just don't transactions and speed won't be handled on a second layer solution. people who think they want a bigger block size can go with Bitcoin cash or Gavin or whatever consortium was the fork and go with that. Good luck.
Never forget: The original protocol did not have the restrictions you are feeling.
Letting volume be the main driver for payments to the network instead of fees (as it is today) scales much better. By that, I am stating that the hostage situation (as you describe it) has been introduced commit per commit.
Well, in the end, its a battle of opinion because smaller blocks give other features to the chain, so it will be interesting to follow how the dynamics between volume, miners, businesses and users unfolds when the original protocol is reintroduced on the BSV chain the 4th of February.
Every release of Bitcoin ever made has had the capacity limitations it has now, or more restrictive.
It's true that Satoshi added the 1MB limit after the first release, but at that time and before then blocks were _implicitly_ limited to somewhat a bit over ~500KB-ish due to issues in the database layer.
This is the reason that you cannot sync a pre-0.8 node all the way to the tip today without modifying it. 0.8 fixed the database problem and made actual 1MB blocks a possibility and the larger blocks triggered pre-0.8 nodes to randomly split off the network.
The limitations are not just the block size. It's all the little things stripping the usability crippling the ecosystem. Amongst other elements:
- Abandoning instant payment by introducing replace-by-fee where you can "undo" a transaction not in a block yet.
- The limitation of what can be done with the scripting language by disabling OP codes needed for (even basic) math operations.
- Forcing transactions to be formatted after specific templates limiting how transactions are used.
Bonus story: As I understand it, Vitalik tried to build on bitcoin but the limitations in the script languarge and transaction format made a globally distributed computer impossible so he went off and created Etherium.
> Abandoning instant payment by introducing replace-by-fee where you can "undo" a transaction not in a block yet.
Unconfirmed transactions are inherently at risk for being replaced, which is why confirmation exists in the first place.
When transactions are explicitly market non-final the software makes replacing easier instead of having to broadcast to the entire network yourself. Replacement for non-final transactions was a feature in the very first version of the software but it was disabled because it was vulnerable to a DOS attack (replacing a transaction over and over again in a tight loop). When a fix was found for the vulnerablity the feature was restored.
This is no way inhibits "instant payment"-- if you don't want to honor _non-final_ transactions until they're confirmed or replaced with a final version, just don't! (However, actual testing shows that doublespends of unconfirmed transactions are highly successful even without making them replaceable.)
Regardless, this wasn't a "stripping"-- it was _original functionality_ which was restored.
Aside, I see you are promoting Craig Wright's scammy BSV coin in other posts. I assume you are aware that the "Genesis hardfork" which they are about to release activates replacement in BSV too? https://github.com/bitcoin-sv/bitcoin-sv/blob/dev-Genesis-be...
> The limitation of what can be done with the scripting language by disabling OP codes needed for (even basic) math operations.
Vulnerable opcodes were disabled-- by Satoshi back in 2010. There has not been a single opcode disabled in bitcoin by anyone except Satoshi.
More recent softforks such as BIP141 have made it easy to reenable (fixed versions of) and add new opcodes. But there has been only moderate interest in reenabling any of the disabled opcodes, particularly since on altcoins and test networks (like elements) where they're enabled they've gone unused.
More interest right now is going into bip-taproot, since its structure enables users to use fancy scripts in an extremely efficient and private way-- allowing them to invoke the script only in exceptional cases.
> Forcing transactions to be formatted after specific templates limiting how transactions are used.
That was also done by Satoshi for attack mitigation reasons, but it hasn't been the case for several years now.
> Bonus story: As I understand it, Vitalik tried to build on bitcoin but the limitations in the script languarge and transaction format made a globally distributed computer impossible so he went off and created Etherium.
That is an outright lie. Vitalik never made any made any contact to the bitcoin developers or community related to this. Had any such effort been made it would be easy to point to public evidence of it. It simply doesn't exist.
Moreover, "build(ing ethereum) on bitcoin" would have made it impossible to "premine" 72 million coins (2/3rds of the current ethereum supply) and pocket tens of millions of dollars, as he's done. The folks that he collaborated with to create ethereum had done several prior altcoin pump and dumps and went on to do several others after ethereum.
It's unsurprising that he didn't seek out collaboration with Bitcoin however: He was well known as a scammer in the Bitcoin community at that point because shortly before starting etherum he had been making a nuisance of himself soliciting investments for a "quantum miner" scam. https://medium.com/bitcoinerrorlog/vitaliks-quantum-quest-9e...
For readers, BSV is an Bitcoin clone created and promoted by Craig Wright. An austrialian man who fraudulently and without any evidence claims to be Bitcoin's creator and that BSV is his (Satoshi's) Vision (thus the name).
Well not just 'not any evidence' -- he claimed to provide a cornucopia of "evidence" all of which turned out to be easily proven to be forgeries. Things like editing his old blog posts to insert mentions of bitcoin (archive.org shows they were added years later), or claimed "digital signatures" by satoshi which were just literally copies out of the blockchain, or trickeries of unsound cryptography ( https://bitcoin.stackexchange.com/questions/81115/if-someone... ).
Unfortunately, the media loves a headline, and all too often doesn't care much about the facts. And cryptocurrency appeals to a diverse collection of people including many that are highly exploitable by Wright's bombastic approach, including a number of business leaders.
Wright has a long personal history of fraud with numerous judgments in courts and administrative bodies against him. His Bitcoin related fraud appears to have begun with an R&D tax rebate scam where he claimed millions then attempted tens of millions in tax credits which he couldn't have possibly earned without spending hundreds of millions of dollars. To justify that he had hundreds of millions to spend, he claimed to be Bitcoin's creator.
From there it appears to have evolved into an advanced fee fraud plus scammy cryptocurreny pump. Essentially he's been claiming that he owns a million bitcoin but it's locked in a trust and asking for investments that he'll repay or getting people to buy his crypocurrency which he assures them will go up in value when he 'dumps' his Bitcoin and uses the income to buy up BSV.
Annoyingly, to pull of this scam he's and his representatives engaged in a massive campaign of harassment and fudding towards people involved in Bitcoin, particular developers and former developers like myself... lying about the history of Bitcoin, our activities in Bitcoin, etc. He even falsely accuses me of funding ISIS and other such nonsense (e.g. https://twitter.com/AldersonBSV/status/1199160142048063488 ). ... and generally just making a mess and turning a previously fun domain to work on into a frightening morass of attacks and threats from conspiracy filled crazy people or people pretending to be ones.
By attacking the credibility of the people most able to call out his deceit he isolates his marks from the very people who would protect them. Walking over all this has clearly had a protective effect, but it doesn't save everyone.
I love the main business proposition from BSV: that the protocol is set in stone. Its makes sense to invest time and development power into something that is aware of not changing the logic that I'm building a business around.
This liberates me from having to focus on who initiated the project - because it is meant to be frozen whoever initiated it can not change the setup at will.
To me it's not important who made visa or who runs it. I use it anyway because it got utility letting me pay at the bakery on a tiny island on the other side of the world.
I don't care about who made the HTTP protocol. I use it every day without knowing.
The article is fairly low-quality. It's more focused on fear-mongering around the perils of machine-judges and trying to make a headline around "if there's someone with commit power then in the end, it's not a decentralized system".
It makes a number of errors, most notably, calling the hashing power spent on securing the network "donations" (quotation marks sic).
Bitcoin has one job: securing the network of transactions.
Bitcoin is a mechanism to aggregate hashing power in order to make it possible to semi-objectively measure the risk of a block being reverted, in fact, this is the only formula in bitcoin's white-paper.
The paper examines a system of economic incentives, and somehow dismiss its key activity as an altruistic "donation". The article goes downhill from this statement onwards, and I couldn't feel like it makes a huge (yet ineffective) effort of deconstructing Bitcoin's governance model.
Some quotes that reinforce the superficial understanding of the Author:
> There are times, however, when two miners can find the
correct nonce for a new block within a few seconds of each other and both broadcast their valid block of transactions (nigh on) simultaneously to the network. This causes a split, or fork, where miners go ‘rushing off’ to mine on top of two competing blocks. Because this form of divergence is endemic
to the blockchain’s mechanics it is referred to here as a systematic fork; the discrepancy should be quickly resolved by network mechanisms (this happens, on average, two or three times a week). Systematic forks are temporary glitches...
These forks are essential to maintaining decentralization as a mechanism to make the network secure: trust the info, not the people that delivered the data, trust the signing mechanism (hash power spent), not the people running the machines.
> Furthermore, the political strategy of a user activated soft fork still requires code developers to create a client that reflects the political will of the market and thus demands the obligatory passage point of a Lead Developer found in version control systems.
Not true -- the UASF measures were not merged into the Bitcoin Core branch. Some code was merged to protect users from potentially problematic interactions with Bitcoin Cash fork.
Modeling Bitcoin's governance system is a daunting task. The author essentially confuses the power developers have with regards to miners: developers know there are things that would never fly with miners, and miners are way more powerful than what is described in the paper.
Are people really trying to re-ignite the blocksize debate in the HN comments section? This battle was waged, every conceivable argument on both sides was made. Small blocks with lightning to scale won, and the big blockers forked into arguably less successful coins like Bitcoin Cash and Bitcoin SV. Time for everyone to move on.
Bitcoin SV was another centralized attack(from nChain+CSW) on BCH.
While both BTC & BSV are centrally developed and managed, BCH has decentralized development with multiple implementations.
Bitcoin has a long journey ahead, we are still handing out large miner rewards, we can check back in 3 more halvings by 2028 and see how things unfold.
Not having read the article but having participated in Bitcoin "production" a decent amount[1], I see a lot in common between Bitcoin and the organization of the intentionally non-hierarchical Quakers.
Quakers, despite being religiously-motivated to pursue non-hierarchical expression[2], necessarily adopt organizational structure: committees, clerks of committees, group decision-making about who will take certain roles, i.e. "meetings for worship with attention to business." There is some natural and arguably necessary inclination toward roles and authority for the sake of organizational clarity and efficiency.
What it does not have is empowered leaders with explicit authority, rather positions are cast as being in service of one another, in organizing groups of effort rather than controlling the outcome of the group, and thus tend toward eliciting the active participation of all. Care and attention are taken to minimize the gravitation toward arbitrary and unaccountable authority.
Bitcoin takes a similar approach - necessary roles expressed in service of one another / the general effort, with attention toward guarding against arbitrary or negative expression.
The other side of this relates to thought leadership - in some sense speakers naturally have authority via the Pareto Principle's natural tendency to distribute virtues unequally. However, by embracing a consensus-oriented development practice, the general perspectives are a check against individual mistakes or abuses by those empowered by position or circumstance.
I think maintaining the balance between the gravity of centralization vs the beauty and safety of decentralization requires a continuous effort. Thankfully, it is not solely up to the developers to ensure this - developers, node operators, and miners can each and all be active by refusing to upgrade or otherwise by forking the codebase. I would say that's the key ultimate check against the centralization, that every individual has the ability to vote with their node / personal activity. I'll be curious to hear if the article addressed any of that.
Exchanges trade both in Bitcoin and BitcoinCash, and I've just learned from the paper that they form a tree with a common origin. Does it mean that if I owned Bitcoin before the Bitcoin-BitcoinCash split, I can now spend it on both chains?
They will give access to the same amount held in those addresses before the date they forked. Coins sent after the time of the fork exist in separate chains except in somewhat bizarre cases where "replay protection" was not used.
yes, but be aware, bcash is plagued with scammers, so as a precaution you should move your coins on bitcoin to another wallet before attempting to use a bcash wallet which could steal your bitcoin private keys.
My understanding is that "bcash" is used as a slanderous term between the two camps struggling for power. This comment seems to be attempting to spread fear, uncertainty and doubt. As far as I am aware there is no evidence that shows Bitcoin Cash clients are attempting to "steal your bitcoin private keys".
We mainly use the Bitcoin.com wallet on our phones and Electron Cash on our computers. Both are open source with many eyes looking at the code. We try to teach our user to verify hashes on upgrades and to have copies of dev pub keys on their computer to verify on a fairly regular basis (but not every upgrade).
We also try to keep scammers out our community and I think we are doing a fairly good job, better than most crypto communities.
when the fork happened there were indeed scam sites that asked you to "paste your private key to see if you have BCH"
There were also replay attacks possible, so that if you paid some BCH to someone they could replay the transaction to get the corresponding BTC as well
Neither of these are a concern anymore AFAIK (the first one never really was, never give away your private key)
You confuse it with other forks, for example in Bitcoin Gold key stealing was very prevalent. It wasn't a big problem for Bitcoin Cash. Bitcoin Cash also had replay protection from the start.
Do you have any proof of any scams other then calling their coin Bitcoin Cash and the original Bitcoin, Bitcoin Core?
The MIT license gives the right to rename.
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The above copyright notice and this permission notice shall be included in all copies or substantial portions of the Software.
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The "bcash" term is used to attack BCH. It makes many of the attackers (that are everywhere on social media) pretty easy to recognize. Dishonesty and personal attacks are their "bread and butter". They attack BCH because it is the only Bitcoin still working to allow massive scaling.
Dark forces captured BTC to stop it from becoming a real peer-to-peer electronic cash for the world's people. BCH is keeping that dream alive and the dark forces opposed to financial freedom have been attacking BCH since before it existed.
I am sure there are BTC and BCH wallets that can steal your private keys. Don't use a wallet from an unreliable source for any crypto.
"Dark forces" like people commenting here with anonymous brand new created accounts, slandering people who were tirelessly supporting Bitcoin long before they ever heard of it?
> people commenting here with anonymous brand new created accounts
I don't think those kinds of comments are warranted here. I don't see any increase in the number of green usernames in this thread compared to any other post. What kind of evidence do you have to support these claims?
Seems this thread is bizarro land. I guess you're going to just ignore the abusive conspiracy theory in the post that I was responding to and instead wag your finger at me for turning it around with a pretty obvious observation?
Attacking my account age is so off-point. Greg's specialty is using true facts to try to claim or imply false information. I am new to this forum. He knows I am not as new to standing up to his form of dishonest distractions used to derail conversations he knows are bad for his house-of-cards.
If I remember right, you came to destroy P2P cash later than I began following it. Regardless, your "tireless support" has been a pox on the real bitcoin and the real bitcoin community you and your army pretend you represent.
This is idiotic fear mongering from one of the many parasitic BTC investors who lost all interest in building sovereign money the second their pockets started filling up with fiat.
They perceive BCH to be a threat to their pocketbook and they should. If BCH succeeds at building p2p electronic cash, there will be no need for BTC to exist.
Yes, they share a blockchain history until a certain point. If your Bitcoins were sent in a transaction belonging to a block prior to the split, you own both BCash and Bitcoin.
Because it's part of a social engineering campaign to discredit Bitcoin Cash and to prevent people from learning about the idiocy of what Bitcoin is doing.
The "bcash" term is used to attack BCH. It makes many of the attackers (that are everywhere on social media) pretty easy to recognize. They attack BCH because it is the only Bitcoin still working to allow massive scaling. Dark forces captured BTC to stop it from becoming a real peer-to-peer electronic cash for the world's people. BCH is keeping that dream alive and the dark forces have been attacking BCH since before it existed.
Around fork time, there was a coordinated push, including websites, subreddits, youtube videos (title of video by jimmy Song interviewing Roger Ver was first known use), and the censored 'bitcoin' forums all calling the fork 'bcash'. One week later, Samson Mow even did a guest column for Forbes magazine[a] mentioning the term. Adam Back later Chastised Cobra for not calling it bcash.
The goal appeared to be two-fold:
1. Strip Bitcoin Cash of the name
2. Frame it as a scam, especially if we take back the name.
"The newly created Bitcoin Cash (BCH) is a rushed spinoff of Bitcoin (BTC), a clonecoin of which there have been many in Bitcoin’s past. Because the name is confusing, many have taken to calling it “Bcash” to avoid buyer confusion."
If that is really their position, it's absurd and untenable... so I'm sure we'll see further clarifications in the future. Like how are you supposed to deal with forks that you do not know about or perhaps could not possibly have had any way of knowing about?
You can avoid uncertainty, however, by selling right away.
Commenters will be interested in my interview with Bitcoin Core developer James O'Beirne on the real nature of 'power' in Bitcoin. See here: https://stephanlivera.com/episode/66/
There is both an overt development bureaucracy of Bitcoin and a shadow group. The overt effort is managed by MIT https://dci.mit.edu/ MIT developers have merge access to the Bitcoin official repo, which is truly the real power.
The shadow is who influences these people, and why. It really isn't conspiratorial - it's the long tail of influencers, media, meet-up groups, conventions, exchanges, and people who have a stake in Bitcoin.
Anytime there is a major disagreement, there is a fork. This is how numerous forks were created, the biggest of which are Bitcoin Cash, which later itself forked into Bitcoin Cash SV. A fork is just a group of developers who disagree with the official Bitcoin bureaucracy at MIT. If these dissenters have enough support then the new coin has value.
Bitcoin is old and stable, and through its age and stability it has gained trust. Major changes to Bitcoin simply won't happen anymore. The Lightning Network required very minor changes to the core protocol, and using Bitcoin's constrained tooling developers have (heroically!) engineered a scaling mechanism. It is not yet perfect nor easy to use, but over time the client services around it will improve.
The extreme wariness of core Bitcoin developers ensures that trust is maintained in the protocol. A major disaster in Bitcoin would be very bad for the whole industry.
If you don't like Bitcoin, just create your own coin, or fork from Bitcoin! Such is how so many new coins are made.
I don't believe any active Bitcoin developers work for MIT anymore. Bitcoin development is almost entirely done in the public (obviously security issues are handled in private), not really much place for any kind of 'shadow'.
I don't think meetups/conventions have much role in Bitcoin development either. I stopped going to them entirely because every event is reliably taken over by ICO/altcoin pumpers-- groups who stand to gain a lot by expanding their audience and are willing to pay to send representatives to events.
The same hardware. Miners get both a reward for mining (the fixed set of coins) as well as collecting fees. After they’re all mined, it’ll just be the fees.
Your confusion is why I hate the term "mining". Call it "transaction notary service" and things make more sense. Currently the people with hardware get paid by a combination of transaction fees and inflation of the bitcoin supply. Once all blocks are "mined" they get paid for being notaries only with the fees.
Every time a block is mined, miners are paid in transaction fees + newly generated coins. After 21 million coins have been generated, miners will only be rewarded transaction fees => it doesn't mean blocks will stop being mined; blocks will keep being mined, but without generating new coins out of nowhere.
It’s offered by those wishing to include their transaction in the next block. Miners look at all the pending transactions and select the most lucrative ones.
Every block has a limited amount of space for transactions (1 MB previously, 4 and up to 8 technically with segregated witness?) , the person mining the block includes transactions based on fees provided by users initiating the transaction.
If there are tons of people looking to make transactions, fees go up or down based on people's willingness to pay to be included in the next block.
Other people have answered the question quite well, but I just want to point out the Bitcoin FAQ [1], which is pretty well written. It is good to read the entire faq to get an understanding of not just bitcoin, but blockchain in general.
In addition to the other answers, there are some cryptocurrencies where the block reward never goes to zero. Look up how it works in Monero for example.
There are also cryptocurrencies where the block reward is fixed forever, so that miners at launch are rewarded no more than miners decades later.
Note that such a linear emission is still disinflationary in the sense that the yearly inflation rate tends toward zero.
It's kinda wrong in the sense that the fees still exist, but it's right in the sense that the "block reward" is terminology used to refer to the fraction of miner revenue in each block which increases the total supply. That part does indeed stop after 21m according to the current codebase.
Nothing changes except for the missing block reward. At the moment mining a block on BTC will net you about $100K (block reward + fees). If BTC wants to keep the same (relative) security as it has now while having no block reward, the transaction fees have to cover the $100K. With the current 7tps (at most) limit that will have to amount to about $24 per transaction when the blocks are 100% full all the time. If people aren't willing to pay that transaction fee or use an alternative (cheaper) cryptocurrency, the security of the BTC chain will plummet.
> (...) the security of the BTC chain will plummet.
Nitpick here, but what will happen is that the cost of mining blocks will outweigh the revenue of selling its fees. This means that miners will at some point decide to stop mining bitcoin. If this happens abruptly, that would cripple the network for a while, since the difficulty adjustment function would not be able to adjust the difficulty in time. If the move is not sudden, but a progression over months/years/decades, that wouldn't cripple bitcoin.
If miners stop mining bitcoin, that doesn't immediately make bitcoin less secure. The hardware might be used to mine other chains, or could just be binned. If a single entity wanted to perform a 51% attack, she/he would need to buy up a lot of discarded hardware without notice.
A reduction of global hash power isn't a security issue per se; it is a multi-variable problem.
are there any recommendations in this paper? Many times with cryptocurrency projects I've found it easier to get anonymous contributions added or considered more heavily compared to having a known persona, since the gatekeepers are not impartial and more often very emotionally driven
Possibly. But you still need a Lead Developer to sign off on decision making. And high net worth individuals will have consolidated voting rights on those decisions. Perhaps if PoS is mixed with other development models?
The article is behind a paywall, but it's essentially a revisionist account of the block size debate of 2017.
This account seems pretty biased to me. For example, it not only gives short shrift to the user activated soft fork (USAF), but gets the basic facts wrong (page 15):
> User activated soft forks require a large amount of coordination, particularly from industry. ...
This is absurd. UASF was supported by far fewer companies than those supporting Segwit2x.
A UASF is a declaration that nodes controlled by a group of users will reject generated blocks failing to conform to certain specifications. In the case of the 2017 incident, the specification was that the block must signal support for segwit, thus ensuring its activation.
> ... The cohesive demand for a node-initiated upgrade of network rules gathers momentum around Bitcoin meet-up groups, forums, blog posts, social networks, conferences and company board rooms. With regard to SegWit, this momentum led to the ‘New York Agreement’ in 2017.
The New York Agreement led to the ill-fated and incompetently executed Segwit2x proposal, not the UASF. The author could have discussed that initiative in detail but didn't. In short, the (single) developer was incompetent and the update didn't even activate properly.
In the same vein: Could we perhaps have the titled changed to something more descriptive? "The senatorial governance of Bitcoin: making (de)centralized money" better describes that this is about the governing process of the protocol development rather than mining.
Yes, true, and as the paper points out they are related. But the mining centralisation story is basically "water is wet" in 2020 for people interested in this. And as a many commenters here show, the mining centralisation problem is being thought about in technological ways ($BUZZWORD)...
The paper seems to focus more about the political/organisational problem, which to me seem more inherent and harder to solve.
Exactly. Bitcoin governance can still be called decentralized but there are still certain degrees of centralized control in decentralized systems (just look at the Internet). The political/organizational problem is hard to solve because humans have to coordinate to make decisions and often this is done from (centralized) points of authority (Lead Developers, Mining pools, Bitcoin wallets/exchanges). This is not a direct democracy but a represantative one because not everyone in the network is equal: 1) Core developers elect the Lead Developer to make decisions on protocol rule upgrades, 2) miners increase the likelihood of coin rewards by using mining pools and in the process elect mining pool operators to make voting decisions on their behalf, and 3) users use Bitcoin wallets to take on technical procedures associated with accessing bitcoins and in the process elect them to make lobbying decisions on their behalf (instead of running their own Bitcoin node). This creates a type of decentralised structure with centralised pieces. "The cost for collective action is [some form of] hierachy" (481).
This is exactly why decentralized currency is no better than regular currency. Bitcoin is centralized in the hands of a few shady, anonymous exchange owners funding the development.
At least in a capitalist democracy we get to elect the criminals who rob us blind.
"...replicating a structure (through organizational or version forking) does not completely address the hierarchy of the structure itself. While it certainly gives others a voice and accounts for fragmentation in the community, power is not flattened among all participants. Quite clearly, senatorial governance is not a direct democracy but a representative one where certain actors (Lead Developers, mining pool operators, software companies) are raised into positions of power by grouping individuals (programmers, miners, users) through their obligatory passage points. This is not necessarily a negative revelation for algorithmic decentralization via (proof-of-work) blockchains but it is important not to assume all stakeholders of their protocols are made equal. The cost of collective action is hierarchy" (481)
The two are not unrelated. If a protocol change creates a forked chain then acceptance of that protocol change is determined by mining the forked chain.
Not really. Although some forks are specifically programmed to require a miner vote, that's not the default case, and isn't how bitcoin cash, sv, or the etherum upgrades have worked. It's not very common these days.
"activity involving mental or physical effort done in order to achieve a purpose or result."
I get it, I have to work to make money while others mine virtual coins. It's a great deal for them is it not? It's just a power grab. I'm sure the people who use to have the exclusive right to print the money are very upset. Centralization of mining and decision making is just another power grab.
Bitcoin decision making is channeled down a funnel: Core Developers make suggestions and the Lead Developer (and those given commit access) sign off on those decisions. Those decisions are then voted for by miners who are (relatively) centralised in that roughly 5 mining pool companies control the vast majority of hashing power used to vote on those decisions. Meanwhile large wallet/exchange companies who control vast amounts of on-chain transactions can lobby miners to pick certain decisions by upgrading their nodes to reflect new rules (miners will want to follow large companies because they create liquidity for coins with the new rules and so they can sell their coins more easily and, theoretically, for a higher value).
So while this is still a decentralised systems because multiple parties have a say, there are still lots of points of centralised control in the governance system. In other words, not everyone is equal. "Individual developers submit to those with commit access, individual miners submit to mining pool operators, and everyday users submit to Bitcoin companies" (478). The Lead Developer acts as a centralised decision maker, mining pools act like centralised voters, and Bitcoin companies act like centralised lobbyers. So there is a certain structure to Bitcoin governance.
Holders of bitcoin are the only people who don't have a say. Buyers, miners and developers decide what is and is not viable (in roughly that order). Holders have a say only as much as they are still buyers.
From the article abstract, it appears that this paper is more about how the governance behind modifying the bitcoin code itself is hierarchical, and not the separate but dependent issue of mining power for the current protocol being concentrated in relatively few hands:
"The overall political framework for altering the Bitcoin code is described as senatorial governance: a (de)centralized model of bureaucratic parties who compete to change the monetary policy (codified rules) of the protocol. This model shows how Bitcoin is not an autonomous system but is assembled and maintained via human discretion."
tezos is attempting to solve this by incorporating on-chain governance - its dPoS and has a code deployment mechanism with a long voting process (multimonth). They have done 2? upgrades now and quorum seems to be ok so hopefully they can keep up voting %
i still think the nano (formerly raiblocks) approach is cool - it scales by running parallel blockchains - each wallet is its own chain. tx's between chains are voted on weighted by % stake - dpos without lockups or slashing. this way its not a competition for space in a single ledger, its competition for voting bandwidth on the worst marginal node. a better tradeoff imho. downsides: the ledger also grows larger quicker than btc (because theres no 7tps limit so you can spam it)
no voting rewards or inflation - theres no on chain incentives for voting at all, but exchanges/pos need to run full nodes to validate ledger anyway and voting is trivial bandwidth. its elegant and the security model works but its hard to tell people about without coming across as a fanatic.
Because nano has free transactions, a big concern was indeed spamming the network because transanctions are free (as in you pay no nano). But since each wallet has to calculate their own blockchain, the prosessing power is purely on the client side and so not free in that sense, which limits the spamming to the processing power you have.
Recent spamming [1][2] has seen nano ledger size balloon by nearly 50%, negatively affecting full node Initial Block Download times as well as archive node disk space requirements.
The PoW requirements go up with network congestion, but at this rate of 5-8 tps are quite minimal.
I see this thread is full of false claims about how BTC-Bitcoin is still a real Bitcoin and will be able to scale to fulfill it's original intended use case (peer-to-peer electronic cash for the world's people). I explain in this opinion piece how such dishonesty is used to fool people into continuing to support the captured, centralized and intentionally broken Bitcoin (BTC).
However, the problem with Bitcoin is that it's built on a monolithic blockchain, so it's actually got a bottleneck. The miner is the bottleneck. Every transaction in the world must be sent to every potential miner, making it even more inefficient.
In most other distributed systems, when you increase the number of computers, the amount of transactions the system can handle increases. Not so with these monolithic blockchains.
That's an interesting way of putting it. Scaling will always be a problem with monolithic records like you say. I have worked on a couple of distributed ledgers with sharding and these governance models seem to be more promising. Often there is some sort of democratic voting system for stakeholders when it comes to making change to the code which can be reduced by certain cryptoecnomic rules (e.g. demurrage fees for hoarders if it uses a proof of stake consensus). You're right though, its the fact that software needs to be updated by humans so that it stays relevant and reflects stakeholder interest over time that demands decision making. And this decision making often tends to materialise in (some sort of) centralised form due to the need to regulate and promotes good decisions (i.e. by experts). The same happens through Wikipedia moderating.
I have absolutely nothing to do with Holochain. I attended one Holochain meetup. Since you thought that, I should say my own project is called Intercoin.org ... I linked to a page that lets you discover a lot more.
Why don’t you say this is a way to shill MaidSAFE?
I guess my shilling was too subtle for you to even notice. And that’s fine.
You know what really bothers me about HN lately... I have written tons of helpful information on all these topics at our domain BUT I AM AFRAID TO LINK TO IT in a comment because it will be heavily downvoted (-3 for now) and called a shill.
You can literally devote YEARS of hard work and bugfixing, open source the code base as I did with https://qbix.com/platform and describe exactly what the problems are and how this solves them and you can take the code and use it...
But the comment is instantly downvoted and You’re called out for shilling. Shilling what, a free and open source project? Why even bother to link to solutions anymore. May as well just stop at a few helpful but vague suggestions. I have started doing that.
In this case I thought it would be good form to mention some competing projects to illustrate a major new generation solving sharding. Turns out that’s even worse. Apparently I’m shilling our competitors now!
Quite possibly, but they are also quite correct - you cannot scale a full mesh network to anything remotely resembling the capacity required, it has to be some kind of sharded, p2p topology.
At which point, and the irony here is quite profound I agree, you are starting to look at something that looks a lot like the existing banking system.
Yeah we need to have massively parallel systems, but that doesn’t necessarily mean what they have for banking and centralized databases... there are a lot of innovations that have happened since the introduction of Bitcoin. I could show you the actual whitepaper and link you to the pages describing the major design breakthroughs in simple terms but I won’t because that would apparently be shilling my project (Intercoin, not Holochain). Just take my word for it ... there is a lot that is far beyond blockchain.
I'll vouch that EGreg isn't part of Holochain. I'm not either but it's one of the projects that I find most interesting in the distributed/decentralized computing space.
