
Update for Customers with Bitcoin Stored on GDAX - wslh
https://blog.gdax.com/https-medium-com-adamlwhite-bitcoinhardfork-3f6ac05ceec6#.3wnykyo78
======
eigenvalue
This seems suicidal, what a terrible idea to change things in this way just
when the idea was getting some traction. It will set a precedent that there is
a lot more uncertainty in cryptocurrencies and hold back adoption.

~~~
zik
There's a lot of back story behind this. The story as I see it is this - a
bank which opposes bitcoin in its current form funded a company called
Blockstream to kick the lead developer off the Bitcoin development team and
take control of it. They want to change the protocol away from a decentralized
blockchain which they can't control to a payment channel system which provides
a potential financial services marketplace for banks.

Now they're following an agenda to deliberately prevent the blockchain from
scaling in the way it was originally designed to. Why? To make the blockchain
look ineffective - and now we have high fees and slow confirmations as a
result. Bitcoin is badly affected by the congestion and so people are becoming
desperate and clamouring for Blockstream's forthcoming off-blockchain scaling
solution.

This would have worked out pretty well for them except that there has
inevitably been opposition to these political games. A couple of other
development teams have sprung up with forks which are more closely aligned to
Satoshi Nakomoto's original scaling vision. These groups have been
vociferously attacked by Blockstream and Blockstream has generated terribly
misleading FUD about them in order to try to retain their control of the
ecosystem.

Blockstream has failed. One of the alternate implementations "Bitcoin
Unlimited" has all but won the war because the majority of miners are worried
that the ecosystem is being damaged by Blockstream. Miners care about the
value of their bitcoins and that's being eroded by the Blockstream-imposed
congestion. The miners appear to be moving to Unlimited and it will most
likely take over as the standard "Bitcoin" implementation at some point.

The whole "chain split" thing is mostly more FUD. A hard fork isn't a big deal
if handled sensibly. The minority chain will quickly die off naturally because
it'll be uneconomic to mine on it. This is just as it was designed to work by
Satoshi Nakomoto.

No doubt people from the other side of this debate will see things differently
but that's how it looks to me.

~~~
jlrubin
I'm a Bitcoin Core Dev. I'm not employed by Blockstream. I work extensively on
scalability, having personality designed and written patches to Bitcoin which
have drastically improved block validation times in the Bitcoin Core client.

For the benefit of anyone taking your comment at face value, I'm here to say:

Your response is total garbage.

edit:

More details, my response was written slightly in haste...

1\. I'm a (non-blockstream) core dev, I've worked on patches for the last
release which sped up validation up to 40% with more efficient caching
algorithms. To imply that Core isn't scaling flies in the face of those
improvements (and the many others, developed by blockstream and others!)

2\. I also co-founded the MIT DCI, which employs several bitcoin core
developers (non-blockstream). Historically, DCI also employed ex-lead
maintainer Gavin Andresen (he resigned to focus on other things). DCI employs
the current lead maintainer.

3\. I also co-founded the Scaling Bitcoin conference (I was the first program
chair). You can see the archives of research presented at the workshop
[https://scalingbitcoin.org](https://scalingbitcoin.org)

4\. Blockstream isn't imposing any constraints: Bitcoin has fundamental
scaling concerns, and they can't be addressed quickly (e.g., increasing
blocksize) without significant drawbacks for the future of the platform.

5\. here's some point by point refutation

> They want to change the protocol away from a decentralized blockchain...

Mining is actually highly centralized right now. There are a handful of people
with a lot of control. If you simply "follow the hash power", these miners
could implement whatever they want, e.g., "I get a million coins per day
extra". Validating against Bitcoin's predefined rules keeps it decentralized.

> Now they're following an agenda to deliberately prevent the blockchain from
> scaling in the way it was originally designed to.

Many of the algorithms in Bitcoin would/will fail spectacularly with really
large blocks, so that wouldn't work. The way Bitcoin is "designed" to scale, I
would argue, is through crypto (e.g., snarks/Mimble Wimble), which allow you
to compress O(n) transactions to O(1).

> Why? To make the blockchain look ineffective

Actually, many of the features added with SegWit make bitcoin more functional
than ever; txn malleability was a major woe for users of the software.

> and now we have high fees and slow confirmations as a result. Bitcoin is
> badly affected by the congestion and so people are becoming desperate and
> clamouring for Blockstream's forthcoming off-blockchain scaling solution.

Bitcoin was always going to need fees -- otherwise why would they be in the
protocol from the start? You need to pay for the bandwidth and permanent
storage costs one way or another. If Blockstream has a commercialization
strategy for off-chain, so be it, but fundamentally they can't be a gatekeeper
to that.

> This would have worked out pretty well for them except that there has
> inevitably been opposition to these political games.

You can spin the game theory whatever way you like... what if the miners want
to have larger blocks that they exclusively fill with their own garbage
transaction, centralizing the network, while still charging high fees for real
users in light of this artificial demand?

> A couple of other development teams have sprung up with forks which are more
> closely aligned to Satoshi Nakomoto's original scaling vision. These groups
> have been vociferously attacked by Blockstream and Blockstream has generated
> terribly misleading FUD about them in order to try to retain their control
> of the ecosystem.

I've looked at their designs. Sometimes you have to call a fig a fig and a
trough a trough. Emergent consensus has a number of fatal flaws, a lot of
other people have gone into good detail on how.

> Blockstream has failed.

Not yet :p

> One of the alternate implementations "Bitcoin Unlimited" has all but won the
> war because the majority of miners are worried that the ecosystem is being
> damaged by Blockstream.

Do you have a source on this? When you say majority of miners, do you mean by
hashrate or by "noses"? Theres a high degree of centralization; so it's hard
to truly judge.

> The miners appear to be moving to Unlimited and it will most likely take
> over as the standard "Bitcoin" implementation at some point.

Miners may be signalling for support but not actually running the code.
Signalling (and getting other smaller miners to try to switch) and not
actually switching is a great strategy to get a mining edge.

> The whole "chain split" thing is mostly more FUD. A hard fork isn't a big
> deal if handled sensibly. The minority chain will quickly die off naturally
> because it'll be uneconomic to mine on it. This is just as it was designed
> to work by Satoshi Nakomoto.

A chain split is indeed a big deal. When the ethereum chain split, a lot of
exchanges lost a serious amount of money with both tokens having replay
attacks. This means that it's difficult -- nigh impossible -- for users to
have a sane outcome using many of the ecosystem platforms following a
hardfork.

~~~
zik
I respect your work on bitcoin, and don't get me wrong - I don't think most
core developers are complicit in what's going on. I think all you guys are
doing great work and will be welcome on whichever team prevails in this mess.

On the other hand I don't respect the political moves made by some other
people in this whole fiasco. They've damaged bitcoin horribly.

Edit: just repeating - I don't think most core developers have anything to do
with this.

~~~
jlrubin
I guess that's what I'm trying to get across: I fundamentally agree with
core's approach over any other. That's why I work on Core. Core not prevailing
here would be upsetting to me because it would be opting for a subpar design
and review system which I think will make Bitcoin a lower utility platform
overall.

------
ubercow
For someone who isn't "in the know" when it comes to Bitcoin, what is Bitcoin
Unlimited and what does it mean for the average user?

~~~
Animats
The Bitcoin block size limits the transaction rate, because when a new block
is generated by a mining operation, every 10 minutes or so, only a limited
number of transactions will fit. Anyone generating a transaction can set the
fee they will pay to have it processed, and higher fees are done first. Until
recently, even zero-fee transactions tended to be processed eventually. But
due to increased traffic, the queue to get into the blockchain is backing up.
Right now, it's 6500 transactions behind. If you want to get your transaction
through in less than an hour, you'll need to pay a fee of about $1.[1]

Increasing the size of the blocks has been discussed for years. There are
upsides and downsides to larger block sizes. If there was a strong consensus
for a change, and everybody just updated their software with new blocks size
limits, that would work out OK. The problem is that a substantial fraction,
maybe 40%, of miners want a change, but the rest of the miners aren't willing
to go along. There is thus the possibility of a "hard fork", as happened to
Etherium.

A hard fork of Bitcoin has considerable implications. Now there are two kinds
of Bitcoins, probably called BTC and BTU. Unless there's a mechanism to avoid
it, each current Bitcoin turns into two, one on each blockchain. This is a
form of dilution, and the price should drop. The people with Bitcoin futures
are very upset about this, and the exact language of futures contracts becomes
very important.

[1] [https://bitcoinfees.21.co/](https://bitcoinfees.21.co/)

~~~
mirimir
Woah, I hadn't realized that. So once BTU was created, could I just create new
wallets on it, and import the keys from BTC wallets?

~~~
Frogolocalypse
You would need to find exchanges that recognized the china-coin tokens. 97% of
nodes in the bitcoin network currently enforce the same consensus rules. As
soon as bitcoin forks, they will no-longer understand, nor view, the tokens in
their forked crypto-coin.

~~~
iopq
Exchanges confirmed they will have BTC-U and BTC-C both available if a
hardfork happens. Whichever fork wins in the end will just be bitcoin.

~~~
Animats
Both forks may live on. That's what happened with Etherium. Etherium Classic
is about $2, and holding relatively steady, with a market cap of $176 million.
Forked Etherium (as modded to bail out the DAO) is around $50. (The market cap
for Etherium is kind of fake, because the coin generation rate is very fast,
and many of those coins are locked up for some period of time.)

~~~
bhaak
Although the difficulty adjustments in Bitcoin are much slower than in
Ethereum.

The chain with the smaller hash rate is unlikely to be functional for a long
time (unless new miners step up but this would be a tremendous investment).

This is by design as this makes it economically unfeasible to fork the chain
and suddenly have twice the amount of coins.

------
canistr
So does this mean we need to stop trading BTC on GDAX until Coinbase considers
the issue resolved after the fork?

What if we haven't touched the BTC on GDAX in a while? Wouldn't those chains
still exist post-fork?

They left a bit of ambiguity in there specifying that we should move BTC out
if we want access to both Unlimited and Core. But I'm unclear what to do since
it doesn't matter to me either way. I just don't want to lose anything and I
want the ability to continue trading.

~~~
xiphias
Actually it doesn't look like an ambiguity: they select a winner chain
(hopefully the one with the higher price) and keep the money that's on the
other chain. I don't think that this is a good strategy for an exchange, but
it's their choice.

------
LeoPanthera
Bitcoin Unlimited is at the moment the dominant version, as measured by mined
blocks: [https://coin.dance/blocks](https://coin.dance/blocks)

The vast majority are picking a side for political reasons - "Core" is
embracing censorship as method to push their client, Unlimited believes in
open discussion.

This is best exemplified on Reddit, where /r/bitcoin is moderated, heavily, by
core, but /r/btc has a no-censorship policy.

This makes the technical differences between the two almost irrelevant, most
are picking a side because they don't (or do) believe in censorship.

"Bitcoin" is normally defined as whatever is the longest continuous chain of
blocks, which if the current state of affairs continues, will be Bitcoin
Unlimited. But somehow Core have managed to stake a claim to the name
"Bitcoin", which is going to cause massive confusion if a fork happens.

~~~
nadaviv
> "Core" is embracing censorship as method to push their client

> where /r/bitcoin is moderated, heavily, by core

This is entirely false. No one in the Bitcoin Core development community has
anything to do with how subreddits are being moderated. Dismissing their
technical contributions due to how unrelated persons are moderating online
communities is nonsensical.

> /r/btc has a no-censorship policy.

[https://gist.github.com/chris-
belcher/c9f4b90bec1b2fbf8caaab...](https://gist.github.com/chris-
belcher/c9f4b90bec1b2fbf8caaab178719ac24)

> This makes the technical differences between the two almost irrelevant, most
> are picking a side because they don't (or do) believe in censorship.

The censorship claims are artificially manufactured and blown out of
proportion. The /r/bitcoin moderators engage in standard moderation and
enforcing the community's rules, a job that became even harder due to all the
manipulation, shilling, sockpuppet accounts and voting robots that infiltrated
the communication channels of the bitcoin community.

[https://medium.com/@shesek/observing-forced-narratives-
and-m...](https://medium.com/@shesek/observing-forced-narratives-and-
manipulation-of-public-opinion-on-r-btc-847f0c65f802) (an article I recently
wrote. see the "Related" part at the end for more details.)

Moderation is an essential part of healthy online communities. It is not
censorship.

[https://xkcd.com/1357/](https://xkcd.com/1357/)

[http://lesswrong.com/lw/c1/wellkept_gardens_die_by_pacifism/](http://lesswrong.com/lw/c1/wellkept_gardens_die_by_pacifism/)

[https://www.stevepavlina.com/blog/2009/09/free-speech-in-
onl...](https://www.stevepavlina.com/blog/2009/09/free-speech-in-online-
communities-the-delusion-of-entitlement/)

------
chabes
Great.. Some /r/btc extremists found a YC thread to troll. Is nothing sacred
anymore?

~~~
elastic_church
Extremists are trolling, what a productive way of dismissing opinions

I'm sure everyone is here just to illicit a reaction from others

~~~
jungletek
You want to use 'elicit' here, my dude :)

-Your local HN spelling pedant.

------
hectorr
I don't think I'm literate enough on the technology and economics to know
which is better, but the amount of vitriol in the Core/Unlimited debate has
convinced me to sell most of my BTC. I'm incredibly appreciative to the
community for all the work it has contributed to the blockchain/crypto space.
That said, I see the current anger and resentment a major risk factor to the
future of the currency, far more significant than the outcome of this decision
either way. I sincerely hope cooler heads prevail soon. Until then however,
I'll be keeping my capital away.

------
joshschreuder
Are GDAX related to Coinbase? This is almost word-for-word a copy of
Coinbase's statement:

[https://blog.coinbase.com/update-for-customers-with-
bitcoin-...](https://blog.coinbase.com/update-for-customers-with-bitcoin-
stored-on-coinbase-904dea08ac5f#.l9vomon79)

~~~
nadaviv
Yes. Coinbase is the brand for their consumer-facing products, while GDAX is
the brand for their exchange/trading products.

~~~
joshschreuder
Thanks, I thought it might be something like that.

I think this would be better linked / re-titled to Coinbase as that is what
most would be familiar with.

