
Bitcoin – Potential Network Disruption on July 31st - amdixon
https://bitcoin.org/en/alert/2017-07-12-potential-split
======
jpatokal
Well, that's a remarkably uninformative announcement. Here's an attempt at a
neutral tl;dr from a Bitcoin amateur.

Bitcoin is currently suffering from significant scaling problems, which lead
to high transaction fees. Numerous proposals to fix the scaling issue have
been proposed, the two main camps being "increase the block size" and "muddle
through by discarding less useful data" (aka Segregated Witness/SegWit).
However, any changes require consensus from the miners who create Bitcoins and
process transactions, and because it's not in their best incentive to do
anything to reduce those transaction fees, no change has received majority
consensus.

In an attempt to break this deadlock, there is a "Bitcoin Improvement Proposal
#148" (BIP148) that proposes a User-Activated Soft Fork (UASF) taking effect
on August 1, 2017. Basically, everybody who agrees to this proposal wants
SegWit to happen and (here's the key part) commits to discarding all
confirmations that do not flag support for SegWit from this date onward. If
successful, this will fork Bitcoin, because whether a transaction succeeded or
not is going to depend on which side of the network you believe.

However, BIP148's odds of success look low, as many of the largest miners out
there led by Bitmain have stated that they will trigger a User-Activated Hard
Fork (UAHF) if needed to stop it. Specifically, if UASF appears successful,
instead of complying with SegWit, they'll start mining BTC with large blocks
instead: [https://blog.bitmain.com/en/uahf-contingency-plan-uasf-
bip14...](https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip148/)

Anyway, it all boils down to significant uncertainty, and unless you've got a
dog in the race you'll probably want to refraining from making BTC
transactions around the deadline or purchasing new BTC until the dust settles
down.

And an important disclaimer: this is an _extremely_ contentious issue in the
Bitcoin community and it's really difficult to find info that's not polarized
one way or the other. Most notably, Reddit's /r/bitcoin is rabidly pro- BIP148
and /r/btc is equally rabidly against it. Here's one reasonably neutral
primer: [https://bitcoinmagazine.com/articles/bitcoin-beginners-
guide...](https://bitcoinmagazine.com/articles/bitcoin-beginners-guide-
surviving-bip-148-uasf/)

~~~
zby
It is probably not possible to solve the scaling problems on-chain - a secure
decentralized consensus on a global scale cannot be fast. Currently the
bitcoin protocol processes about 7 transactions per second. Doubling the speed
by doubling blocks will not make it much closer to the 50K transactions per
second of a system like VISA. But it is probably possible to scale the
transaction system off-chain - with
[https://lightning.network/](https://lightning.network/) \- which works like a
protocol for writing and accepting checks. As far as I know Lightning is
impossible or very hard without SegWit. But with Lightning off-loading the
bulk of transactions miners will lose a bit of their power - so maybe this is
what makes them against it.

Another aspect of the riddle is that SegWit will eliminate ASICBoost - which
is an optimization developed by one of the biggest ASIC miners producer - so
he is probably also against it. There is also the thing that ASICBoost is
probably patented - so it has a lot of opposition in the community.

~~~
Hermel
I'm really tired of hearing the "increasing the block size won't
suffice"-argument. Yes, increasing blocks to 10 MB won't give us VISA-scale,
but it will allow Bitcoin to serve TEN TIMES AS MANY USERS! I can't believe
how many otherwise intelligent people fail to see that this is desirable. It's
like driving your car at 10 km/h per hour on the high-way and refusing to
increase your speed because that would still not make you as fast as a rocket.

~~~
gtrubetskoy
Increasing the block will solve the problem until the new size is not enough,
which will be very soon. A larger block means a larger blockchain, and the
nice thing about the blockchain is that you can download the entire thing.
With a larger block it will outpace the storage advances and will not be
downloadable for the average user, which means that only specifically equipped
entities such as miners will be able to have a copy of it, and that is a big
problem.

10x the transactions is not much at all. The comparison with the VISA network
is not a valid one - with micropayments the volume could be 100x or 10000x -
we should be able to accommodate it.

The _only_ solution is to begin handling transations off-chain. But the
problem is that there is no one good proposal for it. Until it is clear how
off-chain transactions work, we will keep seeing this sort of stuff.

~~~
lisper
> With a larger block it will outpace the storage advances and will not be
> downloadable for the average user

This has nothing to do with the block size. The size of the chain is
proportional to the number of transactions. Whether those are sliced-and-diced
into small blocks or large ones is completely irrelevant to how big the chain
is. The only thing the block size influences is how many transactions can be
mined in one block, i.e. the rate at which transactions can be processed.

~~~
h1d
No. If a block is 10MB, you might as well keep spamming the blocks to
centralize the node operation when the storage starts to require TBs.

Why do you think Satoshi's gave it an artificial 1MB limit if it didn't
matter?

~~~
lisper
Huh? That makes no sense at all.

I have no idea why Satoshi chose a 1MB limit. Probably for the same reason he
chose a 21M BTC limit on the total number of bitcoins that can be mined: both
are arbitrary numbers that he pulled out of a hat. But the next time I see him
I'll be sure to ask.

~~~
andirk
probably more to it than a hat. She's more clever than that

------
buttershakes
This will go down as a massive failure in governance. The Bitcoin core guys
have completely created this situation by taking a hard liner stance based on
a non issue. Committing to a 2 megabyte hard fork 2+ years ago would have
averted this situation and kept control within the core dev team. Now we see
miners taking a stance because SegWit doesn't necessarily benefit them.
Further payment channels and other off chain scaling haven't really been
tested or materialized, and the SegWit code itself is a series of changes to
the fundamentals of Bitcoin without requiring a hard fork. In other words it
is overly engineered to avoid having to have real consensus.

Further the almost rabid attacks against a 2mb increase are bordering on
complete insanity. No serious software engineer would say that an additional 1
megabyte of traffic every 10 minutes is a problem in any way. Instead we are
stuck with a proportional increase in bandwidth and processing to support
segwit and a minor increase in block size, which is through some convoluted
logic preventing centralization. This whole thing is a power grab, plain and
simple.

Now the alternative implementations are racing to complete something the
miners will agree with, the sole purpose being to wrest control away from the
"Bitcoin core" development group which has made some a complete mess of
governance. Anyone who invested in Blockstream has to seriously be scratching
their heads and wondering why they are killing the golden goose over some
ideological bs instead of making what is really a trivial change. I think at
this point they have screamed so loudly for so long that back tracking would
reveal them to be hypocritical in the extreme. To couch this whole debate as a
rallying cry against centralized interests instead of a corporate power grab
is completely absurdist.

~~~
mmagin
As an outsider, I find it especially amusing that cryptocurrencies are
supposed to make it so that users don't have to live with the politics
surrounding traditional currency.

~~~
buttershakes
It's unfortunate but as a consensus driven system it is much different
structurally than say Linux. I can fork the Linux code and run my own version
and nobody cares and it still has utility (for me), but Bitcoin as a whole
requires a lot of different parties to agree on the code they run for it to be
effective. I'm undecided as to whether that is a fatal flaw or a feature.

~~~
PaulHoule
I think blockchains are more practical for a few traders who meet around a
Buttonwood Tree (permissioned) than they are for the public.

The reason we got so far before blockchains were invented was that you've
never get a paper in a CS conference if you built a distributed system that
did not increase it's ability to handle more workload AT ALL when you add more
nodes.

If 5 parties that don't trust each other 100% share a blockchain they get a
lot of benefit from that. Upping that 5 to 500 or 5000 does not increase the
value proportionately. That is, blockchains don't scale.

~~~
buttershakes
Well, they do scale. It's just a question or how much they scale. A practical
perspective says we don't need to scale to VISA levels right now, we just need
to slowly increase the block size to encourage adoption and new users while
keeping fees low, while additional scale measures are explored and integrated.
Bitcoin's proof-of-work is susceptible to centralization risks independent of
the block size. The nodes that are doing validation for light clients are
important, but don't need to store the entire blockchain to do that validation
and so are largely limited by compute and bandwidth. If we slowly increase
bandwidth requirements on a reasonable schedule we can continue to grow
Bitcoin's base for years. Is it reasonable to expect we can handle 24 megabyte
blocks in 6 years? There are other ways to handle scale that are less
complicated than Segwit. This entire thing might fall under extremely
premature optimization.

------
sktrdie
All this "unconsensus" is weird to me given that PoW was created to fix just
that. I don't understand how can any other group of people decide what should
happen other than the miners. After all, anybody can be a miner. Anything
other than that just doesn't make it decentralized anymore.

If you trust the developers, exchanges or even users to make decisions, then
why not just make a BitcoinSQL where the servers are controlled by these
groups?

Mining specifically allows for this not to happen. one-CPU-one-vote as per
Satoshi's paper. No matter the rules of the protocol, the chain with most work
is the one that most people agreed upon. This seems to me the only true
democratic solution and I don't understand how anything else is possible.

With regards to fees being to high and miners actually liking that, that's
bullshit, because miners (which are also users!) care about the health of the
entire system. If something like SegWit will bring many more users, that's a
win for them.

Let's not forget that anybody can be a miner! Miners aren't just these chinese
groups of people. It's the only true democratic way of reaching consensus -
anything else is really not a way to reach trustless consensus in my opinion.

~~~
knocte
> anybody can be a miner

That is false, nowadays.

> Let's not forget that anybody can be a miner!

Even if you repeat a lie a thousand times, it's not going to become true :)
Bitcoin's mining algorithm is so simple that mining industry has specialized
too much, and now the best technology for it is ASICs. You cannot mine (or
rather, it's nowhere near profitable) if you don't have access to this kind of
hardware.

And of course, claiming that anybody can have access to this hardware is very
very debatable. The best indicator of how this is not accessible by everybody
is how centralized this industry is nowadays (just look at the correlation
between ASIC manufacturers and owners of mining pools).

~~~
lawn
> And of course, claiming that anybody can have access to this hardware is
> very very debatable. The best indicator of how this is not accessible by
> everybody is how centralized this industry is nowadays (just look at the
> correlation between ASIC manufacturers and owners of mining pools).

Even if you repeat a lie a thousand times, it's not going to become true :)

[https://coin.dance/blocks](https://coin.dance/blocks)

Where is the centralization?

Also, the issue isn't as much ASICs as it is the free electricity in China.

~~~
qznc
If Antpool, BTC.top, F2Pool, and Bixin conspire, they control 51% of the
mining power. There is the oligarchy aka centralization.

~~~
Obi_Juan_Kenobi
Pools are not miners. Pools can only make decisions that the miners will
tolerate, and historically miners have recognized the dangers even of pool
centralization.

There is very little friction to changing pools.

------
BenoitP
To me, hashing power is not the process by which the outcome will be decided.

IMHO, the percentage of technical signalling will not even matter that much.

Two chains will get created quite quickly. And some BTC holders will try to
take advantage of the situation.

Since transactions can get replayed on the other chain (and copying them from
one chain to the other brings a stability advantage) the technical way things
are going to occur is double-spending to different adresses.

... Which means services supporting different chains will be pitted against
each other.

Users will empty out one wallet at the same time to one exchange on a chain
they don't support, and to another address they control on the chain they
support. In cashing out on the exchange, they will crash the market value of
that chain.

... Which brings me to: exchanges should start signalling support and come to
a consensus pretty quickly, in their own interest. They don't want to be the
exchange everybody cashes out on.

Questions abound:

* Have they started signalling it?

* What software are they running?

* If you hold some BTCs: are you planning to double spend?

* How are you going to proceed?

* Which chain do you support, and how many BTC do you possess?

TL;DR: There will be a run. Exchanges will determine the outcome.

~~~
jsn
Why do you think that being the exchange used for cashing out is a bad
position to be for an exchange? My understanding is, exchanges earn money on
commissions, so the more volume they get, the better, and cashing out sure is
some volume. Those speculators who buy BTC on the wrong chain -- sure, they
will take a hit on that. But the exchange itself will still get their
commission just fine. Am I missing something here?

~~~
BenoitP
You are actually right. It is not the exchange that would be affected,
provided they haven't taken positions in their own markets.

Exchanges should make it pretty clear on which chain they will be operating,
still.

I don't think trying to process transactions on both chains would be the right
move.

~~~
jsn
Well, it's not the first fork in the world, ethereum's fork was pretty big
(ETH vs ETC). As far as I can see, exchanges just treat both sides of the fork
as two completely separate currencies (which, in fact, they are).

------
Twisell
Ok just another proof that bitcoin can definitely not be compared to gold. Or
maybe it could?

"After the event you might end up with gold or lead it all depends if your
banker believe in transmutation or not (and if transmutation is actually
achievable which will be determined by the best alchemists of the kingdom that
need to agree together).

So all in all the guild of merchants recommend that you don't accept gold as a
payement on the last day before new moon (and for a few day after that),
because you wil not be able to tell if you are getting real gold or lead
during that period.

Well to be honest it won't technically be lead you would get but forked gold,
a gold that could be gold but isn't until the alchemists say so. But you shall
still be able to use it in a limited way with people who believe in the same
alchemists dissidents.

It's totally normal if it's sound complicated, it's magic after all!"

~~~
a1371
If you are comparing cryptocurrency exchanges with the real world
transactions, stuff like this could have happened quite often in the old
times. There is the story of the man working cast away for years with little
connection with the rest of the world. After he comes back to a town he finds
out that the king has changed, so all the notes and coins he has accepted as
salary over the years are useless.

In reality, our banking system is much more chaotic than what the end-user
sees it because central authorities are keeping the whole system together. and
their authority is just what all of us believe in. Now, some people, for
better or worse, started believing in something new.

~~~
samat
A little remark - those central authorities have men with guns to enforce
their authority (given that governments are backing centralized system as for
now)

~~~
ar0
Although it's hard to make people believe in the value of money they think is
worthless -- even with guns. Otherwise we wouldn't have had this many hyper-
inflations throughout history. (Nevertheless many governments do not accept
this fact and try -- and fail -- again and again.)

------
unabridged
This is late FUD, a last minute whine by the owners of "bitcoin.org" aka core.
The discussion over scaling has been happening for many months and consensus
has actually just been reached in the last couple weeks. 85% of the mining
power is signalling for segwit2x, and if this continues it will lock in before
Aug 1st completely avoiding the scary situation talked about in the post.

~~~
ambicapter
Does this mean that you could end up holding on to bitcoins that don't have
anymore value? Or are you fine if you just wait for the longest chain to
emerge and don't do any transactions until then?

~~~
reefoctopus
You're fine if you wait for the longest chain to emerge.

------
matt_wulfeck
> _This means that any bitcoins you receive after that time may later
> disappear from your wallet or be a type of bitcoin that other people will
> not accept as payment._

Can you imagine the uproar if Visa said the same thing? It would be totally
unthinkable.

Bitcoin can get away with this type of "disruption" because it's not really
being used for anything other than a speculative vehicle.

~~~
ar0
Isn't "any [money] you receive [...] may later disappear" actually pretty
common with credit card chargebacks?

~~~
matt_wulfeck
This is such a silly argument. Chargebacks are for the _protection_ of the
consumer against a business. They're GREAT if you're a consumer. Why would it
be in my benefit as a bitcoin user to have no recourse for fraudulent
transactions?

------
1ba9115454
If you hold Bitcoin then you need to think about getting hold of your private
keys or using a non custodial wallet like
[https://strongcoin.com](https://strongcoin.com)

If the network splits there will 1 or 2 new types of Bitcoin.

If the exchanges decide to support the new types of Bitcoin you will be able
to sell your holding on the new chains whilst still keeping coins on the main
Bitcoin chain.

But to do this you need to manage your own private keys.

------
taspeotis
[https://github.com/bitcoin-dot-
org/bitcoin.org/commit/9ddfa8...](https://github.com/bitcoin-dot-
org/bitcoin.org/commit/9ddfa8defe4cbf8e7159c828992e5077098a3cf2)

    
    
        Alerts: BIP148/92: change title over objection
        
        Note: I object to this change, which I think makes the alert
        less clear, less forceful, and degrades alert usability.

------
dmitriid
Ladies and gentlemen, we give you the most amazing stable scalable global tech
of the future

------
Fej
Do any significant number of people genuinely take Bitcoin to be the future of
currency at this point?

~~~
hudon
Many people simply believe there is a need for a digital censorship resistant
currency like physical cash.

I don't think it'll replace currencies, but I think it will serve a purpose as
a means to transfer value when authorities don't want you to transfer value.

Not saying if this is a good or bad thing, but it is a real value proposition.

~~~
RexetBlell
It's also useful if you want to buy something online and don't want it showing
up on your Credit Card statement.

~~~
RandomKid
For this use-case there is a better solution - GNU Taler [1]. It doesn't
invent its own coins but works with existing currencies.

[1]: [https://taler.net/en/](https://taler.net/en/)

------
atemerev
For me, the lightning network is the obviously right solution, bringing more
decentralization and totally removing the need for global consensus. Why it is
not that popular, I don't know.

~~~
lawn
Because LN has been vaporware since it's been announced, claiming to solve all
the problems but have yet to done so. On chain scaling has also been shunned
in favor of LN but it's still far from ready.

You talk about decentralization but it's not shown, and may not even be
possible, how the LN should work without relying on centralized hubs.

------
isubkhankulov
this post feels like propoganda. prior bitcoin upgrades have gone much
smoother and when they do go wrong the community banded together to spread the
right information. albiet the userbase was likely a lot smaller back then.

~~~
ithought
If the soft fork goes through, the Chinese miners are going to attack the
chain.

If the soft fork fails, Core developer Luke-Jr said they'd change the Proof of
Work algorithm and possibly create an altcoin (or bitcoin if enough follow).

This is like a Russian Roullete situation. The gun's loaded, all signs point
to neither side conceding. It's the cypherpunks vs the corporate miners (plus
some former devs and very credible people).

~~~
rothbardrand
No, Luke is saying that if chinese miners attack the chain and are successful,
then the core chain will need to change PoW (otherwise with a minority of hash
power it will take al long time for difficulty to adjust.)

There are three factions here-- Segwit2X and Core, who both want segwit, and
Bitmain which does not want segwit and which has threatened a forcible hard
fork into a bitcoin that has unlimited block size-- and they are even talking
about doing an ICO and things like that:

[https://blog.bitmain.com/en/uahf-contingency-plan-uasf-
bip14...](https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip148/)

~~~
ithought
[https://www.reddit.com/r/Bitcoin/comments/6msyk5/comment/dk4...](https://www.reddit.com/r/Bitcoin/comments/6msyk5/comment/dk42z3u)

And Luke's subsequent comment said if enough followed then it could still be
called bitcoin.

Also Maxwell said he'd quit if BIP148 fails. If the soft fork fails, bitcoin
will be something different.

------
frenchie4111
Can someone give me some context on what is causing this?

~~~
6nf
It's called User Activated Soft Fork or UASF for short. It could end up being
nothing but it's worth noting the date.

There are currently two main ideas on how to scale Bitcoin. One camp is the
called Bitcoin Unlimited and it's a proposal that allows the miners to adjust
the block size as needed.

The other idea is called Segregated Witness or Segwit. This is a change in the
way bitcoin transactions are counted towards the 1MB per block limit. It will
allow slightly more transactions per block but also adds functionality that
could allow other types of transactions. Those will be useful in some
situations, e.g. paying the same entitiy many times over the course of the
relationship.

Some people in the Segwit camp are tired of waiting so they are attempting to
force the issue without the support of most miners. The date they picked is
Aug 1.

Since very few miners support this move, it's not likely to succeed in my
opinion, but nobody knows for sure.

~~~
runeks
> Some people in the Segwit camp are tired of waiting so they are attempting
> to force the issue without the support of most miners. The date they picked
> is Aug 1.

I don't understand why the bitcoin.org page sounds so alarmist. If the miners
are not in on it why would some special Bitcoin blockchain (with alternative
rules) matter, since miners could easily DoS this chain, if they wanted to, in
case they don't support it?

Anyone can create their own chain with non-agreed-upon-rules (e.g. testnet3 or
regtest), but that's just not Bitcoin precisely because it's practically
ignored by miners (like a UASF).

Are bitcoin.org, themselves, supporters of this UASF?

~~~
stale2002
Kinda, they could DoS the UASF chain, but then the UASF chain could respond by
doing a proof of work hard fork.

If the community is behind it, then a POW change would render the 10s/hundreds
of millions of dollars in mining equipment worthless.

So the real question is whether or not the UASF side has the support of the
community or economic majority.

~~~
Cakez0r
You mean proof of stake? Is there a working implementation of proof of stake
yet? I thought it was mostly theoretical and academic at the moment.

~~~
stale2002
No, I meant proof of work.

You change the proof of work algorithm so that the existing miners can't use
their fancy Bitcoin miners, and it becomes profitable to mine with GPUs
instead.

------
gopz
As someone with a basic Comp Sci understanding of crypto currencies could
someone explain to me _why_ there is a scalability problem? I thought one of
the primary benefits of Bitcoin was that higher transaction fees will attract
more miners and ergo the transactions can be processed at a higher rate. Why
won't this problem be resolved naturally? Tinkering with the block size makes
sense to me as a way to crank through more transactions per mined block, but
again, why is it even a problem? The mining power is just not there?

~~~
rmah
The scale problem exists because of two things:

1) currently, only about 6 blocks can be verified by the network per hour.
That is fixed, any faster and the difficulty rises. Any slower and the
difficulty declines. With the current code in use, it will always be about 6
blocks per hour.

2) currently, blocks are limited to 1MB in size. This means that only a
certain number of transactions can be processed per block (apx 1200 to 2500).

Thus, only 24 * 6 * #txns_per_block => 170k to 350k transactions can be
processed per day. It doesn't matter how many computers are verifying new
blocks in the blockchain. This is an... issue.

Note, a "transaction" is moving BTC from one wallet to another wallet.

~~~
gopz
Thanks, I forgot about the automatic increase/decrease in difficulty as miners
come and go. Why won't increasing the transactions per block scale forever? I
see lots of people saying it's not a permanent solution. Is the SegWit stuff
basically just going to allow for 'meta-transactions' so that you can create a
faster overlay network as a sort of clearing house?

------
roadbeats
What strategy is the best for small investors ? Moving the money into altcoins
or just pulling completely back ? Should we expect a soar on altcoins (e.g
litecoin, ripple, antshares a.k.a neo) ?

~~~
Taek
Pretty easy. Pull all of your coins into a wallet you control (like bitcoin-
core, running on your own computer), and then just ride through the storm. For
some amount of time, there may be 2 or 3 versions of Bitcoin that are active,
but if you use this strategy you'll own all of your coins on all the versions.

So, as long as the combined value of every version is approximately around the
value of the original version, you haven't lost any money.

Then, wait for the dust to settle, sell the coins for the versions you don't
like, buy coins for the versions you do like, and then resume using Bitcoin
like you had originally.

The altcoin market is pretty upside down right now, even more than Bitcoin is.
It's probably less safe to move to an alt than it is to just ride through the
bitcoin storm.

~~~
wereHamster
I have a few coins in a copay wallet, which is a BIP32 wallet. Does that mean
that wallet is under my control and my coins are safe?

~~~
Taek
If you are the only one with access to the secret key, then you control the
coins. If someone else has the secret key (or keys), then they control the
coins.

I believe copay is okay from a brief glance, but I honestly can't tell if they
give the keys to Bitpay for backup or not.

The safest wallet is bitcoin-core, though there are plenty of reasonably safe
options.

~~~
wereHamster
I used bitcoin-core before, but I wanted to switch to a more light-weight
wallet, and one which is based on BIP32. At that time copay looked like the
best option. And because it's BIP32, I should be able to transfer the wallet
to another compatible implementation without any problems.

------
cableshaft
> "Be wary of storing your bitcoins on an exchange or any service that doesn’t
> allow you to make a local backup copy of your private keys."

I know a couple people who have some bitcoin on Coinbase and aren't too
comfortable moving it to a local wallet (Coinbase is just easier for them,
they don't have to worry about the security of their personal computer).

Does Coinbase allow making a local backup of private keys? I'm thinking they
might not, but maybe they do.

~~~
pat2man
When ETH split Coinbase chose one fork and allowed you to transfer your other
ETH out.

------
kristianp
Here's part of the warning message on bitcointalk [1]:

1\. Ensure that you have no BTC deposited with a Bitcoin bank or other trusted
third-party before Aug 1. If there's no technical way for you to export the
private keys for your BTC, then that BTC is at risk. Some Bitcoin banks may
assure you that they'll definitely keep your BTC safe, but I absolutely
wouldn't trust them.

2\. Do not send transactions or trust received transactions starting 12 hours
before Aug 1 at midnight UTC, and continue this until you hear the "all clear"
from several trustworthy sources. For example, I will post a forum news item
if everything is OK, or if everything is not OK and action is required.

[1]
[https://bitcointalk.org/index.php?topic=2017191.0](https://bitcointalk.org/index.php?topic=2017191.0)

------
Taek
I wish there was a concise way to explain what is going on, but there really
isn't. I'm going to do my best though.

Bitcoin is a consensus system. This means that the goal is to have everyone
believe the exact same thing at all times. Bitcoin achieves this by having
everyone run identical software which is able to compile a list of
transactions, and from there decide what money belongs to which person.

As you can imagine, it's a problem if you have $10, and Alice believes she
owns that $10, Bob believes he owns that same $10, and Charlie believes that
the money was never sent to either of them. These three people can't interact
with eachother, because they can't agree on who owns the money. Spending money
has no meaning here.

In Bitcoin, there are very precise rules that define how money is allowed to
move around. These rules are identical on all machines, and because they are
identical for everyone on the network, nobody is ever confused about whether
or not they own money.

Unfortunately, there are now 3 versions of the software floating around
(well... there are more. But there are only 3 that seem to have any real
traction right now, though even that is hard to be certain about). Currently,
all versions of the software have the exact same set of rules, but on August
1st, one of those versions of the software will be running a different set of
rules. So, depending, people may not be able to agree on the ownership of
money. If you are running one version, and your friend is running another,
your friend may receive that money, or they may not. This is of course a bad
situation for both of you, and its even worse if you are working with
automated systems, because an automated system likely has no idea that this is
happening, and it may have no way to fix any costly mistakes.

It gets worse. The version of the software that is splitting off actually has
the power to destroy the other two versions of the software. I don't know how
to put this in simple terms either.

In Bitcoin, it is possible to have multiple simultaneous histories. As long as
all of the histories are mathematically correct (that is, they follow all of
the formal rules of Bitcoin), you know which history is the __real __history
based on how much work is behind it. The history with the most work wins. If
the history is illegal, you ignore it no matter how much work is behind it.

So, this troublemaker version of the software (the UASF version) has a
compatible set of rules with the other 2 versions. Basically, everything that
it does, the other versions see as valid. So if its history is the longest,
the other versions will treat that history as the one true history. The thing
is, this troublemaker version of the software is stubborn, and so even if the
histories of the other two versions have more work, it'll ignore them and
focus only on its own version of history.

So, the dramatic / problematic situation happens if the UASF software
initially has less work in its history. What'll happen is a split, and two
different versions of Bitcoin will exist at the exact same time. But then, if
the UASF software ends up with more work after some period of time (days,
weeks, etc.), the other versions of the software will prefer its version of
history over their own.

Basically, what happens there is that entire days, or weeks, etc. of history
get completely obliterated. The UASF history becomes canonical, and the
histories built by the other versions all get destroyed. Miners lose all of
their money, people who accepted payments lose those payments, people who made
payments get those payments back. Basically a lot of chaos where people end up
losing probably millions and millions of dollars.

\----

I hope that helps. This whole situation is screwed up, and really the best
thing to do is to put your coins in a cold wallet (one that you control, not
an exchange), and then just not send or receive any coins for a few weeks. Let
the dust settle, and then resume using Bitcoin once its clear that the turmoil
is over.

\----

The most likely situation here is that nothing interesting happens at all. My
personal opinion is that the vast majority of people who matter in Bitcoin
aren't even paying attention to the drama, and something dramatic is really
only possible if the majority of Bitcoin users opt-in to doing something. I
don't think that's the case at all, which means essentially nothing
interesting is going to happen.

But, I could be wrong. There's a non-zero chance that something very
unfortunate happens, and there's a pretty easy way to isolate yourself: don't
send or receive any Bitcoins starting July 31st, and don't resume until it's
clear that the storm has passed. It'll likely take less than a week to come to
a well-defined conclusion.

------
wittgenstein
Does anyone know how Coinbase is going to handle this?

------
modeless
The problems described in this post are unlikely to happen. There is an
attempt to split ("fork") the network scheduled for August 1. The people
forking will force activation of a new feature, Segwit, while the non-forkers
won't. _However_ , the non-forkers are currently planning to activate Segwit
as part of a compromise plan _before_ the deadline. If this compromise happens
as planned, there will be no need to force-activate Segwit with a fork, and so
no fork will happen on August 1.

Frankly, even if the compromise solution fails and the fork does happen on
August 1, it will be a complete non-event. Bitcoin.org is biased as they are
affiliated with people who support the August 1 fork, and so they're
attempting to publicize it. However, the fork has practically zero support
from Bitcoin miners or exchanges. On Aug 1 the vast majority of miners and
exchanges will stay with the current network. Without significant miner
support the forked network will run extremely slowly, and it will be
vulnerable to several kinds of attacks. Without exchange support the forked
network will not have economic value, and will quickly become irrelevant.

Although August 1 will likely not be a problem either way, there is another
date that will. Around the end of October, another proposal to fork the
network is scheduled, and this one _is_ supported by miners and exchanges.
What will happen then is much more murky. It will become clearer as the date
approaches.

~~~
rothbardrand
You're misunderstanding the issue. Core / Bitcoin.org don't have a problem
with Segwit2X which is a UASF like Bip-148 which core supports. (It uses a
different BIP and is slightly different but it's perfectly find with all of
us.)

The threat is that BitMain, the controller of a very large amount of hashing
power, something like %70 is threatening a hard fork into their own, non-
segwit chain:

[https://blog.bitmain.com/en/uahf-contingency-plan-uasf-
bip14...](https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip148/)

~~~
modeless
Sorry, that's completely wrong. "UAHF" is even less likely to happen and gain
adoption than UASF. BitMain does not directly control all of the hash power of
people using their miners and cannot successfully fork by themselves, plus
again they would have no support from exchanges.

Core absolutely does not support Segwit2x, because of the hard fork later. If
they do, why don't they merge it and end this standoff?

------
jstanley
I wrote this in case anyone wants more information:
[https://smsprivacy.org/bip148-uasf](https://smsprivacy.org/bip148-uasf)

Should be a bit more informative than TFA.

~~~
rothbardrand
Naw, this isn't about Segwit2x, it's about the hard fork bitmain wants to do:
[https://blog.bitmain.com/en/uahf-contingency-plan-uasf-
bip14...](https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip148/)

~~~
jstanley
I'm pretty sure the announcement on bitcoin.org is about the BIP148 UASF.

------
jancsika
I haven't kept up with Bitcoin tech for awhile. Hopefully the following
questions are relevant here:

1\. What percentage of Bitcoin's PoW belongs to Bitmain?

2\. Are the drivers for Bitmain's hardware free-as-in-freedom?

3\. Is mining hardware in the same class as Bitmain's manufactured anywhere in
the world other than China?

Edit: Bonus question: If all cutting edge hardware tends to be developed and
manufactured in one particular spot in one particular nation state, and if
Bitcoin mining efficiency now depends mainly upon the manufacture of newer,
more powerful hardware, does that change any of the implicit assumptions made
in the Bitcoin whitepaper? (Esp. considering that same nation state has put a
hard speed limit on all data moving in/out its borders.)

------
kanzure
follow-up thread was posted over here,
[https://news.ycombinator.com/item?id=14788663](https://news.ycombinator.com/item?id=14788663)

------
nthcolumn
I obviously don't understand this at all. I thought it was distributed and
that that was the whole point.

~~~
Doxin
It is distributed, and that _is_ the whole point. The difficulty lies in being
unable to force anyone to do anything, so any change to the protocol runs the
risk of bitcoin splitting two incompatible halves. Changes like these have
happened in the past without too much trouble, but these days there's more
money and politics involved, so it's wait-and-see as to the outcome. Worst
case bitcoin will permanently split into Bitcoin A and Bitcoin B. In practice
I think it's fairly unlikely.

Just suspend your trading near the date until this kerfuffle sorts itself out
and you should be fine.

------
nemoniac
What time zone is "GMT+0100 (IST)" supposed to be?

India Standard Time is something like GMT+5.

~~~
asclepi
That would be the time zone configured on your device. In this case, Irish
Standard Time. Which, unlike the American nomenclature for time zones, is a
Daylight Saving Time time zone (Ireland uses GMT outside of DST).

Note that the page has "2017/08/01 00:00 UTC" in the source, but uses a
"Localize dates" JavaScript function to change that to your configured time
zone.

------
pyroinferno
Good, good. Bitcoin will fall, and eth will become king.

------
davidbeep
Terribly uninformative. I'm actually surprised the coin is trading as high as
it is considering all the uncertainty. I expected a greater freak out from
technologically inapt investors/speculators.

------
ented
What is the max tx/s speed? Still no consensus???

~~~
VMG
With segwit, you can use [http://lightning.network](http://lightning.network).
Lightning network gives you essentially unlimited transaction speed.

~~~
spiralx
Which doesn't actually exist yet, and doesn't solve the problem even
theoretically:

[https://medium.com/@jonaldfyookball/mathematical-proof-
that-...](https://medium.com/@jonaldfyookball/mathematical-proof-that-the-
lightning-network-cannot-be-a-decentralized-bitcoin-scaling-
solution-1b8147650800)

~~~
VMG
The blog author and you need to learn about lighting network and graph theory.

Edit: responses to the specific "proof" you linked

[https://medium.com/@murchandamus/i-have-just-read-jonald-
fyo...](https://medium.com/@murchandamus/i-have-just-read-jonald-fyookballs-
article-https-medium-com-jonaldfyookball-mathematical-fd112d13737a)

[https://medium.com/@murchandamus/some-subsidiary-points-
on-l...](https://medium.com/@murchandamus/some-subsidiary-points-on-lightning-
network-cc68bc81d6f1)

~~~
spiralx
That's just a lot of hand-waving, if the author is so confident about his
rebuttal he should be able to provide a model for it. This person did at least
attempt to simulate something along the lines of an ideal LN, which showed
that micropayments do not do very well at all due to the combination of fees
accrued at each hop:

[https://hackernoon.com/simulating-a-decentralized-
lightning-...](https://hackernoon.com/simulating-a-decentralized-lightning-
network-with-10-million-users-9a8b5930fa7a)

This thread on the same story discusses other issues with LN proposals, one
that stands out to me is how routing is going to work if all nodes are
perfectly equal - routing on the internet relies on a hub model, seems likely
that a decentralised routing protocol adds even more complexity and resource
requirements.

[https://news.ycombinator.com/item?id=14759965](https://news.ycombinator.com/item?id=14759965)

The trouble of course is that LN is just a bunch of proposals right now, each
promising to fix all of Bitcoin's issues without removing all of its unique
features. When it actually exists then I'll revisit, but until then I'll treat
it as another piece of vapourware.

~~~
VMG
> The trouble of course is that LN is just a bunch of proposals right now,

There are multiple implementations of the spec.

------
jageen
It will surely affect on ransomware collectors.

~~~
ktta
Maybe they'll also move to ETH. A great way to get a good % of the population
away from BTC to ETH

~~~
jageen
It is good time for investors :). Or it is already passed, I did not see the
rate of both but there might be major change.

------
cgb223
What is the disruption?

Why is this happening?

~~~
mhluongo
Some good answers in sibling comments
[https://news.ycombinator.com/item?id=14758661](https://news.ycombinator.com/item?id=14758661)

------
ragelink
anyone know why out of all timezones they pick Central america Time?

~~~
sebst
I guess, the times in the document are displayed according to the time zone of
the browser rendering it.

------
wyager
This looks like FUD. As I recall, the owners of Bitcoin.org are mad that their
exact proposed scaling solution didn't go through.

85+% of miners are signaling support for segwit2x, so it's extremely unlikely
that there will be any disruption.
[https://coin.dance/blocks](https://coin.dance/blocks)

