
Is Bitcoin breaking up? - antonius
http://www.wsj.com/articles/is-bitcoin-breaking-up-1453044493
======
pash
The Bitcoin community is rapidly coalescing around an effort to increase the
maximum allowed blocksize to 2MB as soon as possible. This increase is being
implemented in a new client, Bitcoin Classic [0], which is a fork of Bitcoin
Core that changes only the single line of code that sets the blocksize limit.

Bitcoin Classic was created by Jonathan Toomim, an American miner and
developer who went to China to talk directly with Chinese miners and to test
the effect of bigger blocks on mining operations behind the Great Firewall.
Gavin Andresen, Bitcoin Core's former lead developer, and Jeff Garzik, another
prominent Core developer, as well as many others, are collaborating with
Toomim on further changes that Bitcoin Classic may implement later.

The big difference between Bitcoin Classic and Mike Hearn's failed Bitcoin XT
is the concerted effort by the people behind Classic to garner the explicit
support of miners (and other important members of the Bitcoin ecosystem) for a
blocksize increase. At my last check yesterday, mining-pool operators
representing 72% of global hashing power had explicitly expressed their
support for Bitcoin Classic's blocksize increase, as had the operators of many
popular exchanges, web wallets, and payment providers. (There is a growing
compendium of prominent supporters on Bitcoin Classic's website; the complete
list is on the project's Github page [1].)

That means that Bitcoin Classic is very likely to break Core's monopoly on the
protocol soon. The blocksize increase, and the fork of the blockchain that it
will create, is tentatively scheduled to take place after March 1. Get ready.

(By the way, the best sources for information and discussion about the Bitcoin
world are now the /r/btc sub-Reddit and the discussion forums at bitcoin.com
and bitco.in; the community's former hubs, /r/Bitcoin and bitcointalk.org, are
both controlled by the same operator/moderator, and he has strongly censored
and perverted all discussion of changes to the protocol that are not supported
by Core's intransigent cabal of developers.)

0\. [https://www.bitcoinclassic.com](https://www.bitcoinclassic.com)

1\.
[https://github.com/bitcoinclassic/website/issues/3](https://github.com/bitcoinclassic/website/issues/3)

~~~
Lazare
The way XT seems to have failed yet Classic seems to be suceeding seems odd to
me.

Is all it took _really_ just to have a developer fly out to China and talk to
a hanful of people? Seems like there's a lot more politics going on behind the
scenes.

In any case, fixing the blocksize limit will be good, but I think the real
value in Classic is breaking the perceived monopoly Core has and moving to a
healthier political setup. Many people were absolutely unwilling to even
_talk_ about XT (or as you mention, allow others to talk about XT) because
"OMG it's not Core!". That argument will be a lot less viable if everyone's
moved to Classic.

~~~
mike_hearn
No. It took a sharp fall in the BTC price.

This narrative that Gavin and I were unwilling to compromise is deeply
unfortunate. BIP 101 originally started with a 20mb limit+growth. That was
based on some calculations Gavin did. At that point the Chinese miners started
saying they couldn't accept 20 because of the firewall, but eight would be OK.
They put announcements of their support for eight megabyte blocks in their
coinbases, etc.

Why eight? Because it's a Chinese homonym for "prosper" or "wealth":

[https://en.wikipedia.org/wiki/Numbers_in_Chinese_culture#Eig...](https://en.wikipedia.org/wiki/Numbers_in_Chinese_culture#Eight)

It crops up in the Chinese Bitcoin community all the time. So this choice
obviously wasn't based on any kind of scientific analysis. Having Bitcoin
protocol constants be decided by rhymes would obviously have been an
embarrassment, but nonetheless, we compromised and did it.

After Core rejected the now-modified BIP 101, Gavin and I released XT
together. At this point the miners changed their tune. They announced they
would never run anything except Core, period, end of story. This "requirement"
had not been specified before. From both speaking to them personally (I have
had various phone calls with miners around the world, including miners in
China) and their public statments, they made it clear that their loyalty to
Core was absolute and no matter what changes we made to XT, they would never
run it. Thus compromising further was pointless.

Why is Classic different? It wasn't, just one or two days ago. After I
released my article, I was CCd on a private thread where KnC Miner published
an "open letter" and suggested switching to Classic. The other miners shot him
down immediately saying they wanted the change to come from Core. Then the
price started sliding, and they started reversing their positions. Suddenly,
Classic was acceptable whereas just hours before it had not been.

~~~
aws_ls
_> No. It took a sharp fall in the BTC price_

And the trigger for that was your medium article the other day. :-)

And since, block size/scalability was the key point in your post. Would you be
willing to re-join Bitcoin, since what you wanted would be achieved? Even if
its Classic and not via XT.

Perhaps, my question may come across as naive. But looking at it from outside
(reading /Bitcoin & /btc & etc), it would definitely clear a lot of air, and
be good for Bitcoin.

------
mrb
_" Mining already is so expensive that it takes company-sized investments to
participate"_

This is not true at all. I do not understand why journalists repeat this
claim. It is like saying "investing in the stock market is so expensive that
it takes company-sized investments to participate". It is not true. Whether
you invest $1000 or $1 million your returns—as a percentage of your initial
investment—will be the same regardless if this is the stock market or Bitcoin
mining.

In fact I would say the opposite is true: small miners have a slightly better
profitability than large-scale miners, because they are so small they do not
even have to cover certain costs. A large-scale miner will have to pay for
hosting or for building a data center but a small miner will host the hardware
in his house at no extra cost. A large-scale miner will have to hire staff to
maintain the miners but a small miner will maintain his machine himself.

Of course profitability depends a lot on electricity costs, but again you
might be a small miner and live (for example) in Douglas County, Washington
and pay a domestic electricity rate of 2.5 cents per kWh, and you will beat
many large-scale miners who almost always pay more (see my previous comment on
this:
[https://news.ycombinator.com/item?id=10907584](https://news.ycombinator.com/item?id=10907584)).

Large-scale miners may get a financial advantage by buying hardware in bulk,
or manufacturing it themselves, but this is a cost saving of at most 20 or
30%, and this certainly does _not_ make mining so expensive that small miners
cannot participate.

~~~
nharada
I was under the impression that specialized ASIC based miners have made even
GPU mining relatively pointless.

~~~
mhluongo
Not really relevant- small miners can buy ASICs too.

------
sisk
> The problem is bitcoin is open-source software, so any change has to be
> approved a majority of the community, and it hasn’t been able to agree.

The author has conflated a couple of things. That is the exact opposite of how
OSS works. The reason why the majority need to adopt is purely from a "one
true coin" standpoint—there is nothing stopping forks or new alt coins from
spinning out.

------
wemysh
The current situation reminds me a lot of the time when Firefox replaced
Internet Explorer as the most popular browser. And of the time when Chrome
replaced Firefox as the most popular browser.

Currently there is only one Bitcoin implementation. And the developers a)
refuse to implement what users want. And b) implement bloat that users dont't
want.

So Bitcoin will "break up" in a similar way the WWW "broke up" when new
browsers were introduced.

It's a good thing.

~~~
JohnTHaller
Internet Explorer is still the most popular browser among users worldwide.
Chrome is the most popular browser among certain techies. Chrome is also
popular among users tricked into installing it via forced bundleware with Java
updates, free antivirus engine updates, and (ironically) Flash plugin
downloads for Firefox.

~~~
pbhjpbhj
[https://en.wikipedia.org/wiki/Usage_share_of_web_browsers#Su...](https://en.wikipedia.org/wiki/Usage_share_of_web_browsers#Summary_tables)

------
cornholio
"Bitcoin is breaking up" = Buy like a madman. The blocksize cuts down on the
transaction spam making transactions non-free, maybe a few cents each. This is
not optimal and certainly needs to fix in the next few years, because it harms
microtransactions.

But "breaking up" ? That's just sensationalist bullshit. That's like saying
Netflix is on the edge of bankruptcy because it's raging success has
temporarily killed HD streaming in Australia & Antarctica. As a community
building exercise, this debacle is great for Bitcoin, it really shows no one
is in control and consensus to change the rules of the game is very hard to
reach.

~~~
woah
The fact that every transaction ever is saved for ever harms
microtransactions. Luckily nobody actually uses Bitcoin, especially not for
microtransactions. The network can't handle more than 3 transactions a second,
and luckily it doesn't have that volume. Lightning is the only thing that can
actually make Bitcoin more performant than a small VPS with postgres, if it is
something that people want.

Also, "Lightning-like" channels aren't unique to Bitcoin- they can be
implemented on Turing-complete currencies, and even on bank servers[1]

1\. [http://altheamesh.com/blog/universal-payment-
channels/](http://altheamesh.com/blog/universal-payment-channels/)

------
SCAQTony
I think these are very exciting problems. The bigger the problem the more
creative the solution.

It took us two thousand years or so to go from using the weight of a bale of
barley to represent the value of silver, bronze, copper to eventually actual
coinage.

[https://en.wikipedia.org/wiki/History_of_money](https://en.wikipedia.org/wiki/History_of_money)

Maybe digital currency takes 15-years or so to work out the problems much like
they did with barley to coins but it is definitely the future.

------
zekevermillion
Bitcoin is already specified. I doubt that nodes, miners, and the bitcoin
richlist will converge around any alternative spec (whether XT or Litecoin)
and decide to call it "bitcoin". However, the ecology of decentralized digital
assets inspired by the nakamoto consensus has already fragmented and will
continue to do so at an exponential rate. As a rough estimate let's say there
are already 1000 bitcoin clones that have more than a handful of nodes and
miners. I would not be surprised to see that number increase to 10,000 within
2016. That some of the individuals associated with Bitcoin Core are moving
onto other projects is not going to mean very much one way or another for the
original bitcoin spec, though we may see the Core project change. There are
other alternatives for those who want to run an implementation of the original
bitcoin spec. ([http://thebitcoin.foundation/](http://thebitcoin.foundation/))
And there are an exponentially growing number of alternative networks for
those who do not.

------
Animats
The block size issue is missing the point. The use case that matters for
Bitcoin right now is converting yuan to Bitcoins, then Bitcoins to dollars.
That's one way people in China get around China's exchange controls. (Note
that mining in China also is used to move yuan to dollars.) Those are big
transactions. They'll get through regardless of the block size.

Bitcoin as a retail currency doesn't seem to be going anywhere. Robocoin, the
Bitcoin ATM company, just went bust. Lots of companies nominally accept
Bitcoin, but that's just a shopping cart program talking to Coinbase or Bitpay
for immediate conversion. The retail transaction volume is small. Given the
volatility problem, the conversion costs, the risk of loss, and the general
headaches, Bitcoin is a lose vs. paying 1% - 3% for credit card processing.

~~~
RockyMcNuts
> They'll get through regardless of the block size.

They'll get through until China bans it.

China has a classic trilemma : let the currency depreciate, give up on
monetary stimulus, or institute capital controls.

Pick any 2 :
[https://en.wikipedia.org/wiki/Impossible_trinity](https://en.wikipedia.org/wiki/Impossible_trinity)

To date, they've shown pretty good success in controlling the Internet and
Bitcoin is no different.

I don't think Bitcoin advocates have necessarily thought through the
implications if countries were no longer able to control capital movements,
hence pursue independent monetary and currency policies. As the euro
experience has shown (also the history of the gold standard), it's not
necessarily an improvement in monetary arrangements.

~~~
Animats
_" They'll get through until China bans it."_

China's leaky exchange controls are a strange subject. So much is leaking that
investors in China are buying large amounts of property in London, New York,
and Miami, but not occupying it, as a way to stash cash. However, the outflows
aren't big enough to affect the value of the yuan.

The People's Bank of China (comparable to the Treasury Department plus the
Fed) hasn't cracked down as much as they could. There seems to be an internal
policy disagreement within China's government over whether the yuan should be
an international currency. To be used internationally means allowing
convertibility and giving up some control, and facing the possibility that
China's domestic economy can be yanked around by world events. But
convertibility increases China's external economic power. Back in 2013, there
were announcements of convertibility within the next year. In November 2015,
the target date was 2020.[1] China's stock market crashed last week, which may
prompt tightening up on capital outflows again.

Much of what happens with Bitcoin is driven by these far larger issues.

[1] [http://www.bloomberg.com/news/articles/2015-11-03/china-
deve...](http://www.bloomberg.com/news/articles/2015-11-03/china-development-
plan-to-promote-tech-capital-markets-reform)

------
kobayashi
What is the downside to moving from 1MB to 2MB blocksizes, instead of moving
up to 8MB or 20MB? If the reasonable maximum number of trades per minutes is 3
at the moment, does a doubling of the blocksize merely double the allowable
number of trades per minute, or is it somehow a logarithmic change?

~~~
martinko
It does just double it. The problem with increasing it more is propagation
speeds around the planet (this needs to be as fast as possible or another
miner may get the block reward), especially if the miner is sitting in china.

~~~
kobayashi
So is increasing the blocksize beyond 2MB expected to favour Chinese minors
more so than average users? And if that's the case, would you mind explaining
how so, exactly?

~~~
martinko
The dynamic is not one in which when miners win, users lose. The issue is that
users want more transactions per second and therefore want bigger blocks to be
created, however, when miners create larger blocks, they have a hard(er) time
propagating them to the entire network and thereby run the risk of their block
being orphaned (someone else's block will be accepted first, and the miner's
block and work done on that block will be wasted).

~~~
kobayashi
Oh I see, which is why Chinese miners would be especially hesitant about
moving to larger block sizes, because the GFoC significantly limits speeds.

------
greggarious
Not sure due to the paywall.

~~~
davidklemke
Google News link which bypasses paywall:
[https://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=ne...](https://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=newssearch&cd=1&cad=rja&uact=8&ved=0ahUKEwjTvqun2bHKAhVFX5QKHeCSDHQQqQIIHCgAMAA&url=http%3A%2F%2Fwww.wsj.com%2Farticles%2Fis-
bitcoin-breaking-
up-1453044493&usg=AFQjCNGU5YDWRdJ5-1ZcGer_j1BM9J-Zyw&sig2=zhlVV8upWsewf0vJew98bg)

~~~
greggarious
I'd prefer a site that doesn't require a hack to read the text.

------
ZoeZoeBee
If you want to read the article without being blocked by WSJ's paywall just
Google the name of the article and click on the link. More often times than
not you can get to a WSJ article via GoogleNews even if it is pay-restricted.

~~~
xiaoma
If you click the link titled "web" under the title, it will do that for you.

~~~
colinbartlett
Wow when'd that get there? That's incredibly useful. Thanks DanG et al!

------
darwins_pitbull
Hi Mike. I met you at San Jose conference in 2013. I remember very clearly-
you were the most dashing, handsome, well spoken and charismatic person at the
entire conference, a very rare find in the developer community. I was just
finding my bearings in this technology at the time, I was a long way from
home, and remember the confidence it instilled in me, knowing that someone
like yourself was involved in this. But as I followed your contributions to
the effort in the months after the conference, it was so confusing- nothing
you did really seemed to help, your suggestions were widely panned by most of
the best technical minds, and you seemed to devote your energy to platforms
that are largely made up of newbies.

If I was a handler for an organization that wanted to insert an asset into the
bitcoin community, someone like you would be the ideal candidate. Someone that
young people, new to the community, naturally respect and will listen to.
Strange how you've spent so much time cultivating your standing with people
like that, while your reputation plummeted among the people that understood
the network (and had far more skin in the game than you did, because if I
remember correctly you never foresaw the spectacular growth of the bitcoin
network, never thought it would work, and therefore did not really have that
many coins yourself). I have a long history of having a keenly skeptical eye,
I have solid critical thinking skills, and I bat away wacky theories all day
long. I have NEVER, in any forum, posted any comment of any type in regards to
bitcoin, this is my first one- I believe in speaking humbly, thinking deeply
and acting bravely. While the evidence that your motives in the bitcoin
network may not be what you say they are is only circumstantial, it has been
accumulating for some time now. And the strongest allegations have come from
the people who have the best reputations for clear thinking and scam calling.
I mean you no ill will Mike, regardless of your intentions. But the forces at
play and the implications of our technologies' reach is so spectacular that it
is quite reasonable now for us to assume that smart and highly motivated
people will appear who will use great cunning to harm the network. Every
spidey sense I possess has been going off about you for a long time now. I can
remain silent no longer.

J'accuse Mike, J'accuse.

~~~
dang
Personal attacks (and this is a weird and creepy one, something else that
Bitcoin doesn't seem to lack for) are not allowed on HN. Please don't post
them here, especially when your "keenly skeptical eye" can come up with
nothing worse than "dashing, handsome, well spoken and charismatic".

(This is not an opinion about anything to do with Bitcoin or who, if anyone,
works for "an organization".)

We detached this subthread from
[https://news.ycombinator.com/item?id=10921219](https://news.ycombinator.com/item?id=10921219)
and marked it off-topic.

------
powertower
> Is Bitcoin Breaking Up?

If they have to frame a headline as a question, you can usually assume the
answer is "no"...

[https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headline...](https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines#Betteridge_.282009.29)

 _The reason why journalists use that style of headline is that they know the
story is probably bullshit, and don’t actually have the sources and facts to
back it up, but still want to run it._

~~~
narrator
Narrator's law of headlines is : one should prepend "We would like you to
believe that" to any headline that ends in a question mark.

------
colindean
[https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headline...](https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines)

------
ohthehugemanate
This headline is a great "grabber" for older bankers and financiers. It
implies that the whole "bitcoin thing" is finally blowing over, without going
out and saying it. Music to their ears.

~~~
nols
Bankers and financiers are nowhere near as worried about bitcoin as many
bitcoiners seem to think.

~~~
gesman
Bankers and financiers has bigger things to worry about in 2016

