
The resolution of the Bitcoin experiment - tptacek
https://medium.com/@octskyward/the-resolution-of-the-bitcoin-experiment-dabb30201f7
======
Nursie
I've enjoyed watching the Bitcoin experiment. It's been enlightening in a
variety of ways, from technically to socially.

I've been fascinated and appalled in equal measure at the fanboy community, at
the intolerance of criticism that sprang up very quickly, and how strong
feelings ran (likely because of financial investment in the tech).

It's also been interesting watching it go from simple CPU mining, to multiple
GPU rigs in dorm rooms, all the way through FPGA and then to massive
installations of custom ASIC miners.

But I've always hoped it wouldn't go mainstream for two reasons - limited
supply with weighting in favour of early adopters, and the massive electricity
costs of the 'mining' and transaction validation process. Scalable,
competitive proof of work systems for a widespread currency are an ecological
disaster in the making, and deflationary currency with a handful of early
users controlling a huge proportion of the total currency supply... these
aren't "features".

I'll be very interested in what happens next, and for the reasons given I hope
it's not just a BTC clone with better governance.

~~~
return0
I 'll also notice what the whole experiment proved: That money can perverse
moral incentives. The electricity/wasted energy issue you mention is just one
of them. The amount of time spent on building and specializing the hardware is
another. All this was in the hope of the abstract goal of creating money, not
wealth. People weren't so zealous in building specialized hardware for, say,
protein folding. Bitcoin advocates usually put forward "the good of humanity"
argument, yet the product by design puts individual interests above all other
interests.

~~~
nebw
In that vein, I'd like to point out Gridcoin[1], a crypto-currency that
rewards you for throwing your computing power at a BOINC project (basically
scientific data crunching) [2] instead of wasting it on pointlessly solving
crypto problems. It's certainly not perfect, but an interessting idea
nonetheless.

[1] [http://gridcoin.us/](http://gridcoin.us/) [2]
[http://boinc.berkeley.edu/](http://boinc.berkeley.edu/)

~~~
Nursie
That's quite cool, I like that idea a lot more. I think I'd still rather a
currency that didn't rely on burning power as fast as possible, but using that
power for good is, well, good :)

~~~
STRML
Well, there needs to be some proof of work, something that is hard to do at
scale but easy for individuals.

To that degree, Bitcoin has failed, because massive SHA256 crunching is now
easy to do at scale and hard for individuals.

More varied challenges, like BOINC, or PoW that is bandwidth, connectivity,
latency, or disk-space based, will provide a lot more value to the community
and make it easier for individuals to contribute. I eagerly await the day that
one of these alternatives becomes mainstream.

~~~
Nursie
Alternatives are good but.... well, disk-space based would push up the price
of hard drives. Bandwidth connectivity and latency could again be owned by big
players...

I don't know. What I do know is that in a centralised crypto-currency system
you don't need any of this as the issuing authority merely signs the
transactions and we're away. I hope that some bright spark comes up with a way
to make a decentralised one almost as simple...

------
Aqueous
Doesn't this all seem a bit dramatic? Throwing away the baby with the
bathwater? Cryptocurrency is still in its infancy, and BitCoin is the first
cryptocurrency. It's a little early to declare the project a "failure," throw
up your hands and walk out of the room, just because a few people haven't
acknowledged the urgency of a (very fixable) technical problem.

People disagree about the reality of global warming. Does that mean we throw
out the entire system of laws of the United States and other world powers
because it hasn't yet addressed this problem?

This is exactly why I never bought the concept of BitCoin as a 'libertarian'
currency. There's always politics, there's always governance. It becomes
political as soon as more than one person is involved. And as soon as it's
political, institutions, processes, procedures, and laws become necessary -
also known as "government."

I still believe in BitCoin, however. Ultimately, there's a way out of this
tangle, and like with most political problems, it's a political solution.
BitCoin will either adapt and scale up or stay the same and scale (way) down.

~~~
tga_d
I'm not sure why you think bitcoin is the first cryptocurrency, things like
digicash existed since the early 90s. In any case, did you even read the post?
The author explicitly describes the failings of bitcoin's political processes.
His concerns weren't some hypothetical issues of ideology, they were concrete
examples of how those who control bitcoin are preventing it from growing in a
very technical sense, and refuse to engage in any sort of compromise because
it's not within their (business) interests.

edit: To clarify, I'm not trying to say I agree or disagree with the author,
as I don't know anywhere near enough about the bitcoin community to say either
way. I'm merely pointing out that the OP was talking past the author's points,
not addressing them. (In particular, they built a strawman against governance
and political solutions.)

~~~
Aqueous
Ok, I'll add some modifiers: BitCoin is the first global peer-to-peer
distributed cryptocurrency actually in use.

And yes, I did read it.

Step A is realizing that the political processes aren't working, and Step B is
figuring out a way to make them work. Step B is not throwing up your hands and
quitting.

~~~
patio11
Mike Hearn has been doing all the quite politicking, technical writing, code
prototyping, message board and mailing list discussion, and etc that you would
expect a mature OSS project to require to do a technically contentious change.
He lost the argument, decisively, but not for lack of trying reasonable steps.
This is not Step A nor Step B. This is not even Step F ("fork the codebase and
network with the idea of forcing Bitcoin Core to accept a new ground truth"),
which he and collaborators tried unsuccessfully. Quitting is Step Q.

It may be helpful in evaluating the above to note that I'm an open and
notorious critic of Bitcoin and believe efforts to save it are poorly advised,
but I'll happily function as a world-readable notary to say "Yep he really did
try doing that; I watched it happen."

~~~
Aqueous
Either way it will be left to people other than Hearn to decide. I admire
Hearn for his very many hours spent on this seemingly intractable problem, and
I understand his frustration. I just think it's premature to declare this
undertaking a failure.

XT may still be the go-to option when scale and transaction bandwidth actually
starts being an existential problem.

You'll find that people rarely react as urgently as they need to until the
problem starts making their wallet lighter. But for the last year Bitcoin has
increased both in popularity and price. And even at their slowest, _actual
settlement times of transferring monetary value_ on the BitCoin network are
still lifetimes faster than clearances on ACH or other traditional financial
networks, which means Bitcoin still has a competitive advantage over the
traditional financial system. When that competitive advantage starts going
away, I have an intuition that the block size will suddenly increase. I don't
know for sure, but I have a feeling.

~~~
teacup50
Given that XT was met with outright censorship, DDoS attacks, and other
unethical and criminal behavior, I don't see what else you'd expect him to do.

~~~
Aqueous
And yet I can still go to Bitcoin XT repository, download it and run it if I
wish:
[https://github.com/bitcoinxt/bitcoinxt](https://github.com/bitcoinxt/bitcoinxt)

That's the genius of it all. Even the governing body doesn't prevent people
from running the existing patches. As soon as the impasse becomes an
existential threat, we already have a solution, and anyone who wants to run it
can run it. Downloading and running the new Bitcoin is kind of like voting.

~~~
bronson
If you want to be DDOSed, sure.

------
jhulla
Great summary of the current state of bitcoin.

In the conclusion he states: "<i>Even if a new team was built to replace
Bitcoin Core, the problem of mining power being concentrated behind the Great
Firewall would remain.</i>"

Bitcoin's decentralized nature encourages power pool formation by promoting
economies of scale. It is not surprising that like the production of
electronics, clothing, toys, etc. the lowest cost center is in China.

~~~
pmorici
I think he is kind of burying the lead here. The major development in Bitcoin
in the past week is that several crucial players came together to form Bitcoin
Classic.[0]

They have the trifecta of a majority of mining power, two of the largest
exchanges, and several key developers on board. More importantly the miners
supporting the project are in agreement on increasing the block size. It goes
a long way to addressing most of the things Mike brings up in this post.

Mike's done a lot of Bitocin particularly by bringing to light the issues with
Bitcoin core. At the same time this post strikes me as alarmist. It seems more
like a rationalization of his decision than anything else.

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

~~~
mike_hearn
Thanks for reading the article. I mentioned Classic briefly at the end. I did
not dwell on it because it is simply repeating the same process as XT went
through.

When we were preparing for XT, we also went and talked to the Chinese miners.
They told us that the original 20mb limit Gavin proposed was too high, but
that they could accept 8mb. So we compromised and went with 8 + a growth
function. Then after XT was launched they changed their mind and said any
growth after 8 at all was totally unacceptable. Now they're telling the
Classic guys that 2 is the most they could handle. Did the Chinese internet
border really get 4x worse in the span of 3 months? I doubt it.

Western miners aren't much better. One told me quite clearly they'd start
voting for BIP101 back in November (though: voting in such a way that it
wouldn't actually activate!). But they didn't. When I followed up, they again
said it was on their todo list and they'd start really soon. But they didn't.

The miners have proven over and over again that what they say they will accept
and what they actually do accept is not aligned. So right now I'm seeing some
excitement (maybe more like desperate hope) that Bitcoin Classic will solve
anything. Maybe now the "Scaling Bitcoin" conferences have come and gone and
Core's reputation is much worse, they'll have better luck, but even then the
_best case scenario_ is that Bitcoin gets a 2mb limit. That isn't nearly
enough and big backlogs will still occur.

More to the point, even in the best case scenario, the community will
essentially accept that Bitcoin is controlled by the Chinese government and
grows or shrinks at their whim.

~~~
Andrew_Quentin
To be fair, 8mb and 8mb doubling every two years are two very different
things. I understand why 8mb with doubling was offered, but I also understand
why the chinese miners expressed their concerns, concerns which you were
unwilling to address.

I supported BIP101, but your unwillingness to compromise - they offered 4mb
doubling every 4 years I believe - played a great part in it's eventual
failure.

The situation now is very much different with almost 100% of miners saying
they will support 2mb and some 50% already supporting bitcoin classic with
more to come.

So, I share your concerns, but unfortunately mistakes were made, some of them
grave mistakes, mistakes from which we learned, and are thus now well placed
to move forward.

------
namecast
Mike's resolution was apparently to join up with a consortium of banks back in
November:

[http://bravenewcoin.com/news/30-top-banks-and-mike-hearn-
hav...](http://bravenewcoin.com/news/30-top-banks-and-mike-hearn-have-now-
joined-r3-global-consortium/)

Read the article, he was clearly laying the groundwork for this move back in
Thanksgiving.

“The current Bitcoin system, I mean the system we actually use today with the
block chain, isn't going to change the world at all due to the 1mb limit. … So
if I have a choice between helping the existing financial system build
something better than what they have today that resembles Bitcoin, or helping
the Bitcoin community build something worse than what they have today that
resembles banking, then I may as well go where the users are and work with the
banks."

~~~
btown
Whether or not Mike might profit from Bitcoin failing (in favor of the
alternate cryptocurrencies he works with), the picture he paints is one of
inherent instability, mismanagement, and censorship, and it seems like a solid
argument. I'm skeptical of where his money comes from, and I don't think he's
unbiased enough that I would short BTC just on this article alone. But I'm
certainly less bullish on its future than I was.

~~~
zongitsrinzler
Which alternate cryptocurrencies is he working with?

~~~
btown
See link in the GP:

"The use cases they are looking at and requirements they have cannot be met
with the Bitcoin protocol, it just doesn't have the things they need. They are
actually spending a lot more time looking at Ethereum than Bitcoin, as it's
more obvious how to apply it to their use cases."

~~~
zongitsrinzler
Thanks!

------
chippy
What I take from this (and I think I really should invest my own time in
researching more on) is psychology.

People want to protect their investments. But because we are talking about
money, don't confuse this for meaning that the investments are just about
money.

Investments in code contributions, investments in all the articles read,
investments in community, friends, social networking, investments in belief
systems, investment in the justification for choosing one thing rather than
another.

It's simply not consistent to say "oh you only have 20BTC, so you've nothing
to lose" or "oh, you made no code contributions, so why are you complaining"
as both ignore the potential for massive psychological and personal
investments.

All these investments act as a barrier to change. It hurts, it hurts
physically to lose big investments.

There is a cost benefit analysis that humans perform internally. Is the hurt
of losing this investment now worse than the pain by keeping the investment
later.

If we go back to the article, we see Mike repeatedly tell us that Bitcoin is
an experiment. He is saying to us now "look, don't invest your time, effort
and money into it" \- and he is telling himself "I have made the change, I
have accepted a loss by investing so much of my time and effort into this, and
am moving on".

------
kiwidrew
I have always felt that Bitcoin was doomed to this sort of fate, for the
simple fact that the "specification" for the Bitcoin protocol was "whatever
Satoshi's client does". The community repeatedly failed to encourage a
diversity of implementations, and as a result they effectively ceded control
of Bitcoin to the maintainers of the one and only implementation.

By the time independent implementations did begin to develop, it was too late
to introduce diversity into the ecosystem.

The result is what we are now seeing.

~~~
someguydave
>for the simple fact that the "specification" for the Bitcoin protocol was
"whatever Satoshi's client does"

Fully agreed. The largest failure of the so-called "developers" (pretenders
after Satoshi) of Bitcoin have failed to concentrate their efforts on
understanding and specifying Satoshi's code.

The original Satoshi bitcoin implementation is a mess of Boost-y C++ that was
clearly written by a bright guy who was steeped in mediocre C++ programming
(probably on Windows). Studying the code and writing a proper specification is
job number one. Adding random new features onto Bitcoin without first
understanding the codebase is simply juvenile.

------
jegoodwin3
So this is a political problem -- here's my prediction of what will happen
(given that we live in the real, political, world).

A political entity -- not necessary a sovereign government, but perhaps a bank
or financial institution -- will offer a currency swap to existing blockchain
holders to adopt _their_ crypto currency. The inducement will be a limited
time window to put in your claim, with all unclaimed but mined numbers going
to the financial entity to reward their followers or stakeholders.

In the real world, this is called escheat and it is a power of the crown.
Bitcoin is essentially a system for recording deeds to digital land. They
aren't making more numbers, so the problem is the political resolution of
competing claims to the same resource. This sort of claim comes, in the end,
to a network consensus of who is the sovereign.

~~~
patio11
Ethereum is one prominent example of this: we'll swap currency on your
blockchain for currency on our blockchain, ours will totally be worth more due
to enhanced features.

 _They aren 't making more numbers_

"We can conveniently restrict the supply of numbers" is one of the fundamental
failures of the imagination among Bitcoin enthusiasts. "There's only 21
million. Trust us. We counted." "But couldn't I make a new 21 million with a
one character code change?" "Well yeah but they'd be so much less cool than
our 21 million and you'd have to convince people to use them." "But wouldn't I
be able to use the Satoshi adoption strategy -- give them away for cheap to
bootstrap a distributed boiler room then gradually make them more expensive,
enriching early participants in the scheme at the expense of later
participants?" "But that's crazy, it will never work. Nobody wants worthless
currency units tied to a transaction network that provides absolutely no
value. They want spendable money." "Of course people want worthless currency
units tied to a transaction network that provides absolutely no value, if they
have the expectation that they will not be the last people to want those
currency units. That describes why you invested in Bitcoin!"

~~~
Adlai
You can restrict the supply within a single system, and value follows the
network effect due to fear and greed.

[https://coinmarketcap.com/](https://coinmarketcap.com/) lists 650 alternate
value storages which take up 650 million dollars. Bitcoin alone takes six
_billion_.

------
bsder
The problem is incentivizing people to "mine". This effectively created a
pyramid scheme where the "first in" benefit from the "later in" spending
money.

Bitcoin will be more interesting to me once the mining pool is exhausted. At
that point, we'll see how much of Bitcoin's value is in _use_ instead of
_speculation_.

~~~
nickbauman
Having a limited supply of money encourages hoarding. Hoarding does not an
economy make. Bitcoin would fail there too.

~~~
someguydave
So an economy requires money in unlimited supply? That seems like dubious
sophistry.

~~~
Udik
I'm not an economist, but I suppose that yes, in a sense it's true. An economy
requires the value of money to be stable or very slowly decreasing in time. To
obtain this, the amount of money in circulation must roughly match the amount
of wealth. Since wealth is usually increasing, so has to be the total amount
of money for its value to remain stable.

~~~
someguydave
It just strikes me as silly that an economy "requires" an infinite supply of
money. I realize this is a commonly held belief, but I think it is wrong.

~~~
hderms
If you want an economy that encourages investment and trade then you want
people to have some inherent motivation to spend money rather than hold on to
it. The easiest way to do this is by introducing small amounts of inflation.
At the very least we know that more people are being produced in the world,
and people desire money, so merely by the practice of reproduction we are
creating more demand for the same amount of money over time.

~~~
someguydave
It's a nice story, but it's unconvincing. I would agree that a fixed supply of
money might become more valuable as human population increases.

But I'm utterly unconvinced that 'prices can only increase' for the economy to
work. For example, in electronics prices for hardware have generally fallen in
nominal and real terms and yet it's still a pretty big industry.

~~~
Udik
"Nice story": it's not like I'm making up stories to convince people.

Think of a house: would you buy one if you knew that just by waiting a year
its price would be 80% of what it is now? And the year after 65%? You'd
probably just wait. If you waited long enough, you could buy one for,
literally, today's peanuts.

Electronics sounds like a good counterexample, but electronics are also
developing at extremely high speed. The price of a given device decreases very
rapidly in time, but new more powerful devices come on the market every day.
Sure, you could have waited five years to buy an iPhone 1, but that piece of
electronics is now almost worthless compared to the other options you have on
the market.

------
nickbauman
The folly of BitCoin is to believe that technical problems are somehow
orthogonal to social problems. They never are. And never has this been more
true in the history of our species than with the technology of money. Money is
an artifact of the state; always has been, always will.

~~~
snitko
_> Money is an artifact of the state; always has been always will._

Nothing can be further from the truth. You don't have to go too far for the
example. Cigarettes in prisons are used as money. People use all sorts of
things as money. State wants to control it because it wants to collect some of
the value produced by other people. That is all. Bitcoin is about not giving
states these powers.

~~~
lingben
> Cigarettes in prisons are used as money.

No. That's barter. Money has very specific characteristics. Cigarettes in
prison fail these three: divisibility, durability and uniformity.

[https://www.stlouisfed.org/education/economic-lowdown-
podcas...](https://www.stlouisfed.org/education/economic-lowdown-podcast-
series/episode-9-functions-of-money)

~~~
geomark
Cigarettes have all those properties, just somewhat imperfectly. Cartons are
divisble to packs which are divisible to individual cigarettes. Cigarettes are
pretty durable - if you don't get them wet and avoid breaking them they have a
reasonably long shelf life. And they are pretty uniform in each division -
carton, pack, cigarette. Since prisons allow prisoners to smoke cigarettes
they have the cover of utility while being used as money.

------
magicmu
I love this summary, it really touches on all the core issues. However, even
though bitcoin has such severe flaws, I think that cryptocurrency in general
is still really promising. I've been particularly excited about ethereum for
the past two years or so, and progress on that project definitely seems to be
happened (although it's not a currency per se). The concept of the block chain
still has massive potential.

~~~
TD-Linux
Indeed, it seems really early to throw away blockchains because one change to
the consensus rules for the Bitcoin blockchain ended up not being popular.
There's still tons of other unexplored space on the Bitcoin chain itself, not
even counting altcoins - there's a lot of flexibility with Bitcoin script, and
new opcodes are being added (OP_CLTV got turned on very recently).

Some of these allow you to develop altcoins that are backed by Bitcoin, called
sidechains (see Elements Alpha for an example [1]). There's other clever ways
to use the scripting system to do fancy things that could help lower the cost
of transactions, like the Lightning network [2].

[1]
[https://github.com/ElementsProject/elements](https://github.com/ElementsProject/elements)

[2] [http://lightning.network/](http://lightning.network/)

~~~
magicmu
I've never seen Elements Alpha or heard of sidechains, that's a really
interesting project! Thanks for the link.

------
paulsutter
Its no surprise that mining power is concentrated[1]. Activities across
populations tend to have a power law distribution[2]

[1] [https://www.blocktrail.com/BTC](https://www.blocktrail.com/BTC) (scroll
to "Pool Distribution", today more than half the mining capacity is in two
pools)

[2] [https://en.wikipedia.org/wiki/Rank-
size_distribution](https://en.wikipedia.org/wiki/Rank-size_distribution):

"The rank-size rule (or law), describes the remarkable regularity in many
phenomena, including the distribution of city sizes, the sizes of businesses,
the sizes of particles (such as sand), the lengths of rivers, the frequencies
of word usage, and wealth among individuals. All are real-world observations
that follow power laws"

~~~
swehner
People breathe, people have shoes, people have cars, people have toothbrushes,
people have phones, people have email addresses, people work, ... must be
something else.

------
sail
This may be naive but why can't Bitcoin fork? Forks historically produced
better results.

Why would switching to a cryptocurrency that is better designed be a bad
thing?

~~~
zanny
Bitcoin did fork. That is what Bitcoin XT was. Every major operator of Bitcoin
XT nodes got systemically DDoSed, including Coinbase, until participation died
down. There are concerted efforts to prevent blocksize expansion.

Additionally, admins at most major bitcoin news sites censored or banned users
discussing it.

Switching to another cryptocurrency is a whole different can of worms -
remember, btc right now costs around $420 a coin, and all that value is
because of the total sum of people invested in it. No other cryptocurrency has
anything close to the btc market cap, so capital fleeing the bitcoin
blockchain may not trust alternative ones that are much smaller. The problem
with bitcoin _right now_ is that mining power is majority controlled by a very
small group of people, and any other competitive cryptocurrency is much more
at risk for whales taking control.

~~~
chii
> mining power is majority controlled by a very small group of people

what can change to make this better? Because it seems the root of the problem
is that some small group of people managed to amass a large amount of
hardware.

~~~
zanny
A large part of the problem is again a flaw in bitcoin itself. SHA256 mining
is extremely GPU unfriendly by design, whereas most other cryptocurrencies use
scrypt which is much more applicable to the GPU model. As a result, ASIC
hardware to do SHA hashes to compute blocks in bitcoin became by far the most
efficient hardware to mine bitcoin, but because it is custom it requires a ton
of money to fabricate. So you see hundred million dollar mining operations
emerge because only they can afford the fab run on a custom PCB to do SHA256
hashes.

In theory, Litecoin would not have the same pandemic ASIC runaway market
control problem. GPUs would still moderately competitive, and act as a
counterbalance that normal users have available to them to mine. There would
_be_ custom scrypt hardware, certainly, but it would most likely not have the
insane performance advantage over general purpose computers that SHA
algorithms have.p

To fix bitcoin itself, you need to commoditize the hashing hardware used by
the best in the industry. If everyone had access to the ASIC's bitfury were
using at reasonable prices normal people could afford, people could distribute
the mining more, but as it is most of these vendors are using in house
solutions that dramatically outperform off the shelf bitcoin mining hardware.

------
tptacek
This is Mike Hearn.

[http://plan99.net/~mike/](http://plan99.net/~mike/)

------
brownbat
What if the pro-fork community wanted to buy their way to the raised
thresholds?

So we're at what, 0.9 Exahash?[1]

Say you want to force the change. You'd need to add three times that, or 2.7
EHash/s.[1]

Let's say you buy a ton of AntMiners to cover that, at 3.3 GHash/s/$.[2]

So that's a paltry, what... $820 Million?

Less if you just buy the factory in Shenzhen.

Basically just one winning Powerball ticket though.

[1] [http://bitcoin.sipa.be/](http://bitcoin.sipa.be/)

[2]
[https://en.bitcoin.it/wiki/Mining_hardware_comparison#cite_n...](https://en.bitcoin.it/wiki/Mining_hardware_comparison#cite_note-
AntMinerS5Plus-7)

Caveat emptor: my ability to eyeball math in the peta-exa-yotta range is
spotty at best. These results may be off by a factor of... any factor.

~~~
TD-Linux
You can't actually just buy your way to the raised thresholds. Blocks greater
than 1MB are invalid according to the current Bitcoin Core consensus rules,
and will be rejected.

~~~
brownbat
You mean they'll be rejected by the minority of miners who voted no?

Because if so, it sounds like you can buy your way to raised thresholds.

EDIT:

Oh, I see... Can you really call it a main branch if you just added all the
capacity that is immediately forked? Or is it really just an independent
unrelated project at that point?

Let me lay those semantic issues to rest by noting that my original post was
not in any way a serious proposal. I was just thinking through the
implications of a few individuals with fiat over the voting.

~~~
TD-Linux
Yeah, the questions in regard to post-hardfork haven't been definitively
answered yet because Bitcoin has never intentionally hardforked before. It has
done once in the past due to a software error [1], and it was nearly a
disaster but luckily all the right people were online and quickly decided
which fork to keep.

[1]
[https://github.com/bitcoin/bips/blob/master/bip-0050.mediawi...](https://github.com/bitcoin/bips/blob/master/bip-0050.mediawiki)

------
wmf
Related NY Times article:
[https://news.ycombinator.com/item?id=10904397](https://news.ycombinator.com/item?id=10904397)

~~~
dang
Since we probably shouldn't have two articles about this on the front page,
and the current one is the original source, I guess we'll treat the NYT piece
as the dupe.

(We plan to build something to aggregate URLs so this will become less of an
issue.)

------
msvan
Look at the people who derive their influence from the Bitcoin ecosystem. Do
you agree with their views? Do you find them generally friendly? Are you happy
giving them more power by buying Bitcoin? This was what made me stay out of
Bitcoin.

~~~
vanattab
I am confused as to what you are referring to? I am not deeply involved with
Bitcoin and I don't live in the valley so maybe I am missing something. The
only real view I have noticed people universally share in the bitcoin scene
seems to be the need for a decentralize currency. Can you elaborate?

------
puranjay
Bitcoin was always going to fail because even as a technically competent guy,
I could never understand, nor be bothered to understand how the damn thing
worked.

There was no way in hell a normal, non-tech guy could ever understand it
enough to use it everyday.

This was a case of tech folks missing the woods for the trees. Even this
article will go way over the heads of 99% of people on the planet.

Why would you go through all that pain when cash is everywhere, easy to
access, and easy to understand?

~~~
rmchugh
I have to admit, even as a technically competent guy with secondary school
economics and a lifelong interest in economics, I have a hard time
understanding the monetary system. I don't think people not understanding
things fully is an adequate explanation for failure. As Milton Friedman is
said to have said, "nobody knows how to make a pencil". Nobody fully
understands any system they use, the world is just too complex for that. All
they really need to know is how to use a system to get the results they want.
By this measure, government issued money is very easy.

~~~
puranjay
The problem is that we use the monetary system right from childhood. We are
born in it. There's no need to learn it at all.

Asking someone in their 20s or 30s to learn a completely new monetary system,
one built on things as "obscure" (to the lay person) as bits and bytes - well,
that's asking a bit too much.

The current monetary system might be confusing if you dig in, but its
implementation is ridiculously simple.

~~~
TazeTSchnitzel
It's not simple. Everyday usage is to an extent, but the system is actually
very complicated.

The same can be said of Bitcoin though. Everyday usage is simple.

------
pbreit
If bitcoin is such a disaster why is BTC price holding firm or even
increasing?

~~~
imaginenore
Because it's not. Most commenters here forget that bitcoin is not a fixed
thing. It evolves. It forks.

All kinds of famous/important people predict Bitcoin's death every week, but
it just keeps going.

~~~
polemic
Bitcoin forking is generally considered an Extremely Bad Thing To Happen.

~~~
stale2002
It has happened before with emergency fixes....

------
ComNik
Just when I was halfway through explaining byzantine fault tolerance to my
dad.

------
kelvin0
If I were so inclined, I would infer that sabotage is taking place. Taken from
the sabotage expert's manual (page 6):

"Simple sabotage is more than malicious mischlef,and it should always consist
,of acts whose results will be detrimental to the materials and man- power or
the enemy"

[https://www.cia.gov/news-information/featured-story-
archive/...](https://www.cia.gov/news-information/featured-story-
archive/2012-featured-story-archive/CleanedUOSSSimpleSabotage_sm.pdf)

------
foota
Disclaimer: I know very little about the bitcoin community.

It seems like the quotation, "One of the great things about Bitcoin is its
lack of democracy" is grossly out of context. In the original comment, by the
person that @octskyward is talking about, it seems to be referring to the fact
that it is not a majority rules democracy.

edit: grammar

~~~
ebbv
What other kind of democracy is there? If there's a binary decision to be made
(i.e. increase the block chain or not) anything other than majority rules
fails to resolve the issue.

~~~
foota
I suppose what I meant is this, when someone is quoted as saying something is
"not a democracy" most people read it (or at least what I first read it as
was) as meaning it is an autocracy, whereas the point that theymos (referred
to as the person that @octskyward was talking about in my parent post) was
making is that anyone can do something if they want, even if it goes against
the majority.

------
Siecje
> Allowed buyers to take back payments they’d made after walking out of shops,
> by simply pressing a button (if you aren’t aware of this “feature” that’s
> because Bitcoin was only just changed to allow it

What "feature" was recently added? This has always been a problem with BTC.

~~~
patio11
Replace by fee. Zero-confirmation transactions have always been insecure;
replace-by-fee is essentially Firesheep for this vulnerability -- it puts a
friendly UI on it and drops the technical acumen required from "substantial --
you probably have to write your own complicated C++ code" to "you have to be
willing to lie; that's it."

(Replace by fee in a nutshell: All Bitcoin transactions are unstable for a
period of time, generally believed to be "approximately 60 minutes."
Exploiting this instability to retroactively invalidate a transaction was
possible but beyond the ken of casual attackers. Replace by fee lets you
reverse any transaction you made younger than N minutes by simply saying "I'm
willing to outbid the fee I offered on that transaction. The new transaction
does this new thing, for example replacing the $100 transaction 'pay from my
left pocket to restaurant for dinner' into 'pay from my left pocket to my
right pocket.'")

~~~
Siecje
Wasn't this always the case? The higher miner tip would get picked up.

~~~
hawkice
Not really, it used to be that they would just pick the first non-conflicting
transaction they saw, although iirc that wasn't a "rule of the protocol" so
much as how-the-software-worked.

------
Lazare
Fascinating. I don't even _like_ Bitcoin, and this managed to make me feel
kind of sad.

------
oafitupa
> Still, all is not yet lost. Despite everything that has happened, in the
> past few weeks more members of the community have started picking things up
> from where I am putting them down. Where making an alternative to Core was
> once seen as renegade, there are now two more forks vying for attention
> (Bitcoin Classic and Bitcoin Unlimited). So far they’ve hit the same
> problems as XT but it’s possible a fresh set of faces could find a way to
> make progress.

------
xg15
I have no experience with Bitcoin or its community - so apologies if the
following is naive - but some parts of this article make no sense for me.

For events to have taken place like described in the article, several parties
would have been required to work together with the common goal of keeping the
blocksize restriction in place:

The Chinese miners who hold the majority of the hashing power, the developers
of Bitcoin Core, the admins of bitcoin.org and the as of now unidentified
operators of the DDOS attacks.

If you assume it's not a conspiracy, then each party must have reasons why
such a decision would be desirable. But as the author describes it, there are
no reasons. This goal wouldn't just push Bitcoin into a questionable
direction, it would be downright suicidal: Over time, Bitcoin would become
unusable for any kind of transaction. Not even the greedy miners could want a
cryptocurrency that no one uses.

So I think there has to be some upside to the blocksize restriction. If anyone
has more info on that, I'd be happy to know.

------
zekevermillion
The network is being used to capacity and fees are being determined by a
market, which values capacity at an increasing premium! What a failure!
(sarcasm intended)

Hearn's post may be technically accurate in terms of the data he's collected.
But the conclusions he draws are not correct. Usually in any entrepreneurial
project, the fact that the service is over-subscribed and increasingly
valuable is a sign of success. If one views bitcoin as an open-source project
which should have some ideal technical implementation, then yes Hearn has
failed to convince everyone to run his preferred implementation of bitcoin, or
to agree on exclusively running a different protocol that is not bitcoin while
calling it bitcoin.

There is plenty of room for Hearn to run a bitcoinXT altcoin. The only failure
here is one of logic, forced by the concept that there can be only one
successful network based on nakamoto consensus protocol, and that that network
must either be bitcoin or a replacement bitcoin which supplants the original.

------
tim333
I think the doom a gloom is overdone because the "handful of guys sitting on a
single stage" who control 95% of hashing power have a massive incentive not to
destroy their main asset.

------
mirimir
OK, if Bitcoin has just about failed, what's the best alternative
cryptocurrency?

~~~
TazeTSchnitzel
In all seriousness? Dogecoin. It's a joke currency, but that's precisely why
it's good. It has an inflationary economic model (so slightly more practical
than Bitcoin) and people don't take it too seriously.

~~~
mirimir
OK, so I meant "best" in the sense of likely to become widely accepted, at
least online. Do any VPN services or VPS hosters accept Dogecoin?

------
nodamage
I am curious if the DDoS attacks mentioned in the article are in any way
correlated to Linode's recent downtime
([https://news.ycombinator.com/item?id=10806686](https://news.ycombinator.com/item?id=10806686)).
The timing fits...

------
andy_ppp
If true then I hope that the next XXXcoin cost of work function is more geared
toward something inherently useful like protein folding or a more general
purpose problem like simulating cell interactions?

------
LukeHoersten
Cross post from the NYT article comment:

In open source communities, impactful contributions yield influence. Here are
the top 100 bitcoin contributors:
[https://github.com/bitcoin/bitcoin/graphs/contributors](https://github.com/bitcoin/bitcoin/graphs/contributors)

Guys like Wladimir, Pieter, Gavin, Cory Fields, Gregory Maxwell and Luke Jr
have a voice because they’ve contributed many thousands of lines of code.
(Lines of code are only a proxy for impact).

You may have noticed Mike Hearn isn’t in the top 100 contributors list. He is
the primary author of the Java implementation of a bitcoin library:
[https://github.com/bitcoinj/bitcoinj](https://github.com/bitcoinj/bitcoinj)

He started it in 2011, definitely early. But a substantial amount of bitcoin
core work had already set the path. There are also similar implementations in
many different languages but they are not the primary reference implementation
for full nodes.

According to Hearn’s blog post: “I’ve talked about Bitcoin on Sky TV and BBC
News. I have been repeatedly cited by the Economist as a Bitcoin expert and
prominent developer. I have explained Bitcoin to the SEC, to bankers and to
ordinary people I met at cafes.”

Being cited by journalists is not the same as being a primary contributor.

The disagreement between Hearn and the other developers isn’t about whether to
increase capacity, it’s about _how_. Many of the primary full-node
contributors believe a hard-blockchain-fork is a risky approach. Lots of work
is being done to explore better options, like segregated witness
([http://gavinandresen.ninja/segregated-witness-is-
cool](http://gavinandresen.ninja/segregated-witness-is-cool)).

Mike Hearn tried to (very aggressively) push the idea of increasing the block
size with a hard fork. In fact the patch allows node operators to vote and 75%
adoption is needed. When it looked like that wasn’t going to pan out, he
created Bitcoin XT where “Decisions are made through agreement between Mike
and Gavin, with Mike making the final call if a serious dispute were to
arise.”

So the claim that Hearn not being able to take over decision making power for
the bitcoin community is evidence that bitcoin has failed seems to show
something slightly different. It shows that open source software methodology
of forking and adoption lets the best implementation win and prevents hostile
takeovers.

Mike Hearn is not as impactful to bitcoin development as he or recent news
would indicate. Mike leaving the bitcoin community has little impact on the
future success or failure of bitcoin.

~~~
anonx
> You may have noticed Mike Hearn isn’t in the top 100 contributors list.

I've also noticed, there are no any Satoshi Nakomotos in the list of
contributors. Does that mean he (Satoshi) was "not impactful to the
development"?

P.S.: I'm not following the Bitcoin news. Is Satoshi a nickname of one of
those top contributors or the initial author just didn't use version control
system? Or am I missing something?

~~~
LukeHoersten
Yeah I was using that as a transition to talk about Mike's other
contributions. His bitcoinj contributions are hundreds of thousands of lines.
Also I said "Lines of code are only a proxy for impact" and unfortunately
there's probably no realistic measure.

I'm not a bitcoind contributor and this is more of a generic observation about
how open source projects are controlled in general.

------
cookiecaper
Pretty good article, and a great overview of the blocksize controversy.

Also a great exhibit of some stereotypical programmer social problems; we
don't get a lot of middle ground, most programmers are either openly hostile
and combative _or_ so deathly afraid of confrontation and responsibility that
they give away their authority so that they don't have to handle the pressure.
Gavin should've kept control. Bitcoin is learning exactly why a strong central
authority is so desirable in money exchange: it keeps the value of the
currency stable by preventing panic and confusion over issues like this.

Many discussions of Bitcoin claim that this power is transferred to "the
network" to make the final decision, which sounds very egalitarian and
democratic, but Bitcoin failed to provide the controls that would prevent
power hoarding and ensure that the people who depend on bitcoin were fairly
represented. This is one reason why modern democracies are structured within
the framework of a republic. This is probably one of bitcon's hardest to solve
problems, since the hardware to get respectable hashrates is unobtainable for
quite literally everyone who doesn't have access to their own microfabrication
facilities. Even if one of the specialty bitcoin hardware makers had a really
good, cheap chip, why would they share it? They'd hoard all the hashpower for
themselves. Litecoin attempts to address this by hasing with scrypt, under the
belief that it's harder to hoard power with custom hardware if the algorithm
uses a lot of processing power _and_ memory instead of just a lot of
processing power.

Mike failed to mention one incentive that exists to prevent increasing the
block size: miners get the transaction fees attached to each block they mine.
If the block size is large, there is little contention for space in the
blocks, and ergo there is not much reason to incentivize miners to include
_your_ transaction in the next block. By keeping the artificial constraint on
the block size, people who own a lot of hash power will be gaining a lot more
bitcoin for themselves.

I don't think this crisis is insurmountable. So much money has been sunk into
bitcoin that I can't believe people are just going to let this cabal take it
out. BitcoinXT will gain notoriety through the mainstream press and the
resultant sell off among casual investors will freak the big players out and
force them into running XT nodes.

~~~
MBCook
> Mike failed to mention one incentive that exists to prevent increasing the
> block size: miners get the transaction fees attached to each block they
> mine. If the block size is large, there is little contention for space in
> the blocks, and ergo there is not much reason to incentivize miners to
> include your transaction in the next block. By keeping the artificial
> constraint on the block size, people who own a lot of hash power will be
> gaining a lot more bitcoin

If the blocks are bigger, doesn't that mean they can hold more transactions
and thus get more fees total? Or are you assuming the relative scarcity of
transaction space would push fees high enough to overcome that?

~~~
cookiecaper
>are you assuming the relative scarcity of transaction space would push fees
high enough to overcome that?

Yes.

The blocks always contain approximately 10 minutes' worth of transactions
because the network periodically adjusts mining difficulty to approximate that
target.

Right now, the issue is that there are times when 10 minutes' worth of bitcoin
transactions are occupying more than 1MB of space in the completed blocks,
which means a processing backlog is formed. Miners prioritize transactions by
their attached transaction fee, since they get that fee if they find the
block. Thus, users are effectively placing a bid for the network hash power to
verify their transaction.

When a backlog forms, customers that want their transaction processed quickly
have to outbid others to get a miner to start working on it. If there's not a
backlog, their transaction will be included with only a token fee attached
because something is better than nothing. Going from 1MB to 8MB means that
bitcoin would need 8x more transaction volume per 10 minute block to get back
into a transaction backlog, which is the only time that users will attach a
meaningful transaction fee to their transactions.

So if the block size goes up from 1MB to 8MB today, there will still be a
block every ten minutes, but since transaction volume will presumably remain
nearly the same, space in each block won't be scarce and the bidding war won't
take off. It'd be a long time before we got back into the same predicament,
meaning miners would have to wait a lot longer to start collecting meaningful
transaction fees. That's why some people with heavy investments in mining want
to keep the block size artificially low: they're trying to instigate a bidding
war for their hash power.

It should be noted that this eventuality was always part of bitcoin's design.
Bitcoin is programmed to stop "minting" around 22 million coins. At that time,
the network will not issue any reward to the miners that find a block (the
reward will cut itself down until that number is reached, targeted for
approximately 2022 iirc). The solution to this has always been "users will
have to incentivize miners with transaction fees".

It's just that the assumption was always that we wouldn't have to deal with
that until the network itself stopped attaching rewards to mining. In
practice, however, we're in that situation now due to the artificial
constraint on the size of a block (which, afaik, is mostly accidental and was
never intended to be permanent). The debate is over whether bitcoin should
remove the artificial block size constraint and keep its fees negligibly low
or whether it should keep the constraint and "allow" miners to start charging
more for processing transactions.

------
Rauchg
"Why has the capacity limit not been raised? Because the block chain is
controlled by Chinese miners"

The author is complaining that Bitcoin is working exactly as designed.

From Satoshi's paper: "Proof-of-work is essentially one-CPU-one-vote. The
majority decision is represented by the longest chain, which has the greatest
proof-of-work effort invested in it."

If you want to raise the block size, out-vote the Chinese miners.

~~~
patio11
You cannot simply out-vote the Chinese miners on the issue of the so-called
protocol: you need to convince the Bitcoin "economic majority" to accept a
change to the codebase that everyone uses to verify the blockchain, otherwise
you're effectively mining a very expensive altcoin which no merchants or
exchanges accept. (An altcoin is a cryptocurrency that generally captures
every feature of Bitcoin except being called Bitcoin.)

The economic majority on Bitcoin has basically said "We're terrified of what
happens if we de-throne Bitcoin Core, which is the lineal descendant of the
Satoshi client. Accordingly, we'll go along with whatever that project
decides." The problems with Bitcoin Core's decisionmaking process are in the
post. Worth noting, since I don't recall seeing it: Bitcoin Core is operated
by "consensus" with respect to this issue and any of five devs can blackball a
change; three of the devs work for a company whose economic justification for
existing is "the Bitcoin network is inadequate to do the things that many
users want Bitcoin to do." Fixing Bitcoin Core would harm their economic
interests at the new company they founded.

Why be terrified of de-throning Bitcoin Core? Isn't it a protocol with
multiple competing implementations? NO, because the "Bitcoin protocol" does
not exist -- Bitcoin is a network of nodes running one C++ codebase _and that
is essentially the entire ballgame._ Bitcoin's requirement for distributed
consensus means that if you are not bug-for-bug compatible with Bitcoin Core,
which runs a supermajority of the network, you risk being catastrophically
forked from the network at any time of an attacker's choosing.

Also, the scenario where some economic players remain on Bitcoin Core and some
economic players migrate to Bitcoin Better, followed by a hard fork
(irreconcilable split of the blockchains regarded as authoritative by these
two incompatible software ecosystems), results in loss of the global non-
technical consensus in what a "Bitcoin" actually is. You'll find that your
"Bitcoins" might not be actually useable at a merchant who accepts "Bitcoins."
You might find a payment made to you in "Bitcoins", which your wallet says
happened, has not actually happened according to your payment processor. Cats
and dogs living together; catastrophe happens; the price of Bitcoin Core coins
and Bitcoin Better coins both approaches the natural value of Bitcoin, which
is zero.

~~~
Rauchg
> otherwise you're effectively mining a very expensive altcoin which no
> merchants or exchanges accept.

This is not the case. You could run XT for example and remain compatible,
which was precisely its adoption strategy? It just simply did not reach
consensus (aka CPU power).

> By mining with Bitcoin XT you will produce blocks with a new version number.
> This indicates to the rest of the network that you support larger blocks.
> When 75% of the blocks are new-version blocks, a decision has been reached
> to start building larger blocks that will be rejected by Bitcoin Core nodes.

(from [https://bitcoinxt.software/](https://bitcoinxt.software/))

~~~
patio11
That's BitcoinXT's protocol, sure, but that isn't Bitcoin Core's "protocol",
so the powers that be can simply say "We do not accept your attempt to reject
our reality and substitute your own."

~~~
Rauchg
The powers that be are the CPUs. If XT had reached its goal of 75% mining
votes by versioning blocks, today it'd be what you call the "protocol".

~~~
rmc
But _who_ calls it the protocol? Let's pretend this fork happens. Someone goes
to bitcoin.org and download the software called bitcoin and runs it, and they
won't be using that protocol.

------
jMyles
It's been a good run with a lot of interesting observations. Upcoming
iterations will likely solve a lot of the (truly compelling) problems that
bitcoin failed to solve.

This "people problem," as Mike calls it, is undoubtedly a result of the
mechanics of the blockchain. Slightly different rules may lead to dramatically
different (and less insurmountable) people problems.

------
LifeQuestioner
"I have not failed. I've just found 10,000 ways that won't work."

\- Gotta say, even if bitcoin "fails" I don't feel it will be a "failure". The
community and people have learnt so much, I mean, Bitcoin became...big and
it's the first cryptocurrency to reach this level.

To have made a perfect system would be unrealistic really.

------
Procrastes
Bitcoin was always going to fail one way or the other. I expected it to be
power usage, but I should have anticipated bog-standard Open Source
infighting. I'm hoping the idea of a decentralized electronic ledger and
programmable currency doesn't die with it.

------
_superposition_
It's all fun, games, and ideology. That is, until money is involved. What a
shame.

------
caf
With the benefit of hindsight, perhaps what should have happened is that the
original 5 developers should have each maintained their own compatible fork of
the codebase, cross-sharing patches they agreed on.

~~~
MBCook
That's basically what the Bitcoin XT fork mentioned in the article is. The
developers who thought it was a good idea to increase the block size limit
increased it and released the client.

When enough people are using it it will end up being the official block chain
and the versions that don't support these larger blocks will filter away as
they become useless.

There are two problems with this approach. First, as mentioned in the article,
people applied outside pressure such as DDOSes to force people to not use the
alternate software.

Second is simple confidence. While the fork is an unsettled question you can
end up with two diverging blockchains. This makes it uncertain whether someone
has successfully made a payment or not, and introduces the possibility of
double spending. All that uncertainty is likely to hurt the adoption of
bitcoin, possibly causing irreparable damage to its reputation.

------
pc2g4d
I'm inclined to blame the author's negativity on his obvious conflict of
interest.

At least, my understanding is that he recently began working for a group that
competes with Bitcoin in trying to connect traditional banks and (non-Bitcoin)
blockchain technology. He has an incentive to scare people away from Bitcoin.

Not saying there are no scaling/social/whatever issues in Bitcoin. But the
author seems to be conflicted.

Disclaimer: I own a few Bitcoins, and thus hold the opposite conflict of
interest.

------
gesman
Linkbait-ish template of the article takes away from otherwise promising
technical content.

Typical template of building up hype linkbait case - start with a couple of
puffed up credentials, pose yourself like a well wishing visionary and then
shed few crocodile tears of sadness over "it failed" statements which of
course conveying an absolute truth.

Nothing helps to share links better than controversy.

------
dschiptsov
It is rather naive assumption that valuable assets (and bitcoin is a digital
asset, not digital currency) would not be seized by elites, because very
essence of elitism is the ability to sieze and control distribution of
valuable assets, be it Chinese govt or too big to fail US financial
institutions.

------
jokoon
I didn't really understand how the block size is an issue, and what could
happen if it was hit.

Although is it true that if there are 2 large network which are separated (by
the great firewall), does that mean the ledger could be split in 2 ?

------
essofluffy
Somewhat relatable article: [http://hardforkit.com/2016/01/12/Thoughts-On-How-
Bitcoin-Dev...](http://hardforkit.com/2016/01/12/Thoughts-On-How-Bitcoin-
Development-Is-Evolving.html)

------
lumberjack
Of all the Bitcoin people, Mike Hearn is the guy who is respect the most. He
is the only one who could see the picture objectively and not get carried away
by fanaticism. Even very early circa, 2010, he was always a voice of reason
amongst insanity.

------
iofj
Today we could redo bitcoin, as a centralized perfectly trustworthy system :

[https://en.wikipedia.org/wiki/Homomorphic_encryption#The_2nd...](https://en.wikipedia.org/wiki/Homomorphic_encryption#The_2nd_generation_of_homomorphic_cryptosystems)

Simply have 5 servers running that as a network server and you won't need
proof of work, nor will you need a blockchain. Homomorphically encrypt a basic
ledger with an encrypted backend, and throw away the key. Done/done.

One might say encrypting 52 integers in 36 hours is somewhat less than
acceptable performance, but how does it really compare to bitcoin in total
effort ? This is certainly good enough that anyone with a decent pc could run
it. Hell, you might even reward them for running it just like bitcoin does.
And it ought to be a lot cheaper to run than bitcoin.

------
wedesoft
I wonder whether there could be a hierarchy of transactions (like credit
cards, banks, and cross-bank transactions). I.e. not requiring the entirety of
transactions to be present in the top blockchain.

------
nikolay
Bitcoin's potential got ruined by the Chinese speculators. In the West, on the
contrary, people oversold expectations. I really want back the slow, but
steady growth before the boom days!

------
LukeHoersten
In open source communities, impactful contributions yield influence. Here are
the top 100 bitcoin contributors:
[https://github.com/bitcoin/bitcoin/graphs/contributors](https://github.com/bitcoin/bitcoin/graphs/contributors)

Guys like Wladimir, Pieter, Gavin, Cory Fields, Gregory Maxwell and Luke Jr
have a voice because they’ve contributed many thousands of lines of code.
(Lines of code are only a proxy for impact).

You may have noticed Mike Hearn isn’t in the top 100 contributors list. He is
the primary author of the Java implementation of a bitcoin library:
[https://github.com/bitcoinj/bitcoinj](https://github.com/bitcoinj/bitcoinj)

He started it in 2011, definitely early. But a substantial amount of bitcoin
core work had already set the path. There are also similar implementations in
many different languages but they are not the primary reference implementation
for full nodes.

According to Hearn’s blog post: “I’ve talked about Bitcoin on Sky TV and BBC
News. I have been repeatedly cited by the Economist as a Bitcoin expert and
prominent developer. I have explained Bitcoin to the SEC, to bankers and to
ordinary people I met at cafes.”

Being cited by journalists is not the same as being a primary contributor.

The disagreement between Hearn and the other developers isn’t about whether to
increase capacity, it’s about _how_. Many of the primary full-node
contributors believe a hard-blockchain-fork is a risky approach. Lots of work
is being done to explore better options, like segregated witness
([http://gavinandresen.ninja/segregated-witness-is-
cool](http://gavinandresen.ninja/segregated-witness-is-cool)).

Mike Hearn tried to (very aggressively) push the idea of increasing the block
size with a hard fork. In fact the patch allows node operators to vote and 75%
adoption is needed. When it looked like that wasn’t going to pan out, he
created Bitcoin XT where “Decisions are made through agreement between Mike
and Gavin, with Mike making the final call if a serious dispute were to
arise.”

So the claim that Hearn not being able to take over decision making power for
the bitcoin community is evidence that bitcoin has failed seems to show
something slightly different. It shows that open source software methodology
of forking and adoption lets the best implementation win and prevents hostile
takeovers.

Mike Hearn is not as impactful to bitcoin development as he or recent news
would indicate. Mike leaving the bitcoin community has little impact on the
future success or failure of bitcoin.

~~~
makomk
To be clear, Mike Hearn's unilateral fork doesn't switch over to the new rules
when 75% adoption is achieved, or even when 75% of mining is done by
supporters - it switches when 75% of the last 1000 blocks indicate support,
which can quite easily happen with less than 75% support just by random
chance. This is an astonishingly aggressive threshold, and if he succeeded
it's almost certain that Bitcoin would fork into two different, conflicting
versions of the transaction history for a substantial length of time.

~~~
gus_massa
The random chance is very very low. For simplicity, let's say that 50% of the
hashing power agree and 50% of the hashing power disagree. Then the
probability of getting 750 blocks is 7*10^-59 (
[http://www.wolframalpha.com/input/?i=binomial+distribution+n...](http://www.wolframalpha.com/input/?i=binomial+distribution+n%3D1000%2C+p%3D0.5%2C+at+least+750+success)
) There are approximately 50000 blocks in a year, so the expected time is a
lot of millions of years.

This changes when most of the hash power agree. If the 74% agree then the
chances are 24% (
[http://www.wolframalpha.com/input/?i=binomial+distribution+n...](http://www.wolframalpha.com/input/?i=binomial+distribution+n%3D1000%2C+p%3D0.74%2C+at+least+750+success)
). The calculation is more complicated because the intervals may overlap, but
this would take less than a year.

So, when more than 70% of the hash power agree, it's time to upgrade, but 70%
is a clear majority.

(Just for curiosity: With 75% hash power you get a 52% chance. With 76% hash
power you get a 78% chance.)

~~~
someguydave
This calculation doesn't address the arbitrary nature of the threshold.

------
ss6754
What I don't understand is why hard fork is bad or why people oppose it? Isn't
competition a good thing?

~~~
kaonashi
Then it's no longer BTC, it's something else (completely separate networks).

~~~
ss6754
Yes-yes I understand that. There could be two networks: bitcoin and bitcoinxt.
And people could choose between the two. So why is that bad? I am asking
genuinely

~~~
kaonashi
There are tons of alt-coins. Am I missing something?

------
tempodox
I didn't trust BC as far as I could throw a truck. Good riddance.

------
afreak
This was posted in the duplicate thread:

================================================

There are three types of people who are into Bitcoin:

1\. People who are in it out of sheer curiosity.

2\. People who are in it to get rich quick.

3\. People who have been scammed into it.

The people who are in it out of curiosity are the people I don't take issue
with. At its beginnings, I found Bitcoin to be a curious thing because it was
a novel and new idea. However, as things progressed and I learnt more about
how it all worked, I saw it as a cumbersome idea that wouldn't effectively
replace anything and as a result now I'd rather make jokes about it than take
anything about it seriously. I've never spent more than $20 CAD on Bitcoin and
I have gotten it all back for that matter too.

People who get scammed into Bitcoin typically get scammed either one of two
ways: they're either being coerced into using it because they've gotten
something like malware on their machines (CryptoWall and its variants) or they
see it as an investment alternative. The only times I've ever seen non-
technical people experience Bitcoin is when I have to tell them that the
malware on their computers will only release their unbacked-up data requires a
payment using the cryptocurrency to get it all back. And that is really what a
non-technical person's experience with Bitcoin is going to be: it's a way to
pay thieves.

As for the get rich quick people, they tend to fall into the third category or
they themselves are scammers.

Right now there are two forces dominating the Bitcoin community: the miners
and those who are holding out on whatever magical unicorn rainbows makes the
coins have value. The miners don't want to see changes to the software because
it'll hurt their bottom line and the people holding and exchanging it want to
see these changes so they can benefit. So as a result, Bitcoin has entered a
war of attrition and is starting to show its problems. Mike Hearn's leaving is
definitely a consequence of this problem.

Earlier yesterday [1], I made a quip about how it's insulting to suggest that
we get those who are "unbanked" as a result of living at no-fixed-address (ie:
"homeless") should eventually move on to Bitcoin as an alternative to
mainstream financial institutions. It's really for the reasons that Hearn
made: would you want to wait a random period of time ranging from maybe a few
minutes to a few hours for your transaction to go through? It's already
insulting enough that they're living at the bottom of society, so why would we
want to get them to use a bottom-tier financial system? Why not instead
suggest making it easier for them to participate within mainstream banking
schemes?

I anticipate based on my last remarks that the responses to this post will
consist of feckless anecdotes and pointless accusations that I and others have
a "problem" with Bitcoin. I guess to a certain extent the statement of me
having a problem is true, but at the end of the day Hearn is right.

Bitcoin is a failure and if you invested into it then you're getting what you
deserve. If you think that it isn't a failure then you obviously didn't
comprehend Hearn's writing.

[1] -
[https://news.ycombinator.com/item?id=10898408](https://news.ycombinator.com/item?id=10898408)

~~~
CyberDildonics
What about the people who know just enough to be both sour and aggressively,
passionately wrong when they seek validation from other people about how
bitcoin 'has failed'.

Bitcoin is literally working right now. I order food with it, avoid currency
conversions with it, buy blankets with it...

When people say it has failed it is pretty obvious they have some sort of
emotional investment and are not objective.

~~~
cjslep
The Zimbabwe Dollar was literally working in the sense you mean it too. You
could buy goods like bread with trillions of it, etc. So I think a currency's
definition of success is more than that.

~~~
CyberDildonics
The Zimbabwe dollar was centrally controlled by a government which was
printing it as fast as they could, and it only worked under the most extreme
cases. Anyone holding any amount of dollar would see it's value destroyed by
the government who was in sole control.

In any event he said 'bitcoin has failed' which is ridiculous.

------
itistoday2
This is Mike Hearn.

[https://lobste.rs/s/82pz7r/curated_links_to_understand_dange...](https://lobste.rs/s/82pz7r/curated_links_to_understand_dangers_of_bitcoinxt)

~~~
tptacek
This a pretty rude comment. My comment didn't make an argument either way; it
just added some context to the thread. You're arguing so aggressively that
you've hijacked it in order to slam him.

Could you maybe delete that comment and make it a top-level comment instead?
Then I'll delete this one, and the thread will be cleaner.

------
llSourcell
please stop saying 'BitCoin'. It's Bitcoin.

~~~
dang
We detached this subthread from
[https://news.ycombinator.com/item?id=10906561](https://news.ycombinator.com/item?id=10906561)
and marked it off-topic.

------
mahouse
Just another reason to isolate our Internet from China.

~~~
bosdev
I don't think an isolated internet is the solution. That's what North Korea
has (to the extent they have internet), and it is a problem in every way. The
problem isn't really China, it's there are only a handful of people with the
keys to this castle.

~~~
wmf
An Internet for everyone except China and North Korea is hardly the same thing
as an Internet just for North Korea.

~~~
AnimalMuppet
Excluding North Korea is a bit different than excluding a sixth of the world
(China), though.

------
Teodolfo
I am shocked to hear that the techno-libertarian goldbuggery scheme didn't
work out well.

------
ilaksh
Need something like npm. Open semantic modules and you vote on modules with
your feet. Use something like web assembly (which is actually an abstract
syntax tree format) and you get support for many programming languages and
architectures.

------
cenal
I am not surprised to see this first attempt at radically changing how we
think of currency is having trouble. I'm surprised that the Winklevoss Twins
bought so heavily into it. Hopefully the investors in this industry can take
the reigns away from China.

[http://fortune.com/2015/10/05/gemini-winklevoss-
bitcoin/](http://fortune.com/2015/10/05/gemini-winklevoss-bitcoin/)

~~~
i336_
It's kinda sad, but it's gotten to the point that heavyweight players are
going to be needed to fix the problem.

I just really hope that the banks either don't figure out how to make
everything go in their favor, or that the hands they play work out for the
good of everyone.

------
api
It seems like powerful people in the ecosystem (Chinese miners?) _really_ do
not want the block size increased.

Why would this be? Are they hoping for increasing transaction fees and
therefore increasing mining profits?

In any case increasing the block size seems like a no brainer from a technical
point of view, at least if your interest is in Bitcoin itself and its growth
and future.

~~~
mahouse
Did you read the article? The author explicitly explains why Chinese miners
don't want the block size increased.

~~~
api
Must have missed that important point somehow. Will take another look.

Edit: oh, that. Not much of an explanation. I was asking if there is a deeper
underlying reason.

~~~
ch4ch4
Basically, the Chinese miners don't want to increase the blocksize because
they are very bandwidth-limited.

Larger blocks mean longer propagation time, during which time another pool
with more bandwidth could hash and propagate their own block, causing the
Chinese block to be orphaned.

------
jacques_chester
> _But Bitcoin Core is an open source project, not a company._

It has some of the shape of an unincorporated association, though. There's a
lot of caselaw dealing with disputes arising in those, usually from reluctant
courts that were dragged into particularly petty and poisonous disputes.

Given the amount of actual money involved, people might start asking courts to
settle some of these questions before too long.

(But don't ask me to do it, I'm not a lawyer and this isn't legal advice).

------
JulianMorrison
As an outsider, the only thing I can take from this is a certain sad feeling
that it's a demonstration of a pure wild west unregulated and uncontrolled
economy devolving into utter tyranny. You've got your oligarchs, your civil
war, your rent seeking, and maybe you'll end up in a year or two with an
outright winner. At which point that winner might as well cancel bitcoin,
declare themself king and issue a central coinage.

Well, that and "Bitcoin has become garbage, avoid at all costs".

