
The senatorial governance of Bitcoin: making (de)centralized money - cryptowizard
https://www.tandfonline.com/doi/abs/10.1080/03085147.2019.1678262
======
JohnJamesRambo
I still hope that they listen to reason and increase bitcoin’s ability to
scale. We are all held hostage by a tiny cabal of developers that think they
know what is best and want bitcoin to have a perversely small block size and
pitiful 7 transactions per second top speed.

~~~
sunshinerag
Lightning protocol addresses that. You can make millions of transactions per
second [1]. Quite a lot of crypto sites are already supporting it and wallet
support is increasing too [2].

[1] - [https://lightning.network](https://lightning.network)

[2] - [https://blog.bitrefill.com/top-11-lightning-network-
wallets-...](https://blog.bitrefill.com/top-11-lightning-network-wallets-
bitrefill-328b5465b1b4)

~~~
ac29
Why is an additional layer of complexity an improvement? Why not make bitcoin
blocks 10x larger and 10x more frequent?

The argument that "only large entities will be able to keep up with that"
doesn't really hold - thats the status quo already.

~~~
nullc
Why add TCP to IP or HTTP to TCP?

It's sound engineering. Like in other systems by composing layers you can
achieve the advantages of each component while addressing their costs, without
creating insurmountable complexity... "have your cake and eat it too".

Particularly, the central Bitcoin system is a global broadcast medium--
necessarily for its security. Global broadcast is inherently somewhat limited
in its scalability (though less than some assume). Other layers effectively
add "transaction switching" to Bitcoin, radically improving scalablity and
performance with their own costs which are good trade-offs for their
applications.

As far as the status quo of traditional finance... If you're happy with the
status quo! Use it!

(I'm going to assume you don't mean the status quo of Bitcoin--because
28kb/sec isn't something only large entities can keep up with, it adds up over
time-- but even cumulatively its managable)

You could recreate the status quo of centralized finance with Bitcoin, but it
wouldn't be obviously better: at least systems like visa and paypal are
purpose build to do what they do. Bitcoin takes on a lot of costs and
tradeoffs to achieve decenteralization.

Bitcoin was created to be money that existed above and outside of the
vulgarities of immediate human politics, just like how strong encryption made
it effectively impossible for some sysadmin to just read your files based on
some excuse.

I think having that option in the world is extraordinarily valuable.

~~~
lawn
It's laughably bad engineering to try to solve the scaling issue of the base
layer by adding another layer on top. It's like you'd try to solve a
throughput problem of IP by layering TCP or HTTP on top.

But this is the logic of one of the main devs who championed the "fee market"
idea of Bitcoin[0], that high fees are _required_ for Bitcoin to function. And
who in 2017 celebrated when fees were around $50.[1]

[1]: [https://medium.com/@johnblocke/the-fee-market-
myth-b9d189e45...](https://medium.com/@johnblocke/the-fee-market-
myth-b9d189e45096)

[0]: [https://lists.linuxfoundation.org/pipermail/bitcoin-
dev/2017...](https://lists.linuxfoundation.org/pipermail/bitcoin-
dev/2017-December/015455.html)

~~~
__s
2nd layer avoids bloating the ledger. Once limits of 2nd layer are being
explored, you can make adjustments to 1st layer with information about how
that'll improve 2nd layer throughput. This is like arguing that we shouldn't
have in-memory caches, we should just have faster disks

Fees prevent spam

~~~
lawn
Once limits of 1st layer are explored (the Bitcoin developers have never even
bothered to research where the limits are) you can augment it with 2nd layer
solutions. Both should of course be done simultaneously, and never focus on
one to the exclusion of the other.

Even the Lightning Network whitepaper states it needs much larger blocks, and
for it to work well you need to be able to settle quickly and cheaply on-
chain, which is not the case with full blocks.

~~~
vegarde
Let me get this clear: You want to WAIT until it's evident that we can't scale
anymore, and _then_ add 2nd layers?

And this, you want to do after significant adoption?

So, you are basically going to tell the Starbuckses and other large
corporations that have built a large infrastructure around onchain
transactions that they need to stop that, wait a few years until 2nd layers
are adopted, and then start using that?

~~~
lawn
I think you should re-read what I wrote:

> Both should of course be done simultaneously, and never focus on one to the
> exclusion of the other.

I have no issues with developing 2nd layers, but ignoring on-chain scaling and
not even looking at what can be achieved is beyond stupid.

In fact we know that moderate blocksize increases are safe (we can increase it
many times before block propagation time becomes an issue for example). Yet
we've thrown that out and placed our hope that 2nd layers will magically solve
this for us.

> So, you are basically going to tell the Starbuckses and other large
> corporations that have built a large infrastructure around onchain
> transactions that they need to stop that, wait a few years until 2nd layers
> are adopted, and then start using that?

No, that's exactly what has happened to Bitcoin, and what the Bitcoin
developers have been saying the last few years. It's what I'm saying is so
stupid.

The Lightning Network has been "ready in 18 months" the last 4 years. And it's
still not ready.

~~~
DSingularity
Are knobs for scaling the primary network already well understood? They are
limited. Block size and block frequency. So shouldn’t we delay irreversible
changes to primary layer until we understand the additional capacity and knobs
of second layer solution?

~~~
zhoujianfu
No.

------
eordano
The article is fairly low-quality. It's more focused on fear-mongering around
the perils of machine-judges and trying to make a headline around "if there's
someone with commit power then in the end, it's not a decentralized system".

It makes a number of errors, most notably, calling the hashing power spent on
securing the network "donations" (quotation marks sic).

Bitcoin has one job: securing the network of transactions.

Bitcoin is a mechanism to aggregate hashing power in order to make it possible
to semi-objectively measure the risk of a block being reverted, in fact, this
is the only formula in bitcoin's white-paper.

The paper examines a system of economic incentives, and somehow dismiss its
key activity as an altruistic "donation". The article goes downhill from this
statement onwards, and I couldn't feel like it makes a huge (yet ineffective)
effort of deconstructing Bitcoin's governance model.

Some quotes that reinforce the superficial understanding of the Author:

 _> There are times, however, when two miners can find the correct nonce for a
new block within a few seconds of each other and both broadcast their valid
block of transactions (nigh on) simultaneously to the network. This causes a
split, or fork, where miners go ‘rushing off’ to mine on top of two competing
blocks. Because this form of divergence is endemic to the blockchain’s
mechanics it is referred to here as a systematic fork; the discrepancy should
be quickly resolved by network mechanisms (this happens, on average, two or
three times a week). Systematic forks are temporary glitches..._

These forks are essential to maintaining decentralization as a mechanism to
make the network secure: trust the info, not the people that delivered the
data, trust the signing mechanism (hash power spent), not the people running
the machines.

 _> Furthermore, the political strategy of a user activated soft fork still
requires code developers to create a client that reflects the political will
of the market and thus demands the obligatory passage point of a Lead
Developer found in version control systems._

Not true -- the UASF measures were not merged into the Bitcoin Core branch.
Some code was merged to protect users from potentially problematic
interactions with Bitcoin Cash fork.

Modeling Bitcoin's governance system is a daunting task. The author
essentially confuses the power developers have with regards to miners:
developers know there are things that would never fly with miners, and miners
are way more powerful than what is described in the paper.

------
DennisP
By way of comparison, here's an interesting recent article on Ethereum's
development model: [https://www.coindesk.com/ethereums-bazaar-development-
model-...](https://www.coindesk.com/ethereums-bazaar-development-model-will-
pay-off-in-2020)

------
tharne
Are people really trying to re-ignite the blocksize debate in the HN comments
section? This battle was waged, every conceivable argument on both sides was
made. Small blocks with lightning to scale won, and the big blockers forked
into arguably less successful coins like Bitcoin Cash and Bitcoin SV. Time for
everyone to move on.

~~~
nighthawk24
"Small blocks with lightning to scale won" Nope, LN is not P2P Electronic
Cash.

Bitcoin Core protocol kept the Bitcoin branding and continues censorship.

Bitcoin Cash protocol is being actively developed and has a scaling roadmap
[https://www.bitcoincash.org/roadmap.html](https://www.bitcoincash.org/roadmap.html)

Bitcoin SV was another centralized attack(from nChain+CSW) on BCH.

While both BTC & BSV are centrally developed and managed, BCH has
decentralized development with multiple implementations. Bitcoin has a long
journey ahead, we are still handing out large miner rewards, we can check back
in 3 more halvings by 2028 and see how things unfold.

------
Empact
Not having read the article but having participated in Bitcoin "production" a
decent amount[1], I see a lot in common between Bitcoin and the organization
of the intentionally non-hierarchical Quakers.

Quakers, despite being religiously-motivated to pursue non-hierarchical
expression[2], necessarily adopt organizational structure: committees, clerks
of committees, group decision-making about who will take certain roles, i.e.
"meetings for worship with attention to business." There is some natural and
arguably necessary inclination toward roles and authority for the sake of
organizational clarity and efficiency.

What it does not have is empowered leaders with explicit authority, rather
positions are cast as being in service of one another, in organizing groups of
effort rather than controlling the outcome of the group, and thus tend toward
eliciting the active participation of all. Care and attention are taken to
minimize the gravitation toward arbitrary and unaccountable authority.

Bitcoin takes a similar approach - necessary roles expressed in service of one
another / the general effort, with attention toward guarding against arbitrary
or negative expression.

The other side of this relates to thought leadership - in some sense speakers
naturally have authority via the Pareto Principle's natural tendency to
distribute virtues unequally. However, by embracing a consensus-oriented
development practice, the general perspectives are a check against individual
mistakes or abuses by those empowered by position or circumstance.

I think maintaining the balance between the gravity of centralization vs the
beauty and safety of decentralization requires a continuous effort.
Thankfully, it is not solely up to the developers to ensure this - developers,
node operators, and miners can each and all be active by refusing to upgrade
or otherwise by forking the codebase. I would say that's the key ultimate
check against the centralization, that every individual has the ability to
vote with their node / personal activity. I'll be curious to hear if the
article addressed any of that.

[1]
[https://github.com/bitcoin/bitcoin/commits?author=Empact](https://github.com/bitcoin/bitcoin/commits?author=Empact)

[2]
[https://en.wikipedia.org/wiki/Testimony_of_equality](https://en.wikipedia.org/wiki/Testimony_of_equality)

------
wbazant
Exchanges trade both in Bitcoin and BitcoinCash, and I've just learned from
the paper that they form a tree with a common origin. Does it mean that if I
owned Bitcoin before the Bitcoin-BitcoinCash split, I can now spend it on both
chains?

~~~
polyomino
yes, but be aware, bcash is plagued with scammers, so as a precaution you
should move your coins on bitcoin to another wallet before attempting to use a
bcash wallet which could steal your bitcoin private keys.

~~~
ddtaylor
My understanding is that "bcash" is used as a slanderous term between the two
camps struggling for power. This comment seems to be attempting to spread
fear, uncertainty and doubt. As far as I am aware there is no evidence that
shows Bitcoin Cash clients are attempting to "steal your bitcoin private
keys".

~~~
shawabawa3
when the fork happened there were indeed scam sites that asked you to "paste
your private key to see if you have BCH"

There were also replay attacks possible, so that if you paid some BCH to
someone they could replay the transaction to get the corresponding BTC as well

Neither of these are a concern anymore AFAIK (the first one never really was,
never give away your private key)

And yes, "bcash" has a negative connotation.

~~~
lawn
You confuse it with other forks, for example in Bitcoin Gold key stealing was
very prevalent. It wasn't a big problem for Bitcoin Cash. Bitcoin Cash also
had replay protection from the start.

------
stephanlivera
Commenters will be interested in my interview with Bitcoin Core developer
James O'Beirne on the real nature of 'power' in Bitcoin. See here:
[https://stephanlivera.com/episode/66/](https://stephanlivera.com/episode/66/)

------
seibelj
There is both an overt development bureaucracy of Bitcoin and a shadow group.
The overt effort is managed by MIT
[https://dci.mit.edu/](https://dci.mit.edu/) MIT developers have merge access
to the Bitcoin official repo, which is truly the real power.

The shadow is who influences these people, and why. It really isn't
conspiratorial - it's the long tail of influencers, media, meet-up groups,
conventions, exchanges, and people who have a stake in Bitcoin.

Anytime there is a major disagreement, there is a fork. This is how numerous
forks were created, the biggest of which are Bitcoin Cash, which later itself
forked into Bitcoin Cash SV. A fork is just a group of developers who disagree
with the official Bitcoin bureaucracy at MIT. If these dissenters have enough
support then the new coin has value.

Bitcoin is old and stable, and through its age and stability it has gained
trust. Major changes to Bitcoin simply won't happen anymore. The Lightning
Network required very minor changes to the core protocol, and using Bitcoin's
constrained tooling developers have (heroically!) engineered a scaling
mechanism. It is not yet perfect nor easy to use, but over time the client
services around it will improve.

The extreme wariness of core Bitcoin developers ensures that trust is
maintained in the protocol. A major disaster in Bitcoin would be very bad for
the whole industry.

If you don't like Bitcoin, just create your own coin, or fork from Bitcoin!
Such is how so many new coins are made.

~~~
nullc
I don't believe any active Bitcoin developers work for MIT anymore. Bitcoin
development is almost entirely done in the public (obviously security issues
are handled in private), not really much place for any kind of 'shadow'.

I don't think meetups/conventions have much role in Bitcoin development
either. I stopped going to them entirely because every event is reliably taken
over by ICO/altcoin pumpers-- groups who stand to gain a lot by expanding
their audience and are willing to pay to send representatives to events.

------
moneytide1
Once all 21 million coins are "produced" \- what powered hardware will be
required to manage transactions?

~~~
jwilliams
The same hardware. Miners get both a reward for mining (the fixed set of
coins) as well as collecting fees. After they’re all mined, it’ll just be the
fees.

~~~
httpz
But after all the blocks are mined, how does the blockchain even work?

~~~
theboywho
Every time a block is mined, miners are paid in transaction fees + newly
generated coins. After 21 million coins have been generated, miners will only
be rewarded transaction fees => it doesn't mean blocks will stop being mined;
blocks will keep being mined, but without generating new coins out of nowhere.

~~~
forgotmypw
How is the amount of a transaction fee determined?

~~~
alasano
Every block has a limited amount of space for transactions (1 MB previously, 4
and up to 8 technically with segregated witness?) , the person mining the
block includes transactions based on fees provided by users initiating the
transaction.

If there are tons of people looking to make transactions, fees go up or down
based on people's willingness to pay to be included in the next block.

~~~
lawn
In practice Segwit only increases the blocksize to 1.4 MB for normal
transactions and theoretically to 4 MB, but then blocks are filled with
special kinds of transactions people don't really use.

It also doesn't really increase the blocksize, but move some data outside of
the blocksize calculation to make room for more transactions. The important
difference is that Segwit is opt-in and depend on usage for it's effect, while
a blocksize increase would immediately increase transaction throughput to its
full capacity.

------
thacypha
[https://coingeek.com/spam-transactions-in-bitcoin-are-an-
oxy...](https://coingeek.com/spam-transactions-in-bitcoin-are-an-oxymoron/)

~~~
thacypha
small blockers are crazy!

------
rolltiide
are there any recommendations in this paper? Many times with cryptocurrency
projects I've found it easier to get anonymous contributions added or
considered more heavily compared to having a known persona, since the
gatekeepers are not impartial and more often very emotionally driven

------
robcohen
Hopefully some of the PoS coins can help with this, we’ll see.

~~~
cryptowizard
Possibly. But you still need a Lead Developer to sign off on decision making.
And high net worth individuals will have consolidated voting rights on those
decisions. Perhaps if PoS is mixed with other development models?

------
Razengan
Crazy idea:

1: Create a globally-sanctioned Internet Currency

2: Allow people to convert any currency to IC

3: Make internet access free for and available to everyone worldwide

4: Charge IC for access to websites and services like Facebook, Amazon, Steam
etc.

------
aazaa
The article is behind a paywall, but it's essentially a revisionist account of
the block size debate of 2017.

This account seems pretty biased to me. For example, it not only gives short
shrift to the user activated soft fork (USAF), but gets the basic facts wrong
(page 15):

> User activated soft forks require a large amount of coordination,
> particularly from industry. ...

This is absurd. UASF was supported by far fewer companies than those
supporting Segwit2x.

A UASF is a declaration that nodes controlled by a group of users will reject
generated blocks failing to conform to certain specifications. In the case of
the 2017 incident, the specification was that the block must signal support
for segwit, thus ensuring its activation.

> ... The cohesive demand for a node-initiated upgrade of network rules
> gathers momentum around Bitcoin meet-up groups, forums, blog posts, social
> networks, conferences and company board rooms. With regard to SegWit, this
> momentum led to the ‘New York Agreement’ in 2017.

The New York Agreement led to the ill-fated and incompetently executed
Segwit2x proposal, not the UASF. The author _could_ have discussed that
initiative in detail but didn't. In short, the (single) developer was
incompetent and the update didn't even activate properly.

------
wmf
Note to commenters: In this context "Bitcoin production" is not mining;
they're talking about the development of the protocol being centralized.

~~~
wayoutthere
This is exactly why decentralized currency is no better than regular currency.
Bitcoin is centralized in the hands of a few shady, anonymous exchange owners
funding the development.

At least in a capitalist democracy we get to elect the criminals who rob us
blind.

~~~
staplers
Actually the federal reserve is a partially private institution whose head is
selected by the president. The common folk never make that decision.

~~~
6510
We still get the pitch forks.

~~~
bredren
I believe the pitch forks are to not hold any bitcoin, and not accept Bitcoin.

Whereas, you do not have much of an option except to accept your national
currency.

------
6510
The proof of work isn't actual work.

~~~
once_inc
no, it is merely the proof of having done that work. Hence, the name.

~~~
6510
"activity involving mental or physical effort done in order to achieve a
purpose or result."

I get it, I have to work to make money while others mine virtual coins. It's a
great deal for them is it not? It's just a power grab. I'm sure the people who
use to have the exclusive right to print the money are very upset.
Centralization of mining and decision making is just another power grab.

I get it, I should shut up and get back to work.

------
cryptowizard
If you have access to university libraries this academic article describes how
Bitcoin production operates through centralized control points

~~~
gl00pp
Enlighten the graduates.

How is BTC centralized.

I'm waiting.

~~~
cryptowizard
Bitcoin decision making is channeled down a funnel: Core Developers make
suggestions and the Lead Developer (and those given commit access) sign off on
those decisions. Those decisions are then voted for by miners who are
(relatively) centralised in that roughly 5 mining pool companies control the
vast majority of hashing power used to vote on those decisions. Meanwhile
large wallet/exchange companies who control vast amounts of on-chain
transactions can lobby miners to pick certain decisions by upgrading their
nodes to reflect new rules (miners will want to follow large companies because
they create liquidity for coins with the new rules and so they can sell their
coins more easily and, theoretically, for a higher value). So while this is
still a decentralised systems because multiple parties have a say, there are
still lots of points of centralised control in the governance system. In other
words, not everyone is equal. "Individual developers submit to those with
commit access, individual miners submit to mining pool operators, and everyday
users submit to Bitcoin companies" (478). The Lead Developer acts as a
centralised decision maker, mining pools act like centralised voters, and
Bitcoin companies act like centralised lobbyers. So there is a certain
structure to Bitcoin governance.

~~~
nullc
This is not an accurate model of how bitcoin works. :(

Not at all.

~~~
cryptowizard
Can you explain what's wrong with it?

~~~
nullc
It's difficult to do an analysis of a paper I cannot access, so my response
was related to your description.

I talk some about why people who write Bitcoin software don't control anything
this post:
[https://news.ycombinator.com/item?id=21978934](https://news.ycombinator.com/item?id=21978934)

~~~
parkinspace
Hi Greg, I'd be happy to send you a copy and would appreciate your input. My
email can be found on my staff profile:
[https://www.westernsydney.edu.au/ics/people/adjunct_research...](https://www.westernsydney.edu.au/ics/people/adjunct_researchers/dr_jack_parkin)

------
nytf3
tezos is attempting to solve this by incorporating on-chain governance - its
dPoS and has a code deployment mechanism with a long voting process
(multimonth). They have done 2? upgrades now and quorum seems to be ok so
hopefully they can keep up voting %

i still think the nano (formerly raiblocks) approach is cool - it scales by
running parallel blockchains - each wallet is its own chain. tx's between
chains are voted on weighted by % stake - dpos without lockups or slashing.
this way its not a competition for space in a single ledger, its competition
for voting bandwidth on the worst marginal node. a better tradeoff imho.
downsides: the ledger also grows larger quicker than btc (because theres no
7tps limit so you can spam it)

no voting rewards or inflation - theres no on chain incentives for voting at
all, but exchanges/pos need to run full nodes to validate ledger anyway and
voting is trivial bandwidth. its elegant and the security model works but its
hard to tell people about without coming across as a fanatic.

~~~
koonsolo
Because nano has free transactions, a big concern was indeed spamming the
network because transanctions are free (as in you pay no nano). But since each
wallet has to calculate their own blockchain, the prosessing power is purely
on the client side and so not free in that sense, which limits the spamming to
the processing power you have.

~~~
tromp
Recent spamming [1][2] has seen nano ledger size balloon by nearly 50%,
negatively affecting full node Initial Block Download times as well as archive
node disk space requirements. The PoW requirements go up with network
congestion, but at this rate of 5-8 tps are quite minimal.

[1] [https://nano-faucet.org/stats/](https://nano-faucet.org/stats/)

[2] [https://nanocean.org/](https://nanocean.org/) (Click on Live Stream)

------
treelovinhippie
Also centralized: one global ledger with one global consensus mechanism.

Switch to Holochain.

------
BigBubbler
I see this thread is full of false claims about how BTC-Bitcoin is still a
real Bitcoin and will be able to scale to fulfill it's original intended use
case (peer-to-peer electronic cash for the world's people). I explain in this
opinion piece how such dishonesty is used to fool people into continuing to
support the captured, centralized and intentionally broken Bitcoin (BTC).

[https://read.cash/@Big-Bubbler/the-troll-army-still-cant-
sto...](https://read.cash/@Big-Bubbler/the-troll-army-still-cant-stop-magic-
internet-money-c5ad0453)

------
EGreg
Well, all projects can be changed by humans.

However, the problem with Bitcoin is that it's built on a monolithic
blockchain, so it's _actually_ got a bottleneck. The miner _is_ the
bottleneck. Every transaction in the world must be sent to every potential
miner, making it even more inefficient.

In most other distributed systems, when you increase the number of computers,
the amount of transactions the system can handle increases. Not so with these
monolithic blockchains.

Ethereum has the same problem. Vitalik even admitted it this year:
[https://community.intercoin.org/t/vitalik-scalability-is-
a-b...](https://community.intercoin.org/t/vitalik-scalability-is-a-big-
bottleneck/772)

We need systems that are sharded from day 1, such as MaidSAFE and Holochain.
"Embarrassingly Parallel" systems!

~~~
hanniabu
Considering the other comment here about Holochain I feel like this whole
comment was just meant to be an incognito way to shill Holochain.

~~~
neffy
Quite possibly, but they are also quite correct - you cannot scale a full mesh
network to anything remotely resembling the capacity required, it has to be
some kind of sharded, p2p topology.

At which point, and the irony here is quite profound I agree, you are starting
to look at something that looks a lot like the existing banking system.

~~~
EGreg
Yeah we need to have massively parallel systems, but that doesn’t necessarily
mean what they have for banking and centralized databases... there are a lot
of innovations that have happened since the introduction of Bitcoin. I could
show you the actual whitepaper and link you to the pages describing the major
design breakthroughs in simple terms but I won’t because that would apparently
be shilling my project (Intercoin, not Holochain). Just take my word for it
... there is a lot that is far beyond blockchain.

