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Well, that's a remarkably uninformative announcement. Here's an attempt at a neutral tl;dr from a Bitcoin amateur.

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

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

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

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

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




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

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


A counter-argument is that the Lightening work is a proprietary development outside of bitcoin core (lead by Blockstream) and the work is even patent-encumbered.

They state the ip is for defensive purposes only - however that is questionable given that anything they implement, automatically becomes prior-art. It is also contrary to the spirit and practice of the majority of crypto/alt projects.

It is unreasonable to attack miners for having interests, without disclosing that other interests may benefit from the current levels of network congestion that a skeptic would say are caused by having artificially small blocks.


There's nothing proprietary about Lightening Network. Lightning network was started by a startup, who published the paper, there are several open source implementations of it, and to my knowledge there's no actual involvement of Blockstream. Blockstream has their own solution (that doesn't need segwit right now) called Liquid.

Liquid Network and Lightening Network are different things and work in a different ways. A new version of liquid that uses some of he lightening technology enabled by segwit is probably in Blockstreams plans... but there are multiple competing open source implementations of Lightening Network being worked on.

Please link to the patents on the lightening network. I don't think you can.

There is no current network congestion. Free transactions are clearing after awhile and very low fee transactions are clearing right away.

All of the congestion of the past 3 months was from a spam campaign being run by the people who claim "bitcoin doesn't scale without larger blocks" ignoring that Segwit increases block size AND increases efficiency in using that capacity.


I referred to Blockstream and this is their patent front announcement,

> Today we are excited to announce some important steps we are taking on the patent front, why these defensive steps are necessary, and our hope that others will see merit in our approach and follow our lead.

...

> Our Patent Pledge assures developers and users of our technology that we will not sue them for patent infringement, provided they comply with the terms and conditions of our pledge...

https://blockstream.com/2016/07/19/blockstream-defensive-pat...

Edit: Here is a discussion of Blockstream's patent application for side car design,

> The application, submitted on 9th May and published earlier this week, outlines “systems and methods...for transferring an asset from a parent chain to a sidechain”.

http://www.coindesk.com/bitcoin-blockstream-patent-sidechain...

Here is blockstream talking about Lightening,

> Blockstream’s work on the Lightning protocol began two years ago with the intention of enabling new applications and developing new use cases that could help further the adoption of Bitcoin and related technologies

https://blockstream.com/2015/09/01/lightning-network.html

Also presumably if segwit activates then Liquid is no longer needed?

Edit: The relationship between Blockstream and Lightning is underscored, by the fact that the largest contributor to the specification is a Blockstream employee (Rustee Russell),

https://github.com/lightningnetwork/lightning-rfc/graphs/con...


It is worth mentioning that the EFF endorsed Blockstream and this sort of "defensive patent" https://www.eff.org/deeplinks/2016/07/blockstream-commits-pa...


> proprietary development

No, it is not only open source but a healthy mailing list with a lot of interested parties.

> lead by Blockstream

No, Poon and Dryja are not employed by the company Blockstream. The latter seems to be more focused on their sidechain solutions.

> the work is even patent-encumbered

No, there is nothing to suggest this. Patents have to be public at some point.


The 'lightning network' has been one of the promised solutions 'coming soon' for many years now. Except, no-one has solved all its problems yet. There remain difficult issues to do with routing of transactions, and some horrible money-losing behaviour if users don't stay online to protect their channels from being looted. On top of that, there's not enough space on the blockchain to allow everyone to open & close a payment channel anyway.


If Bitcoin took (likely more than) ten years to get to the state where we are now, it's likely that second layer solutions such as Lightning are not developed overnight.


They've been in development for a couple years now.


There are already working implementations of lightning on litecoin which can route transactions.

lighting is designed to be able to farm out channel enforcement to other nodes on the network to prevent cheating while preserving privacy.

lighting does require more block space to operate globally than is available. It still scales better than bitcoin though.


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


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

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

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


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

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


If you don't change the rate of block creation - then the rate of blockchain growth is proportional to the block size. If you increase blocks - then the blockchain will grow faster. This is kind of obvious.

But yeah - the size of the blocks does depend on the number and size of transactions and if you don't have transactions to fill up the block in full (i.e. so that its size is just under the maximal block size) - then the transactions will be the limiting factor.


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

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


Huh? That makes no sense at all.

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


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


There are easy ways to deal with block chain size, many of which are in use already.

The only proposals on the table for off chain storage add profiteering middle men to the system. I'd rather pay for storage.


> With a larger block it will outpace the storage advances and will not be downloadable for the average user, which means that only specifically equipped entities such as miners will be able to have a copy of it, and that is a big problem.

This is eventually going to be a problem sooner or later regardless. The fundamental decentralization of Bitcoin depends on everyone having the whole blockchain. Any sort of "checkpointing" mechanism inherently relies on trusting authoritative nodes about network state, at which point it's no longer decentralized.

(However this is somewhat of a distinction without a difference. In practice you are trusting the nodes on the network anyway - the network is authoritative because everyone agrees to treat it as authoritative. If everyone agrees to trust some other blockchain as "the real truth" then you can either accept the new authoritative network or be on your own chain that nobody else accepts - which is what happened to Ethereum after the DAO hack.)

This is a fundamental limit to the Bitcoin model and will have to be addressed sooner or later. The data is already past ~100 GB (and totally incompressible) and that's with blocks so small that the network is choking due to lack of capacity. This is only a few years' worth of records, what does the big picture look like in 20 years?

Segwit is absolutely mandatory to allow interfacing other chains in a secure manner. Pretty much everyone agrees transaction malleability is a huge design flaw (apart from some Chinese farms which are abusing it via AsicBoost).

What I specifically have a problem with is the way both sides have drawn arbitrary lines here. It's not SegWit or a larger block, we can have both. And in fact the Core proposal does include a larger block, on a surface level this dispute is over how much bigger it should be (the Unlimited devs want a much larger block right away). Again, pretty much everyone agrees that transaction malleability needs to be fixed except that group of miners.

On a deeper level it's about a power struggle between the Bitcoin Core devs and the Bitcoin Unlimited devs, and between the various factions of miners.


Well - increasing the block size is not costless - it is not just pushing the gas pedal a little more like in your example.


What is the cost? I would assume it is consolidation of mining power since larger block size makes it even less likely for smaller players to be able to verify new blocks in real time.

But isn't mining power already consolidated?


The cost is, with 8MB blocks, 95% of nodes that validate consensus will be excluded (unable to keep up or become too costly to run) within 6 months - as per BitFury's (heavily invested Bitcoin mining company) research on bigger blocks: http://bitfury.com/content/5-white-papers-research/block-siz...

Without full nodes validating consensus, miners can (will) force protocol changes (eg. change 21,000,000 coin limit) on users, effectively changing the decentralized leaderless attributes to a centralized dictatorial less-efficient PayPal. At this moment, bigger blocks mean a less-free (as in speech) bitcoin.


What's the cost? It was 36MB originally and it has been reduced to 1MB as a temporary measure to limit spam.


The cost is that larger blocks have difficulty crossing the great firewall of china and mining is already centralized there.

I have seen this myself with a production blockchain and blocks that were less than 1mb. Increasing the size increases this effect and gives Chinese miners and artificial advantage.

Plus there's no congestion on the network right now. There's not a scaling problem. It was spam.

Further, segwit increases block size and efficiency so there's no reason to not activate it.

This whole issue isn't about scale, core is still ahead of the curve on what's needed to scale, it's about control, and disabling ASICBOOST and keeping transaction fees high.


'The great firewall of china' isn't someone manually inspecting every byte that enters and leaves china, it can manage more than a 1mb transaction just fine. And, even if the delays were more than minuscule, how does it favour one side over the other? Both sides have the same delay.

Plus there's no congestion on the network right now. There's not a scaling problem. It was spam.

Woohoo! No need for anyone to do anything then. Remind me again why everyone is trying to scale bitcoin?


You don't even seem to understand what we are talking about (not 1mb transactions) and you're flat out wrong. I have direct experience with a p2p network that I have built, and the problems getting blocks between nodes on opposite sides of the "Great Firewall of China". Really any engineer with an understanding of that system and P2P networks should understand why.

Everyone is trying to scale bitcoin because bitcoin is growing dramatically... that doesn't mean that the "full blocks" and "high fees" we saw recently weren't due to spam.

Please logic.


> The cost is that larger blocks have difficulty crossing the great firewall of china and mining is already centralized there.

Ironically, this has actually become a real Byzantine Generals problem. Guess Bitcoin can't actually solve that problem in the real world.

From what I understand, China isn't too keen on the whole endeavor since it circumvents their (stringent) capital controls. What happens if they turn the baleful eye of their deep packet inspection onto the Bitcoin network? (serious question)

(Background for those who don't know: encryption/etc don't work against the Great Firewall, it knows what a given type of connection "looks like" in terms of packets/activity, so it can identify (eg) a VPN session even if it's "wrapped" or "tunneled" across some other protocol. They use a massive amount of machine learning hardware to profile connections in realtime to pick out "suspicious" activity and those connections will be dropped after a few moments. It's not impossible to run arbitrary connections through the firewall but it's very difficult and getting harder all the time.)


Pushing the gas peddle is not costless either. It costs gas.


This thread is about bitcoin, not ethereum.


No wei!


oi wei.

Gas can mean ETH gas, petrol gas, or gas gas.


I think the car analogy is not quite correct. A car is able to dynamically change its velocity, bitcoin can't easylie do that. It would be much better to find a genereal solution that fix that problem altogether, instead of finding a solution that works for the next few years and might require future forks.


There is rarely a silver bullet, and I don't see one in the case of Bitcoin. Even if lightning network (which is what everyone who does not see the need for a block-size increase points to) was available today, we would need larger blocks to reach VISA-scale. The responsible thing to do is to increase the blocks as early as possible while we still are in "beta".


The most compelling argument I know of against bigger blocks is that the big blockers have started putting Craig Wright (Nakamoto Dundee) forward as, like, any sort of expert.


>I can't believe how many otherwise intelligent people fail to see that this is desirable.

If there were no technical and economic tradeoffs to increasing the blocksize then yes, it would hard to see how otherwise intelligent people could oppose it. Everybody loves a free lunch. But there are tradeoffs, which you conveniently omit, which are giving those otherwise intelligent people pause, rightfully so.


If you believe that Bitcoin needs to scale up far beyond 10x the current size, then it's like driving your car at 10km/h per hour on the highway and refusing to increase your speed because you're trying to get to the moon and going faster in your car won't help in the least.


Can you not simply do a small math?

Currently at 160GB or something with 1MB block, what storage do you think a node will require with 10MB block in the next 5 years when the usage will be growing?


It seems to me that the otherwise-intelligent people are seeing the appropriate analogy as refusing to learn to run fast because they're trying to buy a car. Yes, most humans are capable of running faster and for longer distances than they currently can, with training. But training is a lot of work, and if your long-term goal is to go much faster than any human is known to be able to run, it's not clear that training is your best approach.


There are some new attempts being made without using a blockchain but still reaching the same level of consensus or finality. They are usually based on DAOs (directed acyclic graphs - not to be confused with The DAO Organization). A good introduction is this paper: Blockchain-Free Cryptocurrencies: A Framework for Truly Decentralised Fast Transactions - https://eprint.iacr.org/2016/871.pdf It was previously discussed on HN here: https://news.ycombinator.com/item?id=14730354


The acronym for directed acylic graphs is DAG, not DAO. That's also an incredibly vague thing to be "based on" and seems more like an appeal to "impressive technical sounding name that actually happens to be extremely trivial and something people learn about in a first year undergraduate mathematics course".


DAG and not DAO of course... The mathematical description is straightforward however the implementation (for example mining fee distribution) seems fairly complicated and loses a lot of the beauty of a blockchain. AFAIK Iota is the first serious attempt at running such a crypto currency.


The 7 TPS claim is an apples-to-oranges comparison.

You must remember that Bitcoin transactions are "settled" in that 7 TPS timescale, whereas VISA transactions are merely "recorded" in their 50K TPS rate.

In reality, it generally takes a minimum of 15 days for your VISA transaction to "settle" with your bank account. Thereby the true TPS rate is orders of magnitude lower for VISA.


The numbers are about throughput. Bitcoin has 7 TPS throughput and VISA has 50K TPS (peak) throughput.

With regard to latency bitcoin is still worse in practical applications - because VISA confirms a transaction immediately even if as you write it settles after 15 days - while bitcoin more or less settles after and an hour - but the first confirmation you get only after about 10 minutes.


So everyone quits making transactions for a week while Visa catches up? Or does there backlog increase indefinitely? OR do they have to settle at the same rate as record, just delayed? I'm guessing the last one...


A better question would be what 50K TPS means. Does it mean on average, or at peak, or etc.

Obviously in any case it will be faster than Bitcoin.


Bandwidth is not the same thing as latency.


You're comparing latency to throughput. Visa intentionally has slow latency, to reduce fraud, which is a major problem with Bitcoin. Visa has excellent throughput, beating the pants off of Bitcoin, which is another major problem with Bitcoin.


Even if you spread Visa's transactions evenly over time, the 100 billion transactions per year [1] that they perform would be a couple orders of magnitude higher than what bitcoin can support (~3000 TPS)

[1] https://usa.visa.com/dam/VCOM/download/corporate/media/visa-...


I think you mean to use a total transaction number for bitcoin, rather than a per-second number, to compare to Visa.

If we use the 7 TPS number that people seem to be using (even though the real number I think is slightly lower), then we end up with 220,752,000 transactions in a year; three orders of magnitude less than Visa.


If your mouth is sewn shut, it doesn't matter that much how fast you can digest food.


So how many transactions does each system fully settle in a month?


Well it takes a longer time to settle but the settledPerSecond is still 50k.

Bandwidth != Latency


I don't understand how you know it can't be fast.

I think proof of work mining is extremely wasteful. But once it is in place, you can sign a merkle tree of any size. You can add as many transactions as you want. The problem is that the ledger has to grow and grow. It would be nice if something was developed where you didn't need to keep the whole history.


The problem there is that Lightning Network is as yet vaporware.


While I agree that only increasing block size forever (or simply removing the size limit) doesn't seem reasonable in the long run, are we sure that segwit and the off-chain scaling solutions proposed today will really solve the long-term scaling issues of BTC?

All the practical "here's how lightning's going to work" papers I've read so far leave me very skeptical. Here's an example: http://diyhpl.us/wiki/transcripts/scalingbitcoin/hong-kong/o...

The Q-and-A at the end in particular is interesting:

>Q: On the last slide, one of the assumptions was 3 channels per person. Assuming payment channels wouldn't be useful for retail sales, because you don't want to buy a coffee just to open immediately. Is that correct?

>A: Joseph might expand on this. Let's say you buy a coffee. You're probably buying a coffee only once, right? Well, maybe the coffee is $5, and you put $50 into the channel and leave it open. Then someone else comes to the coffee shop and she does the same thing. But she has a channel with the grocery store. There's me, coffee shop, Alice, grocery store, they all have channels. When I go to the grocery store next time, I don't have to open a channel. Payments are routed.

>Q: It sounded like everybody would have to open new channels.

>A: I am guessing the mean is going to be 3, but it will probably be an exponential distribution. Most people will probably have 1 channel, and then some might have 100s of channels open.

I don't know about you but while on paper that might work I still see a lot of hand waving, guesswork and rather unsubstantiated assumptions. Why would I decide to "lock" $50 worth of Bitcoins when I buy a $5 coffee? What's the incentive for me to do this? Where does this estimate of 3 come from exactly, I see it repeated everywhere but I can't find the maths behind it?

Here's an interesting attempt at simulating a real-scale ligtning network (why aren't there more of these? Aren't we talking about a $40bn market cap currency here?): https://hackernoon.com/simulating-a-decentralized-lightning-...

The simulation is rather unrealistic and I'm not sure how to interpret its conclusions. It seems to kinda work but there are issues:

>133,401 micropayments were attempted and 3461 (2.6%) of these failed. For successful payments the median number of hops was 19 and the median total fees were 2 bits (0.000002 btc) or 32% of the value transferred.

Now it could be caused by a bad simulation rather than a real issue with Lightning network, but frankly I can't tell at this point.

I don't have a horse in this race but as seen from the outside it all looks a bit rushed and amateurish. I don't know the whole story though, maybe I'm just poorly informed.


The simulation starts with each user having 14 channels open - seems like quite a strong assumption for a serious test (starting with 0 channels for each user and then randomly opening new ones would be much more interesting). After a talk by one of the lightning devs I also got the impression that they are betting that several hubs with thousands of channels would quickly emerge - due to the fee gained by running a channel. Needless to say this would undo quite a bit of the decentralized nature of bitcoin.


the incentive is that after you lock $50 in Bitcoins you get to spend $50 eventually for the same transaction fee

so if the transaction fee is $0.50, you get to transact at 1% cost

if you paid $0.50 for each coffee it would be 10%


Seems like a good deal for the coffee shop (you don't have to pay for the Visa fee and you get some free customer retention on top of it all) but as a customer what do I gain from that, practically speaking? The only thing I can think of is low fees if I'm traveling abroad. But if the fees are really very low then your incentive becomes void, I won't bother putting $50 in the coffee shop if it only saves me $0.001 in fees.

Can you really imagine how this would work IRL?

"-Here you go sir, that'll be $32 please."

"-OK, I'm paying it Bitcoins... Oh, you don't have an open channel, I'm going to create one... Mmh, but how much to I put in? Let's say $100, I'll probably buy here again next week. But will that be enough? What if my total is just above that next time? I'll have to pay the fee twice. I guess I'll just make sure not to go over $100."

"-We also accept cash, Visa and MasterCard sir."

Again, maybe it can work, it just feels so "theoretical" so far, I haven't seen anybody paint a convincing picture of a what a "Bitcoin as Visa replacement" world would look like concretely.


You missed a really important feature of lightning. If you have a channel open with Starbucks, and Starbucks has a channel open to Wal-Mart, and Wal-Mart has a channel to $local_bank, which has a channel to $local_store, then you can use your Starbucks channel to pay $local_store.

It's much better than a Starbucks app.


Good point, but then again how this complex routing will be implemented in practice remains a bit foggy and highly experimental: http://bitfury.com/content/5-white-papers-research/whitepape...

And while this is an important feature of lighting, it's not actually a "feature" when compared to Visa or MasterCard and the centralized banking system from the point of view of the user. Ideally this should all be hidden away from the average customer.

People won't want to worry about graph theory when paying for a sandwich at a gas station. Existing payment solutions still wins hands down 99% of the time when it comes to convenience even if we imagine a "perfect" lightning network. I really have a hard time imagining what would drive a mainstream adoption of bitcoin over the current status-quo.


Users don't need to worry about routing when they connect to the internet, though in fact the computer is making 10+ hops for any given connection.

Lightning will work the same way. Nobody needs to worry about graph theory, they can just generally assume that the graph is fully connected, and that their software will be able to find a path from A to B.


The internet is not decentralized the way Bitcoin is. Actually I'd argue that the internet is more like the modern banking system: you have big corporations (ISPs, Google, Facebook, Netflix, Amazon...) interconnecting to provide a service to users in exchange for money. They have a vested interest in making sure the network actually works, at least for them. If you want to use the Visa payment system you need a bank account, if you want an internet connection you need an ISP. Bitcoin has nothing like that.

What will be bitcoin's "ISPs"? Who makes sure the graph remains connected and usable? Who invests in the "infrastructure", making sure channels remain well balanced? Some say that Lightning will be self-balancing through a clever set of incentives, but that's again extremely experimental and untested.

Also note the big "net neutrality" thing going on in the US right now. What will prevent big players from teaming up and interconnecting with each other to facilitate transactions while leaving out the rest?

I don't have the answers to any of these questions, maybe it's just FUD. I'm just surprised that bitcoin is a couple of weeks from making such a huge jump into the unknown. It's extremely interesting to be sure, but I feel like some people are going to get severely hurt if this whole thing comes crashing down.


>Bitcoin has nothing like that.

I don't see a reason that exchanges couldn't take on the role of ISP/bank in this situation. Essentially you have an account with 1500 BTC at an exchange, and you say that you want to put 500BTC into a lightning network. Then the bank centralizes itself in the lightning network graph by making connections with other large banks and some major companies.

Of course what we've just done is recreated the modern centralized payment processing scheme on top of the bitcoin network (ie. a mom and pop shop connects to square connects to BoA has my money which doesn't actually exist anywhere, and they make ledger changes and top up later).

You might even be able to make such a system work with no additional transaction fees. But I'm not sure of that.


>Users don't need to worry about routing when they connect to the internet

God I wish this was still true. The internet is so fragmented now I have to have IPs in different nations for a unified experience.


Why not just use Stellar or Ripple at this point? That's exactly what it was designed to solve. And it has the benefit of being able to use, you know, real currencies. So you can go to your coffee shop, instantly spend $5, and be done without having to worry about what the price of a bitcoin (or in this case, lumen) is.


Meanwhile in real world I already have a channel that's open to everyone.

It's called a credit/debit card.


More likely you just have 1BTC in an open connection to a company that specializes in strong connections to the LN, such as bitpay or coinbase.


> Can you really imagine how this would work IRL?

Yes. This is basically the exact user experience of the Starbucks app, and it's a fine experience.

You pre-pay an amount, have a balance open, transactions reduce that balance, and you occasionally need to reload your balance with another credit card transaction.

Which is to say I don't think this is an intractable problem if there is good software with good user experiences to help out.

All that said, I'm not current on the block-size vs SegWit debate, so my analogy could be flawed.


But Starbucks is the perfect use case for this Lightning scenario, it's a frequent purchase for a relatively small amount. Basically anywhere where a "voucher" system like this starbucks app exists lightning could probably fit with minor disturbance.

Now take amazon, take that small shop on the street where you go twice a year because it's super expensive but it's also opened very late, take your car mechanic, take that guy on ebay you're buying a pair of socks from, take that restaurant in Berlin during your vacation where you'll probably never go back. Will you be willing to "pledge" 10 times the amount while buying there? And if not won't the fee be dissuasive? What's in it for me?

And won't that create negative side effects for competition? For instance if a new coffee shop opens next to Starbucks with your system I have an incentive to keep going to Starbucks since it already has an open channel (exactly what the Starbucks app is about, except I'm paying for it, not Starbucks), so effectively it makes it harder for newcomers to compete. Same thing for, say, amazon vs. some random ebay seller. The more popular a shop, the more likely it'll be to have an open channel pending. Isn't that going against the "completely decentralized currency" ethos? What good is it that the currency is decentralized if I can effectively only use it with a limited number of companies?

It would be pretty amusing to me to see the cyberpunk libertarian cryptocurrency turn into a glorified Costco membership.


And if all my purchases are to unique vendors, I gain nothing?


I have been being told all along that the 7TPS limit is just an artificially-imposed limit and it's only there because the devs don't actually know what would happen if they (say) doubled it... was this a lie?


Surely Hacker News understands exponents enough to see that doubling the size does get us to Visa-like 50k transactions in only 16 doubles.


surely HN understands exponents enough to notice that 1MB * 2^16 = 64GigaBytes.


Yes. And how many applications actually have to store the block chain?


I am rather stunned that the entire global bitcoin network, with its colossal combined computing power, and staggering electricity consumption, is only capable of sustaining 7 tps.

The level of inefficiency here is mind-boggling. Surely this must be one of the least efficient, least environmentally-friendly computing ventures ever?


I can imagine a situation where the transactions are of such a big value that even the 7 transactions per second are enough to pay for the whole system sustenance. But yeah the system currently burns resources on a level comparable to gold mining (https://medium.com/@zby/proof-of-work-8d8265def194) - but it is much less useful than gold (for value store).


Forgive my ignorance, but hasn't the historical value store of bitcoin eclipsed that of gold?


Yes and no. 1 Bitcoin is worth more than an ounce of gold ($2340 Bitcoin to $1215 ounce of gold). But the value of all outstanding Bitcoin vs all mined gold is much lower ($39 billion all Bitcoin to $8 Trillion all gold).


What are you really asking about? What is historical value store of bitcoin? The value stored in bitcoin is still orders of magnitude less than that stored in gold.

Sure the exchange rate of bitcoin has grown much - but it does not make it better value store now, rather the opposite.


It is too early to judge. A good store of value probably shouldn't increase in value 3-10x each year. If I were to put $1000USD in gold today, I could be fairly sure that in 30 years it will still be worth, at least, $500USD. If I were to do the same with bitcoin, I have no idea what would even happen in 5 years.


This is only layer1 (like IP in the networking world). Wait until layer2 comes (Lightning Network, TumbleBit), then we will reach the scalability levels we need for the entire planet to use the same blockchain.


But, but, but...... IP is on Layer 3 ;.;

OSI Model: http://www.webopedia.com/quick_ref/OSI_Layers.asp


Err, each layer on top of IP slows down traffic, not speeds it up. The extra overhead and retransmits result in less useful data being transferred with each packet.

Perhaps not the best example to use.


Depends on what you mean by speed doesn't it? Segmentation via additional layers certainly speeds up the network as a whole. I thought the ability to scale via adding additional layers is why SDN took off.


The keyword is wait.

Waiting. Since 2011.


I'm also surprised to learn this, quite disappointed too.

It's weird because people will argue about how bitcoin is safe because you can trust it, but it seems it's safer to pay for a centralized service and trust such a service because it's administered by very competent people with a high level of scrutiny.

If you look globally, that would mean bitcoin is much, much more expensive. It is just some kind of cool toy for people who hate the federal reserve.


The colossal compute power goes up when more fiat enter the system and traders speculate the price up. It is a security mechanism, not a throughput mechanism


> colossal combined computing power

It's colossal because of the sliding difficulty. The block period is a big portion of why the transaction rate is what it is.


That's right, the reward for mining a block doesn't change just because you put more effort into it, and the difficulty adjusts to keep the rate approximately the same over time. The only reason it takes so much power to mine is there are so many people competing for the same limited prize.


> However, any changes require consensus from the miners who create Bitcoins and process transactions, and because it's not in their best incentive to do anything to reduce those transaction fees, no change has received majority consensus.

This is an unfortunate misunderstanding on the part of the miners, and the math is really simple: imagine a network on top of Bitcoin, e.g. lightning.network, which can process 10 million transactions off-chain and settle it on the Bitcoin blockchain using only a single transaction. Imagine if every one of those 10 million off-chain transactions paid just 0.01 cent in fees... this would earn the payment processor $1000, which can only be realized by publishing a Bitcoin transaction, in competition with everyone else making a lot on off-chain fees. The result is that off-chain profits (in the form of fees) would allow off-chain payment processors to pay huge blockchain fees, because they can deduce it from the profit they've made on off-chain fees. Nothing, in my opinion, will increase Bitcoin fees more than layer 2 protocols creating more users and transactions (because fees are paid per off-chain transaction).

The point some miners are missing is that one billion off-chain transactions each paying a 0.01 cent fee is more profitable than 2,000 on-chain transactions paying $1 each. And if everyone is able to earn $100,000 in fees by publishing a single Bitcoin transaction, this must push up Bitcoin fees, since people will be competing on getting into the chain with the bidding power from their earned profits.


I think what the miners are afraid of, is that the power of the bitcoin network, leaves their hands and fall into the hands of second layer operators. At the same time, a higher blockchain size would make it less profitable for small miners, to mine bitcoin. Bitfury recently released an analysis, that predicts that 95% of current miners, would find mining to be unprofitable at blocksize of 8MB. This would further centralize profits and power over the protocol, with the big datacenter miners.


> Bitfury recently released an analysis, that predicts that 95% of current miners, would find mining to be unprofitable at blocksize of 8MB.

I don't understand this. Due to what would 95% of current miners find mining unprofitable at 8MB blocks?


8mb blocks would mean that the bitcoin blockchain, would grow by 35 gigabyte a month. Compare this to the total blockchain size of about 120gb right now. This increases the cost of mining, by requiring miners to keep up on harddisk space. This cost can be amortized, as you can scale your processing independently of your harddisk space, making it even more profitable to mine for big investors, than smaller fish.


There's an old idea that solves the storage issue completely - utxo commitments.

Literally the only real throughput limit is end user's download bandwidth, which means 500MB blocks or so for 10Mbps download. Spv clients are fine for those unfortunate to have monthly limits.

>making it even more profitable to mine for big investors, than smaller fish.

Both storage and bandwidth are utterly insignificant cost items in a mining operation.


>This increases the cost of mining, by requiring miners to keep up on harddisk space

miners typically mine in pools. so they don't need to download the blockchain because the pool is doing it for them.


That's a much more informative post than the link, and yet, I still don't really understand all the jargon.

But it also reinforces for me just how not ready for primetime BTC is, and it makes me think the appreciation over the past year is truly insane.


Bitcoin doesn't need to be prime time at all. Almost no banking services, outside of checking accounts and index funds, are "ready for prime time" and yet banking services is a huge market.


Fair point, but that still leaves a burden of proof to show what niche Bitcoin fills and how much that should be worth. It has to become a major pillar of either consumer spending or the financial system to justify its value.

Don't get me wrong, I think the concept is brilliant. I just don't see how nearly 10x value was created in about a year.


I would guess that the market value of Bitcoin will sink a bit due to the muddiness of this announcement. Which suggests that a centralized party (Bitcoin.org) has a great effect on Bitcoin after all, despite its appeal of being a decentralized currency.


The demand for something like BTC is clearly there though.


How many individuals/7B is there?


the appreciation over the past year

*Speculation


Not just simple speculation, explicit "greater fool" speculation.


You skipped the option that's closest to consensus! SegWit2x has industry support and has a short enough window to lock-in before the Aug 1st UASF

EDIT: Quick reference https://medium.com/@wintercooled/the-road-to-segwit-activati...


Though it has industry support, it does not have user support, because it does not have a working, tested implementation released. With less than 3 weeks until the fork triggers, I highly doubt they are going to get substantial user adoption by the time the fork triggers.

One of the most amazing properties of Bitcoin is that it's completely user driven. When it comes to the fundamental consensus rules, no amount of hashrate or corporate agreements can force a change onto the userbase. It's a system that intentionally resists central control. Any changes need to start with userbase support, and I'm just not seeing that with Segwit2x.

If I am wrong, I will find out soon enough.


How do you define user support?

All the definitions I heard are able to be manipulated easily:

-The/r/bitcoin consensus? Is mainly in existence because of censorship

-User wallets online? Can be easily created with AWS instances

-Bitcoin core? Who decides these bunch of people are in charge to represent all users and not a bunch of other developers?

One obvious alternative is to let Bitcoin follow economic incentives: Bitcoin miners gain Bitcoin, so they have a vested interest that their income is and stays valuable. Thus why not let the miners decide. This is also the only place where you can't influence/manipulate Bitcoin easily.


User support is really easily measured in the event of a split and really hard to measure before the split.

Quite simply, the coin price indicates support. After the split, there will be two versions of the Bitcoin network with independent prices. A non zero price indicates non-zero support, and as long as it's at least 25% of the original price, it'll probably be okay.

A high price indicates high support.

In the long term, the hashrate follows the price. Miners will mine the coin with the highest price, because they can't afford any other option. Electricity is expensive.


So you say mining of Bitcoin only follows the market value?

Isn't it at least to a large degree the other way round? That market value is following based on what is the most mined chain? If there's a split and 80% of mining power switches to one branch. Then the 20% branch loses a lot of utility for at least some time. It now has five times slower transactions until difficulty gets adjusted(or you change the proof of work of bitcoin, which itself can be precarious). And now to a minor degree the minority chain has also less safety (less hashing power).

Meanwhile why should anyone buy or send Bitcoins at the point of a split? There's a real chance that one branch will die and then you can lose the coins. The best strategy is probably to wait. So the market at least is in some way inhibited during a split.

On the other hand I'd argue miners of the minority chain have a lot of pressure to change branches. Market is not yet a good indicator only hashing power and they'll lose money if they don't continue to mine on the more profitable chain. Their safest bet is to change chains. Also they know that other miners of the minority chain think probably similarly. That's why imo in Bitcoin history every fork/split was resolved very quickly and a branch "won".


For the august 1th date user support for segwit2x does not matter at all. If the miners that agreed to run this software stick to it, they will start signaling bit4 on 21th July, when they reach 80% hashrate it will orphan non segwit blocks (kinda like bip148 but with miner support) and at the same time signal bit1 to lock in segwit which by then if that works has enough hashrate to overcome the 95% threshold to activate it. No user support at all needed for this.

Only the 2x part of segwit2x will need user adoption, but that comes 3 months after segwit has activated (next round of drama, long on popcorn)


User support means nothing. Users have to either accept the way that the system works, persuade the miners to change their ways, or switch to another coin whose systems they prefer.

Certainly, the last of those options seems to be popular recently.


Unlike the UASF timebomb, SegWit2x won't activate unless there's 80%+ support, so it's not going to trigger a fork. (Well, technically it will, but if activated the non-SegWit2x rump will quickly be reduced to irrelevance.)


There's currently 86.5% support.


That's 86.5% miners signalling to signal support. Segwit2x is still yet to have a working and tested implementation.

Would you support something which has not been fundamentally tested?


> Segwit2x is still yet to have a working ...

https://github.com/btc1/bitcoin

> ... and tested implementation.

It will go online on the testnet tomorrow


> It will go online on the testnet tomorrow

It seems rather premature to call it working before it gets properly tested. And three weeks is a woefully short time to test something like this, fix any issues that are found, and then re-test.


The testnet is already online since a few weeks now. But according to the segwit2x timeline this step should come tomorrow if they are still on track:

July 14 - Agreement Participants Install and Test Milestone


https://en.bitcoin.it/wiki/Segwit_support

None of the core developers support segwit2x.


A big part of Bitcoin's entertaining in-fighting is due to the 'core' developers having a mindset that conflicts with many other people. Some speculate that this is because a large number of devs are paid by Blockstream, who have financial incentives to keep bitcoin congested so that their paid-for products (like their lightning implementations) have more value.

I have no bitcoins, so I have no real preference in what happens. But watching politics destroy a 'decentralised' currency is good entertainment :)


That "Bitcoin is currently suffering from significant scaling problems" is the topic of debate.

SegWit was not created toward the end of increasing the blocksize, it was created to fix transaction malleability along with various other improvements. That it arranges the partitioning of witness data from transaction data to sort-of not count against the block size was a bonus, especially since a lot of dubious attempts at forking to a larger block size we're being given decent backing in terms of funds.

The point of fixing transaction malleability is that it allows for more robust smart contracts that depend on transaction validity. Once you enable these smart contracts, you start scratching at the surface of scaling methods that shift risk to the willing participants. As every Bitcoin transaction must be validated by every Bitcoin node, the entire network must inherit the risk of attempting to satisfy demand for transactions. Not just in terms of hardware requirements, but also in terms of the viability of paying for security of the network against a diminishing block creation subsidy.

The maintainers of Core, and plenty of other people in the Bitcoin community, see the scarcity of block space as a positive and as an inevitability. It's a positive in that it provides the incentive for security as the subsidy gets reduced, and inevitable as any 'spare' space in blocks can incentive superfluous transactions. There's plenty of development on the front of moving bitcoins between other chains with different consensus rules that would allow for better scaling, and for better development and testing of solutions that could eventually make their way to the main blockchain.

I'm personally of the opinion that once you allow for the transfer of bitcoins to and from second order chains, that Bitcoin can essentially enter a version freeze.


> That "Bitcoin is currently suffering from significant scaling problems" is the topic of debate.

I find it hard to see how anyone could reasonably dispute it. Transactions were fast and cheap-to-free until mid-2015, when the blocks filled. Since then transactions have been slow and expensive.


And yet the people who maintained the protocol and scaled transaction throughput while it grew to tens of billions of dollars in value largely dispute it. If SegWit could activate without a hostile takeover, it would be much easier to demonstrate why there are no scaling issues.

A lot of ignorant people want to throw the baby out with the bath water though, so ultimately we're probably going to have two chains, one that does it the way the talent in the community says it should be done, and another that shifts responsibility around to a few scaled entities. My money is not on the latter.


It's like they went to Solomon and said "so, shall we cut the kid in half vertically or horizontally?" waving big knives around. Their plan is to use the halves of the corpse to beat each other to death.


this is no longer true. blocks are not filling and mempool is clearing:

https://www.reddit.com/r/Bitcoin/comments/6hzw6c/010_satoshi...

it looks like some faction was spamming the network with transactions to create a false sense of urgency about the need to scale.


They most definitely were. It should also be noted that most transactions already occur off-chain at exchanges.


Bitcoin may not scale well, but it is the capacity problems that lead to high fees. These are two different things and it is important to not conflate the two.

Scalability has improved somewhat during the past two years and most developers believe it is time to increase capacity as well. The question you refer to is how to increase capacity, within the scaling constraints.

I understand the ambition to be neutral in a contentious issue but one must be careful as not to spread misinformation. "Discarding less useful data" is not how segwit works at all. Segwit does away with the fixed blocksize and uses instead a flexible block size of up to four times the previous fixed limit.

The discarding you refer to is the backwards compatible aspect of segwit where it can communicate with older nodes that do not implement this feature by not sending them the data. It is not discarded and a supermajority of the network must use the full larger blocks in order for this to be secure. It is merely a transition method to allow for upgraded and non-upgraded nodes to briefly share the same network.

So what you refer to are two methods for larger blocks. One must be upgraded with a flag day where everyone upgrades or you lose money, and one allows for a transition with a certain amount of backwards compatibility.

It is also misleading to describe this as two "sides". The sides are mostly within social media. The technical debate has been had and there was overwhelming consensus among the developers that the backwards compatible way should be deployed first.

If the technology takes off and solutions such as Lightning prove viable, most developers agree that the non-witness part of the blocks probably needs to be upgraded as well.


Capacity is scaling from the user perspective. If it costs $5 to send $5 worth of bitcoin because of transaction congestion and it's only processing a tiny fraction of what a single US credit card network does, the entire system is not scaling, regardless of how many nodes are running it.


Users don't care about scaling at all. They care about capacity only indirectly.

Scaling is something developers care about, but in the nascent field of cryptocurrencies there probably no single solution.

It should be noted that with your credit card example, however, that credit card networks charge a percentage of the funds transferred while in the case of Bitcoin it is instead a fixed fee. Should you instead have said that it costs $5 to send $5000 it would have been equally true but sounded quite different.

That Bitcoin as it is described in the whitepaper doesn't scale to even a single US credit card network should be obvious to any reasonably informed reader. That every participant in the network store everyone else's transactions forever has its limitations. Does that mean the technology is useless? No, it means the use case is different from credit cards.

It seems possible to build payment systems on top of Bitcoin that fills those use cases, and sidechains and payment channels are research along those lines. But just as crypocurrencies were a theoretical possibility twenty years ago, one should not expect working products too soon. It's not like there is a shortage of payment solutions in the meantime. For end users, credit cards offer a negative cost, so even then we should not expect the use cases to be identical.


> it costs $5 to send $5 worth of bitcoin

Not that this is a whole lot better, but the cost is $1.48 for fastest confirmation time, and $0.42 if a delay of 15-300 minutes is acceptable to you.

Source: https://bitcoinfees.21.co/


How is this supposed to be competitive with the real world?

Paypal transactions, Swish (Sweden), etc. etc. are instant and often with zero fees.


There are many situations where it is a significant improvement:

* Fee is not dependent on amount of money you're sending. You can send $200M worth of Bitcoin to a company in China and it will only cost you $1.50, try doing that with a wire transfer.

* Transactions are "final": after 3-6 confirmations you can have a great degree of confidence it won't get reversed

* Compared to Western Union or MoneyGram, it's still faster and cheaper

But in its current state, bitcoin is definitely not a replacement for your Visa card when buying groceries at the store. Maybe Lightning will change that though.


1. I don't want to spend $200M worth of Bitcoin to a company in China. Something tells me that when you're ready to send that amount of money, bank fees do not even register in the expenses.

2. So, if transactions cannot be reversed, and I erroneously send money, or am tricked into sending money, I can't get it back?

3. So, BitCoin wins only when compared to Western Union and MoneyGram. Oh, what an achievement.

In it's current state bitcoin isn't a replacement for anything, really


As a BTC amateur, trying to approach it from an ordinary user's perspective, all I know is I used to be able to set whatever fee I wanted and wait a few hours and things would get through, and now I have to play some sort of game of chicken with the network, guessing whether my transaction will ever be processed unless I pay as large a fee as possible.

I've used the fee prediction engines to try to avoid low fees and still ended up waiting eight days for a transaction to process. I gave up on it during that week, only for it to go through after I paid another way.

I don't really get the debate, I mean maybe implement the solutions from both sides at once? I don't care, my local solution is to just avoid it as a payment network for now. That's its own kind of vote I guess...

I'm sure there will be a camp arguing that I just wasn't smart enough, with the corollary that UX as a discipline coddles whiners like me.

Maybe so.

The game theory of fees and congestion is still interesting, with miners always interested in an incrementally more painful network for users, until the tragedy of the commons hits and it collapses.

Bitcoin has a first mover advantage, which led to some network effects increasing its popularity. Miners are extracting some rents from that popularity right now. But there may be a weird game theory here, where users are driven to prefer newer bitcoin clones with smaller (less secure) networks, simply because the fees demanded are far lower and (more importantly) more predictable. Price volatility of newer networks is a major a downside, but there's an equilibrium. Everything has a price, even volatility/stability. If you're doing one transaction and not storing value, then your risk on a new network is bounded by how long it takes you to get money in or out of the network and process the transaction. BTC will bleed off support, under some values of: BTC fee, BTC tx processing time, processing time variation, velocity in and out of smaller network, and volatility of smaller network. (This might be asymptotic and leave BTC the leader though, no guarantees.)

While creating a lot of confusion about long term coin viability, these forces could provide a useful equilibrium on power consumption, a downward force on how much power we want validating transactions. I've been worried about the power cannibalism scenario, where BTC becomes a payments standard but we're racing to commit all new power generation simply to verifying the network. But power use puts a floor on tx fees, and users with available alternatives put a ceiling on them, so... maybe we won't build a dyson sphere dedicated only to powering one payment network after all.


> maybe implement the solutions from both sides at once

HERETIC

No really, this is exactly what Segwit2x is doing, but it is still heresy for the UASF camp.


Not at all. Segwit2x is a compromise that's fine by me. Activate segwit then increase block size. It will result in some increase of miner centralization, but not to the extent that 32MB blocks like Bitmain wants would.

Answer me this-- if it's opposition is UASF, why did bitmain, after Segwit2X got so much support, announce they were going to hard fork anyway?

https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip14...

The Bip148 crowd is happy with Segwit2X because it effectively activates the UASF represented by Bip-148. We don't really care which of the BIP mechanisms is used to activate segwit if segwit is (And I think they are changing 148 to activate along with Segwit2x so there's no split in the support between the two.)


Fee estimation is an impossible task. There's never any guaranteed fee that will get your transaction accepted.

Imagine there's 11 people waiting at a bus stop, and the next bus that arrives has 10 spare seats. There's no pricing model that will allow all 11 people on to that bus, regardless of how much the people want to pay, or even how you rate the users. So it goes with bitcoin.


Or,

Any distributed payment network will asymptotically approach unusability over time.

Otherwise miners are leaving cash on the table.


I'd argue the other way. They didn't get involved in this mess and are just warning their users about possible disruption. What you wrote is your point of view which people might agree or disagree with.


The article doesn't state what the issue is though. You probably knew immediately if you've kept up with it, but as someone interested in Bitcoin but not having followed these developments it was like the BBC telling me to lock my doors and close the curtains, but not saying why.


> any changes require consensus from the miners who create Bitcoins and process transactions, and because it's not in their best incentive to do anything to reduce those transaction fees

Can you explain how this jives with miners supporting Segwit2X, which brings both segwit and bigger blocks?


The opposing and (IMHO) ultimately greater pressure is that it's also in miners' best interest to keep Bitcoin alive and successful. It took a long time to hammer out SegWit2x and it's still not certain that it's going to work.


You would think so, but I think that they think they have enough hash power to take over the whole thing. They may be right. They are clearly making a power grab and opposing Segwit2X: https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip14...

Segwit2X would activate effectively Bip148, though it was originally a proposal to use a different mechanism it is acceptable enough that Core is happy to have segwit activated that way.


I think you missed the key issue. Mining is largely centralized under the control of Bitmain, both via pools and indirectly via miners they have sold (which in the past have had backdoors). They profit from using an exploit called ASICBOOST.

Segwit will disable ASICBOOST as a side effect of improving the protocol. Therefore, BitMain has been launching FUD campaigns and numerous attempts to propose alternative software to stop segwit (XT, BU, BTC1, BTCABC etc.)

Segwit2X is a compromise-- but Bitmain does not like it because it activates segwit.

So BitMain has announced they plan to do a forcible Hard Fork of Bitcoin, splitting off into another chain, that they will privately mine-- and they intend to neutralize segwit on it.

They have publicly complained that segwit offers lower fees for transactions that use less resources.

The entire conflict (including the "scaling problems" which have recently been proven to be due to spam driving up transaction costs) is Bitmain attempting to increase and protect their near monopoly.

Please be aware that their fork, which will have nearly unlimited block size will increase their monopoly. Due to the great firewall of china, large blocks have trouble getting transmitted, so whenever a chinese miner finds a block, when the blocks are very big, they have a significant competitive advantage in finding the next block. Thus simply activating a spam campaign (which they have been doing the past 3 months or so already) will allow them to centralize mining in china because the chinese miners will start getting 2-3 blocks ahead. Further on their hard fork they can easily lower the difficulty and get many blocks ahead while private mining (but make it look like the difficulty is higher) -- admittedly a speculation but given their past exploits and announced plans to engage in further shady behavior I would not be surprised.

Here's the blog post where they announce their (very sketchy) hard fork: https://blog.bitmain.com/en/uahf-contingency-plan-uasf-bip14...


>Segwit will disable ASICBOOST

Incorrect. It would make 'stealth' ASICBoost mining improbable but still possible overall.

> Therefore, BitMain has been launching FUD campaigns.

Substantiate your claim.

> proven to be due to spam

Show it. Just show it already. Its a transparent blockchain but no one can show this spam, identify how it is malicious, show where it is coming from.

Show the spam already. Like ASICBoost its an invisible horror used to terrorize people into supporting your narrative. This is not very nice.


Btc noob: What's wrong with asicboost? Is it just because it's patented?


It's an exploit that gives a miner a way to boost profits, but in order to do so, they have to mine empty blocks, which is bad for bitcoin because the purpose of miners is to build blocks with transactions in them.


This is the main narrative being pushed by Blockstream and Core who are afraid of loosing control over the main Bitcoin reference client, beware.

> I think you missed the key issue. Mining is largely centralized under the control of Bitmain, both via pools and indirectly via miners they have sold

False, bitcoin mining has never been as decentralized as it is now: https://coin.dance/blocks

> Segwit2X is a compromise-- but Bitmain does not like it because it activates segwit.

False, they are signaling Segwit2X and have been open to support segwit (except the arbitrary discount).

> So BitMain has announced they plan to do a forcible Hard Fork of Bitcoin, splitting off into another chain, that they will privately mine-- and they intend to neutralize segwit on it.

As per your own link, this is a plan against the UASF fork.

> They have publicly complained that segwit offers lower fees for transactions that use less resources.

And instead they back bigger blocks and flexible transactions which would give them even lower fees? If your statement was true then they wouldn't do that.

> The entire conflict (including the "scaling problems" which have recently been proven to be due to spam driving up transaction costs) is Bitmain attempting to increase and protect their near monopoly.

No, it is because Blockstream and Core wants to retain control. Do they support Segwit2X even when 90+ of all miner power signals it? No.

Segwit as a soft fork is a crappy implementation and reduces the security of Bitcoin. See:

https://medium.com/the-publius-letters/segregated-witness-a-...

Flexible Transactions is a superior proposal:

https://zander.github.io/posts/Flexible_Transactions/


FlexTrans are far more crappy and far far less tested than segwit. It introduces its own weird format that nobody uses, that's sort-of-XML-but-binary (I mean, the authors said to themselves "I like XML so much I want it in a binary protocol") - and problems with types of formats is exactly where the various maleability problems come from! Which was reason for the segwit in the first place!

I am not for UASF and I think it's moronic (since it will lead to chainsplit and user confusion); segwit is fine though and FlexTrans are not a serious contender


> and problems with types of formats is exactly where the various maleability problems come from! Which was reason for the segwit in the first place!

You obviously have no idea what the maleability problem is and you didn't read and understand the linked articles.


Do enlighten us. Please be very detailed. Don't just link to some random article from a non-technical propagandist like you have been. Explain it.

Segwit does fix malleability, and this is critical for bitcoins future, for many reasons.


The article contains a technical explanation... Don't be lazy and dismissive. It also explains that Segwit fixes the malleability and that Flexible Transactions also does (but in a non hacky way), so what is your point?


My point is that you don't understand what you are talking about and are feeding us FUD based bullshit. And you have failed to give an explanation when called on it, just linking to someone else (also ignorant) as "proof".


You oppose Segwit2x AND BIP-148, but you like Segwit?


Segwit2x is sort-of-OK for me frankly.

I don't like the part where they rush to implement everything as fast as possible. And from apart (and I don't follow Segwit2x that much), the changeset seems too big from bitcoind.

And they say openly they plan hard-fork, not this UASF where the S is not really that S and is almost guaranteed to result in a split and confusion.

They signal Segwit in a compatible way, so it's OK. Just the timeline is crazy.


This is not a narrative, this is the technical facts. You're pushing a narrative.

Bitcoin mining has never been as centralized as it is right now with one man controlling over %70 of the hash rate via multiple pools. Many of those pools are just the same player operating under different names.

Segwit2X is in fact a compromise, and I linked to a blog post where Bitmain complains about it. They want to "activate segwit" but what they call segwit is not really segwit. The UAHF article I linked to is not Segwit2X it is a new hard fork they propose because they don't like Segwit2X. If they actually supported it they could just let it activate.

They back a solution that gives them more control over the network and higher fees, not lower fees. You think they will give lower fees but you're uninformed about the current fee situation.

Blockstream doesn't have control. You're pushing an uninformed narrative that makes Blockstream out as some sort of evil corporation--- the reality is block stream employees are a minority of core, core development is done in the public eye (unlike even Segwit2X and certainly any of Bitmains's hacks, like BU which was closed source for awhile before people just gave up on it.)

You keep talking as if the miners are supposed to be in control, as if that's right. It's not. Bitcoin was designed to be a balance, and the only error satoshi made was not realizing that his PoW was vulnerable to ASICs, which have resulted in centralization. You act as if there are a lot of miners and they are the bitcoin community, they are not, they are the minority. Alas they have spent a lot of money to dupe people like you into thinking they are the good guys.

Your articles are non-technical nonsense full of FUD written by people who do not understand the bitcoin code.

Here's the real threat to bitcoin-- people who are not developers are easily mislead by conspiracy theories backed up by thousands of shills posting this kind of crap narrative.

Thanks for the down vote, too bad you didn't have a technical argument.

The great firewall of china is not going away. The centralization threat is real. Segwit is the most tested code put out by core... and a whole lot better than the shitshow of alternatives we've seen put out by those who are trying to take over bitcoin.


You're repeating your arguments without any technical arguments yourself.

You repeat the mistakes as outlined in this article:

https://medium.com/@johnblocke/decentralization-fetishism-is...

> They back a solution that gives them more control over the network and higher fees, not lower fees. You think they will give lower fees but you're uninformed about the current fee situation.

How so? Because bigger blocks will give lower fees than Segwit only.

> Blockstream doesn't have control. You're pushing an uninformed narrative that makes Blockstream out as some sort of evil corporation--- the reality is block stream employees are a minority of core, core development is done in the public eye (unlike even Segwit2X and certainly any of Bitmains's hacks, like BU which was closed source for awhile before people just gave up on it.)

The censorship in those channels are well documented.

> You keep talking as if the miners are supposed to be in control, as if that's right. It's not.

You don't understand the point of PoW in Bitcoin.

> You act as if there are a lot of miners and they are the bitcoin community, they are not, they are the minority.

Doesn't matter. And btw, you think UASF is the majority? Because they are not.

> Your articles are non-technical nonsense full of FUD written by people who do not understand the bitcoin code.

Where are the technical arguments against these supposed "non technical FUD pieces"? You provide none.


> How so? Because bigger blocks will give lower fees than Segwit only.

Who profits from high fees? Core? No. Miners. BitMain is very adamant about not wanting low fees. The idea that Segwit, which quadruples block size and offers a fee discount is an attempt to keep fees high is absurd on the face of it.

>And btw, you think UASF is the majority? Because they are not.

You're convincing me that you're operating from a script and have no technical knowledge of the situation.

Segwit2X IS a UASF.

> And btw, you think UASF is the majority? Because they are not.

Segwit2x is the majority of signaling right now. (Though it's a fake out because Bitmain plans a hard fork.)

Your personal attacks and failure to address the technical issues speak for themselves, so I have not quoted them, nor responded.


Uh I'm obviously referring to BIP148 when I say UASF, but way to argue with semantics.

> BitMain is very adamant about not wanting low fees.

Yet Bitmain supports larger blocks, you're not making sense.

> Your personal attacks and failure to address the technical issues speak for themselves, so I have not quoted them, nor responded.

What personal attacks? Sure, continue dismiss it as "FUD" or "non-technical people".


It's not semantics when you're talking about different activation mechanisms... that you think it is proves to me you don't really understand what's going on.

I point out a contradiction in Bitmains position and you say that means I'm not making sense? Once again, you are arguing that your ignorance somehow trumps the facts.

And of course, you resorting to insults is all the proof I could have needed.

Go educate yourself. Start at bitcoin.org


>This is not a narrative, this is the technical facts. You're pushing a narrative.

Then you immediately launch into narrative, one that avoids detailing how Jihan doesn't control the hashrate. Individual buyers and operators of Bitmain's mining hardware do. You are attributing things in plainly incorrect ways.

>Bitcoin mining has never been as centralized as it is right now with one man controlling over %70 of the hash rate via multiple pools.

Nothing about the owners or the choices they can make with their hashrate. All some narrative about "evil Jihan."


I didn't avoid dealing with your lie, I stuck to the truth.


A neutral response would probably not use the phrasing 'muddle through' with regards to the solution endorsed by most of the technical experts in the Bitcoin space.

----

Right now there are 3 implementations of Bitcoin in the wild, and each of the 3 will react differently to different network events. The network is essentially splitting apart, with each fragment driven by a different faction.

If you don't know what the different factions are, you probably don't need to. Its needlessly involved, highly political, and full of echo-chambers and shouting matches.

What happens largely depends on how much support each faction has. Unfortunately, there's no real way to measure how much support each faction has until the fork actually occurs. Each faction thinks that its the largest by a significant margin, and thinks that the other factions have used underhanded techniques to bolster their visible support.

When the rubber meets the pavement, we will know though. If the network splits into three pieces, likely the coin price for each piece will move around violently, and one portion of the network will probably end up with a much higher coin price than the other parts. Or maybe it'll be an even three-way split, which will make things in the Bitcoin world very confusing.

----

As a huge Bitcoin fan, I hate to say this, but if you aren't clued into the various events, and you can't name the three factions or explain the beliefs of each, you should just stay away for a while. If you get pulled into the split without knowing what's going on, you are very likely to lose money. There will certainly be opportunists trying to take advantage of the situation, and you, being ignorant of the situation, will be the one who gets taken advantage of.

----

If you do know what's going on, you can name the factions, etc, then what you should do is pretty simple. When the split happens, sell all of your coins on the forks that you disagree with, and use the resulting money to buy coins on your preferred fork.

----

For anyone who cares, my alignment is with the status quo. I feel great animosity towards the hardfork faction (confusingly called Segwit2x), precisely because they have forced a situation where people who don't know what's going on are able to get hurt. They have also repeatedly, repeatedly, ignored very sound advice from the technical experts of the industry.

The UASF faction (confusingly, a 'pro Segwit' and 'anti Segwit2x' faction) has my spiritual support, but I don't think they have the numbers behind them to make a difference. I don't think running the UASF software is the right move.

I personally believe that overwhelmingly, the vast majority of people who use Bitcoin are probably largely unaware of what is happening, and are running the status-quo software (confusingly, the 'Segwit' software, or the 'Bitcoin-core' software). I'm guessing when the forks all happen, it'll be pretty dominantly vanilla Bitcoin with the highest price, and then a few weeks later it'll all be a bad memory, and nothing will have happened at all.

I guess we'll find out.


> Right now there are 3 implementations of Bitcoin in the wild

Make that 4...

https://www.bitcoinabc.org/


My view is that SegWit is a bandaid, not a cure: while it would give Bitcoin some breathing room, it doesn't fix the underlying constraints and is not alone going to solve scaling, hence "muddle through".


That's a not very informed view. Segwit involves segwit, but a very large number of previously pending enhancements that needed a soft fork to activate (core is conservative about any kind of fork) It has dramatic scaling capability due to segwit, it allows lightening network and other solutions to be built on BTC, and in fact, in my opinion will be the last scaling solution BTC ever needs because it will enable unlimited scaling via off chain and side chain transactions.


You can characterize a blocksize increase too with those exact words. Calling one a "muddle" and not the other appears anything but neutral.


> When the split happens, sell all of your coins on the forks that you disagree with, and use the resulting money to buy coins on your preferred fork.

Or keep all the forked coins in case you are wrong ?


If you are keeping all the forked coins, you probably don't have a strong ideological opinion. It's not about being 'wrong' in this case, it's about ideological alignment. If you follow my advice, you will more or less end up with the same amount of money as you started with, regardless of where the prices of the coins end up (as long as you wait through the early volatility stages).

If you aren't ideologically aligned, holding onto all forks is a perfectly sane choice.


Profit trumps ideology even when you hold strong views.

For example, in this experiment small payments for correct and "don't know" responses sharply diminished the gap between Democrats and Republicans in responses to "partisan" factual questions.

http://www.nber.org/papers/w19080


Choosing to be on the minority chain is not less profitable than choosing to be on the majority. If you sell your majority coins, you will sell them for majority price. As a result, you will end up owning more minority coins than you had originally, though the US dollar value should be about the same.

Profit comes from knowing how the markets will move before they do (and performing arbitrage), not from owning the asset that has the greatest market cap.


> sell all of your coins on the forks that you disagree with

How would you do this in practice? Most exchanges probably won't code in the ability to sell on multiple chains.


Were the scaling problems not predicted or known in the original design?


They were known since the beginning, but for any complex problem it takes time to explore the solution space and hone in on the best (or least bad) solutions.


Has anyone got a link to a neutral article summarizing the POVs and the players involved? I'm still confused as to many of the details, e.g. what /r/btc advocates if not SegWit.


So this all sounds pretty scary and gloomy, so why is BTC/USD trading up $86.00 in the last 24 hours? Shouldn't it be getting hammered? Is this a buying opportunity then?


Those issues have been known for a while so it's no surprise they haven't affected the price in the last 24 hours. Explaining Bitcoin's price movements is a bit like astrology but this guy probably lifted some spirits today: https://media.giphy.com/media/8cTtn78RkOAk8/giphy.gif


There's a lot of shady movement going on in both BTC and ETH right now. We're seeing pretty violent swings. I'm guessing this is a symptom of the uncertainty. We'll likely see a downtrend overall in the next few weeks. Daily movements are day by day.


The 24 hour upswing may be another bull trap masking the bearish trend that has taken hold for the last month, which has hit the entire crypto market and sent some market caps down over 50%. The BTC scaling crisis has been a known factor for even longer than that and may have precipitated a runup in other coins that directly preceded this downtrend.


Because the OP is FUD, not a well-founded concern. The network has already overwhelmingly decided on a scaling solution. https://coin.dance/blocks


I think this is the most neutral and the best description so far of what's going on with Bitcoin.


So whilst the chain is split, am I correct to assume you can spend your money twice?


Yes, if you can find a place to spend your coins that accepts the old chain, and another place that accepts the new chain.


thanks




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