The BIP66 voting was inept too.  It was the ineptitude of the Core devs, not dishonest miners, that caused the two "forks of July" (6-block and 3-block long, respectively) and required broadcasting to all clients the embarrassing alert "everybody had better wait for 30 confirmations for a while".

The BIP100 voting scheme is a joke.

I think that blcokchain voting in general is a stupid idea, but the 75% of the BIP101 voting is not bad.  Any brat can set up NotXT nodes to falsify the node statistics; miners, however, will not want to play games with their revenue.  If they are against BIP101, their interest is to vote against it, to prevent the 75% trigger to happen. Why would they want to trigger a messy fork and then have it collapse?  That is the sort of puerile "cut the nose to spite the face" reprisal that only a Blockstream worker would find amusing...


If Adam had not been born, BitcoinCore would probably have lifted the block size limit years ago...

The war would not have happened if Adam had not labored so hard to create it.

The NotXT fork and the DDoS attacks on XT nodes may not have been his idea, but
he does seem to think that they were "well done".

EDIT:  There are other options for a higher block limit than full BitcoinXT --
such as a patched BitcoinCore, BitcoinXT with only BIP101, or simply editing
the MAX_BLOCK_SIZE line to raise the limit on a fixed date.  Raising the limit to 8 MB
does not present any demonstrable risk, but avoids congestion and
reduces risks and consequences of spam attacks.  Adam did not start the war
for technican reasons, but only to protect Blockstream's  power grip on
the protocol. 

What exchange is that?  Bitstamp?  Kraken?

Brazil currently has many big problems, but fortunately bitcoin still does not seem to be one of them.  Perhaps Brazilians are indeed smarter than the folks in your bithole.

Industry does get concentrated.  For example, many car makers that were independent in the early 20th century got absorbed by the big ones -- Ford, GM, Chrysler in the US.  There are thousands of other examples. 

Customs barriers and national economic policies are one obstacle for the concetration of  traditional industries.  In some countries, anti-trust / fairi-competition laws also prevent total centralization.  Neither of these obstacles exists for bitcoin.


Miners are not fools to kill their cash cow; but there are many things they can do to squeeze more milk out of it, that will not be bad enough to scare bitcoiners away.

My mother had a supertitious prayer in Venetian that she recited during storms, asking for "Santa Barbara e San Simon" to protect us from "thunder and lightning".  Of the same genre as St. Benedict's apocriphal verses to repeal the Devil.

"The economic majority rules" is a similar mantra that superstitious bitcoiners invoke to drive away the menace of the Five Evil Mining Pools, those that have 70% or more of the total hashing power.   The bitcoiner's mantra is just as logical, effective, and tested by experience as those medieval formulas.

If a mining majority decides to impose a protocol change, that the other players don't like but can live with -- like higher or lower block size limit, higher minimum fees, delayed reward halving -- the "economic majority" will accept it, because it knows that miners can hurt them far more efffectively and promptly than they can hurt the miners.

Holders, in particular, have almost no power.  All they could do is to commit financial suicide by dumping their coins and crashing the price; but they wold inflict more harm to themselves than to the miners.  Therefore they will not do that; they will keep holding, praying to Sain Barbara that the price will not suffer.  Indeed, I bet that they will even speak out in favor of the change, to protect their investment.

When the US government removed the backing of the dollar, Americans did not burn their dollar bills.  When banks as a whole raise their fees or cut some services, clients do not run en masse to close their accounts.  


Well, not "every" bitcoin holder would do that.  Like bankers and governments, the miners will usually avoid diong something so bad that it will directly hurt all of them and cause all of them to revolt.  Therefore, most holders will be upset, but will not spend real money with utility bills just to fight some ideological "purity of protocol" cause.  

But, even if all off-line mining equipment was brought on-line again, it probably would not account for 20% of the total hashpower.,

Not at all.  

First, if you are not a miner, you can do any mess in the code that you want, and the worst that can happen is that you are unable to move your coins, or you send them to Neverland, or you reveal your keys to hackers and they steal your coins.  No matter what you do, there will be no fork.

If you were a miner, you would probably know what you are doing because your company's revenue depends on it.  But even if you change the code in an incompatible way, there will not be a permanent fork.  

First, if your program accepts transactions that are invalid according to the official version, that bug will matter only if some client issues such a transaction.  That is rather unlikely, because clients usually want their transactions to be executed, so they usually try to generate only valid ones.  Even if that happens, and you include that transaction in a block,  that block will be rejected by all other miners.  So you would indeed fork the blockchain, but no one will accept your new branch and it will be orphaned right away.  

Ditto if your software may create blocks from valid transactions that are invalid to the official version, for their size or something in the header.  Any such block will be a trivial fork that is orphaned right away.

Finally, if your program rejects transactions or blocks that the official version accepts,  you will be in trouble if and when some other miner mines such a block.  Then the chain will indeed fork.  You will reject the main branch of the chain, that starts with that block, and you will try to mine only on a side branch that contains ony blocks that you approve.  However, you will be the only miner working on that branch; so it will grow very slowly, and everybody, again, will ignore it.  No one will accept the coins that you mine.  Therefore, as soon as you notice that you are no longer in the flock, you will quickly get smart, fix your code, and join the others mining on the main branch.

... or unless the price crashes to pennies ...


One must wonder whether mass adoption will ever happen.  The block size limit has not been an obstacle so far, yet adoption does not seem to be exactly exploding.  (The block size limit might be an obstacle within a year, if the traffic keeps growing at the recent rate.)

It would be very important to have reliable information on the size and growth of the user base, and on the actual volume of payments for various uses.  Unfortunately, the few companies that have such data are hiding it, and giving only a few statistics (like "number of wallets") that may be intentionally misleading.  Statistics derived from the blockchain are mostly useless because they do not distinguish payments (coins changing hands) from non-payment uses (such as betting and tumbling) and from housekeeping overhead, (such as hotwallet/coldwallet flow). 

The 2014 numbers released by BitPay recently were a notable exception to that pattern of corporate secrecy, but were still too limited and did not tell about growth.  Some indirect evidence suggests that adoption and usage did not grow at all in the last 12 months...

Unfortunately, Satoshi's breakthrough, that made bitcoin possible, was to give all the power to the miners -- with the proof-of-work trick to keep them from cheating.  That would have worked if mining had remained well-distributed, so that it would be practically impossible to convince a majority of them to sabotage the system. 

But it did not happen that way, basically because the price shoot up to 100 or 1000 times what it should have been, given its usage.   With that hyperinflated price, and the fixed block reward, mining become a very profitable activity, that was worth carrying out in an industrial scale, by entities distinct from the users.  Then the mining industry got concentrated in a few companies because of economies of scale.

Bitcoin was created to be a peer-to-peer payent system that did not require trusted third parties, including central authorities.  Strictly speaking, bitcoin is broken right now; because the top 5-6 miners are third parties that must be trusted not to abuse their power.  With the BIP100 discussion, bitcoiners seem to be gradually becoming aware of that fact: it will be the miners that will decide whether, when, and how to change the block size limit

Bitcoin may still get "cured" if mining becomes again distributed among the users.  However, I do not see how that could happen, unless the price crashes to such a low level that no one will want to mine for profit, and mining becomes again a client activity -- say, a convenient alternative to buying bitcoins, that an ordinary person could use  to get some bitcoins to pay for coffee or whatever.

Taking away the power from the miners -- in particular, forcing them to process all transactions issued by clients -- would require reforming bitcoin to the core.  It seems that another Satoshi-level ingenious idea would be needed do that without introducing some trusted central authority.
[/quote]

Help me understahd: the "anti XT" camp here is euphoric with the idea that slush or other miners may run their own 8 MB software, as long as it is a private patched copy of Core rather than a private copy of BitcoinXT -- that is a patched copy of Core.  Is that so?

So the real issue is only whose boots are to be licked, Adam's or Mike's?

Blockstream has been more than clear about it: they do not want to raise the block size limit until the network is saturated.  And they want to keep it saturated forever; although they admit that the limit will have to be raised later, they do not intend to raise it to match the demand. 

They are adamant about that, because their vision for the future of bitcoin includes having users compete for space on the blocks by raising their fees, in teh so-called "fee market".  They also want all "banal" traffic (such as paying for a cup of coffee) pushed out of the blockchain, to some off-chain solution. 

The "fee market" will not happen unless the network is congested, that is, there is a persistent backlog of unconfirmed transactions in the queues, and not every transaction that is issued will be included in the next block.  If there were no backlog, then every trasnaction would be confirmed in the next available block, and therefore no one would have to pay more than the minimum fee. 

Yeah, that seems quite easy. Why didn't I think of that? [/sarcasm]


Estimates of people who own some bitcoin range from 3'000'000 (Coinbase, BCI claims) to 300'000 (me).  The latter is my estimate of how many people own at least 1 BTC; together, those users own 99% of all bitcoins in existence.  

So, how many bitcoiners do you think know enough about the bitcoin protocol to understand how they can get get their transactions executed in one chain only; and know how to do that without messing up their wallet file; and can obtain a few satoshis that were mined after the fork; and are interested in handling split coins; and can find buyers who can also do all of that; and are dumb enough to buy coins that may die in a few days?

To help you: Reddit's /r/bitcoin section lists 172,115 subscribers, but less than 1000 are logged in at any time.  However the moderators of /r/bitcoin delete most posts about BitcoinXT, so I doubt that its readers will learn about that there.  There are new sections for bitcoiners who dislike censorship and for people interested in BitcoinXT; they have ~2000 and ~12'000 subscribers, respectively.  

My most optimistic guess is that the "market" for minority-branch coins will not exceed 300 people, worldwide.  There is of course a network effect there:  once they realize that they are so few, they will realize that their chances of making money from coin splitting are small, and they will lose interest -- and then there will be fewer still...


Yes, I have observed already that, for the fanatic bitcoiner, *every* detail of bitcoin is a feature; and *everything* that happens is "how the system works".  

Sorry, but it is a bug that the coins on each branch may or may not be moved independently, with most clients being unable ot understand or control what is happening.

Hackery is what you propose to do: move coins independently on the two branches by tainting them with coinbase coins, and sell the version you think will die to anyone fool enough to buy them, or to anyone naive enough to not understand what he is buying.   The 100 block delay was probably meant to discourage that kind of hackery after forks -- soft, hard, or accidental.


Correct.  More precisely, any UTXOs that were created before the fork exist and can be used on both branches.  If you try to move them without tainting, they will be moved on both branches, to UTXOs that are still untainted.  Once you get hold of some satoshis that were mined on one branch (either one), you can first move all your old UTXOs on that branch to new UTXOs, with tainted transactions, and then you can move again the same old UTXOs to still other UTXOs with untainted transactions, that will be executed only on the other branch (because on the first one those outputs are already spent).  

Tastes good, but not very substantial.  Imagine a fat date kernel wraped in bok choy stem that was boiled in light syrup with discrete bubble gum flavor, wrapped in avocado skin but deep-red and covered with goose bumps.

That is very old news (and very old misreading of the news).

What happened is that some MtGOX victim tried to bypass the bankruptcy process by claiming that some of the remaining 200 kBTC in MtGOX's spoils were his property, and he was entitled to have his property back. 

(As one redditor explained, it would be like a customer of a bankrupt dry cleaner demanding to repossess his suit that he had left there for cleaning, rather than seeing it to be auctioned and the money divided among creditors.) 

But the court said nope, the bitcoins in MtGOX wallets (like the dollars in MtGOX bank accounts) were owned by MtGOX and not by the depositors, because one cannot claim ownership of specific bitcoins, but only the right to receive their value (like one cannot claim ownership of specific dollar bills or euro bills, but only the right to receive their value).  So that customer was told to file a claim and wait for his share of the spoils, like the other MtGOX victims and creditors.

And they thrive because the organism fails to recognize tumors as malignant, and even feeds them more than the sane organs.

Jeff seems to be making the same mistake that the Blockstream devs did: assume that the block size limit is meant to limit traffic. (That would make the speed limit analogy pertinent.)

But that is not the purpose of the block size limit, and it never was.  The original 32 MB size limit existed for programming convenience reasons (to make blocks fit into a single message), and ws lowered to 1 MB to prevent a specific hypothetical DoS attack (a rogue miner solving a block so big that it would choke some players).  The block size limit was, and should always be, many times higher than the expecte average normal traffic, so that it is never a cap to it.

It seems you have not read what I wrote at all.



Of course I know that.  But how do you get those few satoshis?

Do you realize that 99.99% of the bitcoin holders will NOT know about that bug feature of the protocol, or would not have the means or interest of exploiting it? 

So how are you going to meet the 0.01% of users who know that, have got some coinbase satoshis from one of the branches, and are interested in trading single-branch bitcoins? 

By the way, there is a minimum delay of 50 blocks (IIRC) before one can use coinbase coins, presumably to discourage this sort of hackery.  On a branch with 25% of the mining power, that means at least 2 days. Wlll that branch survive that long?

That is the problem: libertarians are all for free markets, but have a totally wrong idea of what "free market" means.  

It is NOT a market free from control or regulations.  

There are several requirement for a market to be a "free market". Among them: there must be several suppliers, and consumers must be free to choose among them, or do without the service.  Consumers know the price charged by each supplier in advance, and, if they pay that price, they will get what they paid for.  Most importantly, suppliers can increase their production if they find it is in their interest, and there cannot be unfair barriers preventing new suppliers to come into the market, if they have the required capital and expertise.

A market can have a ton of regulations and paperwork and licenses and bizarre licensing and auditing requirements; but it can still be a free markets, as long as those conditions apply to all suppliers, and there are entrepreneurs who could meet them -- if they saw a profit in doing so.

The theory then says that free markets are good fro mankind, because, in a free market, the suppliers will enter or leave, and adjust their prices, until the price will be just high enough to cover the cost of efficient production plus a return on investment as good as any other activity -- that is, maybe 10 percent per year.  

The "fee market" would fail to meet all of these conditions.  To begin with, there is only one supplier -- the bitcoin network -- and all bitcoin holders are forced to use it.  The supplier would not be allowed to increase the supply, because the block size would be limited by the developers' decision.  The clients will not know the fee that is required to get confirmed in N minutes before they send their transaction. (They will only know it after N minutes have passed, by inspecting the blocks that have been mined.) No matter how much they pay, they cannot be certain to receive the timely service that they thought they were paying for.

Indeed, what the "fee market" advocates want is the exact opposite of a fRee market: they want to create a monopoly market, where the single supplier limits the supply to a level that will guarantee him maximum return on investment.  Which means much reduceed benefits to society and a much higher price than what a free market would provide.

The only free market that could exist in cryptocurrency would be the market for e-payments among competing cryptocoins.  But that does not seem to be free in the US either...
 

Rats.  It is so embarassing to be predictable. 

... all this time with demand well below capacity and without a "fee market".  But now the lemonade stand is under a new management, who are is determined to change that...