Well, I find it funny that people care about whether others run XT or Core; since that choice, besides being irrelevant, is practically invisible from the outside.   Even the difference between the various BIP100s is not important at first.   

As I wrote before, the most important parameter is how many miners will accept blocks bigger than 1 MB at some point in the future.  That is basically what will determine the future of bitcoin: a chain with big blocks will prevail, a chain of small blocks only will prevail, or both chains will survive for some time, with disjoint communities.

Well, this crowd seems to be here for the fun, and facts and data are not much fun, unfortunately. 

Amazing how Adam Back, Ph. D., with two months of relentess FUD and personal smears, without any hard arguments or data, has managed to turn the question "1 MB vs. 8 MB" into the holy war "Heroic Blockstream devs vs. CIA agent Mike" in the heads of so many bitcoiners.

It is irrelevant which version of the software is being used (Core, XT, or other).  What happens after the first big block is mined depends only on how many miners accept big blocks.  ("Small block" = at most 1 MB; "big block" = more than 1 MB but not more than 8 MB.  See below for BIP100, BIP102, and other complications.)  Note that even the Core version is trivially patched to accept 8 MB blocks.

The chain will (theoretically) split once the first big block B(N) gets mined.  There will be a "big-block" branch that grows on top of that block, containg perhaps other big blocks; and a "small-block" branch that starts with an alternative small block C(N) with the same block number and contains only small blocks.

If, at that moment, more than 50% of the miners accept big blocks, the big-block branch (mined by them) will eventually grow faster than the small-block branch (mined by the rest of the miners).  The split will be permanent and the big-block branch will grow faster.

If, at that moment, less than 50% of the miners accept big blocks, the small-block branch will eventually grow longer.  Then the big-block miners will stop mining their branch, which will be orphaned, and they will start mining the small-block branch too.  If someone mines another big block, the chain will split again.  This situation will repeat over and over, as long as some miner happens to mine a big block.  There will be a single small-block chain with recurrent big-block side branches that are orphaned sooner or later.

Sane bitcoiners should want the first case to happen, and as cleanly as possible: namely, with almost all the miners accepting big blocks.  Then if someone mines a big block, the few stubborn miners who refuse to accept big blocks will be left mining a slow chain with a huge and growing backlog.   In this case, clients who accept big blocks will be fine, while clients who reject them will not be able to use bitcoin until they upgrade.

Blockstream fans who are not totally stupid will want the second case to happen, but also as cleanly as possible: namely, with almost all miners rejecting big blocks.  Then, if someone mines a big block, the few miners who accept it will waste time mining on top of it, only to have that branch orphaned right away.   In this case, all clients will be fine, except that clients who accept big blocks will see occasional big orphans.

Bitcoiners who are stupid, or are into financial sado-masochism (like those who are planning to sabotage the blockchain voting), will try to get some intermediate situation when the miners who accept bitcoin are neither the vast majority nor a small minority.  In this case, the situation will be highly confusing either to the clients who accept big blocks, or tho those who reject them, or possibly for both.

The competing BIPs with other notions of "big block" will make the situation more confusing.  Unless Jeff is into sado-masochism too, he should retract his "compromise" 2 MB proposal.  It is obvious by now that the Blockstream devs will never accept any compromise solution.

1000 blocks is almost exactly 7 days.  The first block mined just fell out of the window.

You have your nose, I have mine... 

There is a version of XT with the block size limit increase only, without the other controversial changes.

If you don't trust XT, but (for some bizarre reason) you do trust Blockstream, you can take a copy of BitcoinCore and apply the size increase patches from XT yourself. There may be a copy of that out there, too.

Indeed, if you are not a miner, you can just take the BitcoinCore code and replace the one line where it says "MAX_BLOCK_SIZE = 1000000" by "32000000".  That way you will accept big blocks if they are in a blockchain that is longer than any other.  There are some hypothetical situations when that will be the "wrong" chain for a block or two, but those situations may occur only briefly sometime in 2016, and will not be different from the orphan blocks that happen 2-3 times every day already,

Scarcity alone will not make bitcoin valuable.  There is a finite and fixed supply of tickets for last month's issue of the Pennsylvania Lottery; but they are quite worthless.  Ditto for Zimbabwean dollar bills, Litecoins, Dogecoins, and any other altcoin.  

Back in ~Nov/2013, when I first became aware of bitcoin, the "gospel" was that bitcoin's value would derive from it capturing some fraction of the market (or the whole market) of PayPal, Visa, of the US dollar.  That is what Antonopoulos and all the bitcoin gurus used to say every time.  There was a slide by A. with such projections, ending with 1 BTC = 1 million USD or so -- all based on the money velocity equation (P = V x T / N, where P is the price USD/BTC, V is the volume of payments in USD/day, T is the mean number of days between reuses of the same coin, and N is the number of coins in circulation, namely 21 M BTC).

In particular, bitcoin was supposed to be much more vaulable that altcoins because of the "network effect" and the "first player's advantage", which would ensure that bitcoin, and not the altcoins, would be used for e-commerce.


None of these things will determine the price of bitcoin.  Old PA Lottery tickets are permissionless and decentralized (you can transact them anywhere without intermediaries), not affected by human miscalculations (they are just printed pieces of paper), and quite secure (it is practically impossible to forge them so as to fool modern microanalysis equipment).  But they are worthless, all the same.


Bitcoin was created because there was no system for peer-to-peer electronic payments that did not require a trusted intermediary or central authority; and Satoshi thought that he had figured out a way to build one.  That is the "fundamentals" of bitcoin.  

The world did not (and does not) need another speculative investment instrument, or another system for buying computers from Dell, or a police-proof system to pay for cocaine, guns, and fake passports.   Destroying banks, governments, and government-issued currencies are stupid goals, because no one knows how to make a functioning society without them.  Bitcoin was not created for such purposes, and none of those purposes justifies its exstence.


Please.... That is what Blockstream did.  The mess is all their fault.  If you want to save bitcoin, for any purpose, you should get it out of their hands.  


That is not a sensible wish, not even logical.  

For example, next year the block reward will be cut in half.  Why isn't that that a change in the rules?   If the reward is NOT halved, would that be a change?

The 1 MB size limit was meant to be raised by a hard fork, just as the reward was meant to be halved:

A congested network and a "fee market" were totally not the original design; isn't it a (big!) change to allow those things to occur?  

That is because it is not a technical issue, of course.  The options and consequences are quite clear to everybody who has a little patience and chooses to look at the numbers.

The issue is, first of all, who will be in control of bitcoin's evolution: Blockstream, or other people?

Then there is the question of whether saturation and its consequences ("fee market", long delays) are "good" or "bad".   Blockstream definitely wants saturation and does not seem willing to accept any compromise.  Their motivations are not clear, though. 

I have seen various motivations advanced or hinted to, by them or by others; but they don't make much sense.  Like, the hope that the  fees will go up enough to compensate for loss of revenue of the miners at the next reward halving.  Or the hope that banks and other big players will find bitcoin more attractive. 

Either there is something else, or they are severely misguided...

If you look at the last 2 years you will see that the daily average it has doubled in the last 12 months.  Even if the growth is linear rather than exponential, if it continues at that pace it will be 0.60  MB/block by mid-2016.

On the other hand, the stress tests showed that the actual capacity of the network is only 0.75 MB/block.  And since traffic is not uniform over the day and over the week, there will start to be recurrent "traffic jams" well before the traffic reaches capacity; maybe as soon as mid-2016.

Moreover, a "spam attack" now is very cheap because the attacker only needs to generate more than the average free capacity, that is 0.35 MB/block, to create a permanent traffic jam.  By mid-2016, he will need only 0.15 MB/block.

The Blockstream devs know this, for sure.  Why don't they care?


The blocks will not get 18 times bigger with BIP101.  The will continue to be 0.40 MB now, and will continue to grow at the same pace as they would with 1 MB limit.  The effect of BIP101 will start to be felt only sometime in the first half of 2016, when traffic will get to 0.55 MB/block close to the 0.75 MB capacity.  With the 1 MB limit, there would start to be recurrent jams and long waits; whereas, with the 8 MB limit, the traffic will just continue growing beyond that value, at its natural rate, and maybe reach 1 MB/block in 2017.


That is true.  If a minimum fee of (say) 0.001 BTC = 0.20 USD was imposed on each transaction, the traffic would probably drop by 80% or more, and the block size limit would not be a pressing issue for a couple of years, at least.  But neither camp wants to see hat, for several reasons...

Good question.  It can't be the realization that Peter Todd and Luke Jr are leading bitcoin developers.  Neither Blockstream' brilliant plan of increasing adoption by limiting the capacity of the network.  Perhaps it is a growing fear that Ethereum, rather than Bitcoin, will become the world's reserve currency?

Quite a feat there since I only became aware of bitcoin  around Nov/2013.  That is 1 year and 10 months ago, barely.  So who is lying?  


I am pretty convinced that Blockstream tried, and is still trying, to centralize control of software development.  It would be quite a bit of coincidence, don't you think, that they hired most of the Core developers:  Adam Back (President), Greg Maxwell, Pieter Wuille, Matt Corallo, Mark Friedenbach, Rusty Russell, Patrick "Intersango" Strateman, Jorge Timón, and Glen Willen. There may be others. Luke "Tonal" Jr works for Blockstream as contractor.  Do you think that they would be happy to see some other implementation become the reference one?

Sidechains were not intended to centralize development on Blockstream.  Their stated goal was to allow experimentation with different protocols and service models without the need of changes to bitcoin itself.  Their unstated goal was basically political, namey to protect bitcoin from the threat of being superseded by an altcoin.  The hope was that promising altcoins would choose to be "backed by bitcoin" (even if that did not mean much actually) and therefore would want to cooperate with and support it, instead of compete with and disparage it.  

The grand plan of Blockstream devs for scaling bitcoin has been, for some time already, pushing the normal traffic to off-chain solutions and having bitcoin be the "gold of the internet", a medium reserved for high-value settlements between those off-chain systems.  At first, they fuzzily imagined that sidechains could be such off-chain systems, but perhaps they realized that they would not work (I can think of many reasons why).  So, when the Lightning Network came up they embraced it.  The existing sketch of the LN has many fatal problems too, which they know; but still they are happy to use it as an excuse for their plan of bitcoin into congestion.


As I said many times, I have been doubling my holdings of bitcoins every day since Nov/2013.  Honest.  I still don t have as much as Satoshi, though.

That is correct.  He is part time employed at Viacoin, an altcoin that competes with bitcoin.  I don't know whether he has other emplyment.  But he is one of the "core devs".

IIRC, his statement that sidechains were not intended to solve the scaling problem was made on the same reddit thead where Greg announced the Sidechain Elements release; and I did not see any denial by the other core devs.


Some time ago, someone claimed that sidechains would not need special-purpose mechanisms in the bitcoin protocol; that the "peg" could be implemented simply by moving coins to and address controlled by the sidechain.  Pretty much like when a bitcoiner moves his value from raw bitcoins to a Coinbase or Bitstamp account.  I have never seen an explanation of why that would not be sufficient, and why there had to be specific support for pegs in the bitcoin protocol.


My reference to independent 'design, implementation, and management' of sidechains was not referring to Blockstream specifically.  On the contrary, my understanding is that the sidechains would NOT e under Blockstream control.  Therefore not even Blockstream could trust that they would be secure or work as claimed.


I am fairly satisfied that, in the current sketch, there is not much room for fraud in the LN.  (Not totally, though.)  But, if the LN were to be implemented, its many fatal problems would have to be solved, and the only way I can see to solve them is for clients to surrender the coins to the "LN banks" (hubs); just like today the banks own their clients' dollars.  

Even without such "improvements", the hubs could block client funds for months, deny service to specific clients and merchants, charge whatever fees they can think they can get away with, etc..  


See how well they welcome BitcoinXT.  Blockstream had clearly counted on having control of the code base; for what exactly I don't know, but Adam's desperate attack on Gavin and Mike seem to be motivated more by the fear of losing that control than by seeing congestion get delayed for several years.

Luke on reddit defended that the defintion of the protocol IS the BitcoinCore code, and disaster would befall if people used any other code base; because if the other code did not copy Core down to the most obscure bug, the coin would split and that would be doom.  


Forget sidechains, they are not important anymore.  Blockstream openly declared vision for the future of bitcoin is a settlement layer for the Lightning Network, which will carry most payments. The Core devs have been saying all the time on reddit that they expect the "fee market" will make bitcoin transactions so expensive that only settlements between hubs and other high-value transactions will be worth doing there.  They have talked of fees of 10, 20, or even 100 USD per transaction.  


Yes, I do hope that the bitcoin investment pyramid will collapse as soon as possible.  I have no problem with bitcoin the payment system (although I believe that it will not get much beyond an interesting experiment).

But the reason I am bothered about the Lightning Network and the "fee market" is that I am a comp sci prof and they are bad computer science.  Imagine how a physicist would react if someone proposed to replace coal stations by perpetual motion generators.

And the reason I am bothered by Blockstream is that I have this problem with cheats and liars...

That is one of the things that sidechains CAN be.  The paper does npt say that they have to be merge-mined, or that they use that same algorithm, or even that their blockchain is anywhere like the bitcoin blockchain.  In fact, alternative blockchain designs was one of the things that the sidechains were supposed to experiment with.


You should spend some time actually trying to understand the things before staking your reputation on defending them.

It was one of the devs (Peter Todd maybe) who wrote on reddit that Sidechains are not a solution for scaling.  For some time now, I haven't seen them claim that they are.  Sidechains are still said to be ways to test all sorts of alternative ideas without endangering Bitcoin itself.

As for myself, I have read the Oct/2014 whitepaper with some care,  It mentions many examples of things that COULD be Sidechains of bitcoin; but I still don't know what CANNOT be a sidechain.  

One fundamental property is that each sidechain is supposed to be designed, implemented, and managed by an independent team.  Therefore the bitcoin developers cannot give any assurances that the sidechain will do what it claims to do, or will follow any constraints.  

According to the paper, a sidechain can even have its own tokens, not pegged to the bitcoins that were exported to it.  I cannot see how the sidechains could help bitcoin scale to hundreds of millions of users -- except by being altcoins independent of bitcoin.


The LN is very different from sidechains.  It executed payments by means of "bitcoin IOUs" that are guaranteed by actual bitcoins that were locked by users for a predetermined time.  While sidechains are too unconstrained, the LN is too constrained.  

From all that I know, it has some formidable practical problems, like requiring that users lock in advance all the bitcoins that they intend to spend for the next 6 months into bank-like entities.

I have asked about these problems directly to Adam Back, Luke Jr, and a few other developers, including Joseph Poon, one of the LN inventors.  The dialogue always ends at that point.


So you don't mind having the bitcoin network literally owned by one company, which intends to make it unusable for its original purpose and to reuse it as an internal component of their nonsensical project... It makes me very hopeful that bitcoin will collapse -- not under external attacks, as bitcoiners always feared, but from the greed and mistakes of its defenders.  It will be fun to watch...

Wait, where does that leave me?  Am I useless then?

A possible motivation has been discovered: Coinwallet.eu has a wallet whose distinguishing feature, according to them, is an effective fee estimator. 

Needless to say a fee estimator is useful only when there is a backlog of unconfirmed transactions.  Without a backlog, every transaction should be confirmed in the next 1-2 blocks, whatever its fee.

That has been talked about, but, AFAIK, it is not in the released BitcoinXT yet.


People should check what the XT authors say about these.  However, there is a fork of XT that has only the block size limit increase patch, not the other controversial ones.  (Since these are node/client policy changes, not protocol changes, they will not cause a fork of the chain, not even a soft one.)

And anyone could make a clone of BitcoinCore with the increased block size limit.   Such a version too would be compatible with the other BitcoinXT options.

You got 10 Cute Points there, but surely you know what I meant? 

Blockstream's invariant message for the last two months has been "it is not necessary to increase bitcoin's block size limit because the LN will accomodate any future traffic increase."  Except that the LN will be centralized and dependent on trusted third parties; users will have to submit to AML/KYC, their coins will be locked in the system for months, ad their payments can be easily traced and blocked. Oh, and, while bitcoin exists and sort of works, the LN is very unlikely to do either thing...

The stress tests were not traffic jams.  They created a huge backlog but with a fixed low fee (0.2 mBTC/kB), so anyone who paid more than that got through with no problem.

Even so, at one moment when I checked the queue, there were at least 5'000 transactions that paid less than that, and were therefore delayed until the backlog cleared.  The total number of transactions that were blocked by the three big stress tests must have been a lot more than that.

Presumably, the thousands of users who issued those transactions were not aware of the fee/priority thing, or had no way of setting a higher than normal fee, or were not aware that the "stress test" was going on.  I suspect that they were not particularly thrilled with bitcoin's quality of service.  

Could that be the reason why the average traffic is now ~110'000 tx/day, or ~8000 tx/dat less than it was in mid-June?  (By the trend of the previous 12 months, it should have been ~10'000 tx/day more.)

In a real traffic jam, you will not be competing against a "stress tester" who pays fixed fees, but against other user like you who are trying to push you out of the next blocks so that their transactions can get in.

Smart wallets and tools like RBF and CPFP will not reduce the average wait time by one second.  SO, unless you have a Golden Priority Pass signed by Satoshi himself, there is no reason to suppose that your transactions will be confirmed faster than those of your peers.  Therefore you can expect to have your transactions delayed by hours, even though you will pay a lot more than you pay now.