Honestly... I thought this project was DOA because of when it launched... but holy shit, it is just now seeing it's price action catch up with the first mover advantage it had a couple years ago. And remember, Garzik has stated in past interviews that he created Metronome as a new beginning, a project that embodies what he would do differently after building on Bitcoin for a number of years. This is a top 50 project at uniscam prices. You know the devs You know the backers You know what happens next Don't say you weren't warned.
Average Bitcoin transaction fee is now above five dollars. 80% of the world population lives on less than $10 a day. So much for "banking the unbanked."
80% of Bitcoin's potential user base, and the group that stands to benefit the most from global financial inclusion, are now priced out of using Bitcoin. Very sad that it's come to this. edit: since this post is trending on /all, I'll share some background info for the new people here:
The vast majority of old-school bitcoin users still believe that Bitcoin should be affordable, fast, and available to everyone. Bitcoin development was captured by a bank-funded corporation called Blockstream who literally believe that the more expensive and difficult to transact Bitcoin is, the more valuable it will be (because they apparently think that cost and difficulty of use are the defining characteristics of gold). Just a couple of days ago the CEO of Blockstream re-affirmed that he thinks even $100 transaction fees on Bitcoin are acceptable: https://www.reddit.com/btc/comments/6fybcy/adam_back_reaffirms_that_he_thinks_100/ This subreddit, /btc, is where most of us old timers hang out since we are now mostly banned and censored from posting on /bitcoin. That subreddit has become a massive tool for pulling the wool over the eyes of new users and organizing coordinated character assasinations against any prominent individual who speaks out against their status quo. It was revealed that the Blockstream/Core group of developers even have secret chat groups alongside the moderators of /bitcoin for coordinating their trolling campaigns in: https://telegra.ph/Inside-the-Dragons-Den-Bitcoin-Cores-Troll-Army-04-07
Smart contracts raped the Bitcoin blockchain and they had to be crippled to minimize the damage
Core gave Ethereum a big competitive advantage by crippling smart contracts which were "raping the blockchain" according to Luke JR's brilliant reasoning. The 80 bytes OP_RETURN was reduced to 40 bytes and stayed that way for quite some time. Ethereum and similar platforms flourished during that time. https://github.com/bitcoin/bitcoin/pull/3737 https://imgur.com/a/4jiOD
Newbs might not know this, but bitcoin recently came out of an intense internal drama. Between July 2015 and August 2017 bitcoin was attacked by external forces who were hoping to destroy the very properties that made bitcoin valuable in the first place. This culminated in the creation of segwit and the UASF (user activated soft fork) movement. The UASF was successful, segwit was added to bitcoin and with that the anti-decentralization side left bitcoin altogether and created their own altcoin called bcash. Bitcoin's price was $2500, soon after segwit was activated the price doubled to $5000 and continued rising until a top of $20000 before correcting to where we are today. During this drama, I took time away from writing open source code to help educate and argue on reddit, twitter and other social media. I came up with a reading list for quickly copypasting things. It may be interesting today for newbs or anyone who wants a history lesson on what exactly happened during those two years when bitcoin's very existence as a decentralized low-trust currency was questioned. Now the fight has essentially been won, I try not to comment on reddit that much anymore. There's nothing left to do except wait for Lightning and similar tech to become mature (or better yet, help code it and test it) In this thread you can learn about block sizes, latency, decentralization, segwit, ASICBOOST, lightning network and all the other issues that were debated endlessly for over two years. So when someone tries to get you to invest in bcash, remind them of the time they supported Bitcoin Unlimited. For more threads like this see UASF
The Great Bitcoin Bull Market Of 2017 by Trace Mayer
By: Trace Mayer, host of The Bitcoin Knowledge Podcast. Originally posted here with images and Youtube videos. I just got back from a two week vacation without Internet as I was scouring some archeological ruins. I hardly thought about Bitcoin at all because there were so many other interesting things and it would be there when I got back. Jimmy Song suggested I do an article on the current state of Bitcoin. A great suggestion but he is really smart (he worked on Armory after all!) so I better be thorough and accurate! Therefore, this article will be pretty lengthy and meticulous. BACKGROUND As I completely expected, the 2X movement from the New York Agreement that was supposed to happen during the middle of my vacation flopped on its face because Jeff Garzik was driving the clown car with passengers willfully inside like Coinbase, Blockchain.info, Bitgo and Xapo and there were here massive bugS and in the code and miners like Bitmain did not want to allocate $150-350m to get it over the difficulty adjustments. I am very disappointed in their lack of integrity with putting their money where their mouths are; myself and many others wanted to sell a lot of B2X for BTC! On 7 December 2015, with Bitcoin trading at US$388.40, I wrote The Rise of the Fourth Great Bitcoin Bubble. On 4 December 2016, with Bitcoin trading at US$762.97, I did this interview:
As of 26 November 2017, Bitcoin is trading around US$9,250.00. That is an increase of about 2,400% since I wrote the article prognosticating this fourth great Bitcoin bull market. I sure like being right, like usual (19 Dec 2011, 1 Jul 2013), especially when there are financial and economic consequences. With such massive gains in such a short period of time the speculative question becomes: Buy, Hold or Sell? FUNDAMENTALS Bitcoin is the decentralized censorship-resistant Internet Protocol for transferring value over a communications channel. The Bitcoin network can use traditional Internet infrastructure. However, it is even more resilient because it has custom infrastructure including, thanks to Bitcoin Core developer Matt Corrallo, the FIBRE network and, thanks to Blockstream, satellites which reduce the cost of running a full-node anywhere in the world to essentially nothing in terms of money or privacy. Transactions can be cheaply broadcast via SMS messages. SECURITY The Bitcoin network has a difficulty of 1,347,001,430,559 which suggests about 9,642,211 TH/s of custom ASIC hardware deployed. At a retail price of approximately US$105/THs that implies about $650m of custom ASIC hardware deployed (35% discount applied). This custom hardware consumes approximately 30 TWh per year. That could power about 2.8m US households or the entire country of Morocco which has a population of 33.85m. This Bitcoin mining generates approximately 12.5 bitcoins every 10 minutes or approximately 1,800 per day worth approximately US$16,650,000. Bitcoin currently has a market capitalization greater than $150B which puts it solidly in the top-30 of M1 money stock countries and a 200 day moving average of about $65B which is increasing about $500m per day. Average daily volumes for Bitcoin is around US$5B. That means multi-million dollar positions can be moved into and out of very easily with minimal slippage. When my friend Andreas Antonopolous was unable to give his talk at a CRYPSA event I was invited to fill in and delivered this presentation, impromptu, on the Seven Network Effects of Bitcoin. These seven network effects of Bitcoin are (1) Speculation, (2) Merchants, (3) Consumers, (4) Security [miners], (5) Developers, (6) Financialization and (7) Settlement Currency are all taking root at the same time and in an incredibly intertwined way. With only the first network effect starting to take significant root; Bitcoin is no longer a little experiment of magic Internet money anymore. Bitcoin is monster growing at a tremendous rate!!
SPECULATION For the Bitcoin price to remain at $9,250 it requires approximately US$16,650,000 per day of capital inflow from new hodlers. Bitcoin is both a Giffen good and a Veblen good. A Giffen good is a product that people consume more of as the price rises and vice versa — seemingly in violation of basic laws of demand in microeconomics such as with substitute goods and the income effect. Veblen goods are types of luxury goods for which the quantity demanded increases as the price increases in an apparent contradiction of the law of demand. There are approximately 16.5m bitcoins of which ~4m are lost, ~4-6m are in deep cold storage, ~4m are in cold storage and ~2-4m are salable. (http://www.runtogold.com/images/lost-bitcoins-1.jpg) (http://www.runtogold.com/images/lost-bitcoins-2.jpg) And forks like BCash (BCH) should not be scary but instead be looked upon as an opportunity to take more territory on the Bitcoin blockchain by trading the forks for real bitcoins which dries up more salable supply by moving it, likely, into deep cold storage. According to Wikipedia, there are approximately 15.4m millionaires in the United States and about 12m HNWIs ($30m+ net worth) in the world. In other words, if every HNWI in the world wanted to own an entire bitcoin as a 'risk-free asset' that cannot be confiscated, seized or have the balance other wise altered then they could not. For wise portfolio management, these HNWIs should have at least about 2-5% in gold and 0.5-1% in bitcoin. Why? Perhaps some of the 60+ Saudis with 1,700 frozen bank accounts and about $800B of assets being targetted might be able to explain it to you. In other words, everyone loves to chase the rabbit and once they catch it then know that it will not get away. RETAIL There are approximately 150+ significant Bitcoin exchanges worldwide. Kraken, according to the CEO, was adding about 6,000 new funded accounts per day in July 2017. Supposedly, Coinbase is currently adding about 75,000 new accounts per day. Based on some trade secret analytics I have access to; I would estimate Coinbase is adding approximately 17,500 new accounts per day that purchase at least US$100 of Bitcoin. If we assume Coinbase accounts for 8% of new global Bitcoin users who purchase at least $100 of bitcoins (just pulled out of thin error and likely very conservative as the actual number is perhaps around 2%) then that is approximately $21,875,000 of new capital coming into Bitcoin every single day just from retail demand from 218,750 total new accounts. What I have found is that most new users start off buying US$100-500 and then after 3-4 months months they ramp up their capital allocation to $5,000+ if they have the funds available. After all, it takes some time and practical experience to learn how to safely secure one's private keys. To do so, I highly recommendBitcoin Core (network consensus and full validation of the blockchain), Armory (private key management), Glacier Protocol (operational procedures) and a Puri.sm laptop (secure non-specialized hardware). WALL STREET There has been no solution for large financial fiduciaries to invest in Bitcoin. This changed November 2017. LedgerX, whose CEO I interviewed 23 March 2013, began trading as a CFTC regulated Swap Execution Facility and Derivatives Clearing Organization. The CME Group announced they will begin trading in Q4 2017 Bitcoin futures. The CBOE announced they will begin trading Bitcoin futures soon. By analogy, these institutional products are like connecting a major metropolis's water system (US$90.4T and US$2 quadrillion) via a nanoscopic shunt to a tiny blueberry ($150B) that is infinitely expandable. This price discovery could be the most wild thing anyone has ever experienced in financial markets. THE GREAT CREDIT CONTRACTION The same week Bitcoin was released I published my book The Great Credit Contraction and asserted it had now begun and capital would burrow down the liquidity pyramid into safer and more liquid assets. (http://www.runtogold.com/images/Great-Credit-Contraction-Liquidity-Pyramid.jpg) Thus, the critical question becomes: Is Bitcoin a possible solution to the Great Credit Contraction by becoming the safest and most liquid asset? BITCOIN'S RISK PROFILE At all times and in all circumstances gold remains money but, of course, there is always exchange rate risk due to price ratios constantly fluctuating. If the metal is held with a third-party in allocated-allocated storage (safest possible) then there is performance risk (Morgan Stanley gold storage lawsuit). But, if properly held then, there should be no counter-party risk which requires the financial ability of a third-party to perform like with a bank account deposit. And, since gold exists at a single point in space and time therefore it is subject to confiscation or seizure risk. Bitcoin is a completely new asset type. As such, the storage container is nearly empty with only $150B. And every Bitcoin transaction effectively melts down every BTC and recasts it; thus ensuring with 100% accuracy the quantity and quality of the bitcoins. If the transaction is not on the blockchain then it did not happen. This is the strictest regulation possible; by math and cryptography! This new immutable asset, if properly secured, is subject only to exchange rate risk. There does exist the possibility that a software bug may exist that could shut down the network, like what has happened with Ethereum, but the probability is almost nil and getting lower everyday it does not happen. Thus, Bitcoin arguably has a lower risk profile than even gold and is the only blockchain to achieve security, scalability and liquidity. To remain decentralized, censorship-resistant and immutable requires scalability so as many users as possible can run full-nodes. (http://www.runtogold.com/images/ethereum-bitcoin-scability-nov-2017.png) TRANSACTIONS Some people, probably mostly those shilling alt-coins, think Bitcoin has a scalability problem that is so serious it requires a crude hard fork to solve. On the other side of the debate, the Internet protocol and blockchain geniuses assert the scalability issues can, like other Internet Protocols have done, be solved in different layers which are now possible because of Segregated Witness which was activated in August 2017. Whose code do you want to run: the JV benchwarmers or the championship Chicago Bulls? As transaction fees rise, certain use cases of the Bitcoin blockchain are priced out of the market. And as the fees fall then they are economical again. Additionally, as transaction fees rise, certain UTXOs are no longer economically usable thus destroying part of the money supply until fees decline and UTXOs become economical to move. There are approximately 275,000-350,000 transactions per day with transaction fees currently about $2m/day and the 200 DMA is around $1.08m/day. (http://www.runtogold.com/images/bitcoin-transaction-fees-nov-2017.png) What I like about transaction fees is that they somewhat reveal the financial health of the network. The security of the Bitcoin network results from the miners creating solutions to proof of work problems in the Bitcoin protocol and being rewarded from the (1) coinbase reward which is a form of inflation and (2) transaction fees which is a form of usage fee. The higher the transaction fees then the greater implied value the Bitcoin network provides because users are willing to pay more for it. I am highly skeptical of blockchains which have very low transaction fees. By Internet bubble analogy, Pets.com may have millions of page views but I am more interested in EBITDA. DEVELOPERS Bitcoin and blockchain programming is not an easy skill to acquire and master. Most developers who have the skill are also financially independent now and can work on whatever they want. The best of the best work through the Bitcoin Core process. After all, if you are a world class mountain climber then you do not hang out in the MacDonalds play pen but instead climb Mount Everest because that is where the challenge is. However, there are many talented developers who work in other areas besides the protocol. Wallet maintainers, exchange operators, payment processors, etc. all need competent developers to help build their businesses. Consequently, there is a huge shortage of competent developers. This is probably the largest single scalability constraint for the ecosystem. Nevertheless, the Bitcoin ecosystem is healthier than ever before. (http://www.runtogold.com/images/bitcoin-ecosystem.jpg)(/images/bitcoin-ecosystem-small.jpg) SETTLEMENT CURRENCY There are no significant global reserve settlement currency use cases for Bitcoin yet. Perhaps the closest is Blockstream's Strong Federations via Liquid. PRICE There is a tremendous amount of disagreement in the marketplace about the value proposition of Bitcoin. Price discovery for this asset will be intense and likely take many cycles of which this is the fourth. Since the supply is known the exchange rate of Bitcoins is composed of (1) transactional demand and (2) speculative demand. Interestingly, the price elasticity of demand for the transactional demand component is irrelevant to the price. This makes for very interesting dynamics! (http://www.runtogold.com/images/bitcoin-speculation.jpg) On 4 May 2017, Lightspeed Venture Partners partner Jeremy Liew who was among the early Facebook investors and the first Snapchat investor laid out their case for bitcoin exploding to $500,000 by 2030. On 2 November 2017, Goldman Sachs CEO Lloyd Blankfein (https://www.bloomberg.com/news/articles/2017-11-02/blankfein-says-don-t-dismiss-bitcoin-while-still-pondering-value)said, "Now we have paper that is just backed by fiat...Maybe in the new world, something gets backed by consensus." On 12 Sep 2017, JP Morgan CEO called Bitcoin a 'fraud' but conceded that "(http://fortune.com/2017/09/12/jamie-dimon-bitcoin-cryptocurrency-fraud-buy/)Bitcoin could reach $100,000". Thus, it is no surprise that the Bitcoin chart looks like a ferret on meth when there are such widely varying opinions on its value proposition. I have been around this space for a long time. In my opinion, those who scoffed at the thought of $1 BTC, $10 BTC (Professor Bitcorn!), $100 BTC, $1,000 BTC are scoffing at $10,000 BTC and will scoff at $100,000 BTC, $1,000,000 BTC and even $10,000,000 BTC. Interestingly, the people who understand it the best seem to think its financial dominance is destiny. Meanwhile, those who understand it the least make emotionally charged, intellectually incoherent bearish arguments. A tremendous example of worldwide cognitive dissonance with regards to sound money, technology and the role or power of the State. Consequently, I like looking at the 200 day moving average to filter out the daily noise and see the long-term trend. (http://www.runtogold.com/images/bitcoin-price-200dma-nov-2017.png) Well, that chart of the long-term trend is pretty obvious and hard to dispute. Bitcoin is in a massive secular bull market. The 200 day moving average is around $4,001 and rising about $30 per day. So, what do some proforma situations look like where Bitcoin may be undervalued, average valued and overvalued? No, these are not prognostications. (http://www.runtogold.com/images/bitcoin-price-pro-forma.png) Maybe Jamie Dimon is not so off his rocker after all with a $100,000 price prediction. We are in a very unique period of human history where the collective globe is rethinking what money is and Bitcoin is in the ring battling for complete domination. Is or will it be fit for purpose? As I have said many times before, if Bitcoin is fit for this purpose then this is the largest wealth transfer in the history of the world. CONCLUSION Well, this has been a brief analysis of where I think Bitcoin is at the end of November 2017. The seven network effects are taking root extremely fast and exponentially reinforcing each other. The technological dominance of Bitcoin is unrivaled. The world is rethinking what money is. Even CEOs of the largest banks and partners of the largest VC funds are honing in on Bitcoin's beacon. While no one has a crystal ball; when I look in mine I see Bitcoin's future being very bright. Currently, almost everyone who has bought Bitcoin and hodled is sitting on unrealized gains as measured in fiat currency. That is, after all, what uncharted territory with daily all-time highs do! But perhaps there is a larger lesson to be learned here. Riches are getting increasingly slippery because no one has a reliable defined tool to measure them with. Times like these require incredible amounts of humility and intelligence guided by macro instincts. Perhaps everyone should start keeping books in three numéraires: USD, gold and Bitcoin. Both gold and Bitcoin have never been worth nothing. But USD is a fiat currency and there are thousands of those in the fiat currency graveyard. How low can the world reserve currency go? After all, what is the risk-free asset? And, whatever it is, in The Great Credit Contraction you want it! What do you think? Disagree with some of my arguments or assertions? Please, eviscerate them on Twitter or in the comments!
Bitcoiner awakes from Core Propaganda Trance, Admits Being Brainwashed
This is a true story: One of my Internet acquaintances was not long ago a full fledged "Core Coolaid" drinker, complete with all the talking points. Then suddenly, he appeared to do a 180. I privately asked him: "What happened, what made you see the light, and what made you buy into the propaganda to begin with?"
Here is his reply to me that I am posting with his permission:
"I'll try and lay it out for you best I can because I really can't pinpoint the exact thing or moment that led me to the light. Simply put, in my case, it was willful ignorance. Slight backstory on me....this isn't a normal thing for me. I consider myself a very intelligent and also extremely open minded person. Always willing to ask questions and examine new ideas. I take pride in my ability to discern. Except this time. Emotions and greed took over and blinded me. I was led to believe Core is good and BU is bad. I wanted higher prices. I didn't want contention. I thought the majority wanted segwit like all those people still do, so that was the path of least resistance to btc prices skyrocketing I thought. I was over invested and under informed. Sight of the true freedom bitcoin could offer the world had slipped away in my mind for the time as well. The vast majority of my exposure to bitcoin was through /bitcoin on reddit. That was the major problem. They run a heavy propaganda machine. Anyway, as a noob to bitcoin, I think it was somehow implanted in my brain through that sub that the "Core" developers are special. Afterall, they were involved with bitcoin for a long time right? They are renowned coders right? Well they must know best and have the best intentions for bitcoin right?! I simply appealed to authority, of what appeared to have majority support. It was there where I unknowingly made the decision to buy every last bit of bullshit, not excluding the big blocks = bad FUD. A true sheeple moment I am ashamed of. It wasn't too long after the UASF campaign something felt really off. At first, as you know, I was all for it (of course, I thought segwit = higher price. Only thinking with emotions), but then it just started looking bad. I could tell it was not much more than a threat to the miners, but the way people kept picketing and protesting eventually turned me off and made me think and look at myself. That just didn't seem like the bitcoin way I have always heard about. I think that was the turning point. Then came research. I already knew the AXA connection, but ignored it. I spent the whole day on /btc reading posts and important articles (like from Jeff Garzik) that I flat out ignored when they were published because my emotions had got to me again. This person was the cause of a price dip....damn them, right? All of that combined with discussion with Gmax and Lukejr...I kept asking him questions about blocksize, and I kept clarifying between base blocksize and segwit and kept repeatedly lying directly to my face. I was also attacked for asking how Blockstream intends to profit etc. I knew I had been duped. I finally decided to read thoroughly through your letter to the miners. The cognitive dissonance was pretty strong for the time being. It was like discovering one of those ultimate truths that completely change your way of viewing and thinking about the world (but on a smaller scale). I think the initial shock is wearing off. In a bit of a cage stage right now trying to make up for my Core cheerleading in the past. I consider myself much more knowledgeable about bitcoin than the average user, but I am not good with the technical aspect unfortunately. I should probably stay out of the debate altogether. Lastly, my sincere apology to you. I can't quite remember but I am pretty sure you were one of the users I have before lashed out at on here. Totally ridiculous and embarrassing on my part. I am ashamed of my prior actions. To be caught up so much in emotions like that is outside of my character and I am truly sorry it came to that. I want to thank you, and people like you, who have worked hard to open my eyes and also for protecting the true vision of bitcoin. I really hope anything I said helps you see some of what we may be dealing with on the other side. Sadly, even though I was completely duped like a brainwashed idiot, I don't see as many people being able to deal with and accept the truth as I have. Maybe they will need bitcoin to change first. I don't know. I hope I'm 100% wrong however. Wish you well. Cheers. "
Hi Bitcoiners! I’m back with the tenth monthly Bitcoin news recap. Last month I couldn’t post as I was travelling a lot and missed a few days of news. Normally seen that's not a problem, but Reddit decided to discontinue historical searches for specific timeframes. I know, I was sad too. Anyways for those unfamiliar with the recaps, each day I pick out the most popularelevant/interesting stories in bitcoin and save them. At the end of the month I release them in one batch, to give you a quick (but not necessarily the best) overview of what happened in bitcoin over the past month. Now I know the price went absolutely 🥜 this month, but there’s a lot more going on in the space than that! You can see recaps of the previous months on Bitcoinsnippets.com A recap of Bitcoin in October 2017
Barry and his millionaire friends pumping the B2X (BT2) price on Bitfinex.
They can do that now easily due to the low liquidity, as time passes it will be more difficult to do. Even with the pumping, they can't get the S2X coin, appropriately named 'B2X' on Bitfinex (with symbol 'BT2'), over 1/2 the price of one real Bitcoin 'BTC' (with symbol 'BT1'). Even with Bitfinex appropriately naming each coin, it is still confusing, since the S2X'ers labeled their nodes as btc1, which they've been unable to grow in numbers, stagnating around just a little over 200. The S2X/NYA attack is failing and losing steam as their few (albeit very rich) supporters are exposed to the light in every possible social media regarding their hidden motives and names behind the attack, so everybody is well informed and there is no confusion between the real Bitcoin and the altcoins with 'bitcoin' in their name. Also, every bitcoiner should know about what DCG (digital Currency Group) is, and call out publicly these people that are working for the Corporations/Bankers against Bitcoin: Sam Patterson (and OB team), Gavin Andresen, Jeff Garzik, Mike Hearn, Roger Ver, Jihan Wu, John Mcaffe, Craig Wright, Barry Silbert, Larry Summers, Blythe Masters, Stephen Pair, Erik Voorhees, Vinny Lingham and Brian Armstrong. Once people are informed, they won't be fooled (like all the poor guys at btc) and will follow Bitcoin instead of Bizcoin or Bcash or any other centralized altcoin they come up with disguised as Bitcoin. Focus your education/pressure efforts on just two people, if even one of them withdraws, S2X/NYA is effectively dead. And those two are:
Anyway, if they decide to stick to S2X altcoin, they MAY end up bankrupt or at least losing a lot of money from the loss of real bitcoins and from the subsequent lawsuits and the hit on their reputation and credibility leading to the loss of users/clients/customers. Bitcoin would be set back a little bit (like what happened with the recent China+Bankers attack), but Moneybadger don't care, it will emerge stronger than ever, blasting through $10,000 and beyond. Just Hodl (buy more if there's a dip), start a Core node if you haven't yet, and let your voice be heard if you have an account with Coinbase: This is the direct link to contact them: https://support.coinbase.com/customeportal/emails/new On the bottom, click on "Submit a request". This was my answer to them after my first email:
Thank you for your response, but to say "We will have more information about the fork in the coming months" it is not acceptable, since we need to know by the end of October, and we need to move all the funds from the Vault. We won't be dealing with any company supporting the S2X/NYA fork. If Coinbase does not care what their customers want, that is very disappointing, you need to be clear and officially declare why are you supporting such attack on Bitcoin, or definitely withdraw from such an irrational agreement which, by the way, it does not even have a replay protection yet, so Coinbase it is opening itself to many legal problems for all the lost coins that will result from that fork. Please side with the vast majority of the Bitcoin community and your customers, instead of a few corporations and miners with shady intentions and crapy developers. The majority will be following the Core developers. Please listen to your own Charlie Lee and withdraw from S2X now. Please let us know clearly your plan, so we can take all the appropriate measures in advance. Don't keep all of your customers in this unnecessary suspense and uncertainty. Thanks.
The /r/btc China Dispatch: Episode 1 - China Reacts to Hearn’s Rage Quit
Hello, fellow /bitcoin refugees! The thought recently occurred to me that the transition from North Korea to our new uncensored home here might be helped if more original content was published to this sub. As I am a translator by trade, it seems like the best way for me to contribute on an individual level is to provide the English-speaking community here with a window into how the Chinese-speaking bitcoin community thinks about bitcoin and the issues facing bitcoin today. I believe that it is more important now than ever to bridge the cultural and linguistic gaps in this space so that more minds can have access to all available information and work on the most important problems facing the community together. Therefore, I have decided to commit a small amount of time every day for the next week to translating a Chinese discussion thread or news article into English. My hope is that you guys will find these translations interesting and informative and if the response this week is generally positive, I may consider making this into a regular project. So, without further ado: here is a thread from the Chinese bitcoin forum 8btc.com regarding Mike Hearn’s recent decision to throw in the towel on bitcoin. The original thread can be viewed here: http://8btc.com/thread-27998-1-1.html) [OP] Title: The Bitcoin Experiment Has Failed: Time to Sell Your Holdings and Pack it in Folks Posted by 英年早睡
I’ve spent more than 5 years being a Bitcoin developer. The software I’ve written has been used by millions of users, hundreds of developers, and the talks I’ve given have led directly to the creation of several startups. I’ve talked about Bitcoin on Sky TV and BBC News. I have been repeatedly cited by the Economist as a Bitcoin expert and prominent developer. I have explained Bitcoin to the SEC, to bankers and to ordinary people I met at cafes. From the start, I’ve always said the same thing: Bitcoin is an experiment and like all experiments, it can fail. So don’t invest what you can’t afford to lose. I’ve said this in interviews, on stage at conferences, and over email. So have other well known developers like Gavin Andresen and Jeff Garzik. But despite knowing that Bitcoin could fail all along, the now inescapable conclusion that it has failed still saddens me greatly. The fundamentals are broken and whatever happens to the price in the short term, the long term trend should probably be downwards. I will no longer be taking part in Bitcoin development and have sold all my coins.
http://www.8btc.com/mike-hearn-bitcoin Well it looks like one of the big gods has spoken. What are you guys still holding out for? [Response 1] Posted by 胡老头 Back in 2013 there was a developer who gave up on bitcoin, and what happened after that? This is nothing but a personal miscalculation. I don’t care whether it’s a developer or even Satoshi himself saying that a decentralized system like bitcoin has failed - it’s equally meaningless and doesn’t do anything to change the general trend of robust development. [Response 2] Posted by ls-a This Mike Hearn is the guy who was promoting XT, right? Just because XT has failed doesn’t mean that bitcoin has failed. [Response 3] Posted by 秦的爱恋 Just because bitcoin has failed doesn’t mean that cryptocurrency has failed. [Response 4] Posted by yuli7376 The future success or failure of bitcoin is not something that can be decided by a single person. Even if the entire development team quit there will always be new people who will take the reigns and continue development. [Response 5] Posted by bitea I guess the foreign [Western] community had a bit of a shock and have started selling? In that case keep it up guys. Makes it easier for us to accumulate. [Response 6] Posted by 玛_雅
This Mike Hearn is the guy who was promoting XT, right? Just because XT has failed doesn’t mean that bitcoin has failed.
His decision “not to continue participating in the development of bitcoin” may be due to the fact that the community saw that he put forward the radical proposal known as XT and expelled him since he was not suited to core development. In truth, he didn’t exit core development, but was kicked out. Now with this announcement he’s trying to make it out like he’s the one quitting as a way to save face. Given that he tried to promote the 8MB solution in XT, it’s clear that he’s not a “big god,” but more like just a “big cow” [translator’s note: in Chinese netspeak, “big cow” can be used to refer to someone of talent, but the word is a significant step below “big god”]. There is a greater security risk with 8MB. The real big god is the guy who proposed the “segregated witness” soft fork. [Response 7] Posted by 大绅士奇奇怪 I looks to me like he’s pissed off because of the lack of support for XT. At the current stage the vast majority of people who accept bitcoin are fairly radical. Yet this big god complains in his essay that other people are too conservative! He’s gotta be off his meds. Also, this big god seems to really like to talk smack about China’s internet, but he doesn’t do anything except complain. His attitude is really not what you would expect from someone of his caliber. [Reponse 8] Posted by vatten Any time that money is involved any kind of radical proposal is going to be rejected. It’s the same reason why the US Fed can only move interest rates 0.25% at a time. [Response 9] Posted by yuxuan If you don’t want to play, just leave quietly. That’s all for now folks. Will be back with another installment tomorrow. Edit + 4 hours: Holy shit. Never would have thought there would be so much enthusiasm for this post. Thanks for all the positive feedback. I look forward to continuing this series in the future!
The two phases of SegWit2X and what you can do to participate. (ELI5 style)
A lot of miners in China said yesterday that they will begin signalling for SegWit2X on Monday. Here's what you need to know (before we get 200 ELI5 posts asking for this). SegWit2X is both an agreement between many businesses and a software release intended to support the spirit of that agreement. The agreement calls for two things to happen at two different times. First, to activate SegWit through a miner activated soft fork as soon as possible with 80% of the miners supporting it. Second, sometime later, to activate a 2 MB blocksize hard fork. The software approach to achieve this, led by Jeff Garzik, is attempting to write one software package to accomplish both. As an aside, if you told me I needed to deliver one complicated software feature soon and another complicated feature later, I would not try to deliver both simultaneously for the deadline of the first one. That seems like it would be obvious to a 5 year old. But to be fair to Jeff Garzik, there's politics involved in this thing being driven by people who don't understand software development, so that bit of stupidity is understandable. But this just shows why 5 year olds are smarter than a group of executives in suits. For all of you though, SegWit2X has two very different things it's going to do at two different points in time. First, the miners are going to try to activate SegWit alone, before the August 1st deadline set by the user lead movement known as UASF. What do you have to do about the SegWit part of SegWit2X? You have two choices. One is to do nothing. SegWit is backwards compatible to all wallets. If you have a wallet that will support SegWit itself you also don't need to do anything because SegWit2X is actually trying to activate SegWit using the same code on your wallet. However, to ensure you are also enforcing SegWit activation you may choose to run either a UASF enforcing node or, if they make one available, a SegWit2X enforcing node. Again, an aside from me, UASF nodes have had very few lines of code changed and the only change is that after August 1st, a block must signal in favour of SegWit to continue to be considered valid. SegWit2X has had a whole lot of changes - it is trying to see if 80% of miners are signaling in favour SegWit2X and if they are then it is going to try to reject blocks that don't signal for SegWit (and it has all sorts of hardforking code inside of it too that is meant to be dormant until some time in the future). I myself will be running a UASF node the whole time. I think that's reliable software. I know what it's going to do when it activates. And, the more of us that run it, the more incentive there is for none of the miners to betray their pledge to activate SegWit. I would not be surprised if many of the miners who have pledged support of SegWit2X actually instead choose to run the UASF because it does the same thing with way less risk of failure. After SegWit is activated the first phase of SegWit2X will be complete. People will rejoice in the streets and there will be much merriment. Everyone on both sides of the scaling debate will declare victory. The price of bitcoin might go lunar. Next comes phase 2, the 2MB hard fork. Where you didn't have to do anything at all to get SegWit, you will have to take action to support a hard fork. In fact, a hard fork requires every single node to take action. Unlike a soft fork, a hard fork is not backwards compatible. SegWit2X will need to release software for every user to download and install and run for the 2MB hard fork to be universally supported. The software task ahead of the SegWit2X team (which is really just poor Jeff Garzik and a few kind and not-so-kind code reviewers) is very hard. Testing a hard fork is extremely difficult. And testing on a test network is not the same as testing on the real world network. As bitcoin is constantly under attack by all sorts of parties, preventing an early activation or some kind of mis-activation can also be hard. The Bitcoin Unlimited hard fork client accidentally forked when it wasn't supposed to, for example, and it has a software development team larger than one person. Also Jeff only yesterday found out from a kind reddit user that the code he wrote to activate a hard fork didn't actually do that. If at this point you're thinking maybe you want a more careful approach to a hard fork you're on the same page as me. I do not oppose bigger blocks. I just want a very safe approach to any hard fork, if we're going to have one. Anyhow, since this is bitcoin, you can expect all kinds of campaigns after the activation of SegWit to tell you that you have to upgrade and to tell you that you must not upgrade. There's even one proposal out today by one of the core developers that suggests that big blocks can be mined without a hard fork using a technology called a drivechain. The community will review that too and maybe something like that will satisfy everyone who matters in this decision. The good news for everyone is that we are breaking through this scaling debate. Bitcoin will always be under attack and in debate. Don't sweat it. It can't be stopped. This is already a lot of ELI5 information, so I'm going to wrap it up here. Any questions?
Some people have called the prospect of limited block space and the development of a fee market a change in policy compared to the past. I respectfully disagree with that. Bitcoin Core is not running the Bitcoin economy, and its developers have no authority to set its rules. Change in economics is always happening, and should be expected. Worse, intervening in consensus changes would make the ecosystem more dependent on the group taking that decision, not less. This completely ignores reality, what users have experienced for the past ~6 years.
"Change in economics is always happening" does not begin to approach the scale of the change. For the entirety of bitcoin's history, absent long blocks and traffic bursts, fee pressure has been largely absent. Moving to a new economic policy where fee pressure is consistently present is radically different from what users, markets, and software have experienced and lived. Analysis such as  and more shows that users will hit a "painful" "wall" and market disruption will occur - eventually settling to a new equilibrium after a period of chaos - when blocks are consistently full.  http://hashingit.com/analysis/34-bitcoin-traffic-bulletin  http://gavinandresen.ninja/why-increasing-the-max-block-size-is-urgent First, users & market are forced through this period of chaos by "let a fee market develop" as the whole market changes to a radically different economic policy, once the network has never seen before. Next, when blocks are consistently full, the past consensus was that block size limit will be increased eventually. What happens at that point? Answer - Users & market are forced through a second period of chaos and disruption as the fee market is rebooted again by changing the block size limit. The average user hears a lot of noise on both sides of the block size debate, and really has no idea that the new "let a fee market develop" Bitcoin Core policy is going to raise fees on them. It is clear that - "let the fee market develop, Right Now" has not been thought through - Users are not prepared for a brand new economic policy - Users are unaware that a brand new economic policy will be foisted upon them
So to point out what I consider obvious: if Bitcoin requires central control over its rules by a group of developers, it is completely uninteresting to me. Consensus changes should be done using consensus, and the default in case of controversy is no change.
False. All that has to do be done to change bitcoin to a new economic policy - not seen in the entire 6 year history of bitcoin - is to stonewall work on block size. Closing size increase PRs and failing to participate in planning for a block size increase accomplishes your stated goal of changing bitcoin to a new economic policy. "no [code] change"... changes bitcoin to a brand new economic policy, picking economic winners & losers. Some businesses will be priced out of bitcoin, etc. Stonewalling size increase changes is just as much as a Ben Bernanke/FOMC move as increasing the hard limit by hard fork.
My personal opinion is that we - as a community - should indeed let a fee market develop, and rather sooner than later, and that "kicking the can down the road" is an incredibly dangerous precedent: if we are willing to go through the risk of a hard fork because of a fear of change of economics, then I believe that community is not ready to deal with change at all. And some change is inevitable, at any block size. Again, this does not mean the block size needs to be fixed forever, but its intent should be growing with the evolution of technology, not a panic reaction because a fear of change. But I am not in any position to force this view. I only hope that people don't think a fear of economic change is reason to give up consensus.
Actually you are. When size increase progress gets frozen out of Bitcoin Core, that just increases the chances that progress must be made through a contentious hard fork. Further, it increases the market disruption users will experience, as described above. Think about the users. Please.
Top post on /r/bitcoin about high transaction fees. 709 comments. Every time you click "load more comments," there is nothing there. How many posts are being censored? The manipulation of free discussion by /r/bitcoin moderators needs to end yesterday.
Can you quantify the decrease in security that is likely/possible from raising the maximum block size allowed from 1MB to 2MB?
The problem is that no one has any way to realistically estimate how transaction fees will change with larger block sizes, and ultimately all of the security will soon come from transaction fees. Here's a reply I added lower down the thread: This is the tragedy of the commons at play. Individuals are demanding lower transaction fees because they want to pay less, but they ignore what the transaction fees pay for. An average 600 byte transaction will cost the network around 6 cents to store for the next few hundred years. I calculated that from S3 storage and bandwidth prices, assumed the price of storage and bandwidth continued to drop by 1.5% per year, and assumed we stay at ~5000 full history Bitcoin nodes, and changing the assumptions don't change much since most of the cost comes within the next 15 years anyway. But more importantly, transaction fees are needed to pay for miners to secure the network from attackers. As the Bitcoin network grows more popular and stable, it will become a bigger target for countries or high net worth organizations that want to manipulate it like a stock. If they amass a huge sum of money and short the Bitcoin net worth for X% of its total value, there needs to be enough mining power to make a 51% attack (mining farm built for the purposes of driving down the price to profit from the short) not viable. There can only be enough mining power if the total sum of transaction fees picks up where the block reward drops off. There's a way to estimate the mining rewards versus the total Bitcoins that would have to be shorted to be a viable attack. The price of Bitcoin drops out of the equation and within 5 years the total number of Bitcoins becomes (effectively) static as well, so that leads to this rough estimation table: https://i.imgur.com/M03YcXa.png Our current transaction fees are ~100 btc per day. If they don't increase, someone would only have to gain a profit of 2% of the total net worth to justify building a mining farm that would 51% attack the currency. With leveraged shorting and high-net-worth organizations, that's fucking nothing. We start to be in real danger if transaction fees haven't increased by ~2028.
It is not a good argument or analogy. The price is now dis-attached due to a civil war on how to scale, which is a serious problem that deserves som attention, not some simple phrase about supercomputers.
I also feel this way. when I got into the community in 2012 there was way more wildly optimistic idealism. It felt like we were really onto something revolutionary here. The longer I have stuck around the more I realized 99 percent of the community is here for self gain. It's a little sad now that when i hear people talking about how btc is going to help all these third world populations and etc, & I can plainly see there are zero solutions in that regard at the moment, that people are saying these things out of greed. They really don't care about people in third world countries. they mainly just want their btc to be worth more. I started my btc journey a very naive idealist, totally convinced we'd soon have our own huge bitcoin economy where people have finally decided to stop supporting the petro dollar and funding the war machine etc etc... but now I realize that idea sounds batshit insane to most people (even a lot of people involved with btc) and not to mention would be an extremely dangerous and volatile thing to attempt to do on a societal scale.
56MB blocks are not unfeasible for the future. Bandwidth is doubling roughly every 18 months. Other computer hardware is still progressing as well. 8MB blocks are completely feasible TODAY. 56MB blocks should be feasible within 5 years. Ultimately, we need adjustable block sizes (adjustable without hard forks) so that it can adapt to current hardware/bandwidth availability.
no. stop pricing out the poounbanked. we don't need to maintain HW requirements of running a node at 2008 levels indefinitely. The unbanked don't need to be able to run a node to make onchain transactions. If you moderately scale bitcoin so that it can accomodate increased user adoption, then # of global nodes will increase due to a larger user base. capiche?
Good thing someone along the line has the ability to convert it to $4800, huh? To most people, saying "my 5 btc transaction only cost .00025 btc" is meaningless. In short, it's only clean money because someone went through those channels that you're mocking to convert it
Core/Blockstream are now in the Kübler-Ross "Bargaining" phase - talking about "compromise". Sorry, but markets don't do "compromise". Markets do COMPETITION. Markets do winner-takes-all. The whitepaper doesn't talk about "compromise" - it says that 51% of the hashpower determines WHAT IS BITCOIN.
They've finally entered the Kübler-Ross "bargaining" phase - now they're begging for some kind of "compromise". But actually, markets aren't about compromise. Markets are about competition. Markets are about winner-takes-all. And the Bitcoin whitepaper never mentions anything about "compromise". It simply says that 51% of the hashpower determines what is Bitcoin. And as we know - the best coin will win. Which will probably be Bitcoin Unlimited with its market-based blocksizes - and not SegWit with its 1.7MB centrally planned blocksize based on a dangerous anyone-can-spend spaghetti-code soft-fork. Let's review how this played out:
Core/Blockstream accepted $76 million in "fantasy fiat" from the "legacy ledger" of central bankers via their buddies at AXA.
And Core/Blockstream accepted censorship on the sad subreddit of r\bitcoin.
And lo and behold, Core/Blockstream's reliance on fiat funding and central planning and censorship has culminated in this pathetic piece of shit called SegWit, with the following worthless "features" that nobody even wants:
Yet-another centrally-planned 1.7MB maybe-someday blocksize - combined with some random arbitrary 1-to-4 "discount" that nobody asked for,
Fixes for low-priority non-problems like malleability and quadratic hashing,
By listening to real people in the actual market, and by following Satoshi's principles as stated in the whitepaper, Bitcoin Unlimited has been able to (surprise! surprise!) offer what real people in the actual market actually want - which is currently:
FlexTrans is much better than SegWit Also, these independent, non-fiat-financed devs developed Flexible Transactions, which is way better than SegWit. Flexible Transactions can easily fix malleability and quadratic hashing - while also introducing a simple, easy-to-use, future-proof tag-based format similar to JSON or HTML permitting future upgrades without the need for a hard fork. So Flexible Transactions provides the same things as SegWit - without the dangerous mess of SegWit's "anyone-can-spend" soft-fork hack - which Core/Blockstream tried to force on everyone - because they want to take away our right to vote via a hard fork - because they know that if we actually had a hard fork a/k/a full node referendum, everyone would vote against Core/Blockstream. The market wants to decide the blocksize So more and more of the smart, non-Blockstream-aligned miners, starting with ViaBTC and now including many others, have been adopting Bitcoin Unlimited - because they understand that:
Market-based blocksizes are the right, consensus-based mechanism to provide simple and safe on-chain scaling to solve the urgent problems of transaction delays and network congestion - now and in the future
Every increase in the blocksize roughly corresponds to the same increase squared in terms of price
ie 2x bigger blocks will lead to 4x higher price, 3x bigger blocks will correspond with 9x higher price, etc. - which means that bigger blocks will make everyone happy: more profits for miners, and no more high fees or transaction delays for users.
Now Core/Blockstream are starting to bitch and moan and beg about "compromise" And actually, we couldn't answer "Sorry it's too late for compromise" even if we wanted to. Because markets and economics and cryptocurrencies aren't about compromises. Markets are about competition - they're about winner-takes-all. Nakamoto Consensus is about 51% of the hashpower decides what the rules are. Imagine if Yahoo Email were to suddenly start begging with Google Mail for "compromise". What would that even mean in the first place?? Yahoo wrote crappy email code - based on their crappy corporate culture - so the market abandoned their crappy (and buggy and insecure) email service. Core/Blockstream is similar in some ways to Yahoo. They wrote crappy code - because they have a crappy "corporate culture" - because they accept millions of dollars in fiat from central bankers at places like AXA - and because they accept censorship on shit-forums like r\bitcoin - which is why they have no clue about the real needs of real people in the real market in the real world. Censorship and fiat made Core/Blockstream fragile and out-of-touch Core/Blockstream devs enjoy the "luxury" of being able to put their head in the sand and hide from the reality of the "shreaking" masses of actual people actually trying to use Bitcoin, because:
They get millions of dollars in fiat shoveled to them by central bankers,
They conduct their "debates" in the fantasy-land of the shit-forum r\bitcoin where all the important comments get deleted and all the intelligent posters got banned long ago - including quotes from Satoshi.
And then (surprise! surprise!) the following happened:
At any moment now, at the Schelling point of our own choosing, more hashpower can also "dump Core" and start using Bitcoin Unlimited - which is why everyone involved with Core/Blockstream is now shitting in their pants.
But in a decentralized, permissionless, open-source system like Bitcoin, there is not a single thing that CEO Adam Back u/adam3us and CTO Greg Maxwell u/nullc at their shitty little AXA-funded startup Blockstream or u/theymos and u/bashco on their shitty little censored forum r\bitcoin can do to stop Bitcoin Unlimited from taking over the network - because in open-source and in economics and in markets, the best code and the best cryptocurrency wins. Everyone (except Core/Blockstream) predicted this would happen So now - predictably - the Core/Blockstream devs and their low-information supporters are all running around saying "Nobody could have predicted this!" But actually everyone has been shouting at the top of their lungs predicting this for years - including the most important old-time Bitcoin devs supporting on-chain scaling like Mike Hearn, Gavin Andresen and Jeff Garzik who were all "censored, hounded, DDoS'd, attacked, slandered & removed" - plus new-time devs like Peter Rizun u/Peter__R who provided major scaling innovations like XThin - by the vicious drooling toxic authoritarian goons involved with Core/Blockstream. Everyone has been predicting the current delays and congestion and high fees for years, out here in the reality of the marketplace, in the reality of the uncensored forums - away from Core/Blockstream's centralized back-room closed-door fiat-funded censorship-supported PowerPoint presentations in Hong Kong and Silicon Valley, away from years and years of Core/Blockstream's all-talk-no-action scaling stalling conferences. The Honey Badger of Bitcoin doesn't give a fuck about "compromise" and "censorship" and "central planning". The Honey Badger of Bitcoin doesn't give a fuck about yet-another centrally planned blocksize (Now with 1.7MB! SegWit is scaling!TM) which some economically ignorant fiat-funded dev team happened to pull out of their ass and bundle into a radical and irresponsible spaghetti-code SegWit soft-fork. Markets aren't about "compromise". Markets are about competition. As u/ForkiusMaximusrecently pointed out: The market couldn't even give a fuck if it wanted to - because markets and cryptocurrencies are not about the politics of "compromise" - they're about the economics of competition. Markets are about decentralization, and they're about Nakamoto Consensus, where 51% of the hashpower decides the rules and everyone else either gets on the bandwagon or withers away watching their hashpower and coin price sink into oblivion. So, anyone who even brings up the topic of "compromise" is simply showing that they have a fundamental misunderstanding of how markets work, and how Nakamoto Consensus works. This actually isn't very surprising. Blockstream CEO Adam Back u/adam3us and Blockstream CTO Greg Maxwell u/nullc and all the rest of the so-called "Core devs" and all their low-information hangers-on like the economic idiot Blockstream founder Mark Friedenbach u/maaku7 have never really understood Bitcoin or markets. And that's fine and normal. Plenty of individuals don't understand markets very well. But such people simply lose their own money - and they generally don't get put in charge of losing $20 billion of other people's money. Markets don't need managers or central planners. Markets run very well on their own - and they don't like central planning or censorship. Now Core/Blockstream has finally entered the Kübler-Ross "bargaining" phase So now some people at Core/Blockstream and some of their low-information supporters have have started bitching and moaning and whining about "compromise", as they sink into the Kübler-Ross "bargaining" phase - while their plans are all in shambles, and they've failed in their attempts to hijack our network and our currency. Meanwhile, the Honey Badger of Bitcoin doesn't give a fuck about a bunch of central planners and censors whining about "compromise". Bitcoin Unlimited just keeps stealing more and more hashpower away from Core - until the day comes when we decide to fork their ass into the garbage heap of shitty, failed alt-coins. Fuck Blockstream/Core and the central bankers and censors they rode in on We told them for years that they were only shooting themselves in the foot with their closed-door back-room fiat-financed wheeling and dealing and their massive censorship. We told them they were only giving themselves enough rope to hang themselves with. Now that it's actually happening, we couldn't say "it's too late for compromise" even if we wanted to - because there is no such thing as "compromise" in markets or cryptocurrencies. Markets are all about competition And Bitcoin is all about 51% of the hashpower.
Bitcoin Core decided to bet on hard-coded centrally planned 1.7MB blocksize based on a a shitty spaghetti-code soft-fork. That's their choice. They made their bed now let them lie in it.
Meanwhile, Bitcoin Unlimited decided to bet on market-based blocksizes. And that's the market's choice. Bitcoin Unlimited listened to the market - and (suprise! surprise!) that's why more and more hashpower is now mining Bitcoin Unlimited blocks.
The proposed software upgrade or “hard fork” to occur on Nov. 16 was canceled on Nov. 8, due to disagreements between many prominent CEOs and key players in the Bitcoin space. The SegWit 2X fork would have increased the block size from 1 to 2 megabytes and thereby double transaction capacity on the network. This upgrade was aimed at helping the scalability of Bitcoin. However, following a lack of consensus within the community, implementing the hard fork was suspended. In fact, it has always been a controversial topic — many Bitcoin companies have not actively supported the move. The main fear was that it would split the community into two branches. Mike Belshe, CEO and co-founder of a major Bitcoin wallet provider BitGo, announced the cancellation in an email on November 8. One of the leaders of the Segwit2x project, he argued that the scaling proposal is too controversial to move forward:
Although we strongly believe in the need for a larger block size, there is something we believe is even more important: keeping the community together. Unfortunately, it is clear that we have not built sufficient consensus for a clean block size upgrade at this time. Continuing on the current path could divide the community and be a setback to Bitcoin’s growth.
BitGo’s Mike Belshe, Xapo’s Wences Casares, Bitmain’s Jihan Wu, Bloq’s Jeff Garzik, Blockchain’s Peter Smith and Shapeshift’s Erik Voorhees all signed the statement. Quickly following this news, Bitcoin’s price hit an all-time high as people were glad that the community divide seemed over. However, that euphoria soon faded as the reality kicked in that fundamental issues with Bitcoin remained.
What does this mean for the future of Bitcoin?
Well, no one really knows, but here's a bit of insight as to what we think could happen. In 2017, the Bitcoin network capacity hit the “invisible wall.” Fees skyrocketed, and Bitcoin became unreliable, with some users unable to get their transactions confirmed, even after days of waiting. Today, people are paying up to $25 USD for a transaction to be processed, which says a lot about the usefulness of Bitcoin. Bitcoin usage stopped growing; its market share among other cryptocurrencies plummeted from 95 to 40 percent as many users, merchants, businesses and investors abandoned it. The cancellation of SegWit 2X leaves two competing bitcoin chains now: Bitcoin SegWit 1X (BTC) and Bitcoin Cash (BCH). With SegWit, data is stored differently in each block, which improves the capacity of the blockchain, however only marginally compared to the capacity available with the Bitcoin Cash blockchain. The improvement in capacity from SegWit 1X is 70 percent with no plans for any more significant updates within at least the next 18 to 24 months. The SegWit upgrade is a small capacity increase at best, and it's already showing it's not going to handle exponential growth or worldwide adoption. Bitcoin Cash was born on August 1, 2017, as a result of a few major players from the very early days of Bitcoin becoming fed up with the direction the cryptocurrency was headed. Bitcoin Cash immediately raised the transaction capacity by 800 percent as part of a massive on-chain scaling approach. Currently, there is ample capacity for everyone's transactions, and huge developmental progress has been made to allow massive capacity increases up to 1000 times the current BTC SegWit network. This means low fees and fast confirmations for everyone. However, Bitcoin cash is still quite far behind, so which bitcoin will win?
Let's start at the beginning...
In 2008, Satoshi Nakamoto, the creator of Bitcoin, published a paper titled, “Bitcoin: A Peer-to-Peer Electronic Cash System.” Most people are aware of this, but the exact title needs to be repeated because today, even the most basic facets of Bitcoin are being challenged. Regardless of “which side” of the scaling debate you are on, it should not be contested that Satoshi always planned for and advocated simple, on-chain scaling. (On-chain scaling is a term that basically means using the Bitcoin network itself to process all transactions. Unfortunately, this is not the proposed plan of the Bitcoin network’s core development team. They intend to implement a supplementary technology called the “Lightning Network” to process the extra transactions that Bitcoin can't handle. Not yet proven to work, this technology is at least 18 to 24 months away from being ready. It also takes Bitcoin in a much more centralized direction as a small group of people will be running this secondary transaction layer, earning money from fees and controlling how it works. Giving a small group of people this sort of control sounds pretty familiar, don't you think? Reminds us of a thing called the USD? We need to get away from this. We KNOW that on-chain transactions work; they've worked for 9 years, and scaling on Bitcoin Cash is working.
Now to today...
It seems more and more users, merchants, businesses and investors are beginning to realize this. Today, we've seen the biggest “pump” in cryptocurrency history, with Bitcoin Cash going from a low at $1,280 USD to a high of $2,799 USD. Peaking at a whopping $41 Billion USD market cap, almost tripling in 36 hours, and to top it off, the trading volume was $11.5 billion USD in 24 hours. We've never seen numbers like this, and it's happening for a reason. The potential for Bitcoin was so great; however, it went off in the wrong direction due to a small group of people who wanted to control it. Today, Bitcoin Cash has made huge progress on the “flippening,” a term used by many in the community referring to the possible future event when Bitcoin Cash overtakes Bitcoin to become the most valuable cryptocurrency in terms of market capitalization. If the flippening occurs, there's a very bright future for Bitcoin Cash. The aim is for it to become a world currency used by billions of people, one that does not discriminate based on levels of wealth, one that is equally usable to those earning $1 a day or companies earning billions. Right now, one billion people are living in slums. They cannot hope to escape without some international form of trade. This can be achieved with access to secure and low cost money, which is what Bitcoin Cash delivers. We hope that in the next decade, Bitcoin Cash starts to offer hope and a way out of poverty. *This article was written by one of the crypto consultants at decrypt
Adam Back is not a Bitcoin Expert, if he were then he wouldn't have ignored Satoshi Nakamoto's e-mails until the price was over $1000
Adam Back is not a Bitcoin Expert. The problem that Adam Back and many Core developers who I consider Bitcoin non-experts make, is they think its the technology that rules Bitcoin and not the people and social interactions. This shows a complete lack of understanding of what Bitcoin is at the most fundamental level. Bitcoin is a social system, and the technology is only the backbone and skeleton of that system. Bitcoin and money itself at its most fundamental level is just a public ledger. The Bitcoin tech could break right now, and in a few hours the humans in the system would reboot it and relaunch the ledger. All we are doing is maintaining a public ledger and using technology and an incentive system to do it. Obviously Adam Back is not a Bitcoin expert. It is so obvious that Adam Back is only a Specialist and not a Generalist Bitcoin Expert as Peter R explains. He misses the forest for the trees, as Gavin Andresen says. The fact that Adam Back ignored Satoshi Nakamoto's e-mails until price was over $1000 shows that he lacks complete vision for what Bitcoin is and why it works. If he understood it he would have jumped on from the beginning. The fact that he didn't get on board until the price was over $1000 shows that he didn't understand the social aspects of the system. He didn't understand that users would buy and use Bitcoin and the price would go so high. He doesn't understand enough about users, merchants, miners, or the other players involved in Bitcoin. The guy invented hash cash and he can't even put together simple puzzle pieces to understand Bitcoin as a social system, because he completely misses the point. He is focused on tiny details, and technical details, and mathematics. He is a specialist and not a generalist expert. Frankly the mathematics and details in Bitcoin don't matter as much as everyone is lead to believe. The tech helps the humans secure the public ledger system sure, but the tech does not have to be perfect, and in fact the Bitcoin tech is not perfect, has never been perfect, and never will be perfect. It works despite this imperfection. This is what Adam Back fails to realize and why he didn't find Bitcoin until the price went high. Its also what Greg Maxwell fails to realize and is why he "proved" bitcoin was impossible. Also Peter Todd freaked out about Ghash and 51% attacks and sold half his Bitcoin. We can all freak out about every little imperfection and panic sell too like these non-experts do, or we can realize Bitcoin is robust because of the social interactions of the network and not because of the technology. This is what many developer minded and mathematician minded people that are involved in Bitcoin really miss.
Jeff Garzik: There is no point to a regulated blockchain that requires AML/KYC
I'm referring to this statement you made in 2011:
We’re working with the government to register bitcoin exchanges as MSBs (Money Service Businesses) to make sure that the long arm of the government can indeed reach bitcoin. A lot of bitcoiners are diehard Ron Paul libertarians, who might not necessarily agree with me but the only way bitcoins are going to be successful is working with regulation and with the government. And that’s what we’ve been doing specifically with the bitcoin exchanges, that’s where you exchange your US dollars or Euros to Bitcoins and back again, is that all of these are fully regulated with the government, fully complying with all the anti-money laundering and know-your-client laws. ~Jeff Garzik
The only reason bitcoin has become popular is because it offers a way to avoid the banks and not have to use them for transactions. That is what made them originally go up in price, which then attracts non-libertarian types. But the origin is a desire to avoid banks. If DCG and the central banker types get their way and turn bitcoin into a regulated system that requires AML/KYC, no one will use it. People ok with banks will just use better systems like Visa, and libertarian types will just move to the hundreds of different alt-coins - essentially accelerating the demise of the banks. All those people who missed out on Bitcoin, but put lots of money in alts will be rich, meaning there will actually be even more crypto-millionaires that the banks have to deal with. I guess if that was your long term strategy, then you're doing the right thing.
This is an overview for those who may have not been following events closely, so unfortunately a TL;DR is not possible. However, I have added headings to make navigation easier. Depending on your interest, you can navigate to: The Debate, Decision Time or How to Run a Node Introduction China is having some huge celebrations right now for their new year, which to China is like Christmas for us. So they're enjoying their time with their families and friends, enjoying their food and I should think they are enjoying some wine. I wish them all a very happy new year and may it bring them good health and good fortune. Hopefully they'll have some time during their holidays to consider the matters summarized here. The Debate As you know, we have been having a debate for about three years now and a massive debate for the past 10 months on the question of whether onchain transaction capacity should increase. After two conferences, then a third in Miami, then a fourth in China, a wide economic and mining consensus has been achieved with almost all prominent bitcoin companies supporting classic, with 54% of real hashing power expressing their clear support for classic so far, with 80% of users by most polls and with renown users such as Roger Ver and "loaded" who in combination hold some 340k btc, having expressed support for classic. We do not however have 100% agreement. Some developers have maintained for quite some time that onchain capacity should not be increased or should be increased by the smallest amount that is absolutely necessary and that most, if not almost all, transactions should instead happen on layer2 settlement systems. Chief amongst them is Gregory Maxwell who has maintained the same view over the past 3 years and has formed a company with a number of other developers to provide lightning and other products to operate as the settlement system they envision. Another developer who has maintained the same view is Peter Todd who argued in a propaganda video some three years ago that increasing onchain scalability means nodes will have to be run on datacentres which affects decentralization, therefore everyone should pay $100 or $1000 per onchain transaction instead with most transactions operating through centralized hubs which do not employ proof of work (commentary: no proof of work - no decentralization) Gavin, Jeff Garzik, many other developers, academics, almost all wallet developers, take a different view. They argue that bitcoin can remain decentralized while scaling onchain. I would add to their argument two points. Bitcoin is efficient because it automates away man. Software is very cheap, employees - the tens of thousands that visa has and the millions that banks have including their rented space etc - are very, very expensive. Calculations have been made which show that to run a node, even if blocks were full right now at 20mb per block, would cost only $100 per year. I'd argue that is a tiny price to pay for the huge benefits that onchain scalability provides. And, even if it costs 1k or 10k, it should be the node operator who pays the market price for the extra security that his node provides, rather than ask users to pay 100 or 1k dollars per transactions instead. A node provides indirect, but in some circumstances necessary, value to businesses, miners, researchers, hobbyist and whoever wants to run one. Asking 5k nodes to pay 1k makes far more sense than asking 200k transactions a day to pay 100 or 1k per transaction and it is of course way cheaper too. However, after all the conferences, after all the debates, after all the never ending arguments, they retain their position. Therefore, developer agreement is not possible. Decision Time As such, the decision has now been opened to everyone to decide one question alone. Whether you agree with Satoshi's vision that we should scale onchain - and thus support classic - or whether you agree with Gregory's vision of a settlement system, and thus keep running a core node. The way this works is in stages. Firstly, nodes have to upgrade first so that everyone has the time and opportunity to upgrade and be on the new rules. This is extremely important because old nodes (including core nodes) won't be able to work anymore if classic succeeds. Therefore, the economy (which includes businesses, miners, individuals) has to be given the opportunity to upgrade first, with miners having their vote second by the blocks they mine. An indirect result of the upgrade process is that it gives an indication of where the sentiment and public opinion stands. Of course, this can be played, so it is not a perfect indication, but there are ways of telling when this indication is played to a significant degree. I'd rather not go into the details just as google doesn't go into the details of how it ranks pages, but this is an important time for bitcoin and the world so I would ask all who have the true interest of bitcoin at heart to refrain from any immature behavior so that we can learn where the community stands, giving the losing side, whichever it may be, the opportunity to accept the will of the people, and the results, thus allowing us to move forward as one. I'll give some instructions on how to run or upgrade a node in a way that can be counted. First I want to say that you should run a classic node for many reasons, but chiefly three. It implements Satoshi's vision, the vision of that genius who knows how bitcoin works best and who with that knowledge designed it to scale considerably. The second is in regards to our community. Many individuals, and not just Theymos, have engaged in censorship and banning in almost all the main communication channels, including the Hong Kong conference, the mailing list, the IRC channels and of course on bitcoin. I hope you agree with me that it is extremely important for us to show fundamental disapproval with such unprincipled and immoral behavior by running classic, and not reward them for it. Thirdly, because cheap, fast and convenient is an incredibly important competitive quality of bitcoin. I would argue that the only reason why the mainstream media and silicon valley is abuzz about bitcoin is because it can save billions in fees and other ways such as making value transfer faster and more convenient. I want to change the world and offer to all bitcoin's supreme qualities of an open, permissionless, decentralized, global ledger, with fast if not almost instant and very cheap transactions, while having a gold like retention of value. We know this works. It has been working for 7 years and works right now (although blocks are full making it not work as well as it can). Let's keep it working by upgrading to welcome the new wave of people and companies and miners. How to run a node: If you are not already running a node, you can download classic here: https://github.com/bitcoinclassic/bitcoinclassic/releases/tag/v0.11.2.cl1.b2 For windows, it is as easy as downloading any normal software. You just have to wait for it to synchronize and you are good to go. You'll then need to open port 8333 for your node to be counted https://bitcoin.org/en/full-node#daemon-peer-info If you already run a node you can easily upgrade without having to re-download the whole chain. You can use cloud servers as well if you wish. Cloud nodes do still provide all the functionalities, but the cloud admin may have some control over your node, so it is best you run it on hardware you control. If nonetheless you still wish to use cloud, it is best that you do so through your own account rather than through someone else. I think that covers all grounds. Obviously the above overview is necessarily reflective of my own views, but nullc and petertodd are welcomed to express their views at this important time and I hope they do not get downvoted simply because we disagree with their views, but allow them to have their say.
A. With automation and billions of people joining the global market, more jobs are moving online. People are becoming freelancers. They will be paid to preform micro tasks. Some call this transition as the 'gig economy'. It wouldn't make any sense to use local currencies, because of conversion fees and added inconvenience. For the global market to operate properly, a stable, trustworthy global currency must be in place. B. In the new emerging economy Bitcoin has the opportunity to take the role of the global currency. Roughly speaking, this the market bitcoin is aiming to overtake: Broad Money (includes coins, banknotes, money market accounts, saving, checking and time deposits) :$80.9 Trillion People will be able to use it for regular needs but also as a store value for a long term. It should provide a real alternative to Gold:$7.8 Trillion. C. The reality where machines can operate autonomously and transfer value between themselves, is only achievable using smart contracts. Machines will own themselves and you will only pay for operating costs, no company will be able to compete with autonomous self-owning machines. With the invention of smart contracts, it means that machines can transact between themselves, they can own a wallet, they can pay money to other machines for services, they can rent themselves for the highest bidder. For example, if a car owns itself, you, the consumer, will only have to pay for the operating costs of the car. No middle man will take a cut for the service, you will get all the benefits of owning a car without all the burdens that come with it. Now, because there will always be some people that prefer to pay a little extra to ride a new car, it will enable the new cars to pay the manufacturer fee in order to become financially autonomous in the future. When fees are paid in full by the consumers, the manufacturer will have bigger profit by selling it to an autonomous corporation, that operates on zero profit, rather than selling it for parts. The same model can scale to factories and if you want to go a step further to smart cities. According to Cisco the internet of everything has a $19 Trillion potential. http://ioeassessment.cisco.com/learn/value-stake-analysis Each time you'll purchase something, you'll automatically become a shareholder in that company and will receive dividends. You will be able to rent, trade and split ownership on the most secure blockchain, bitcoin blockchain. Apps will manage your portfolio on a decentralized exchange. Each and every purchase will become an investment opportunity. People worry about automation. They think there will be no jobs in the future. Jobs will move into creative domain. Creativity, imagination and attention will be extremely valuable. The maintenance of our biological existence will be cheap, because of how resources will be managed by machines. Most of our time will be spent in VR. Work will become play. Money will be a way to manage attention of others, because attention is a scarce resource. Propagation of information, or culture, will have a price tag. If one wishes to advertise their ideas and values, one will have to pay directly for attention. The way I see it, the new dynamic will be that of creating of ideas, designing VAR, being paid for creativity, being paid to create tools that can minimize the lag time between imagination and reality, and being paid for attention, to listen to the ideas, to participate in different worlds - to play. As we're moving in to AVR. Bitcoin will provide the necessary layer of digital scarcity. A layer that will enable people to create fungible digital assets. That means, that all digital goods will be attached to digital assets and treated as commodities. All commodities will be traded on a decentralized exchange backed by the most secure blockchain. Centralized solutions will be too unreliable and too expensive. Other blockchains will not be able to compete with the network effect and security of bitcoin blockchain. D. A scarce resource, such as bitcoin, derives its’ value from the utility it provides. The more use cases Bitcoin has, the higher the value it will have. Bitcoin will not hard fork in order to include the complex smart contract capabilities. Hard forks are extremely risky, community splitting, and should be avoided at all cost. Sidechains would never be able to provide the security of the main blockchain simply by design. Peter Todd: “(Merge)-mined sidechains have some really ugly security issues; your funds can be stolen in a reorg attack. Embedded consensus systems like counterparty are as secure as the Bitcoin blockchain. “ What about colored coins? “There's a lot of stuff that's better done with the much simpler colored coin technology, but equally, there's a lot of stuff colored coins just can't do for technical reasons. In short, if you want to play around with Ethereum-style smart contracts in a decentralized system, you need a token of value like XCP.” https://www.reddit.com/Bitcoin/comments/2m30j6/counterparty_recreates_ethereum_on_bitcoin/cm0mdpz The only rational solution is to build on top of bitcoin. Jeff Garzik: "Counterparty already implemented Ethereum lang on top of Bitcoin block chain. Zero changes or forks required of bitcoin." https://twitter.com/jgarzik/status/603784205571600384 Counterparty proved to have a solid track record since 2014. No bail outs, no pre mines, ico/ipo nonsense. The whole “move fast and break stuff” philosophy doesn’t work when you’re dealing with money. Soon smart contracts will be introduced into bitcoin ecosystem without compromising its’ security. There will be no reason to risk your money in an insecure environment when you’ll be able to use smart contracts at the highest security possible. Unlike other blockchains, counterparty actually being backed by bitcoin security. When value is transferred on Counterparty, Bitcoin must be used for fees. Each transaction that is made on counterparty platform is adding value to bitcoin. All Bitcoin addresses are XCP addresses. Counterparty already has a decentralized exchange and a powerful asset management platform in place. I think the majority of people here understand what it means to have a decentralized exchange that can eventually scale and make centralized exchanges completely obsolete. All Things will become connected to a super cloud. This will eventually replace internet services (such as google and facebook). With the super cloud we will be able to overcome the dangers of data centralization and replace the business model of advertising, privacy abuse, and outdated intellectual property laws, with frictionless micro transactions. Storj, a technology that uses counterparty platform, is the beginning of that. You’ll be paid in micro transactions by simply renting the bandwidth and disk space of your stuff. Micro payment solution will open the door to all the things I’ve mentioned and more, and it is being implemented as we speak. Assets that can be attached to digital and non-digital commodity, a robust decentralized exchange, micro payments that can scale to manage the new emerging economy and the super cloud, all of that are tools that are being built on counterparty platform today. A positive feedback loop, with which each additional layer that is built on top of bitcoin, will increase its’ network effect, and thus get it closer to position itself as dominant and most trusted currency there is. E. We are in the very early days of crypto. Nothing is decided yet. Let me say this the first currency to dominate the smart contract market will become the default global currency. There is no reason not to use a currency as regular money and use a different type of crypto for smart contracts. This will just create unnecessary complexity which the market will go against sooner than later. The path of the least resistance always wins. The crypto that provides what the market needs will win and will be used for ordinary transactions as well as store of value. If ethereum dominates the new emerging market it will be used for all the things bitcoin was supposed to be used. Calling bitcoin gold and ethereum oil is nonsensical. In fact, Coinbase, a company that is funded by ‘smart money’, already treats ethereum as a currency. The whole facebook/myspace comparison already became a cliché, but it has a grain of truth to it. Willing to admit it or not, Ethereum is in direct competition with bitcoin. In the end of the day, no matter if we're called bitcoin maximalists or not, make no mistake about it, there is only room for one global currency. TL:DR This post is a summary of the previous discussions I've had here. In short, Crypto-Diversification is a myth.
My draft for a new /r/btc FAQ explaining the split from /r/Bitcoin to new users
If /btc is going to actually compete with /Bitcoin, it needs to be just as friendly and informative to new users, especially given its position as the “non default” or “breakaway” sub. The current /btc sticky saying "Welcome to the Wiki" doesn't even have any content in it and I feel this is a bit of a wasted opportunity to create an informative resource that new users will see by default and everyone else can link to instead of retyping things over and over about the history and difference between the subs. Here's what I've written as a starting point. I've done my best to keep it as concise and relevant as possible but in all honesty it is a complicated issue and a short but effective explanation is basically impossible. I hope the community can expand/improve on it further. Quick bit about me I got into Bitcoin in October 2013, when /Bitcoin had around 40k subscribers if I remember correctly, so by now I've actually personally experienced a large portion of Bitcoin's history - including the events preceding and since the creation of this sub. I have been an active and popular poster on /Bitcoin for almost all of that time, until the split and my subsequent banning. With the recent censorship fiasco, I'm finding I have to reiterate the same points over and over again to explain to newer users what happened with the /Bitcoin vs /btc split, questions about hard forks, what is likely to happen in the future and so on. So I put a couple of hours into writing this post to save myself the trouble in future.
There is a TL:DR; at the bottom, but it is exactly that. If you skip straight to the TL:DR; then don’t expect sympathy when you post questions that have already been covered in the lengthy and detailed main post.
New to Bitcoin?
I am totally new to Bitcoin. What is it? How does it work? Can/should I mine any? Where can I buy some? How do I get more information? All of these questions are actually really well covered in the /Bitcoin FAQ. Check it out in a new tab here. Once you've got a bit of a handle on the technology as a whole, come back here for the rest of the story.
What's the difference between /btc and /Bitcoin? What happened to create two such strongly opposed communities? Why can't I discuss /btc in /Bitcoin? Historically, the /Bitcoin subreddit was the largest and most active forum for discussing Bitcoin. As Bitcoin grew close to a cap in the number of transactions it could process, known as the 1MB block size limit, the community had differing opinions on the best way to proceed. Note that this upcoming issue was anticipated well ahead of time, with Satoshi's chosen successor to lead the project Gavin Andresen posting about it in mid 2015. Originally, there was quite a broad spread of opinions - some people favoured raising the blocksize to various extents, some people favoured implementing a variety of second layer solutions to Bitcoin, probably most people thought both could be a good idea in one form or another. This topic was unbelievably popular at the time, taking up almost every spot on the front page of /Bitcoin for weeks on end. Unfortunately, the head moderator of /Bitcoin - theymos - felt strongly enough about the issue to use his influence to manipulate the debate. His support was for the proposal of existing software (called Bitcoin Core) NOT to raise the blocksize limit past 1MB and instead rely totally on second layer solutions - especially one called Segregated Witness (or SegWit). With some incredibly convoluted logic, he decided that any different implementations of Bitcoin that could potentially raise the limit were effectively equivalent to separate cryptocurrencies like Litecoin or Ethereum and thus the block size limit or implement other scaling solutions were off-topic and ban-worthy. At the time the most popular alternative was called Bitcoin XT and was supported by experienced developers Gavin Andresen and Mike Hearn, who have since bothleft Bitcoin Core development in frustration at their marginalisation. Theymos claimed that for Bitcoin XT or any other software implementation to be relevant to /Bitcoin required "consensus", which was never well defined, despite it being seemingly impossible for everyone to agree on the merits of a new project if no one was allowed to discuss it in the first place. Anyone who didn't toe the line of his vaguely defined moderation policy was temporarily or permanently banned. There was also manipulation of the community using the following tactics - which can still be seen today:
Default thread sorting changed to "controversial" in selected threads instead of "best" like nearly every other subreddit
Comment/upvote scores hidden by default (combined with the previous point this prevented theymos and other unpopular mods like StarMaged and BashCo from ending up at the bottom of every thread they posted in)
The implementation of a custom CSS sheet that disguises long threads of [removed] comments. This was especially effective at the time as the censorship was obvious since threads were becoming wastelands of hundreds of deleted comments, similar to other Reddit throw downs like GamerGate
This created enormous uproar among users, as even many of those in favour of Bitcoin Core thought it was authoritarian to actively suppress this crucial debate. theymos would receive hundreds of downvotes whenever he posted: for example here where he gets -749 for threatening to ban prominent Bitcoin business Coinbase from the subreddit. In an extraordinary turn of events, Theymos posted a thread which received only 26% upvotes in a sample size of thousands announcing that he did not care if even 90% of users disagreed with his policy, he would not change his opinion or his moderation policy to facilitate the discussion the community wanted to have. His suggested alternative was instead for those users, however many there were, to leave. Here are Theymos' exact words, as he describes how he intends to continue moderating Bitcoin according to his own personal rules rather than the demands of the vast majority of users, who according to him clearly don't have any "real arguments" or "any brains".
Do not violate our rules just because you disagree with them. This will get you banned from /Bitcoin , and evading this ban will get you (and maybe your IP) banned from Reddit entirely. If 90% of /Bitcoin users find these policies to be intolerable, then I want these 90% of /Bitcoin users to leave. Both /Bitcoin and these people will be happier for it. I do not want these people to make threads breaking the rules, demanding change, asking for upvotes, making personal attacks against moderators, etc. Without some real argument, you're not going to convince anyone with any brains -- you're just wasting your time and ours. The temporary rules against blocksize and moderation discussion are in part designed to encourage people who should leave /Bitcoin to actually do so so that /Bitcoin can get back to the business of discussing Bitcoin news in peace.
/btc was therefore born in an environment not of voluntary departure but of forced exile. This forced migration caused two very unfortunate occurrences:
It polarised the debate around Bitcoin scaling. Previously, there was a lot of civil discussion about compromise and people with suggestions from all along the spectrum were working to find the best solution. That was no longer possible when a moderation policy would actively suppress anyone with opinions too different from Theymos. Instead it forced everyone into a "with us or against us" situation, which is why the /btc subreddit has been pushed so far in favour of the idea of a network hard fork (discussed below).
It has distracted Bitcoin from its mission of becoming a useful, global, neutral currency into a war of information. New users often find /Bitcoin and assume it to be the authoritative source of information, only to later discover that a lot of important information or debate has been invisibly removed from their view.
Since then, like any entrenched conflict, things have degenerated somewhat on both sides to name calling and strawman arguments. However, /btc remains committed to permitting free and open debate on all topics and allowing user downvotes to manage any "trolling" (as /Bitcoin used to) instead of automatic shadow-banning or heavy-handed moderator comment deletion (as /Bitcoin does now). Many users in /Bitcoin deny that censorship exists at all (it is difficult to see when anyone pointing out the censorship has their comment automatically hidden by the automoderator) or justify it as necessary removal of "trolls", which at this point now includes thousands upon thousands of current and often long-standing Bitcoin users and community members. Ongoing censorship is still rampant, partially documented in this post by John Blocke For another detailed account of this historical sequence of events, see singularity87 s posts here and here. /btc has a public moderator log as demonstration of its commitment to transparency and the limited use of moderation. /Bitcoin does not. Why is so much of the discussion in /btc about the censorship in /Bitcoin? Isn't a better solution to create a better community rather than constantly complaining? There are two answers to this question.
Over time, as /btc grows, conversation will gradually start to incorporate more information about the Bitcoin ecosystem, technology, price etc. Users are encouraged to aid this process by submitting links to relevant articles and up/downvoting on the /new and /rising tab as appropriate. However, /btc was founded effectively as a refuge for confused and angry users banned from /Bitcoin and it still needs to serve that function so at least some discussion of the censorship will probably always persist (unless there is a sudden change of moderation policy in /Bitcoin).
The single largest issue in Bitcoin right now is the current cap on the number of transactions the network can process, known as the blocksize limit. Due to the censorship in /Bitcoin, open debate of the merits of different methods of addressing this problem is impossible. As a result, the censorship of /Bitcoin (historically the most active and important Bitcoin community forum) has become by proxy the single most important topic in Bitcoin, since only by returning to open discussion would there be any hope of reaching agreement on the solution to the block size limit itself. As a topic of such central importance, there is naturally going to be a lot of threads about this until a solution is found. This is simply how Bitcoin works, that at any one time there is one key issue under discussion for lengthy periods of time (previous examples of community "hot topics" include the demise of the original Bitcoin exchange Mt Gox, the rise to a 51% majority hash rate of mining pool GHash.io and the supposed "unveiling" of Bitcoin's anonymous creator Satoshi Nakamoto).
Bitcoin Network Hard Forks
What is a hard fork? What happens if Bitcoin hard forks? A network hard fork is when a new block of transactions is published under a new set of rules that only some of the network will accept. In this case, Bitcoin diverges from a single blockchain history of transactions to two separate blockchains of the current state of the network. With any luck, the economic incentive for all users to converge quickly brings everyone together on one side of the fork, but this is not guaranteed especially since there is not a lot of historical precedent for such an event. A hard fork is necessary to raise the block size limit above its 1MB cap. Why is /btc generally in favour of a hard fork and /Bitcoin generally against? According to a lot of users on /Bitcoin - a hard fork can be characterised as an “attack” on the network. The confusion and bad press surrounding a hard fork would likely damage Bitcoin’s price and/or reputation (especially in the short term). They point to the ongoing turmoil with Ethereum as an example of the dangers of a hard fork. Most of /Bitcoin sees the stance of /btc as actively reckless, that pushing for a hard fork creates the following problems:
The possibility of an irrevocable community divergence, as has happened in Ethereum (discussed below)
The chance of introducing new code bugs by forcing a network update without totally comprehensive software developer review
The possibility of reducing decentralisation in the network as higher hardware requirements puts greater strain on network nodes and miners
According to a lot of users on /btc - a hard fork is necessary despite these risks. Most of /btc sees the stance of /Bitcoin as passively reckless, that continuing to limit Bitcoin’s blocksize while remaining inactive creates the following problems:
Transaction fees are continuously rising as transactions compete for the limited space in each block
Confirmation times for any given transaction are also increasing, especially ones without a rapidly escalating fee attached
Fee and confirmation times is making BItcoin hostile to new users, who are confused by their difficulties with this “revolutionary” new technology
Restricting Bitcoin’s growth increases the likelihood it will be overtaken by another unrestricted cryptocurrency
Passively validating the stance of /Bitcoin to continue censoring the debate about this important issue
Bitcoiners are encouraged to examine all of the information and reach their own conclusion. However, it is important to remember that Bitcoin is anopen-source projectfounded on the ideal offree market competition (between any/all software projects, currencies, monetary policies, miners, ideas etc.). In one sense, /btc vs /Bitcoin is just another extension of this, although Bitcoiners are also encouraged to keep abreast of the top posts and links on both subreddits. Only those afraid of the truth need to cut off opposing information. What do Bitcoin developers, businesses, users, miners, nodes etc. think? Developers There are developers on both sides of the debate, although it is a common argument in /Bitcoin to claim that the majority supports Bitcoin Core. This is true in the sense that Bitcoin Core is the current default and has 421 listed code contributors but misleading because not only are many of those contributors authors of a single tiny change and nothing else but also many major figures like Gavin Andresen, Mike Hearn and Jeff Garzik have left the project while still being counted as historical contributors. Businesses including exchanges etc. A definite vote of confidence is not available from the vast majority of Bitcoin businesses, and wouldn't be binding in any case. The smart decision for most businesses is to support both chains in the event of a fork until the network resolves the issue (which may only be a day or two). Users Exact user sentiment is impossible to determine, especially given the censorship on /Bitcoin. Miners and Nodes Coin.dance hosts some excellent graphical representations of the current opinion on the network. Node Support Information Miner Support Information What do I do if the network hard forks?* Do we end up with two Bitcoins? Firstly, in the event of a hard fork there is no need to panic. All Bitcoins are copied to both chains in the case of a split, so any Bitcoins you have are safe. HOWEVER, in the event of a fork there will be some period of confusion where it is important to be very careful about how/why you spend your Bitcoins. Hopefully (and most likely) this would not last long - everyone in Bitcoin is motivated to converge into agreement for everyone's benefit as soon as possible - but it's impossible to say for sure. There isn't a lot of historical data about cryptocurrency hard forks, but one example is alternative cryptocurrency Ethereum that forked into two coins after the events of the DAO and currently exists as two separate chains, ETH (Ethereum) and ETC (Ethereum Classic). The Ethereum fork is not a good analogy for Bitcoin because its network difficulty target adjusts every single block, so a massive drop in hash rate does not significantly impede its functioning. Bitcoin’s difficult target adjusts only every 2100 blocks - which under usual circumstances takes two weeks but in the event of a hard fork could be a month or more for the smaller chain. It is almost inconceivable that a minority of miners would willingly spend millions of dollars over a month or more purely on principle to maintain a chain that was less secure and processed transactions far slower than the majority chain - even assuming the Bitcoins on this handicapped chain didn't suffer a market crash to close to worthless. Secondly, a hard fork is less likely to be a traumatic event than it is often portrayed in /Bitcoin:
The Bitcoin Core and /Bitcoin stated policy is to avoid a hard fork at all costs. So there is no risk of a hard fork on that side.
The Bitcoin XT/Classic/Unlimited and /btc side is prepared for a hard fork if necessary, but it will only come to pass if a clear majority of miners (and presumably users, although that's harder to determine) are already signalling that they would be onboard. There is no exact threshold value, but no miner is going to risk publishing a block larger than 1MB until they are very confident the network will follow them.
What Happens Now
How do I check on the current status of opinion? Coin.dance hosts some excellent graphical representations of the current opinion on the network. Node Support Information Miner Support Information Users are also welcome to engage in anecdotal speculation about community opinion based on their impression of the commentary and activity in /btc and /Bitcoin. Haven't past attempts to raise the blocksize failed? There is no time limit or statute of limitations on the number of attempts the community can make to increase the block size and scale Bitcoin. Almost any innovation in the history of mankind required several attempts to get working and this is no different. The initial attempt called Bitcoin XT never got enough support for a fork because key developer Mike Hearn left out of frustration at trying to talk around all the censorship and community blockading. The second major attempt called Bitcoin Classic gained massive community momentum until it was suddenly halted by the drastic implementation of censorship by Theymos described above. The most popular attempt at the moment is called Bitcoin Unlimited. /btc is neutral and welcoming to any and all projects that want to find a solution to scaling Bitcoin - either on-or off-chain. However, many users are suspicious of Bitcoin Core's approach that involves only SegWit, developed by a private corporation called Blockstream and that has already broken its previous promises in a document known as the Hong Kong Agreement to give the network a block size limit raise client along with Segregated Witness (only the latter was delivered) . What if the stalemate is irreconcilable and nothing ever happens? Increasing transaction fees and confirmation times are constantly increasing the pressure to find a scaling solution - leading some to believe that further adoption of Bitcoin Unlimited or a successor scaling client will eventually occur. Bitcoin Core's proposed addition of SegWit is struggling to gain significant support and as it is already the default client (and not censored in /Bitcoin) it is unlikely to suddenly grow any further. If the stalemate is truly irreconcilable, eventually users frustrated by the cost, time and difficulty of Bitcoin will begin migrating to alternative cryptocurrencies. This is obviously not a desirable outcome for long standing Bitcoin supporters and holders, but cannot be ignored as the inevitable free market resort if Bitcoin remains deadlocked for long enough.
Bitcoin is at its transaction capacity and needs to scale to onboard more users
The community was discussing different ways to do this until the biased head moderator of /BitcoinTheymos got involved
Theymos, started an authoritarian censorship rampage which culminated in telling 90% of /Bitcoin users to leave. /btc is where they went. Here is the thread where it all started. Note the 26% upvoted on the original post, the hundreds of upvotes of community outcry in the comments and the graveyard of [removed] posts further down the chain. Highly recommended reading in its entirety.
To this day, /Bitcoin bans all discussion of alternative scaling proposals and /btc
Bitcoin is about freedom, and can’t function effectively with either an artificially restricted transaction cap or a main community forum that is so heavily manipulated. This subreddit is the search for solutions to both problems as well as general Bitcoin discussion.
Debate continues in /btc, and generally doesn't continue in /Bitcoin - although posts referencing /btc or Bitcoin Unlimited regularly sneak past the moderators because it is such a crucial topic
Eventually one side or the other breaks, enough miners/nodes/users get on one side and Bitcoin starts scaling. This may or may not involve a hard fork.
If not, fees and average confirmation times continue to rise until users migrate en masse to an altcoin. This is not an imminent danger, as can be seen by the BTC marketcap dominance at its historical levels of 80+% but could change at any time
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