The Bitcoin XT Fork
There has been a long standing debate in the past year over the need (or not) to increase the bitcoin block size. The debate has raged most intensely inside the small group of developers who have commit access to the bitcoin core. They are called the “core developers.” These software engineers control the basic architecture of bitcoin. This is how most open source software projects are managed and bitcoin is an open source software project at its core.
I won’t get into the technical arguments for and against the need (or not) to increase the block size. If you want to read up on it, I suggest you read Gavin Andresen’s blog, Mike Hearn’s blog post announcing the Bitcoin XT fork, and Rusty Russell’s blog post on the topic.
What is more interesting to me is that this XT fork showcases a number of interesting things about open source software and how it is governed. It also gets into the issues around trusting an open source system and the people who build it.
A group of open source core developers are a democratic system. They decide what gets “committed” to the code base and what does not. That generally works well but at times it does not. The debate around increasing the block size is an example of where that form of democracy is failing (or succeeding depending on where you sit in the block size debate).
So the developers who most fear a breakdown of bitcoin without a block size increase have taken it upon themselves to “fork” the bitcoin core and produce a new version called “Bitcoin XT.” Bitcoin XT is described here.
That’s where this gets interesting. Bitcoin is a democracy in more ways than its core developer group. The miners who operate the transactional infrastructure of bitcoin are also a democracy. They decide what software they want to run to mine bitcoin. And in doing so, they determine what technology will become the standard. The folks who have produced the Bitcoin XT fork are hoping that the miners will adopt their software. This is from the Bitcoin XT website and explains how this works:
By mining with Bitcoin XT you will produce blocks with a new version number. This indicates to the rest of the network that you support larger blocks. When 75% of the blocks are new-version blocks, a decision has been reached to start building larger blocks that will be rejected by Bitcoin Core nodes. At that point a waiting period of two weeks begins to allow news of the new consensus to spread and allow anyone who hasn’t upgraded yet to do so. During this time, existing Bitcoin Core nodes will be printing a message notifying the operators about the availability of an upgraded version.
If the hard fork occurs and you are still mining with Bitcoin Core, your node will reject the first new block that is larger than one megabyte in size. At that point there is a risk your newly mined coins will not be accepted at major exchanges or merchants.
So now that Bitcoin XT is out in the wild, the “market” will decide which version of bitcoin it wants to exist. And that market is driven by the miners. Of course, miners are not necessarily a representative sample of the entire bitcoin ecosystem. They have particular needs, desires, and are at times ruthless and mercenary. But they are the ones who operate the bitcoin transactional infrastructure and they will ultimately decide if the Bitcoin XT fork works or not.
It will be fascinating to watch this play out. If you are used to big corporations or governmental institutions making decisions behind closed doors about how your financial systems work, then you might enjoy watching a new model of innovation and technology evolution unfold. I believe we will see more and more things like this in the coming years.
For what it is worth, I support a larger block size and think it will be good for bitcoin. A list of supporters and detractors is here.
Well the thing about forking is it can be re-synched to the master branch at any time and each amendment gets tracked (staging <=> commit) — just as in Git.Liquidity fragmentation was a big concern for the banks; that’s why they agreed to co-create a number of institutional platforms rather than splintered stand alone entities.Maybe Bitcoin XT is acting as an Distributed Operating Committee?
what you call democracy i would call anarchy: everyone is just doing what they want, the end result of which will be nothing getting done. i think there are merits to not increasing the block size and to increasing it — it just depends on the rest of the vision that the bitcoin oligarchs have. that there is no coherent vision is the real problem, and perhaps the real problem with open source — and why open source works best when someone comes along and uses it as a foundation to create an integrated, governed platform (like what google, amazon, and xiaomi are doing with android, and what many big players are sort of indirectly doing in sponsoring open source projects and open protocols).
I couldn’t have put my reaction any better.Cells of people doing variations of a theme can wreck big things….but I am not so sure they can build big things.An uninformed guess here is that this is the beginning of the end of Bitcoin.
You should write up your reasoning; I’ll make sure it gets onto bitcoinobituaries.com 😉
I agree. This may lead to democracy, but its not there yet. It’s hard to say if these acts will eventually lead to something productive.. or if all we will get is a tea flavored Boston harbor.
So let’s suggest 5 parties who should / could step in to solve what @wmoug:disqus sees as Bitcoin’s leadership crisis.By parties, this could be a corporate entity as well as a charismatic individual who could get everyone in line.
UNIX, Android, and other open platforms greatly fostered innovation at a steep price to standardization, which does have value. There is no one right answer, but participants should make decisions based on the value to the community they serve, and not solely on not-invented-here, or worse, not-sold-here.
Yep, I called it a Forkjacking.I’ve been chiming on it on Twitter since yesterday and in favor of increasing the block size too.
BitCoin Drama, a tragedy, comedy, or musical?
A TV Series….never ending.
House of Bitcoins or Orange is the new Bitcoin?
Mining Badcoin?….I’ll see myself out now.
Bitcoin Empire with the Hooli crew.
Free markets are messy. This is a classic case of two different standards and network effects-not dissimilar from betamax vs vhs. Free markets require patience But, they allocate resources far better than centralized markets. This will be totally fascinating to watch develop and because of places like Reddit etc, it will be more transparent and in real time.
and network effects-not dissimilar from betamax vs vhsThe FUD with this is  magnitudes greater for end users than which magnetic tape player they choose to buy. Especially and most importantly since those end users can’t even wrap their head around exactly what this means to them assuming they come into contact with this information. And the reality of it not making a difference doesn’t even matter it’s the perception that matters.
So that means that those who have millions of dollars in Bitcoin ( and everyone else too) will not know for some time whether their assets have moved to XT or not. Am I wrong?
No one loses any Bitcoins. This was a sign that developers want to move. Miners need to follow now.
Thanks Williams.BTW, I read your post on marketing last night.I’ve immersed myself deeply enough in marketing since the mid 90’s and in fact we’re in agreement: fundamentals don’t change.As a result of reading your posts, though, I came to realize that it was advertising in specific that’s being turned on its head, and I see that you also seem to concur.
whether their assets have moved to XT or not. Am I wrong?Sure but you have to understand that among normals and even techies not fluent in bitcoin and/or the blockchain reading the above roughly swishes around the brain as follows:a) This is something I don’t understandb) I therefore can’t calculate the riskc) If I can’t calculate and/or know the risk I may be at risk.d) I can’t protect against something that I don’t understand.e) There is little social proof regarding bitcoin among my peers, therefore best not to be a pioneer for fear of getting shot in the back.f) There is no clear authority that I trust to tell me “everything is going to be ok” (the role of your Doctor plays in medical problems..)
well…your assets aren’t on the blockchain. they are in your wallet or in some exchange. the blockchain has a record of these transactions, and that moves with the fork. bitcoins proper don’t move.[think DECENTRALIZATION, not like a CENTRAL bank vault]
Sure but my point is “a” through “f” wouldn’t matter if people fully understood what was going on. They don’t and they won’t. At the very least if it gets to the point of either “f” existing or simply a tremendous amount of social proof ie”Nobody else on the airplane seems to be questioning the pilots skills so we must be ok I guess. Hmm, let me take a nap..”. Anything new is particularly susceptible to this phenomena. And even things that are old and established can run into problems with irrationality in human behavior in the face of an unknown.  An example, the Tylenol Scare:http://iml.jou.ufl.edu/proj…An entire industry was built (tamper proof product packaging) as a result of this one event which was totally irrational with regard to the real risk (small chance of it happening).
As the recent Open Letter from Bitcoin Devs showed, I hope you’re aware that “developers want to move” is false. 90% of those responsible for commits to Bitcoin in the last 1-2 years signed that letter, expressing solidarity. The XT fork is the minority of devs, as well as including a portion of the Reddit mob.
No, assuming that you don’t make any transactions and don’t mine, all your assets will be exactly the same in both old-version-blockchain and XT-blockchain; if the blockchains fork then your only loss would be in the decrease (or increase) of the real world value of each BTC.
That’s what I thought thanks.
Reading a bit more about this issue kind of gave me chills to learn how badly the miners are behaving. If the miners are the “guardians”, or central banks of bitcoin, how can you trust the currency if you learn that they are using DDOS against each other and even stealing bitcoins from clients?
I have not seen a reference anywhere about miners “stealing bitcoins from clients,” and I’d be interested in learning more about that. Can you post a link to where you learned about that? Thanks.
It’s on Rusty Russel’s post that Fred linked above: (http://rusty.ozlabs.org/?p=…”And miners have been behaving very badly. Mining pools orchestrate attacks on each other with surprising regularity; DDOS and block withholding attacks are both well documented. A large mining pool used their power to double spend and steal thousands of bitcoin from a gambling service. When it was noticed, they blamed a rogue employee. No money was returned, nor any legal action taken. It was hoped that miners would leave for another pool as they approached majority share, but that didn’t happen.” https://bitcointalk.org/ind… “GHash.IO and double-spending against BetCoin Dice” mmtech et. al 2013
Somehow the “Mexican stand-off” that is the bitcoin-mining-process does not feel like a sustainable answer to “the prisoners dilemma” of currency-exchange cheating !
Security is my concern, even simple changes open big bugs. Bitcoin is not a blog engine where you are just exposing your content, it is one of the most delicate protocols found on Internet and most transactions are irreversible (indeed all transactions are irreversible but sometimes you can recover your money).Forking code sounds great but we are talking here about money and assets, I would prefer agreement even when distributed systems are exciting.
Disruptive-evolution featuring sustained security/stability around new network-effect mechanisms for money and credit, now that, is going to be a serious “eye of the needle” social transition dilemma.A transition that will inherently require someone(read the public/taxpayer) getting burned along the way 🙂
This reflects the reality of the market. Endless consensus has led to compromises and slower innovation.In times of crisis, you need bold decisions, not consensus.
So True. Contrast This with rollout of alphabet.
Yup. Good point. Bitcoin has had a leadership crisis.
Ha but alphabets have been forked since time beganConsider that the word alphabet is a fork of ancient Hebrew via Greek then Latin etc;)
In times of crisis, you need bold decisions, not consensus.That rings true historically but begs the question as to whether consensus mechanisms have simply not yet reached their evolutionary digital-nervous-system networked-metrics potential.Maybe this is an example of that evolving process ?
The way biological nervous systems do it is pretty simple. When another neuron tells you something, you assume it is the best truth they are able to tell you. This leads to a whole host of wonderful algorithms for rabidly assimilating noisy information and achieving consensus.The problem is that those assumptions don’t hold for the global financial markets. Hell, if they did hold and everyone was always giving you their best guess at the truth you wouldn’t even really need money.
True – in a world where volitional people/institutions stand in as the higher order analogue instantiations of their bio-based neuro-net precursors we have historically received their best-selfserving-spin not their true best guesses.But as transparently networked information/metrics become evermore dominant as the pivotal success mechanism/survival-strategy then that evolutionary volitionally inherent knee-jerk selfserving-spin behaviour will be suppressed by the social organics of an ever evolving mutually dependent digital-nervous-system.
Here’s boldness for you…
The problem is that, without leadership, Bitcoin is a classic Banana Republic.Wikipedia: “Banana republic is a political science term for a politically unstable country, whose economy is largely dependent on exporting a limited-resource product, e.g. bananas. It typically has stratified social classes, including a large, impoverished working class and a ruling plutocracy of business, political, and military elites. This politico-economic oligarchy controls the primary-sector productions to exploit the country’s economy.”Swap “bananas” for bitcoin. The miners whose coins won’t be accepted become the impoverish working class. The ruling plutocracy would be the exchanges, major investors in the technology. This oligarchy would include the Chinese government who, at the moment, underwrite most of the world’s Bitcoin mining.
Very true. That there are real technological problems at the heart of bitcoin has been known for some time. People forget that this implementation was an experiment that escaped into the wild and thrived beyond its originator’s wildest expectations.
Yup. Put 2 engineers in a room, outside of political interference and they will solve any technical problem you give them.
Isn’t the core thesis of the Blockchain that distributed consensus is better than bold decisions? This is just truly bizarre.What happens in 100 years when there is some other group of 5 people running the commits? Does the functioning of the system depend on the competence of those 5 or not?The real hard question is: how many forks could the system survive? I’ll bet that Jeff and Gavin are right that it can survive one, but I’m very skeptical that it could survive multiple. Essentially each fork splits your money into two different currencies, and the best possible outcome is that one of them hits zero value very quickly. Talk about capital flight!
This is one of the most interesting things to watch. I was especially amused by the Not Bitcoin XT fork on Github. https://github.com/xtbit/no…This is a special fork for those who do not agree with the blocksize scheduled increase as proposed by Gavin and Mike in their divisive altcoin fork, “Bitcoin XT”. Running this version will make it impossible for the Bitcoin XT network to detect the correct switchover.It prevents correct detection of Bitcoin XT adoption in the wild since usage will be known to have been tampered with and thus all statistical data gathered by getnodes can only be considered unreliable.
Woah, the cold war just when crypto-nuclear.
To be clear, while the miners will be the entities who have the ability to actually trigger the fork by switching to mining XT-versioned blocks, the miners are kept in check by the rest of the ecosystem. Miners aren’t going to switch to mining a new fork of a chain unless they receive clear signals from the major economic players in the system such as exchanges, payment processors, and wallet software companies. This is because miners need to ensure that they will actually be able to sell their mined coinbase rewards for local currency in order to pay their operating expenses.
that’s a great point. i left that out and should not have
“The customer is king” of marketplace signalling !
So nowadays we “mine forks of chains”.Who’d a thunk it!How the world has changed.#JustKidding
Isn’t this a huge problem though? The worst case scenario would be that some merchants switch early but others don’t as quickly. Those merchants who pick the wrong fork to back could stand to loose significant amounts of money on any goods they traded for on the now obsolete fork. If I were a merchant on the fence or only lightly invested in bitcoin transactions, this would seem to be a huge signal to back way off. Markets are powerful, but they tend to hate ambiguity.
It could be a huge problem if the fork occurred spontaneously. A fork that is planned publicly many months in advance gives blockchain ecosystem participants plenty of time to come to a consensus in meatspace and to implement “freeze” switches to throw in the event of the fork occurring. This enables blockchain participants to ensure that they are on the popular fork of the chain before processing transactions.
That system of ‘freezes’ sounds a lot like a governing structure. Who gets to throw that switch? What are it’s limits? What % of merchants need to implement the freeze in exactly how many months? What happens to those who can’t or won’t make the switch? Do they really just get all of their transactions, that they’ve sent real merchandise for, voided because they didn’t agree? This sounds exactly like the centralized authority Bitcoin was supposed to avoid.With a bit more thinking about this, I’ve come to the realization that even the even the proponents of the fork think it would be a bad idea for someone else to fork the blockchain.”Those who really believe that an über-niche currency is better should create an alt coin with a limited size block chain as part of the founding vision. Not try and convert Bitcoin into one by exploiting the casual nature of an old, quick kludge.” – Mike HearnI don’t see why the same logic doesn’t apply to Bitcoin XT. If they want to change the underlying algorithm and can’t get broad consensus, it seems like the right thing to do is to fork the code, but start a new chain.EDIT: The crux of the misunderstanding by Mike in his quote is that “Bitcoin” is more defined by the algorithm used to instantiate it than the ideals of it’s founding. I’m sure he is trying to keep to those ideals as he sees them, and he’s probably right in that a different algorithm is needed to fullfil them, but that doesn’t change the fact that Bitcoin IS that algorithm.
To be clear, any ‘freezing’ of payment processing would be voluntary at an individual participant level if they are not sure they are on the popular chain. Based upon previous spontaneous forks, it only take the ecosystem a matter of hours to come to consensus about which chain is “correct” / more popular.The reason for forking Bitcoin rather than creating a new chain from scratch is quite clear – to preserve the wealth of everyone who is already participating in the system. If sidechains were feasible than that could be a viable alternative, but they’re still highly experimental.Bitcoin is a protocol – the protocol is a “living document” if you will. Or you can consider it to be a contract with no particular dates attached to it – the contract is for the current version and it is perpetually up for renegotiation. If you don’t want to renegotiate the contract, no worries – if you like your chain, you can keep it. But the value may move to another fork of the chain and leave you behind.
Bitcoin is a protocol, the specific blockchain in question is NOT a protocol, it is a ledger. One main advantage of alt-coins is to enable them to be separated. Creating an alt coin fully satisfies your own criteria of ‘preserving the wealth of everyone who is already participating in the system’The core issue comes down to the following. What is right about this first quote but wrong about the second?”Those who really believe that an über-niche currency is better should create an alt coin with a limited size block chain as part of the founding vision. Not try and convert Bitcoin into one by exploiting the casual nature of an old, quick kludge.” – Mike Hearn”Those who really believe that a bigger block size is better should create an alt coin with a larger size block chain as part of the founding vision. Not try and convert Bitcoin into one by means of a social coercion.”I can’t see anything other than whose ideology you think is better.
Creating an alt-coin without a cryptographic peg from Bitcoin does not preserve people’s wealth – they have to manually convert their tokens via third parties and it becomes another set of risks to deal with.Making any argument about a “founding vision” of Bitcoin is irrelevant – all that matters is what the current participants want. Satoshi’s vision is irrelevant since he abandoned the project – if he wishes to re-appear and participate, then he can contribute once more.
No, that means you want to automatically convert their wealth from one system to another. Preserving wealth means leaving it where it is, as unchanged as possible. What if the new protocol also had to attach a valid social security number to each wallet? Would forking still be the right move then?And exactly, “founding vision” is irrelevent, so Bitcoin XT is no different than anyone else who wants to change how the protocol works. They, like everyone else, should make a new ledger to accompany it.
I think we’re using different terms for wealth – I’m specifically speaking to the distribution of cryptographic tokens in these systems, not of the value of those tokens in relation to other assets.What people “should” do is your opinion – I’m more concerned with what people /can/ do – and the system allows for dissent via exit. Exit can be creating a chain with a new genesis or it can mean forking the chain from a predetermined point.
“the value of those tokens in relation to other assets”are you really saying that that is not the definition of wealth? I suggest you listen to this. http://www.thisamericanlife… It is the best general public facing explanation of what wealth is that I have heard.What people /can/ do isn’t terribly interesting on it’s own. They /can/ call rocks at the bottom of the ocean that no one has seen wealth, or they /can/ call certain strings of bits wealth. The interesting part is what the consequences of those choices are.The consequences of Bitcoin XTs proposal would seem to be pushing digital currencies towards a zero-sum game with a governing structure run by miners. One fork is going to win and one fork is going to loose, and ultimately the miners get to pick. There might be ways of influencing those miners indirectly, but hashes are votes, and some undetermined % wins.Up until this point, one of the main strengths of digital currencies were that they weren’t in a zero-sum game and had no detectable governing structure. If you had a new protocol that could piggyback on the main blockchain, great, you are a sidechain, no one can stop you. If you had a protocol change that couldn’t piggy-back, fine, just start a new chain and you minimally disrupt existing systems.Maybe this is the only push that ever needs to happen. Maybe it will go smoothly and everyone will barely notice a shift. However, pretending like this is just ‘preserving wealth’ is silly. As I originally pointed out, if this doesn’t go smoothly, the consequences of these actions could result in real losses for business and individuals. It also appears that the originators of this movement took no interest in taking the existing path that would minimize the chances of such consequences.
Just when I thought I had a grasp on what bitcoin was… It’s starting to feel like Bitcoin is the string theory of economics.
I’ve been in a string theory class, most of the class is just head knodding.
Bitcoin is a set of rules.Participants decide what set of rules they follow.Bitcoin Core, XT, d, etc. are all various implementations of the rules.Fork means change to the set of rules (in this case the blocksize limit).
So now that Bitcoin XT is out in the wild, the “market” will decide which version of bitcoin it wants to exist. And that market is driven by the miners. Of course, miners are not necessarily a representative sample of the entire bitcoin ecosystem. They have particular needs, desires, and are at times ruthless and mercenary. But they are the ones who operate the bitcoin transactional infrastructure and they will ultimately decide if the Bitcoin XT fork works or not.So let’s summarize and simplfy the above.1) The market will decide2) The market is driven by miners3) Miners are not a representative sample of the ecosystem4) They are biased5) They are ruthless and mercenary6) They have control7) Ultimately it’s their decisionHow is the above supposed to make a rational business person want to stake a business purpose or usage on bitcoin, especially when we are talking about money and not the way jpeg photos are compressed or ethernet data is transferred over cat whatever cables?
Yep, I still cant get my head around why Bitcoin needed to be gamified vis miners of the block chain.
In the end they validate transactions and the complexity of validation keeps the Bitcoin price in check.
So the most sophisticated electronic currency (et al.) is dependent on some mysterious group of renegades to keep the train running?
Motivated by greed, secured by algorithm.This fork seems to be disrupting the harmony.
Per my post above. This is a total non-starter in the corporate world.
Then those in the “corporate world” with this line of thinking shall fall behind as innovators adopt this new technology. There are plenty of large corporations adopting this tech, so your generalization doesn’t seem to hold 100% true.
Identity is unimportant in a trustless system. But actually, most miners have chosen to publicly identify themselves.
Validate and create new bitcoins.
It isn’t gamification. There is a cost to validating the distributed trust. The miners pay that price and are rewarded with the bitcoin they mine.
#2 is wrong, miners need to sell their coins, if the fork they prefer is rejected by the exchanges they’re mining worthless coins. Ultimately it’s the exchanges that decide which fork will be most valuable and thus which will be mined.
It kind of is the real governing system of bitcoin – there are two layers; the miners can vote with their actions on whatever changes they wish (and in a majority consensus that will happen in the blockchain); and the end users can vote with their feet if they disapprove, making the pie smaller for everyone, including the miners.The miners are the only ones who can actually make and enforce changes, everyone else can only take their ball and go home and/or use the threat of it to keep miners in check.
Interesting. What happens in the meantime though with existing coins deposited at exchanges? Can those coins become suddenly worthless if the exchange doesn’t make the right choice?
The market is driven by users. If miners go against the users their business is ruined.
I think it’s important to note that this is really a market mechanism that we’re watching, not a democratic mechanism. Not everyone gets a say, only those who’ve invested: Market. And they don’t have an equal say either, the strength of your “vote” is directly proportional to the size of your miners: Market.It would be interesting to think how this would play out if it was democratic though.
yup great point
Other than in a purely theoretical definition of democracy all real world democratic processes boil down to some form of very uneven marketplace mechanisms.Isn’t that our longterm networking-effect challenge here, to dream up creative distributive-mechanisms that more fully realize the theoretical definition of democracy as regards all human activity? (example: distributive election-finance reform)
I’m with you regarding our longterm challenge:https://medium.com/organize…And I agree that market mechanisms play a role in democracy in practice, to some degree. But for the purposes of this conversation I wanted to make sure we don’t get to democracy-at-work gushy about this.
If you are used to big corporations or governmental institutions making decisions behind closed doors about how your financial systems workIt’s quite obvious that people don’t think about this because they don’t have to think about it. The system works, at least in their lifetime it has, and even manages to recover quite well from any particular setback or interruption. Plus, and this is important, the motivating force in keeping the current financial system healthy and working is money, profit and the chance of losing it rather than egos. Which is what appears to possibly be happening with what you are describing above. And to boot additionally, a clear pecking order of importance as far as who is the final decider in the end. And there are cases where that is clearly better I am thinking.
Are these really our only two evolutionary choices ?Corrupt, oligarchic, self-serving, institutionally centralized short-term stabilitiesorUnstable network-decentralized marketplace mechanismsIsn’t that selling the creative potential of network-decentralized marketplace mechanisms a bit short especially this early the game ?
I have to agree with most of these comments. I have been engaged by a group trying to promote wider adoption of bitcoin/blockchain in the corporate environment by addressing the security risks. This type of “forking” from the core group is exactly the opposite of what needs to happen.I believe the blockchain has tremendous potential in the security software market. But what you are seeing are not security risks – but governance risks. In traditional open source, the company can get a copy of the code and branch it as needed. With blockchain, the keys to the kingdom (no pun intended) are controls by some mysterious group that has to real accountability to the overall system. The thinking here is backwards: Only when you have a PRIVATE blockchain/coin system will this technology make it into the mainstream.
real talk. that last sentence is the truth. no one wants to hear they’ve spend all this time building a building only to discover the foundation is backwards, but alas, here we are.
Product without a market.
Do you like my little atom of business innovation? Yes, it randomly occurred to me the 4P and 7P models taught by Harvard, INSEAD, MIT Sloan etc aren’t quite up to par so I created my own P-model!Alas for Bitcoin, it currently has these deficits:(1.) People — in particular, a leader who will step up to facilitate the writing of policy and governance frameworks as well as pull in the banks to be active participants (underwriters of risk, counterparties etc).(2.) Price — the fluctuations and stability have been documented.(3.) Place — forking means multiple distribution pipelines but it’s not like Amazon’s controlling all of them.(4.) Process — they claim it’s democratic (but not all votes are equal) …And there’s a 10-minute delay so it’s not exactly Straight Through Processing (STP) which the banks are used to.(5.) Promotions — the communication of Bitcoin to Joe+Jane Mainstream is peppered with “Let’s make their eyes glaze over” geek jargon.(6.) Practice — just when the miners thought they’d got the mining thing down pat, the first of many forks happens and throws them off their practice.(7.) Proof — the “market” is an echo chamber of clique, vested interests.(8.) Perceptions — so many issues still to solve before it gains mainstream adoption and maybe even adoption by the banks.Not that I’m bearish on Blockchain+Bitcoin. Just that when troubleshooting strategic problems, it helps to identify them specifically.Then you can see which of the P’s is most pressing. Prioritize that, solve it…Voilà, PRODUCT HAS A MARKET.
From a Joe mainstream’s perspective, I would vote for number 5!
are controls by some mysterious group that has to real accountability to the overall system.Mystery is one of the core practices of groups that want to retain some kind of defactor power. It is quite common in many parts of computing, law,  government to name just a few areas. Further the more confusing things are (by intentional or inadvertent use of difficult to remember words and/or concepts) the better it is for the group in control in terms of keeping others out and making them dependent on the more knowledgeable ones who are well verse in the lingo and practices. Law is actually a good example and anyone who is not a lawyer and reads a legal contract knows that.
The digital medicine men !
Medicine is another. Think of all the abstruse technical terms used.
Once the blockchains are created and validated, it is impossible to repudiate them. Private blockchains that are simultaneously validated by linking them and validating them indirectly into a public block chain is a concept that Etherum is beginning to accept.
Consider that Blockstream completely controls Core development.This degree of conflict of interest is not acceptable.
For the 98% of the blog readers whose eyes rolled backwards when reading this headline 🙂 but speaking of forks ….trying to follow a sporting event on Twitter (with twitters new curation algo) is a disaster.
What seems to be missing from this proposal is details on a new proposed Governance for this new fork. That’s an important consideration the market needs to know about.
The governance is discussed in the FAQ page of the site. tl;dr — Mike and Gavin will decide everything. If Gavin disagrees with Mike, Mike can overrule and make the final decision.
This is fascinating. The basic building block (blockchain) is still going to through the chaotic throes of creation, to be expected but chaotic nonetheless. This is the bottom most layer of the stack. In parallel the hard core evangelists (VC’s, developers, others) are impatient, and pushing the rest of the world to wake up and smell the coffee on the possibilities. This presumes a level of confidence on the foundation that hides the amount of uncertainty and chaos there.Lots of analogies abound (think talking about something called “facebook” or a game called “minecraft” that people around the world can use, while http is still being designed) That said I realize these analogies are weak. Of course everything we are excited about is based on the abundance that HTTP created.tl;dr: This is something new. There is unsubstantiated optimism being promoted around the potentials of the top of the stack while the bottom most layers still change dramatically.
47 comments in to a Bitcoin post and you can be sure there are no women commenters. Except! Twain is in, she is in the race! People! Vote Twain, she will take over the world! Go, team, go!
Agreed.Its well established that Twain is the bomb.
Hey, wait! I didn’t get that memo!There are lots of “Da bombs” in AVC bar!
I wonder if that has something to do with women not wanting to appear stupid perhaps? Why do you feel women wouldn’t be able to offer any comments about this? I wouldn’t assume every man is fully versed and/or understands the subject matter. I don’t for example. But there are always underpinning concepts that apply to many things that Fred writes about even if you don’t fully understand the topic.
@LE First, the way you said that is hopefully not what you meant. That said, I believe men do not mind appearing stupid or voicing their opinions openly as much as women in general.Second, there are statistics to support this commenting gap: http://bit.ly/1E0UYe7 and some thoughts as to why: http://wapo.st/1TRyy0vI like these 2 lines best:“Maybe,” one (female) commenter suggested, “women are sensible enough to realize that all this commenting — whoever is doing it — is just a waste of time.”and”Rather, I don’t comment on Web sites for the same reason I don’t watch wrestling, or go to strip clubs, or do any number of other things that men statistically do far more than women: I think it’s stupid, and I’m not into it.”Third, I think commenting needs to evolve and commenting platforms need to give control to the commenters in different ways than publishers might (which are how all commenting platforms are designed). It’s part of what I call Web 4.0: a full-duplex, interactive and generative web, or in this case, commentsphere. Then women will be more likely to contribute.
I’ve commented a few times on Bitcoin posts here 🙂 I absolutely defer to Twain’s knowledge, though. Today’s is pretty “inside Bitcoin” for me.
And we all salute and cheer these women in Bitcoin! @karen_e:disqus* http://www.coinfilter.com/t…I’m wondering if @fredwilson:disqus will tweet out his future Bitcoin posts to those women so they can increase female participation on AVC and also enlighten us as Bitcoin practitioners.
I think the response is, “Yesssssss.” ;-)Meanwhile, I’ll give ’em hell over a Gotham Gal today. Rawr!
I’m probably missing something, but the fork doesn’t seem to present a long-term challenge to Bitcoin.What I would like to hear at some point from somebody who knows Bitcoin as well as Fred is what mechanism exists to prevent mining pools from combining into a single cartel that controls the critical threshold level of processing power on the network? As a technology, Bitcoin is capable of providing a distributed ledger for transaction processing — which is a great start; we haven’t had that technological capability before. But if nothing else this fork demonstrates that there are still fundamental political and economic issues for the network. And it’s going to be “old” political and economic theory (and regulations) that resolve those issues for the masses.
Technically there is nothing that can prevent a cartel from taking over. But as Lucas Dailey pointed out, a Bitcoin mining consensus is not a democratic but a market mechanism. So one way of ruling out such a possibility is running tests for an “efficient market” of miners. Interesting study that would be.
Thanks for the reply. I agree! That kind of study would be very interesting!What we know about cartels from a long history of regulating them is that they do tend to fall part easily where there is no mechanism for punishing defection. The problem (or opportunity, depending on which side of this you’re on, I suppose) for Bitcoin seems to be that there are a lot of ways to setup such a mechanism.Suppose a new mining pool joins the network and charges lower fees. The existing cartel can simply delay broadcasts of newly mined blocks so that the new mining pool is marginally less profitable on top of charging lower fees. There are probably other, better ways to accomplish the same thing.
The block size debate has been very disappointing. On one side you have essentially two people amassing popular support via blog posts and reddit dramatics – arguing that an immediate block size increase is an obvious step in scaling Bitcoin that comes without any tradeoffs whatsoever. On the other, you have the vast majority of technical consensus advocating for a more reasoned and cautious approach.Politically, it’s easy to label the latter as being obstinate or self-interested and, unfortunately, that’s what has been done. So now there’s a schism between people who understand that there is, in fact, a very real decentralization tradeoff and those who think the core developers are somehow sabotaging Bitcoin, an environment that preempts any productive discussion.Almost no one believes the block size should stay of 1MB forever, despite what is being claimed. But a Bitcoin that runs exclusively in centralized data centers is incredibly uninteresting… it’s just a much less performant VISA.Meanwhile, /r/bitcoin is spamming the bitcoin-dev mailing list with political theatrics, work on Bitcoin Core (including much less controversial scaling work) has ground to a halt, and Bitcoin is less interesting than it has ever been.
And… Fred Wilson neither knows of this side of the debate (he is in love with Gavin & Hearn only), nor does he apparently care.
> they will ultimately decide if the Bitcoin XT fork works or not.There some information that might be misleading here regarding power the miners have.Miners have the ability to block a hard-fork from occurring by not letting the threshold be reached. Bicoin-XT uses as a trigger an nVersion supermajority where 75% of the recent blocks must be tagged with nVersion set to a specific value. Shortly after that threshold is reached a big block (larger than 1MB) will be accepted by other Bitcoin-XT nodes. So even just 26% of the hashing capacity can cause Bitcoin-XT to never behave different from Bitcoin.Also, even if the hard-fork happens, the original chain (where the 1MB limit is still enforced) can persist — even with much less than 50% of the mining capacity still there. The same is not true for Bitcoin-XT. It needs to remain with more than 50% of the combined total hashing capacity otherwise if enough hashing returns to the original chain it can regain the position of being the chain with the greatest amount of work. The result of that for Bitcoin-XT is a block-reorg and the hard fork disappears as if it had never happened. This is true regardless of how many confirmations the big blocks / Bitcoin-XT side had after the first big block occurred.The reason mining capacity might revert to the original chain after initially supporting Bitcoin-XT is simply economics — they mine where the greatest return occurs. With difficulty being identical (initially), the exchange rate for BTCs (newly mined bitcoins from the original chain) need be only near that of the BTXs (newly mined coins from the big blocks / Bitcoin-XT side) for that to indicate that catastrophic consensus failure occurred.If there were a BTC/BTX futures market (or CFD) we could start getting an idea well in advance of what the market might look like after the hardfork occurs.
I guess I have a one word comment on the notion of open source = democracy. And that word is ‘Linus.’
The article gets super surreal. The crux of his argument also means there is a huge problem ahead for Bitcoin.”Like a committee with no chairman, the meeting never ends. To quote the committer who has pushed hardest for stasis, “Bitcoin needs a leader like a fish needs a bicycle”.
This is certainly an interesting situation to watch unfold, yet another test to Bitcoin’s resilience.That said, the list of supporters and detractors is not accurate. The vast majority of the economic and technical ecosystems support larger blocks, but they want to see them implemented into Core and not into a contentious hard fork that has only two commiters, Andresen and Hearn, being the latter also a supporter of blacklisting of “tainted” coins and an advocate of pushing anti-Tor policy.Furthermore, the vast majority of developers agree that a jump to 8mb blocks is a huge security risk – most favour a more gradual, flexible approach, like the one proposed by Sipa here: https://gist.github.com/sip…
This is certainly an interesting situation to watch unfold: yet another test to Bitcoin’s resilience.That said, the list of supporters and detractors is not accurate. The vast majority of the economic and technical ecosystems support larger blocks, but they want to see them implemented into Core and not into a contentious hard fork that has only two commiters, Andresen and Hearn, being the latter also a supporter of blacklisting of “tainted” coins and an advocate of pushing anti-Tor policy.Furthermore, the vast majority of developers agree that a jump to 8mb blocks is a huge security risk – most favour a more gradual, flexible approach, like the one proposed by Sipa here: https://gist.github.com/sip…
Interesting that you’re the only one who mentioned these pertinent facts of the debate. No one else has done so in this comment section, which just shows how polarized AVC and his viewers are.
What do you think about the ongoing censorship of bitcoinXT or bitcointalk or /r/bitcoin? Do you think it will alter the market choice over which protocol to use in any ways?
the timing is interesting. the Grexit pump phase seems at an end. time to dump the price and buy it back cheap?
To me this issue has transcended the large/small block size debate, and has become a debate about client choice.No one group owns or speaks for the protocol – were this the case, it would represent an easy point of censorship or attack. By design the system allows anyone to propose a “winning” solution that defines the protocol through economic consensus.What we’re seeing is the next step in hardening Bitcoin. We see that no entity can control Bitcoin against the will of the economic majority. If a fork will improve Bitcoin, the majority will accept it, and the value will rise, even if it is a change that threatens special interest groups.
There’s a great technical conversation on this topic going on at the Blockstack.org Forum about Bitcoin XT. Hope everyone heads over there and joins the discussion. Blockstack Community Thoughts on Block Size – Bitcoin XT Debate
There is nothing more closed, tyrannical and oppressive — and hugely undemocratic — than “open source software.”Open source = closed society of coders.There is nothing “democratic” about their deliberations or their rule unless you mean “democratic centralism” as the Soviet Politburo had under Brezhnev, where elite leaders get to debate among their tiny group until the stronger suppress the weaker and they have to shut up and go along.Openness doesn’t come from declarative statements that you are open; it comes from due process, the rule of law, fairness, and justice. And all of these principles outside of code-as-law are alien and even hostile for authoritarian coders.Given how much coders are taking over our every day life in that “computer in your pocket” it’s really scary how their horrid, vicious authoritarian culture is spreading — and then getting blessed in part in a post like this, even though Fred is taking the “more democratic” view here in this sectarian war.The key to understanding the failure of BitCoin and its injustice is not just that it is anonymous and therefore unaccountable, it’s that it is ruled like the Politburo — you said it all here: “The debate has raged most intensely inside the small group of developers who have commit access to the bitcoin core. They are called the “core developers.” These software engineers control the basic architecture of bitcoin. This is how most open source software projects are managed and bitcoin is an open source software project at its core.”This is just like Wikipedia that “anyone” can edit — sure, if they master a set of arcane sectarian procedures and bow to the whim of a set of anonymous overlords in a tiny group that makes the final decisions on controversies.It’s not just that the group is small or arbitrary or authoritarian; it’s that their are various cultural memes along the way decided to perpetuate the tyranny. I thought the writings of Harper Reed, the geek who was central to Obama’s digital work in his winning campaign were a good way to understand this — he praised the idea of brutally tossing out anyone who didn’t get alone with the scrum leader (all open source projects talk about the boss character to be obeyed in every project):”Pruning – kind of like a bonsai tree. It’s knowing when to remove someone from your community. Hire problem solvers and fire the non-problem solvers, or guide non-problem solvers to be more productive. Take away: don’t be a pussy.”http://3dblogger.typepad.co…Whatever your notions are about a business running with these harsh methods, *society* cannot be run by them as ultimately people will rebel if you don’t crush them which is also a terrible outcome.What’s also funny is that you believe now that the authoritarian problem of Bitcoin is solved by having these “skilled workers” — or let’s say a middle class of executives under the overlord “code committers” who mine — are now going to decide things along with the “market.” Except, obviously they can’t get to decide things when it is pre-rigged by the coders.There isn’t any new model of “innovation” or “technological evolution” at play here, Fred, it’s the same old Bolshevism. We who are affected by this economy some day have no say in it unless we are coders or miners — this is like Orwell. A tiny group decides really, because they commit the code — the others, even if there are more of them, are a mere layer grafted on to that reality. Nothing changed here about our freedom because we didn’t get to choose BitCoin itself, an anonymous, unaccountable bunch of crypto-anarchists like Snowden.
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