The most important is the decision making mechanism
Current mess is caused by that there is no decision making mechanism, so that all the design happens without first have a consensus based decision. When the design finished, programmers find out that there is no miners interested in their solution, this result in waste of time and human resource
But that's what BIP's are for. BIP's are design proposals, but how are they get approved? That's decision making mechanism Currently they are approved by the 5 core devs that have Git commit right, but their approval does not mean the approval of miners and other interested community members. And this is especially problematic when those 5 core devs have a conflict of interest themselves |
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The most important is the decision making mechanism
Current mess is caused by that there is no decision making mechanism, so that all the design happens without first have a consensus based decision. When the design finished, programmers find out that there is no miners interested in their solution, this result in waste of time and human resource
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I don't think a constitution will fly. Bitcoin is an incentives machine. If something changes it will be because the incentive structure has changed somehow.
Innit?
Of course incentives is also part of the picture. Since currently there is no such kind of code, anything can be openly discussed, you can look at Classic where they are trying to make such constitution, to decide on some basic rules that should never change It can be very specific, for example always 21 million coin supply. But it can also be very abstract, like to keep the miner incentive intact, for example averagely 50 bitcoins per block forever (This unavoidably will limit the block size) The constitution is about the part that almost never changes, so that if you disagree with those rules, for example 21M bitcoin, you better leave for another coin Another part is about the decision making, e.g. how to reach consensus in a community full of different people with different political/culture/religion ideology. There is still no good way to count user's opinion, using hash power voting is not a really good method |
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So the idea was invented by Japanese scholars and integrated by a polish student? And to show the respect to the original creator, he used a combination of their names  That's really decentralization |
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I think it is a bit disingenuous to argue that nationalities don't matter as many western bitcoiners, including prominent ones, cite Chin as a factor in their assessment of the success of Bitcoin or lack thereof.
It is almost like to say that on the level of atoms, there is no sexuality or race, therefore the society should heed nothing but laws of physics.
I agree that code itself doesn't recognise nationality, but it is not only the code, but people who are involved with it.
That's an interesting point, so the culture also plays a role in the consensus building too. It will make the consensus more difficult to reach I believe that the first consensus community must reach is to write some constitution level rules so that every one is agree with, so that we have some common ground to build upon. The reason that we have so many different road maps promoted by different party is because there is no such level of commonly agreed basic principles |
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You inverted the cause and result: People spend energy to dig out gold because it has value, not because the digging action itself will generate value. Higher mining cost is a result of competition. You should ask why so many people crazily mine bitcoin even they pay more electricity than coin's exchange rate
So it's not the work that gives gold value, but the fact that gold has value in the first place?! So much for work giving BTC its value  Folks put plenty of work into mining fool's gold too, because they thought it had value. It didn't. That's what made them fools. Avoid mirrors. It is not cost decide bitcoin's value, but the cost is an indicator of how much it worth, it is the same for gold, no cost, no value. And you know, most of the fool guys are rich, so they can afford it  |
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Similar to the way that central banks manipulate the exchange rate of their currency
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If one type of nodes, Classic for example, controls over 51% of hash power, they can implement whatever change they like by simply use this soft fork trick: Let all the old Core nodes accept their new format blocks while Classic nodes will reject Core blocks, so that Core blocks all get orphaned due to less hash power
This is nothing but a classic 51% attack by cooperating miners, and has nothing whatsoever to do with soft forks. If you manage to control 51% of the hashpower, you can ignore everyone else and always have the best chain. Bitcoin 101. In my previous knowledge, there are things 51% attack can do, like double spending and reverse transactions, but there are things a 51% can not do, like spend the coins in other people's cold wallet etc. But now I understand, these are only true if the attacker run the same software as the rest of the network The attacker can run whatever software he wants, as long as he, or they, generate valid blocks. If the blocks are invalid, e.g. by creating or spending coins in invalid ways, the blocks will be ignored by all validating nodes. (SPV wallets may be vulnerable if the attacker has enough nodes on the network.) Under this new soft fork trick, a 51% attack is not only a disturbance of the transactions, it become a political weapon to suppress the people with different idea and force them to give up due to their economy incentive
You aren't describing a soft fork, what you describe is a 51% attack. You describe a situation where 51% of the hashrate cooperate by ignoring blocks produced by others. This is perfectly doable today, and the main reason why miner centralization is a problem. If you mine at the large pools, switch to one with less than 10% of the global hashrate. Soft forks aren't activated until 95% of the last 2016 blocks conform to the new rules, btw. In case of an intentional attack towards bitcoin, there is no difference. An attacker (a bank or government for example)who want to destroy bitcoin would just publish empty blocks and stall the network with more than 51% of hash power, and they don't need to change the software, just use the same software as the rest of the network However, in case of an internal political conflict, this becomes dangerous, because the attacker might not want to kill bitcoin, but just to capture and morph the hash power from his opposite side to his side. In that case, commanding 60% hash power can almost guarantee it will happen |
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Overall, there seems to be a sense of helplessness. Some reflected on why the Chinese had so little say in the matter and some urge that the Chinese should form their own core development team and create their own fork. Hi Eric, What do you think about the Classic implementation? What does chinese miners think about it? Many Chinese Bitcoiners - not only miners, but also exchanges and wallet services, originally supported Classic for its support of 2MB block size, but after meeting Jeff Garzik in Beijing, many backtracked because they didn't believe that the team behind is capable or there is a roadmap. This is true, because there should not be a road map at all without first have widely reached consensus, and you should not blindly accept proposals without your own judgement, and you should also participate in making a road map I think the communication between all the participants is very important, especially the core devs, they must constantly broadcast their proposed change with human understandable bulletin to increase understanding. They should not start to implement any change without a design specification which is approved by major consensus, otherwise it will be wasted time and resource working on a solution that no miners will use |
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Have I basically summarized the last year? Anyone want to add any bullets?
Nice summary, but maybe you noticed that Gavin constantly change his proposal based on community feed back, which proved to be a much more efficient way of gaining support. Blockstream give me a feeling like: We decided, it should be done like this, because we are the expert and you should listen to us and respect our hard work. This is not a way to reach consensus in a community full of paranoid conspiracists  It's exactly this kind of people most attracted by bitcoin because they trust nobody by default |
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So what i ask myself, when the old nodes only see empty blocks, aren't the transactions needed to calculate if the block hash is correct? If the transactions are not seeable then how can the hash be calculated as valid? As far as i remember, changing the transactions of a block will give you another seed part that is used as base to find the block hash.
In old nodes' view, it is just an empty block with a coinbase transaction, nothing special, like those blocks generated by SPV mining. So the hash function will return OK signal. You write that segwit miner still would need nearly half of the network to do this fork but wouldn't it be sufficient when 10% segwit nodes find a block, let's say a minute before the 90% non segwit nodes, then they propagate it through matt's network(?) to all the big miners and these miners can instantly confirm the block because nothing big to be calculated. They would accept the block and that would be it.
Though even then, the old nodes would still think the bitcoins, that were moved in the segwit block, are at the old addresses and the segwit nodes with bitcoins that were transferred already, wouldn't that mean a fork of some kind has happened because a big part of the network has different details about the status of the bitcoins?
You are right. If Segwit nodes only have 10% of hash power, then when they publish their block, the block will be accepted by core nodes, and core nodes see nothing in it. But in Segwit nodes' view, that block contains a transaction that spent Alice's coins. Core nodes does not see this transaction, thus they believe Alice's coins are still there, but in Segwit nodes' view, it is already spent As a result, later when core nodes trying to spend those Alice's coins, that block will be accepted by Core nodes but not Segwit nodes, so a fork will happen. The fork happens because Segwit nodes does not have enough hash power to prevent core nodes to publish Alice's transaction. If Segwit nodes commands more than 60% of hash power, then core mining nodes will never be able to spend Alice's coins, because all their blocks are orphaned. And there will never be a fork Further on, when the network only has 10% segwit nodes, which is likely in the beginning, then wouldn't there an attack vector by misusing the blindness of the nonsegwit miner nodes?
I mean depending on how the nodes confirm the segwit blocks at all, what if someone creates a block that contains fake segwit transactions? Completely rubbish or scammy transactions. The segwit nodes would discard this block but the nonsegwit nodes could not check if the block is invalid. They would accept it and hardfork. Though when i think about it, nothing would change for the nonsegwit nodes anyway because they don't know the segwit transactions. And the segwit nodes would still work on what they know.
True, this has been pointed out by someone and it seems to be a big issue. If a rogue segwit miner publish an invalid segwit block, it will be accepted by the core nodes while rejected by segwit nodes, so a fork will happen from there. In fact this makes the segwit implementation phase so vulnerable that just one invalid block will cause it to fork into its own chain (Correction: Before the fork condition is reached, e.g. 75% hash power supporting segwit, segwit nodes will not generate and accept new transaction format, so the system is still safe. And after the fork, the attacker need more than 25% of hash power from segwit nodes to push in such an invalid block, since the other 25% of old nodes' hash power will assist to write the block into the chain) |
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If one type of nodes, Classic for example, controls over 51% of hash power, they can implement whatever change they like by simply use this soft fork trick: Let all the old Core nodes accept their new format blocks while Classic nodes will reject Core blocks, so that Core blocks all get orphaned due to less hash power
This is nothing but a classic 51% attack by cooperating miners, and has nothing whatsoever to do with soft forks. If you manage to control 51% of the hashpower, you can ignore everyone else and always have the best chain. Bitcoin 101. In my previous knowledge, there are things 51% attack can do, like double spending and reverse transactions, but there are things a 51% can not do, like spend the coins in other people's cold wallet etc. But now I understand, these are only true if the attacker run the same software as the rest of the network Under this new soft fork trick, a 51% attack is not only a disturbance of the transactions, it become a political weapon to suppress the people with different idea and force them to give up due to their economy incentive |
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OP Are you saying "Why soft fork TO SEGWIT is a bad idea?" I agree. Good post.
He is saying that all soft forks are bad, but it is interesting that he only brings it up now when SegWit is being prepared to be deployed. We have had multiple soft forks already to deploy new features. It seems to just be an attack at SegWit while simultaneously attacking soft forks. I'm not specifically aiming segwit, but this soft fork idea is not the traditional soft fork. In a traditional soft fork, the new version only tighten the rules and make the new version more strict in accepting blocks, so that some old blocks become invalid, like july 04 soft fork. But this soft fork is trying to cheat old nodes to implement other rules, which are not a tightening of existing rules, but a total change to another set of rules It came out from the HongKong conference, where Pieter said he originally thought it is impossible to seperate the blockchain data without a hard fork, so he dismissed that idea, but later Luke_jr told him that he can do this trick as a soft fork But what I don't understand is, if you use this soft fork trick, you can expand the blocksize to 2MB the same way, avoiding a hard fork too. So if the main purpose of Segwit is to avoid hard fork, then a 2MB soft fork will be a better solution than Segwit, since it does not need to separate data, which causes some extra coding and testing Segwit just ain't Bitcoin.
How so? Segwit to bitcoin is a RAID to a hard drive, they can achieve the same purpose of storing data, but technically they are not the same thing |
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It's a great advance in current deadlock situation
For any kind of change, you need nodes and miners to be able to run the new version to express their support. If SW is also published, those interested miner can run SW client too, let the mined blocks finally show what is the opinion of majority of the hash power
I think miners should get more clear and objective explanation about their choice of software and the possible consequence
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I ask because this is the question that we have been asking ourselves a lot recently.
We are a Chinese BTC company that has invested a lot in mining and also runs an off-chain wallet service. So we have a vested interest in Bitcoin not failing. Like many Chinese miners, we believe that a simple and conservative solution to the block size question would be the best, but it seems that neither Core or Classic is willing to offer. I would very much like to hear your views.
I think the most important thing is that you have to understand what you are doing and the consequence of those actions, not blindly listen to others. Because the spirit of bitcoin is that every one should make their own judgement voluntarily, not forced by anyone else. This is important for your investment, since no matter how brilliant each side talks, in case of a failure, none of them will responsible for your loss and compensate you Like you said, when you are lacking enough information to make the decision, it is better to be simple and conservative, e.g. assume that the current situation is the best until there is evidence it is not. And when you are making a change, make sure it is as small as possible, don't make sudden moves |
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1. I can't send Beanies through the internet, though your bitcoin isn't soft and cuddly. What does this have to do with scarcity?
2. My boiled ice hasn't lost 2/3rds of its value over the past couple of years, so it most certainly beats Bitcoin as "store of value."
Again, you haven't answered my question: Is my boiled ice more valuable now that I wasted a bunch of electricity and my time put work into it?
If you plot the exchange rate performance of bitcoin for more than 4 years (which is a reward halving cycle), you get a risk/reward ratio which no investment can beat. It is a long term value storage, although it is disrupted by short term bubbles and crashes, similar to housing You inverted the cause and result: People spend energy to dig out gold because it has value, not because the digging action itself will generate value. Higher mining cost is a result of competition. You should ask why so many people crazily mine bitcoin even they pay more electricity than coin's exchange rate |
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TL/DR: A transaction fee market exists without a block size limit assuming miners act rationally.
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Miners being net econo-rational is probably an axiom for Bitcoin to work in the first place.
This is the biggest assumption of various schools of economics. However, economy is always political, economy policy is decided by the ruling class to manage the majority of poor people, so they are modeled towards average households that barely can live without the next pay check. For these people, econo-rational means short term profit seeking However, the definition of econo-rational is different for different people, depends on their income, their time frame, and their risk tolerance level. If you move those theory to bankers and large capitalists, you will clearly see their behavior do not follow these models. As we know, the miners and pool owners are bankers and capitalists in bitcoin ecosystem, so they won't seek short term profit like average household, their concerns are much larger and longer term. Yes, I completely agree. Like I said up-thread, with this academic work regarding the transaction fee market, what we're doing is considering different lenses through which to view the problem, so that we can make incremental progress in our understanding. We know that these models are imperfect, but we ask what happens if the assumptions hold, so that we can gain intuition about the more complicated real problem. More here: https://bitcointalk.org/index.php?topic=1274102.msg13678877#msg13678877And YarkoL's post was great: https://bitcointalk.org/index.php?topic=1274102.msg13680077#msg13680077After so many days of reading exhausted debate from each direction, I'm so tired I guess in the end people will just simply reach agreement by meetings, a solution that is not too far away from today's model because that is mostly like to reach consensus. Any large change is almost impossible at this stage As long as block space is unlimited, the fee income will always be a neglectable part of the block reward because they only need to compensate for the orphaning risk, so the miner's need to limit the block size to increase their incentive, but by how much? I think a target of $0.1 per transaction is reasonable, it gives miners enough incentive (higher than orphan risk) while don't hurt average users, so that bitcoin payment is still quite competitive against main stream international payment solutions And it is also easy for consumers, they know exactly it will cost $0.1 to do a transaction in bitcoin network, it is a constant. Certainty is good |
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It also shows a strong philosophy when it comes to future scalability: Simple solutions tends to survive long term wise. It is very easy to expand the capacity of a simple system by simply adding more of it, because you don't change the behavior of existing system and all the systems that are dependent on it can work as usual
It doesn't change the behavior of the system? This can only be said for segwit until everyone is using it, after that it is the system. However, I would argue that this 'simple' solution has a broader effect unlike what many claim. Does it not push away some existing nodes and potential new nodes due to the increased requirements? The thinking behind RAID 0 is to split data between two disks so that data can transfer parallel thus reach double throughput, it is a change of the behavior. But as a means to reach higher throughput, it is short lived. We all know that the rise of SSD has replaced most of the RAID 0 setup quickly since they works exactly as a single hard drive but provide magnitudes higher throughput Similarly, the hard drive will move to a SSD based route and reach PB level storage with ease, cost is not a problem when it is mass produced. As to CPU limitation, special ASICs can be developed to accelerate the verification process, so that a 1GB block can be processed in seconds The only thing left is the network bandwidth, which is the current bottleneck. Segwit will not help in that regards since it brings more data given same amount of transaction. But we are far from reaching the theoretical limitation of fiber networks communication yet. Currently it is already Pbs level in lab. With the new trend of 4K content streaming, especially 4K live broadcast, it requires enormous amount of bandwidth. If average household want to see 4k live broadcast, they must get 1Gbps level optic fiber, and I think it will happen in latest 10 years All these things seems to be able to scale indefinitely because they simply add more to its existing capacity, but the way they inter-operates never changed, so that component manufacturer can focus on capacity increase instead of worrying about losing backward compatibility |
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@johnyj:
1. Bitcoin is no more scarce than Beanies, and getting less scarce by the minute. Every ten minutes, actually. As in every ten minutes 25 more BTC mined out of thin air.
2. If "work" (turning electricity into heat, the Rube Goldberg way) is what makes BTC valuable, why would BTC value fluctuate?
If I spend days boiling water & then freezing it in my freezer (turning electricity into heat, the Rube Goldberg way), will my water become more valuable?
If Beanies can be send on internet anonymously, and have limited supply and have a mining cost, and free entry of production, e.g. anyone can make it, then I guess it will have some value just like any other alt-coins. But since bitcoin already occupied this market segment, the competition is hard Fluctuation of the price is caused by speculative capital, but they also follow the fundamentals. When they anticipate a large increase of demand when they forecast the difficulty is going to rise (difficulty is a good measure for demand since mining is the lowest cost to acquire pure clean bitcoin), they will start to drive the market price to start a round of bubble Bitcoin's major demand comes from 3 area: Secure and annoymous long term value store, anti-inflation, world-wide instant transaction. If your boiled ice block can do the same thing, I guess it will also become valuable |
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I think any normal people will just go for the first option, only geeks and technical interested guy will try the second approach, and eventually many of them will give up on the second setup because it is just too complex to implement and maintain, and a Raid 0 will have higher risk of failure, it does not worth the effort
RAID 0 does not have a high risk of failure and it is usually used for much better performance not endurance/storage and thus this analogy is wrong. Let's move on. I use this example because it has proven history: After so many years of Raid technology appearance, most of the people are still not running Raid, and when they run, they typically run Raid 1 or Raid 10 in data centers to have more data safety. This is all because raised level of complexity caused so many compatibility/driver problems which do not exist for a single hard drive setup, so that the benefit of increased speed does not worth the effort of setting up and maintain a RAID It also shows a strong philosophy when it comes to future scalability: Simple solutions tends to survive long term wise. It is very easy to expand the capacity of a simple system by simply adding more of it, because you don't change the behavior of existing system and all the systems that are dependent on it can work as usual |
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