Discus Fish is the pool mined this block 390619 (most probably) so it is likely their own transaction

I remember during early days when Satoshi was testing transactions, he would include 50 BTC as fee, and because he was the only miner, he would receive those fee back into his wallet

Similarly, these might be miner constructed transactions to test some function, and since they are included in his own mined block, he does not lose anything

It seems you were not here during the 2013 hard fork and did not know what happened either. You just blindly against anything that is against your idealism regardless of facts, unfortunately talk does not change facts, get some facts first

That's a good quote here. In fact this governance problem not only happens on bitcoin, but any kind of large scale social community. That's why politics always exists. Notice that politics does not exist on gold since no one can change its property, but bitcoin's protocol is destined to struggle

You have several genius/technocrats each promoting different future plan, and majority of normal users would not be able to understand the pros and cons of those plans. So it finally ends up with politics, e.g. the solution who gain the most support wins, not the most brilliant solution wins. So trying to prove that you are most brilliant does not help to win the vote, instead you must try to study what is voters' favorite

In this case, what majority of uses want? Trust and stability. They might be willing to pay a little bit higher fee or use other off-chain services for daily small transactions, but they definitely don't want to see a split in the core devs and even strange forks that might destroy the whole ecosystem. When bitcoin worth nothing, all its function becomes useless, so to preserve its value is the highest priority here, and in order to do that you must give up on certain functionality

This is not centralization but a fixed set of consensus rule. You can select not to participate and start your alt-coin, but you can not change the rules. No human can change the physical property of gold, that's the reason it is the most trustworthy money for thousands of years



In fact this  you is already here, it is called enterprise interest. There are many enterprises trying to push their desired features into bitcoin protocol. And it could even be an OPEC like organization that consists of large miners and exchanges, and there is strong incentive to cooperate to get higher profit by passing a new protocol

The protocol indeed rely on large actors to enforces it. I would glad to see that the protocol itself is self-aware and reject any attempt to modify it, then we have a truly decentralized system without human interference. All the scaling solution will go off-chain, and I thing that will make bitcoin the most trustworthy/incorruptible monetary system on this planet

But currently the protocol is the centralized control point, if you can persuade 12 large actors (5 mining pools, 5 exchanges, 1 web wallet and 1 payment processor) to adopt one specific protocol, then you basically control the majority of this ecosystem, anyone else has neglectable influence

The reason that it gives people hope that a political move might work is because the protocol is highly centralized, if we indeed have a very decentralized system then there will not be such difficulties like we see today. But you can not have freedom in selecting protocol, since that means you just created another alt-coin which will worth a little due to its inflation nature

I have played with several altcoins since I know bitcoin, but I quickly realized that the current cryptocurrency economy only focus on one coin, for the simple reason that people don't come here seeking for inflation. You have some mainstream economic knowledge that is weaved by banks to confuse the majority of human, so no doubt you will draw conclusions that does not fit reality (Reality is that none of the alt-coins will thrive, including banks' alt-coins)

If you look from the view of the central bank, the most important for a monetary system is trust. One of FED's mandate is moderate inflation, because hyperinflation will destroy the trust for their money

BIP 101 shakes investor trust since it is too radical, and BU is even more radical. When you are facing a change that no one has done before, you can only act conservative and prepare for the worst, not act radically and hope for the best. Thus the motivation behind BIP101 and BU is questionable: Why take huge risk when you can take less? Are those devs all illiterate in finance and don't' know how to manage risk?

It is very misleading claim that bitcoin users do not need to trust centralized authority, in fact every one uses bitcoin is trusting this centralized protocol originally designed by Satoshi: Every miners, nodes, exchanges, merchants, users, no exception

You can use what ever alt-coin you like, but those coins do not have any meaningful value, because they are inflation in cryptocurrency world. In order to have limited total money supply, you can not have more than one coin, otherwise there will just be endless inflation in the name of fork freedom, what is the purpose for anyone participating in such endless money printing game?

And the analogy of Zimbabwe dollar vs US dollar is wrong, since they are two different economy. Now we are talking about increase the money supply in existing ecosystem, equal to double the amount of USD in US.  It is not another alt-coin,  because all the pre-fork coins can be spent on both chains, thus a double of the existing coin supply overnight, but you can not double the economy overnight, so the result is a total crash of the whole monetary system or one of the fork die immediately

Regarding the governance of the protocol, I think it is not very difficult to reach a consensus if it is a simple fact and everyone understand it. However if you go the radical or complex route, then your fork will just become orphaned

You can look at Litecoin, having a different hash mechanism and higher block rate, theoretical higher transaction capacity, why it is still minimum in market capital? Because it is inflation in cryptocurrency world

There are several reasons that makes a hard fork without super majority (e.g. two parallel chains) dangerous


1. It broke the promise of limited total money supply
After each fork, the amount of total bitcoin in the whole ecosystem almost doubled. This is even worse than FED, they never double the money supply in a single day! So people will find out that no matter whatever reason, this bunch of developers are not any more trustworthy than central bankers, they better return to their fiat money and forget about bitcoin altogether


2. Suddenly increased money supply will destroy the long term perspective of bitcoin
Once forked, you have hyperinflation, the promise of long term deflation is broken, the coin value start to drop long term wise, and there is no hope it will pick up again: Who knows some day these guys will bring another fork and double the amount of money supply again?

3. It broke the promise of trustless network
Now people will understand, by forcing a fork without other's consent, you can change any rule in the current system, including the money supply schedule, network communication protocol, or even who can spend your coin. The fate of your bitcoin barely lies in the hands of a few developers, you have to trust them and worship them not ruin the whole thing

Basically a controversial hard fork destroy the trust in bitcoin and then no one will be interested in it any more

And just because of this, anyone who understand a little bit more about bitcoin will strongly against it. So they will prevent the hyper inflation by instantly sell the weaker fork into alt-coin level value and once that coin's value has crashed, miners will immediately leave it due to the loss of mining worthless coins, it will end pretty quick


Jeff supports a hard fork with super majority, I think 2MB is the easiest to reach, or at least everyone can live with (1MB is currently the super majority)

This is also why Jeff Garzik call a hard fork an extinction level event

Recently I noticed another post https://www.reddit.com/r/btc/comments/3t4kbk/forkology_301_the_three_tiers_of_investor_control/

It says that investors can already bet on the fail of one fork by sign a future contract to sell one coin for another coin at a certain exchange rate before the fork (for example, one contract is based on the sell of 1000 XT coins for 1000 core coins, and the actual execution rate might be 500, so that you get only 500 core coins for 1000 XT coins due to too many XT sell order than buy order). Thus the fate of that fork is more or less already decided even before the fork, to make sure those sure losers giving up the idea of fork (When you know for sure that your fork will die, would you still do that?)

Nice video, finally someone has clearly put this topic on table: If a negotiation failed, then who had the most power will decide. He did not include the exchanges, and also he did not follow the route and dig further into the failed negotiation scenario. Saying everyone have the same power is definitely wrong

Let's analyze each actor's ability to attack another fork and defense against such attack

1. Developers
IMO, developers' can attack a forked chain use spams and special transactions, they can not do too much on a fork's code base that is not in their control. They can defend against a technical attack by committing new rules to deal with spams and false transactions. It is just like virus and anti-virus, a never ending fight but seldom affect the major functionality of a coin

Attack: 2
Defense: 10

2. Miners
Miners hold hash power, a weak chain with less hash power will be easily 51% attacked by the stronger hash power

However, a 51% attack does not affect the bitcoins in cold storage, it will just disturb the transactions in networks, and while those power are used on attacking, the attacking chain will become weaker, so this kind of fight might not be so effective to totally disable another chain

Attack: 5
Defense: 5


3. Exchanges
Exchanges are important, because they can affect the exchange rate to a degree. To be honest, most of the bitcoin's early success is ensured by MTGOX, it had the power to stablize and raise the exchange rate of bitcoin thus quickly gathered lots of fans

If majority of exchanges do not upgrade to the forked version, then that version will never gain any user support (buying expensive ASICs to mine some coin that has nowhere to sell for fiat money?). If only a few exchanges upgraded to a specific version, then the low liquidity there combined with the dump of pre-fork coins from other chains will make its exchange rate quickly drop to alt-coin level

In principle, an exchange can either create bitcoin or fiat money out of thin air, and even stop large withdraw to slowdown the market reaction, thus have certain ability to manipulate the exchange rate against a sell off short term wise. I'm not sure if an exchange will provide the trading for another forked coin, since that gives them chance to crash the exchange rate of that coin, maybe they will do that to show that forked coin is destined to fail

Attack: 10
Defense: 10


4. Investors
Investors are those who hold lots of bitcoins either through mining or through purchasing. Because over 90% of the coins are in the hands of investors, they have the biggest influence of the ecosystem. By dumping their pre-fork coins on the chain that they don't like, they will immediately create a sell pressure hundreds of times larger than average day, thus crash that coin's exchange rate to 0 in a very short time

However, when facing large amount of sell-off from opponents, unless they are super rich in fiat money, they can not defense a sell-off that is hundreds of time larger than normal, so their ability to defense against such attack is limited

You can imagine, if you are an investor holding 7 billion dollars fiat to make sure all the dumps from opponent's fork will be absorbed, the chain that you support will go mainstream. In fact you don't need that much at all, 3 billion is enough, but I guess none of the bitcoiners here have that much capital

Attack: 100
Defense: 5

5. Merchants and payment processors
Since merchant adoption and payment function require world wide transaction, they have to passively follow the strongest chain, they will not use a chain that has lower exchange rate or without super majority, and they won't support fork

Attack: 0
Defense: 0


Many early adopters are both developers, miners and investors, this makes the whole picture very complicated. But anyway, when a negotiation failed, it is not likely we will have a fork, since the power of an exchange rate attack is so huge and the defense is almost none, it is a mutually assured destruction, heavily hurt both chains and the bitcoin game is over

You can trust the free market and fork to whatever chain you like, but then it is exactly the inflation that you are against, do you see the contradiction here?

In fact, the day you fork your coin and set up your exchange, you will face millions of pre-fork coins dumped on your exchanges, then your coin on that fork will worth basically nothing. This is the result of free market forking, and exactly because of this result, you are not free to fork as you wish, that's why I say that your freedom here are heavily limited by your economic incentive

I think this picture is incomplete, it lacks some of the other variables: cost of mining rig deployment, cost of operational cost, cost of electricity, and the network speed. When you add those variables in the calculation, the whole picture become more complex

I would like to establish my mining operation in China because of all those costs are much lower there, although their network speed is lower, but I get much higher profit mining every block there. And then if majority of the mining power is in china, then the propagation speed is really decided by the network speed into and out of China, no matter how fast a network a western miner have, you do not benefit from a small block since your block can not reach china thus will be orphaned by their higher hash power. However Chinese miners can use a large block inside their mainland due to faster network there

Then why are you here? You should listen to those master economists that have won Bank's Nobel price of economics: Money supply must be inflative so that it is good for the society 

Then it will be centralized to a few large data center thus very easy to be shutdown. So you can understand why some devs even think about in future we should reduce the block size limit. When you have double amount of blocks in another 7 years, the situation will just get worse

Another thing to be considered is the new node setup. Currently it is already a pain to setup a new node, it takes at least several days of delay in downloading and verifying all those transactions, it is especially slow for this year's data, you can imagine that it will be weeks after block size is raised to 2MB

No one knows what will happen if the blockchain continuously grow at 1MB per block, but I think it is already quite a large of stress even in a modern computer, you already need server level hardware to be a node without too much load (16GB memory, 8 core). If the block size is bumped to 2MB, I guess many of the consumer level hardware will not be able to run nodes

Imagine that if in future, each one block takes 1 minute to verify, then it means it will take 271 days to verify 390000 blocks, setting up a new node will take almost one year. Even if each block takes 6 seconds to verify, it is still 27 days for setting up a node

If you look at the coinwallet.eu September attack, they did not do anything, just give out coins that stored in millions of dust addresses, and people automatically come to construct special transactions to claim those coins. This is similar to throwing out millions of $20 notes from the top of Empire State Building, it will immediately jam the traffic of Manhattan. How do you prevent people from claiming those notes? In fact F2pool is the one who claimed a mass of those coins and get a block took 30 seconds to verify

I guess you only need to construct such a specific block that takes forever to verify, not necessary a valid mined block, no hash power is needed

Attacks being cheaper or expensive means nothing for malicious large institutions, but if they are unable to stop the normal function of bitcoin network, then the attack is just wasted resource. A large block gives attacker such possibility to stop the traffic of all nodes because all they need to do is sending out large blocks that takes forever to verify (You don't know how long to verify a block unless you have already verified it), and if they control some super nodes that can quickly verify such kind of blocks, that will give them more chance to orphan the rest of the network since no one is able to keep up with their verifying speed

Of course this special kind of dust sweeping block can be prevented at nodes level, but currently there is no fix yet as I know. And when you start to police on what kind of transaction is illicit then you really start to act like a government organization  

It will be based on user feedback, but not something out of thin air. Users must physically experience the problem and send their feedback to change the current design.

Are Blocks Filling up, and Is That a Problem?