Bitcoin XT - Officially #REKT (also goes for BIP101 fraud)

[coalitionfor8mb]

We should be able to test this empirically: if the theory is true, then, for example, we should never have a sustained period in the future where the total fees collected by miners is significantly greater than the aggregate losses due to orphaning.

1) We definitely should. We must let the pressure build up and see if the network effect alone can hold it. Maybe even let the pressure leave for a while.

The question is whether or not we have a choice.  My prediction is that there will never be a sustained period in the future where aggregate fees are significantly greater than aggregate losses due to orphaning.  The protocol will fork (or demand will leak somewhere else) before this happens.

Let's say "sustained" = more than 6 months and "significantly greater" = more than double.

Oh, that's the third "key"!

The third "key" is the understanding that you have the first "two"!
It's the reason most of the people who understand Bitcoin are into it. The understanding of it's core value proposition is the greatest attractor here. That's by the way where the "economic pressure" comes from in the first place.

Do we have a choice?
Everyone of us personally?
Yes, absolutely!

Now, let's see, who is going to benefit from the removal of the block size limit.
1) Businesses. Yes, they are likely sitting on a decent network connection and will be able to process more txs and serve more customers.
2) Miners. Yes, they will move to a better network connection and be able to process more transactions with fees and gain more profits.
3) Users. Yes and No. It depends.

Users will benefit from the growing economy (driven by the first two categories of players) via profits they derive from the coins they still hold, but they will lose the ability to validate the rules of the game. It's a scenario where the users of Bitcoin become mere consumers. They no longer have a say in the way this particular economic environment operates.

Losing that second "key" (to access and maintain the blockchain in a permissionless way) puts the first "key" (the private one that holds the coins) in danger as well, as the new rules may develop into something that won't allow the users to receive and spend those coins in a permissionless way. That's where the whole ecosystem turns into something that defeats the purpose of Bitcoin in the first place.


Bitcoin (the network) is undoubtedly a "star", that produces bitcoins (the currency) and all the other goods that come with it. What holds the star together? The gravity and the sheer mass of its outer shell. It's the massive network of validating full nodes that prevents the large businesses and miners from colluding and forging the rules, but those active profit-driven players are definitely needed as well.

The only way for Bitcoin to continue as intended (to shine as a "star" that is) is if the mass of its users is well aware of what is it they are doing and why. A proper balance between the two forces in the ecosystem needs to be sought for it to become successful.

Changing the protocol rules is identical to a relatively rare and discreet transition stages that any star undergoes in order to find a new balance point, when the old one no longer serves its accumulated mass. That's when the block size limit needs to be raised. The new limit needs to resonate with the whole ecosystem as it's supposed to represent the interests of the whole. It needs to preserve enough mass in the outer shell (users and validators), but leave enough space and entropy for internal competition (businesses and miners) to continue to produce goods with a higher energy levels than before.

Any protocol change needs to be checked against those three "keys" outlined above in order to preserve the original core value proposition that made the whole system attractive (and brought the economic pressure in) in the first place. If (in case of too small blocks) most of the economic activity moves off-chain (sidechains and such), while actual bitcoins are "parked" somewhere else, then the first "key" is in jeopardy, as people are no longer holding (and transacting with) their bitcoins per se. If (in case of fairly large blocks) too much of the economic activity is happening on-chain, then the second "key" is in danger, as people no longer have permissionless access to blockchain and cannot validate the rules. If people are clueless about the way things are, then the third "key" is missing and they need to find one first. If you managed to get this far and read the above, you got it!

Oh, and by the way, Bitcoin is not above the law, it is The Law and it Reigns Supreme!

I guess you meant this!

[CIYAM]

There is no reason why businesses shouldn't benefit from larger block sizes, unless of course people are conscious enough not to use those businesses that are trying to put them out of the game. In the case above, they likely over-projected in their business plans somewhere.

Huh?

If no-one is using Bitcoin to pay for things then how on earth are these business benefiting from larger block sizes?

[hdbuck]

There is no reason why businesses shouldn't benefit from larger block sizes, unless of course people are conscious enough not to use those businesses that are trying to put them out of the game. In the case above, they likely over-projected in their business plans somewhere.

Huh?

If no-one is using Bitcoin to pay for things then how on earth are these business benefiting from larger block sizes?

who said you have to spend bitcoins to make them worth moar?

as long as i hold my private key, bitcoin is fulfilling perfectly what i need it to.

[CIYAM]

as long as i hold my private key, bitcoin is fulfilling perfectly what i need it to.

And clearly there is no need to increase the block size to do that (am actually agreeing with you).

[coalitionfor8mb]

There is no reason why businesses shouldn't benefit from larger block sizes, unless of course people are conscious enough not to use those businesses that are trying to put them out of the game. In the case above, they likely over-projected in their business plans somewhere.

Huh?

If no-one is using Bitcoin to pay for things then how on earth are these business benefiting from larger block sizes?

For as long as businesses are playing by the rules, I welcome them.
The current limit needs to prove itself in action before we consider raising it.
Because if nothing prevents the current one from holding, then the same nothing will prevent the new one from staying long either.
Only when another system provides better value proposition beating Bitcoin in every aspect, then Bitcoin needs to raise and adjust.

[tl121]

Now, let's see, who is going to benefit from the removal of the block size limit.
1) Businesses. Yes, they are likely sitting on a decent network connection and will be able to process more txs and serve more customers.

Maybe you didn't read that BitPay has sacked most of their staff today basically because "there are hardly any customers" (at least not enough to sustain their current business model).

So we should increase the block size for businesses to serve customers that actually "don't exist"?

This is a "chicken and egg" problem.  If you wait for business before building it, they will never come, because they will see there is nothing there.  If you build it, you take a risk and they might not come.  In which case, you are stuck with what you've built.

In the case of a blocksize increase, you are stuck with a few lines of changed code that will cost almost nothing to deploy.  You won't even be stuck with any larger blocks if no business does come, except possibly some spam.  Even some spam won't necessarily be bad, because it might force the software to improve, so as to make more efficient in use of storage, bandwidth, and processing resources.

Unfortunately, the bitcoin community seems to have a total lack of leadership at present.  From reading many forum posts one might conclude that the bitcoin community is a foolocracy.  (The more conspiratorial inclined may chose to describe the situation as the result of an organized campaign by bitcoin's enemies.)

[VeritasSapere]

If no-one is using Bitcoin to pay for things then how on earth are these business benefiting from larger block sizes?

who said you have to spend bitcoins to make them worth moar?

as long as i hold my private key, bitcoin is fulfilling perfectly what i need it to.

It is not true that no one is using Bitcoin to pay for things. We need to increase the block size so that more people can use it, it is impossible to effectively discriminate between spam and legitimate transactions like remittance for example. We should not attempt to dictate what uses of Bitcoin are legitimate and which are not, Bitcoin is permissionless.

The idea that we do not need to transact in Bitcoin is deeply flawed. Unless you think that Bitcoin is just a way to get rich, that when the price soars we exchange for fiat making us more wealthy. This would make Bitcoin like a pyramid scheme, this is not viable being a zero sum game. This is not how I see Bitcoin and even if I did it would still be flawed since to exchange to fiat and vice versa would still require us to transact, and to enable more people to do this we would still need higher throughput of transactions. I think there is a difference between holding in order to sell for fiat, and holding until we do not need to exchange back to fiat. This would imply that one day we should be able to exchange our Bitcoin for goods and services directly. Which I am already doing today for many things in my life, if the blocksize is not increased over the long term I will lose the ability to transact on the Bitcoin network directly. Because it would become prohibitively expensive and transactions would become unreliable. You can keep repeating that no one uses the Bitcoin network to purchase things as many times as you like, it does not change the reality that many people do use Bitcoin. Including in my own life, which is a counterfactual to your statement.

[CIYAM]

Unfortunately, the bitcoin community seems to have a total lack of leadership at present.  From reading many forum posts one might conclude that the bitcoin community is a foolocracy.  (The more conspiratorial inclined may chose to describe the situation as the result of an organized campaign by bitcoin's enemies.)

I am not a Bitcoin enemy but I think Bitcoin is losing its way in getting pushed around with this whole block size debate (that seems to be far more about politics and control rather than anything else).

Patience is the first thing I think those that actually believe in the invention should have - buying coffees for BTC might end up being the final result but it isn't what we should be caring about now.

[VeritasSapere]

Unfortunately, the bitcoin community seems to have a total lack of leadership at present.  From reading many forum posts one might conclude that the bitcoin community is a foolocracy.  (The more conspiratorial inclined may chose to describe the situation as the result of an organized campaign by bitcoin's enemies.)

I am not a Bitcoin enemy but I think Bitcoin is losing its way in getting pushed around with this whole block size debate (that seems to be far more about politics and control rather than anything else).

Patience is the first thing I think those that actually believe in the invention should have - buying coffees for BTC might end up being the final result but it isn't what we should be caring about now.

This debate is about politics and control the sooner we can all come to realize this the sooner this debate will be resolved.

[brg444]

Look Peter it's quite simple, either you accept that for the block size to increase consensus needs to be reach by all actors of the Bitcoin market or you continue pretending that the demand of consumers & merchants for lower cost transactions will move the needle which it won't in that case if they "fork" it will be in their own cheap little altcoin.

You love going around in circles, don't you?  

As knight22 already explained a few times, there's no such thing as perfect consensus.

Do you refuse to accept the possibility that an economic majority will have their way and increase the blocksize even though you don't agree?

 

The economic majority is the one most interested in keeping the block size small.

The XT #REKT event should have made that clear.

Consumers and merchants are never going to be the economic majority in Bitcoin

Not by themselves, perhaps, but throw a few others into the mix and the picture starts to look a little different.


Larger (than 1MB) blocks will naturally provide benefit to:

Anyone who wants to use Bitcoin as a payments network
VC investors
Miners
Merchants
Payment processors
Average users in general

Smaller blocks will naturally provide benefit to:

Those who want to use Bitcoin as an asset class (i.e. not the average user)
Those wanting to run full nodes cheaply (i.e. not the average user)
Those who don't care if the average user is priced off the main chain (i.e. definitely not the average user)

Pretty sure that first group will agree on a proposal before too long.  We'll see if you're right about them not being an economic majority.  

The "picture" might look different because your fabricate it to fit your twisted view of how you believe it should work.

Here's how the decision process unfolds in reality.

Tier 1
Network peers (nodes)
Bitcoin holders

Tier 2
Miners

Tier 3
Exchanges

Tier 4
Everyone else (merchants, payment processors, consumers, redditards, Fidelity & other banking parasites)

TLDR; if you don't have the support of the network peers and the "bitcoin rich list" your fork goes the way of XT which goes the way of Stannis at Winterfell -> #REKT

[brg444]

There is no reason why businesses shouldn't benefit from larger block sizes, unless of course people are conscious enough not to use those businesses that are trying to put them out of the game. In the case above, they likely over-projected in their business plans somewhere.

Huh?

If no-one is using Bitcoin to pay for things then how on earth are these business benefiting from larger block sizes?

"MASS ADOPTION" fantasies.

Don't you know that a block size increase will unleash Bitcoin to the masses. It's actually why they're not using it right now. Just the other day my grand ma was asking me "when are they going to increase this goddamn blocksize so I can spend my bitcoinz"

 

[VeritasSapere]

The "picture" might look different because your fabricate it to fit your twisted view of how you believe it should work.

Here's how the decision process unfolds in reality.

Tier 1
Network peers (nodes)
Bitcoin holders

Tier 2
Miners

Tier 3
Exchanges

Tier 4
Everyone else (merchants, payment processors, consumers, redditards, Fidelity & other banking parasites)

TLDR; if you don't have the support of the network peers and the "bitcoin rich list" your fork goes the way of XT which goes the way of Stannis at Winterfell -> #REKT

There should be no tiers in the decision making process. The consensus should be formed by the economic majority in the form of running full nodes and mining. You are wrong in maintaining this arbitrary tiered ordering of the decision making process, this does not reflect the reality today and this should not be how decisions are made either.

[muyuu]

Worth listening
https://www.reddit.com/r/Bitcoin/comments/3md3ec/gavin_andreesen_i_use_bitcoin_because_when_i_make/

[figmentofmyass]

Unfortunately, the bitcoin community seems to have a total lack of leadership at present.  From reading many forum posts one might conclude that the bitcoin community is a foolocracy.  (The more conspiratorial inclined may chose to describe the situation as the result of an organized campaign by bitcoin's enemies.)

I am not a Bitcoin enemy but I think Bitcoin is losing its way in getting pushed around with this whole block size debate (that seems to be far more about politics and control rather than anything else).

Patience is the first thing I think those that actually believe in the invention should have - buying coffees for BTC might end up being the final result but it isn't what we should be caring about now.

This debate is about politics and control the sooner we can all come to realize this the sooner this debate will be resolved.

would you not agree that politics are not a sufficient reason for a hard protocol change? consensus may make bitcoin a bit of a dinosaur, but it is a critical security feature built into bitcoin. until a commit is supported by an extreme supermajority, consensus says no protocol change. that may be disappointing to some, but it is what keeps the blockchain safe to transact on. a fork based on politics is an excellent context for a civil war.

(why 75%? let's just do 51% and get on with it )

[brg444]

Now, let's see, who is going to benefit from the removal of the block size limit.
1) Businesses. Yes, they are likely sitting on a decent network connection and will be able to process more txs and serve more customers.

Maybe you didn't read that BitPay has sacked most of their staff today basically because "there are hardly any customers" (at least not enough to sustain their current business model).

So we should increase the block size for businesses to serve customers that actually "don't exist"?

This is a "chicken and egg" problem.  If you wait for business before building it, they will never come, because they will see there is nothing there.  If you build it, you take a risk and they might not come.  In which case, you are stuck with what you've built.

In the case of a blocksize increase, you are stuck with a few lines of changed code that will cost almost nothing to deploy.  You won't even be stuck with any larger blocks if no business does come, except possibly some spam.  Even some spam won't necessarily be bad, because it might force the software to improve, so as to make more efficient in use of storage, bandwidth, and processing resources.

Unfortunately, the bitcoin community seems to have a total lack of leadership at present.  From reading many forum posts one might conclude that the bitcoin community is a foolocracy.  (The more conspiratorial inclined may chose to describe the situation as the result of an organized campaign by bitcoin's enemies.

No it is not a "chicken and egg" problem.

What you are building is monetary gravity. By buying bitcoins and holding them you are charging a battery that stores wealth and rewards saving because of its deflationary nature.

If you build it, they will come but you need not to worry about them at the present.

Well who needs merchants anyway?

Who Needs Merchants Anyway?
Hoarders are more important than merchants. If a restaurant downtown starts accepting bitcoins, this does not necessarily create an incentive for anybody to buy more bitcoins. Why would anyone bother if they can still just use a credit card? If you can convince a merchant to accept bitcoins and stop accepting dollars, then I’ll be impressed.

Unless a merchant is offering something that cannot be bought for dollars, or at least offering a discount, he is only benefiting Bitcoin to the extent that he encourages more hoarding. If he immediately converts the bitcoins he receives as payment into dollars, and if his customers only buy bitcoins so as to spend them at his shop shortly thereafter, then neither has much direct effect on Bitcoin’s demand. The real hero is the hoarder behind the scenes who buys from the merchant and enables him to convert his payments into dollars.

http://nakamotoinstitute.org/mempool/im-hoarding-bitcoins-and-no-you-cant-have-any

You won't even be stuck with any larger blocks if no business does come, except possibly some spam.

Maybe you've never heard the phrase "supply creates its own demand"?

Case in point: Fidelity schmucks waiting to "turn on their switch" and fill the blockchain with their spammy non-monetary transactions.

[VeritasSapere]

Unfortunately, the bitcoin community seems to have a total lack of leadership at present.  From reading many forum posts one might conclude that the bitcoin community is a foolocracy.  (The more conspiratorial inclined may chose to describe the situation as the result of an organized campaign by bitcoin's enemies.)

I am not a Bitcoin enemy but I think Bitcoin is losing its way in getting pushed around with this whole block size debate (that seems to be far more about politics and control rather than anything else).

Patience is the first thing I think those that actually believe in the invention should have - buying coffees for BTC might end up being the final result but it isn't what we should be caring about now.

This debate is about politics and control the sooner we can all come to realize this the sooner this debate will be resolved.

would you not agree that politics are not a sufficient reason for a hard protocol change? consensus may make bitcoin a bit of a dinosaur, but it is a critical security feature built into bitcoin. until a commit is supported by an extreme supermajority, consensus says no protocol change. that may be disappointing to some, but it is what keeps the blockchain safe to transact on. a fork based on politics is an excellent context for a civil war.

(why 75%? let's just do 51% and get on with it )

If you define politics as the the study or practice of the distribution of power, it has a very wide meaning in the definition. If the people want a civil war then a civil war it should become, if Bitcoin reflects the will of the economic majority. So hypothetically if there was a fifty fifty split then splitting Bitcoin in half would be justified in this case if the differences are fundamental enough. Which I do not think is the case presently with the blocksize debate, I think we should be able to find consensus and all agree on a blocksize increase at least, otherwise I am confident there will be a split. 51% is indeed enough to fork the network if the disagreement is fundamental enough to justify such an action. Part of the beauty of this solution within Bitcoin is that it does solve the problem of the tyranny of the majority.

[coalitionfor8mb]

Changing the protocol rules is identical to a relatively rare and discreet transition stages that any star undergoes in order to find a new balance point, when the old one no longer serves its accumulated mass. That's when the block size limit needs to be raised. The new limit needs to resonate with the whole ecosystem as it's supposed to represent the interests of the whole. It needs to preserve enough mass in the outer shell (users and validators), but leave enough space and entropy for internal competition (businesses and miners) to continue to produce goods with higher energy levels than before.

Taking this analogy further...

We can observe that the energy levels (or stress-tests) in the core have risen
and the outer shell (of full nodes) is being challenged having hard time holding up (at home).

It's definitely not the right time to increase the energy level even further (raising the block limit),
but on the contrary a time to invite more full nodes to be able to sustain the reaction.

Any non-consensual fork at this level might result in the Coronal Mass Ejection (or CME) type of event
and can be viewed as another "Fly, You Fools" situation.

[DooMAD]

Consumers and merchants are never going to be the economic majority in Bitcoin

Not by themselves, perhaps, but throw a few others into the mix and the picture starts to look a little different.


Larger (than 1MB) blocks will naturally provide benefit to:

Anyone who wants to use Bitcoin as a payments network
VC investors
Miners
Merchants
Payment processors
Average users in general

Smaller blocks will naturally provide benefit to:

Those who want to use Bitcoin as an asset class (i.e. not the average user)
Those wanting to run full nodes cheaply (i.e. not the average user)
Those who don't care if the average user is priced off the main chain (i.e. definitely not the average user)

Pretty sure that first group will agree on a proposal before too long.  We'll see if you're right about them not being an economic majority.  

The "picture" might look different because your fabricate it to fit your twisted view of how you believe it should work.

Here's how the decision process unfolds in reality.

Tier 1
Network peers (nodes)
Bitcoin holders

Tier 2
Miners

Tier 3
Exchanges

Tier 4
Everyone else (merchants, payment processors, consumers, redditards, Fidelity & other banking parasites)

TLDR; if you don't have the support of the network peers and the "bitcoin rich list" your fork goes the way of XT which goes the way of Stannis at Winterfell -> #REKT

Okay Mr. "everyone else is beneath me".  Whatever you say.  

Why is it that anyone who absorbs MP rhetoric also inherits his colossal egotism?

Also, if your plan is still to make it as cheap as possible for people to run nodes to support a chain they can't afford to transact on, it's still a stupid plan.  No one is going to support a network that doesn't support them.  Either it benefits everyone, or everyone goes elsewhere and you can hodl your defunct novelty toy when the miners go elsewhere with them.

[mallard]

There is no reason why businesses shouldn't benefit from larger block sizes, unless of course people are conscious enough not to use those businesses that are trying to put them out of the game. In the case above, they likely over-projected in their business plans somewhere.

Huh?

If no-one is using Bitcoin to pay for things then how on earth are these business benefiting from larger block sizes?

"MASS ADOPTION" fantasies.

A lot of people here want mass adoption because they are selfish and they want to make some quick money, they don't really care about Bitcoin.

[knight22]

There is no reason why businesses shouldn't benefit from larger block sizes, unless of course people are conscious enough not to use those businesses that are trying to put them out of the game. In the case above, they likely over-projected in their business plans somewhere.

Huh?

If no-one is using Bitcoin to pay for things then how on earth are these business benefiting from larger block sizes?

"MASS ADOPTION" fantasies.

A lot of people here want mass adoption because they are selfish and they want to make some quick money, they don't really care about Bitcoin.

Bitcoin is useless if nobody can use it.