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Author Topic: What You Need to Know About Bitcoin XT  (Read 594 times)
The Bitcoin Co-op (OP)
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August 26, 2015, 04:56:48 PM
 #1

I was tired of all the overreacting, so I wrote this FAQ to clear the FUD around the current debacle with Bitcoin XT and the potential fork. Send this to anyone who asks you if Bitcoin is dying: http://www.newsbtc.com/2015/08/26/what-you-need-to-know-about-bitcoin-xt-2/

Quote
Fork is a dirty word in the Bitcoin community. The price of BTC is threatening the $200 line, and many blame the recent division between Bitcoin Core and Bitcoin XT over the maximum block size. It’s understable that many people want answers.

The reality is that there’s no need to panic. Consensus realignment is a natural process in the tech world, one that developers have handled responsibly time and time again. This is how the Internet has survived and evolved over time, and there’s absolutely no need to panic–here we’ll clear up some misconceptions.

Is the Bitcoin Blockchain Forking?

No. A hardfork occurs when a new version of the Bitcoin client is incompatible with the previous one, producing transactions and blocks that are not accepted by the old protocol.

The Bitcoin Core and XT programs are currently compatible, operating on the same blockchain. This will remain true unless and until a supermajority (75%) of Bitcoin nodes adopt the XT protocol, which you can watch in real time. It will then be two weeks before XT begins increasing the maximum block size.

At that point, most of the holdouts will probably switch over to the new system. Any users and miners that remain will branch off and build the blockchain in a different direction, which is where the term “fork” comes from.

Will I Lose My Money?

No. When the blockchain forks, the “genesis block” of the new blockchain will be the last one before the split occurred, and you will have as many XT bitcoins as you did bitcoins. Your Bitcoin balance on the original blockchain will remain unchanged.

You might fear that this will dilute Bitcoin’s value by dividing the market cap between a larger number of coins. The value is not actually lost, however, but merely transferred to the XT blockchain. A fork wouldn’t change your net worth: if 5% of Core users hold out and leave that much market value behind, you could just sell your bitcoins for XT coins.

All you have to do is play your cards right. Similar to Goxcoins (which would have been redeemed for bitcoins stuck in the failed Mt.Gox exchange), it’s likely that a futures market will emerge. You could offer someone bitcoins right now for the promise that they’ll give you XT bitcoins if and when the hardfork occurs.

Is This Really Necessary?

Yes. This is how we got from VHS tapes to Blu-ray discs. VHS beat Betamax; Blu-ray beat HD DVD; the only people who lost anything were the developers of inferior systems. Everyone else got prettier pictures.

Any other method would require the use of authority or force, which is anathema. In a consensus-based system like cryptocurrency, all of us must agree to a rule change or else go our separate ways. A financial program that could be arbitrarily updated against your will would be abused by hackers, if not the central power controlling it.

Why Is It Such A Big Deal?

Politics and hysteria. Many people are already working on solutions to the block size limit: instead of settling all transactions on the Bitcoin blockchain–which can handle no more than seven per second–they would be settled by parallel, complementary systems. Factom and the Lightning Network are great examples.

These solutions become less necessary if the maximum block size increases, creating profit motivations. This had led to accusations of cronyism, and some of the more paranoid types even believe that Bitcoin XT is intended to allow blacklisting or a backdoor to your privacy. Others believe the increased hardware requirements will limit mass participation, but computer and network speeds are constantly increasing.

More than anything, it’s nerd drama, and sensationalism born in ignorance. Everything is going to be fine, as history clearly shows–Bitcoin has forked, before.

We work hard to promote Bitcoin adoption and the decentralization of society. You can support our efforts by donating BTC to 35wDNxFhDB6Ss8fgijUUpn2Yx6sggDgGqS
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August 26, 2015, 05:04:16 PM
 #2

I was tired of all the overreacting, so I wrote this FAQ to clear the FUD around the current debacle with Bitcoin XT and the potential fork. Send this to anyone who asks you if Bitcoin is dying: http://www.newsbtc.com/2015/08/26/what-you-need-to-know-about-bitcoin-xt-2/

Quote
Fork is a dirty word in the Bitcoin community. The price of BTC is threatening the $200 line, and many blame the recent division between Bitcoin Core and Bitcoin XT over the maximum block size. It’s understable that many people want answers.

The reality is that there’s no need to panic. Consensus realignment is a natural process in the tech world, one that developers have handled responsibly time and time again. This is how the Internet has survived and evolved over time, and there’s absolutely no need to panic–here we’ll clear up some misconceptions.

Is the Bitcoin Blockchain Forking?

No. A hardfork occurs when a new version of the Bitcoin client is incompatible with the previous one, producing transactions and blocks that are not accepted by the old protocol.

The Bitcoin Core and XT programs are currently compatible, operating on the same blockchain. This will remain true unless and until a supermajority (75%) of Bitcoin nodes adopt the XT protocol, which you can watch in real time. It will then be two weeks before XT begins increasing the maximum block size.

At that point, most of the holdouts will probably switch over to the new system. Any users and miners that remain will branch off and build the blockchain in a different direction, which is where the term “fork” comes from.

Will I Lose My Money?

No. When the blockchain forks, the “genesis block” of the new blockchain will be the last one before the split occurred, and you will have as many XT bitcoins as you did bitcoins. Your Bitcoin balance on the original blockchain will remain unchanged.

You might fear that this will dilute Bitcoin’s value by dividing the market cap between a larger number of coins. The value is not actually lost, however, but merely transferred to the XT blockchain. A fork wouldn’t change your net worth: if 5% of Core users hold out and leave that much market value behind, you could just sell your bitcoins for XT coins.

All you have to do is play your cards right. Similar to Goxcoins (which would have been redeemed for bitcoins stuck in the failed Mt.Gox exchange), it’s likely that a futures market will emerge. You could offer someone bitcoins right now for the promise that they’ll give you XT bitcoins if and when the hardfork occurs.

Is This Really Necessary?

Yes. This is how we got from VHS tapes to Blu-ray discs. VHS beat Betamax; Blu-ray beat HD DVD; the only people who lost anything were the developers of inferior systems. Everyone else got prettier pictures.

Any other method would require the use of authority or force, which is anathema. In a consensus-based system like cryptocurrency, all of us must agree to a rule change or else go our separate ways. A financial program that could be arbitrarily updated against your will would be abused by hackers, if not the central power controlling it.

Why Is It Such A Big Deal?

Politics and hysteria. Many people are already working on solutions to the block size limit: instead of settling all transactions on the Bitcoin blockchain–which can handle no more than seven per second–they would be settled by parallel, complementary systems. Factom and the Lightning Network are great examples.

These solutions become less necessary if the maximum block size increases, creating profit motivations. This had led to accusations of cronyism, and some of the more paranoid types even believe that Bitcoin XT is intended to allow blacklisting or a backdoor to your privacy. Others believe the increased hardware requirements will limit mass participation, but computer and network speeds are constantly increasing.

More than anything, it’s nerd drama, and sensationalism born in ignorance. Everything is going to be fine, as history clearly shows–Bitcoin has forked, before.

Better even, save the words and just say : Bitcoin XT is DOA
https://bitcointalk.org/index.php?topic=1162684.0

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
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August 26, 2015, 05:14:05 PM
 #3

The Bitcoin Core and XT programs are currently compatible, operating on the same blockchain. This will remain true unless and until a supermajority (75%) of Bitcoin nodes adopt the XT protocol, which you can watch in real time. It will then be two weeks before XT begins increasing the maximum block size.

I don't think this is true.

If I remember correctly, the trigger is 750 of the most recent 1000 blocks solved, not 75% of nodes.

No. When the blockchain forks, the “genesis block” of the new blockchain will be the last one before the split occurred

This is NOT true.  The "genesis block" will not change.  Bitcoin XT will have the same "genesis block" as bitcoin has always had.

you could just sell your bitcoins for XT coins.

While this might technically be possible in some situations, many people won't have the technical knowledge to know how to isolate their XT transactions from the CORE miners.  Perhaps someone will eventually create a service which will assist those that are less technically capable, but initially, most people won't know how to structure their wallets in a way that makes certain that transactions sent on XT don't effect their CORE wallet (or vice-versa).
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August 26, 2015, 05:15:31 PM
 #4

Better even, save the words and just say : Bitcoin XT is DOA
https://bitcointalk.org/index.php?topic=1162684.0

Stop confusing your wishes with the reality. XT is well and alive for a long time to come. Even if the fork is not or won't occur. 

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August 26, 2015, 05:19:30 PM
 #5

Quick ELI5:

Running XT at this time is equivalent with running Core. It's the same network, and the same Bitcoins. At some point in the future, if 75% mining majority is reached (but not before January 2016), the network will split whenever a miner creates a block larger than 1MB. This will not be accepted by Core unless they adopt a large blocks patch, but will be accepted by XT, and at this point there will effectively be two chains.

Running XT means that you will always be on the largest (75%+) chain, regardless of whether the fork actually happens or not. Running Core means that you will be left behind if a 75% majority is reached. Regardless of which version you run, coins will be safe (on both chains) as long as you acquired them prior to the fork, and for some time the chains will largely mirror each other.

brg444
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August 26, 2015, 05:21:30 PM
 #6

Better even, save the words and just say : Bitcoin XT is DOA
https://bitcointalk.org/index.php?topic=1162684.0

Stop confusing your wishes with the reality. XT is well and alive for a long time to come. Even if the fork is not or won't occur.

 Huh

Can you point me to one Bitcoin XT users, active miner or better yet a Bitcoin XT transactions ?

Well and alive under what criteria exactly? A couple hundred of nodes hosted on VPN trial accounts?

If you're referring to the old Bitcoin core code implementation that shit was barely used and with the event unfolding before your very eyes will die a slow death.

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
brg444
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August 26, 2015, 05:25:35 PM
 #7

Quick ELI5:

Running XT at this time is equivalent with running Core. It's the same network, and the same Bitcoins. At some point in the future, if 75% mining majority is reached (but not before January 2016), the network will split whenever a miner creates a block larger than 1MB. This will not be accepted by Core unless they adopt a large blocks patch, but will be accepted by XT, and at this point there will effectively be two chains.

Running XT means that you will always be on the largest (75%+) chain, regardless of whether the fork actually happens or not. Running Core means that you will be left behind if a 75% majority is reached. Regardless of which version you run, coins will be safe (on both chains) as long as you acquired them prior to the fork, and for some time the chains will largely mirror each other.


Quicker ELI5:

Running XT means your are openly supporting a scam and endangering your Bitcoin holdings by means of splitting community consensus and trust.


"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
The Bitcoin Co-op (OP)
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August 26, 2015, 05:56:04 PM
 #8

This will remain true unless and until a supermajority (75%) of Bitcoin nodes adopt the XT protocol, which you can watch in real time. It will then be two weeks before XT begins increasing the maximum block size.

I don't think this is true.

If I remember correctly, the trigger is 750 of the most recent 1000 blocks solved, not 75% of nodes.

Indeed, bad phrasing on my part.

No. When the blockchain forks, the “genesis block” of the new blockchain will be the last one before the split occurred

This is NOT true.  The "genesis block" will not change.  Bitcoin XT will have the same "genesis block" as bitcoin has always had.

What I was saying is that you'll have as many XT coins as you did bitcoins. Many people don't understand that. They just think the value of their bitcoins will be diluted.

you could just sell your bitcoins for XT coins.

While this might technically be possible in some situations, many people won't have the technical knowledge to know how to isolate their XT transactions from the CORE miners.  Perhaps someone will eventually create a service which will assist those that are less technically capable, but initially, most people won't know how to structure their wallets in a way that makes certain that transactions sent on XT don't effect their CORE wallet (or vice-versa).

If enough people run Bitcoin XT for the fork to occur, the market will have two weeks to develop a service for the exchange of Bitcoin Core coins and XT coins. It will probably succeed.

What people seem to be forgetting is that this is a natural process. The threat of a fork must exist, or the original developers have no incentive to maintain competence and honesty. They'll probably hurry up about increasing the block size and maintain control of the network, I'm guessing--Bitcoin will prevail based on market forces either way.

We work hard to promote Bitcoin adoption and the decentralization of society. You can support our efforts by donating BTC to 35wDNxFhDB6Ss8fgijUUpn2Yx6sggDgGqS
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