Segregated witness - The solution to Scalability (short term)?

[brg444]

Mining pools, exchanges and processors have no direct say. All that is needed for the BIP to be merged is agreement among the lead developers. That would be Van der Laan, Gavin Andresen, Jeff Garzik, Gregory Maxwell and Pieter Wuille. Correct me if I missed a name or am in error.

Miners have most of the power. 

No.

We do. (assuming you hold any bitcoins)

[BitUsher]

Mining pools, exchanges and processors have no direct say. All that is needed for the BIP to be merged is agreement among the lead developers. That would be Van der Laan, Gavin Andresen, Jeff Garzik, Gregory Maxwell and Pieter Wuille. Correct me if I missed a name or am in error.

Miners have most of the power.  

No.

We do. (assuming you hold any bitcoins)

The power dynamics is a stratification of users/nodes/developers/miners/merchants and exchanges; each exists with differing capabilities to exert influence on each other.

Many Miners have the most power as they are in at least 3 of those categories and sometimes 4. A user that doesn't host a full node is only in one of those categories therefore is more limited in their vote/abilities.

Meritocracy is really an critical aspect within bitcoin. It isn't just Proof or work with regards to hashing but proving ones work with developed and tested code, proving ones work with a hosted node, proving ones working with the most hashing power, proving ones work by client base or political power, ect...

If you only own bitcoin than your vote is counted far less than if you actively contribute to the ecosystem.

[hdbuck]

salt..

This denigration of signatures represents nothing less than an attack on the primacy of cryptography in cryptocurrency. The blockchain represents a complete and verifiable historical record of every transaction and balance in Bitcoin. Attacking verifiability by lopping off signatures in a misguided effort to cram more transactions into a megabyte. This leaves a eunuch which is no longer the virile Bitcoin we love. As signatures fade into history, cryptographic certainty is replaced by faith and hope.

Ultimately, it is about increasing the number of places where Bitcoin can break and reducing the prominence of cryptography in cryptocurrency.

http://qntra.net/2015/12/after-xt-failure-gavin-andresen-supports-jim-crow-for-signatures-on-the-blockchain/


and pepper... http://trilema.com/2015/theres-a-one-bitcoin-reward-for-the-death-of-pieter-wuille-details-below/

[brg444]

If you only own bitcoin than your vote is counted far less than if you actively contribute to the ecosystem.

That's absolutely backwards.

The best contribution to Bitcoin is every owner's respective economic share.

Yes, that absolutely implies that large holders are de facto more powerful than those with less coins.

No, your "activity" has nothing to do with this.

TLDR: The investors run Bitcoin http://nakamotoinstitute.org/mempool/who-controls-bitcoin/

What are the implications of this conclusion? The motivation of investors is the value of the coin. The general rule about Bitcoin upgrades, therefore, is that upgrades which increase Bitcoin's value will be adopted and those which do not will not.

[johnyj]

My understanding is that decision making power in this case very much rests with the developers. The consensus so far seems that Segregated Witness will be proposed as a soft fork when the BIP is published. Mining pools, exchanges and processors have no direct say. All that is needed for the BIP to be merged is agreement among the lead developers. That would be Van der Laan, Gavin Andresen, Jeff Garzik, Gregory Maxwell and Pieter Wuille. Correct me if I missed a name or am in error.

This will be very true if you add Btc guild's owner and dial back time to 2013, where they successfully prevented an accident fork by commanding more than 60% of the hash power and forced the chain go back to their desired direction

And today? Btc guild does not even exist, large mining pools from China have dominated hash power distribution, and even inside the core devs there are large disagreement

The core devs are losing dominance because bitcoin is open source. Suppose that a group of large mining pools are not satisfied with the solution proposed by core devs, they could easily deploy their own R&D people and make a version that they prefer, and because they have dominant hashing power, when they roll out the change, their fork will be the strongest chain immediately. Of course they could not persuade others to join them, and they risk being abandoned by the other pools and exchanges, but having so much hash power definitely can affect lots of things

This was not the case during early days of bitcoin when mining pools were just a couple of hobbyists, they didn't have resources to implement such large code change, they only listen to core devs (I still remember the deepbit pool refused to upgrade to any latest version and stayed at 0.3 for a very long time That could be the earliest case of mining pool not following core devs)

Fortunately, chinese mining pools are not very interested in codes, so core devs still hold a lot of saying power, but when there is a disagreement inside core devs, we have already seen on BIP101, miners have veto right

Let me quote Bitmain’s Pan Zhibiao's word here:
“There are many technical solutions. Every solution has pros and cons. The miners are put on a pedestal to be a jury. Right now there is no lawyer on both side. We need a lawyer, we need more discussion, more evidence. ”

I happened recall the movie "Divergent", there are 5 factions, each doing its own job, maintaining a balanced society, hopefully we can reach that status of balance here

[RoadTrain]

Exactly. If a solution is not understandable for users with average IT expertise, then it will never be understandable for anyone with even less IT knowledge. And typically owners of large mining farms and exchanges do not have time to do those learning, so they tends to select the solution that they can understand or listen to people they like. This will turn the decision making into politics, and who are good at lobbying and PR will push in their changes. And this is not people would like to see in bitcoin. So, the knowledge gap of different participants decided that you really can't reach a wide consensus upon a radical or complex solution, XT's failure already proved that

Understanding can be of different levels: conceptual, algorithmic, implementational... I bet most people don't quite grasp how Bitcoin's Script stack machine is implemented, though it doesn't prevent them from utilising it, if they know conceptually at least. What's enough for most people is that a particular component has been peer-reviewed thoroughly to prove it's safe to use it.

Indeed, during early days of bitcoin, developers have much more freedom to do whatever they want, partly due to that no one cares about it, and partly due to that there are no major interested stake holders because of its low value

But now situation is different, the network has attracted so much venture capital and investors, these guys all have their own agenda thus the political landscape has changed. A good example is kncminer, they took the crowd funding money, realized their projects and start to drive their own mining operation secretly

At this stage, posting on a forum or reddit or checkin some code in git does not make a lot of sense, because the decision making power is not in the hand of developers, but in the hand of large mining pools, exchanges and payment processors. If devs represent a complex solution which those large players do not understand thoroughly, they would just ignore it (they have to protect their million dollar investment as best as they can). They could just keep running the old client, and build their clearing and settlement channel to avoid the scaling problem altogether

Imagine that when the blocks are full and each transaction cost a lot to clear, then only large service providers would be able to use blockchain to clear with their business partners. Users will find out that using web wallet services will cost just a few cents as usual and clears instantly, but using core client will cost $100 and maybe confirmed after 1 day, so they will definitely move to use blockchain.info or similar web wallet instead

You see, this is also a solution, since the risk on individual service provider is much smaller than the risk of the whole network, it can be accepted. And this solution is much easier for every investor to understand than that Segregated witness complication. In fact, most of the people are still very used to centralized service provider, so they would accept a locally centralized solution easily

The best scenario is that all the large players out there have deep IT expertise and can easily get what those new changes' pros and cons, but in my experience it is not the case. Rich people have totally another set of criteria in decision making

If we speak about SW in particular, I don't see it too complex to be understood by miners. The recent BIP65 rollover, which is a necessary step towards fully-functioning Lightning Network, is going very fast. Of course SW is a fair bit more complex than BIP65, I guess it shows us that miners either a) possess enough expertise to evaluate proposals; b) trust core devs' expertise. I'd prefer 'a', to be honest

[johnyj]

The best scenario is that all the large players out there have deep IT expertise and can easily get what those new changes' pros and cons, but in my experience it is not the case. Rich people have totally another set of criteria in decision making

If we speak about SW in particular, I don't see it too complex to be understood by miners. The recent BIP65 rollover, which is a necessary step towards fully-functioning Lightning Network, is going very fast. Of course SW is a fair bit more complex than BIP65, I guess it shows us that miners either a) possess enough expertise to evaluate proposals; b) trust core devs' expertise. I'd prefer 'a', to be honest

They are totally different, SW is a redesign of bitcoin, while BIP 65 is a planned patch toward lightning network which is easy to understand since it is very similar to a clearing based solution. Lightning network make things more simple (combining thousands of transactions into one) while SW make things more complex (split one transaction into two chains)

[Amph]

Mining pools, exchanges and processors have no direct say. All that is needed for the BIP to be merged is agreement among the lead developers. That would be Van der Laan, Gavin Andresen, Jeff Garzik, Gregory Maxwell and Pieter Wuille. Correct me if I missed a name or am in error.

Miners have most of the power. 

No.

We do. (assuming you hold any bitcoins)

what if all the miners agree to leave the bitcoin mining scene, does we can save it by simply holding our coins? i don't think so

i could agree that also merchants matter, but i can't see how a simple holder waiting for dumping his stash could matter here

[mezzomix]

what if all the miners agree to leave the bitcoin mining scene, does we can save it by simply holding our coins?

The large miners own only a fraction of the hardware. Changing the pool credentials is easy for the hardware owner. 

If the hardware owners leave the mining scene they have to sell their machines to recover (parts of) their investment.

[Mickeyb]

The best scenario is that all the large players out there have deep IT expertise and can easily get what those new changes' pros and cons, but in my experience it is not the case. Rich people have totally another set of criteria in decision making

If we speak about SW in particular, I don't see it too complex to be understood by miners. The recent BIP65 rollover, which is a necessary step towards fully-functioning Lightning Network, is going very fast. Of course SW is a fair bit more complex than BIP65, I guess it shows us that miners either a) possess enough expertise to evaluate proposals; b) trust core devs' expertise. I'd prefer 'a', to be honest

They are totally different, SW is a redesign of bitcoin, while BIP 65 is a planned patch toward lightning network which is easy to understand since it is very similar to a clearing based solution. Lightning network make things more simple (combining thousands of transactions into one) while SW make things more complex (split one transaction into two chains)

Also just to add, I think that we will need all of these solutions when the real mass adoption hits! So in my opinion it is very good to see that many solutions are being proposed, hard forks, LN, as well as this segregated witness proposal which is really just a smart move to buy us more time.

Remember guys, we will need them all, simple as that!

[hdbuck]

The best scenario is that all the large players out there have deep IT expertise and can easily get what those new changes' pros and cons, but in my experience it is not the case. Rich people have totally another set of criteria in decision making

If we speak about SW in particular, I don't see it too complex to be understood by miners. The recent BIP65 rollover, which is a necessary step towards fully-functioning Lightning Network, is going very fast. Of course SW is a fair bit more complex than BIP65, I guess it shows us that miners either a) possess enough expertise to evaluate proposals; b) trust core devs' expertise. I'd prefer 'a', to be honest

They are totally different, SW is a redesign of bitcoin, while BIP 65 is a planned patch toward lightning network which is easy to understand since it is very similar to a clearing based solution. Lightning network make things more simple (combining thousands of transactions into one) while SW make things more complex (split one transaction into two chains)

Also just to add, I think that we will need all of these solutions when the real mass adoption hits! So in my opinion it is very good to see that many solutions are being proposed, hard forks, LN, as well as this segregated witness proposal which is really just a smart move to buy us more time.

Remember guys, we will need them all, simple season that!

No we wont, there is no solutions to be found to a non problem.

Seriously you should take a deep breath instead of cheerleading all the BIPs ph0rking initiatives.

Sick of the highjack BS. Let it be people, or make your own "blockchain"!

Bitcoin is, and has features, not bugs.

[justspare]

Could you please re-tell this topic in words that ordinary people, like me, will be able to understand? So there is something about malleability, stopping fraud and increasing the block-size, that is all I got from that.

[justspare]

Lauda, explain Segregated Witness to me like I'm five.

It's a bit hard to correctly explain something so complex without leaving out important information. Let me try this: "Normally the transactionID is the hash of the signature and transaction", with the segregated witness the signatures are being excluded (as they consume 60% of the data on the blockchain now). In other words, they are going to re-work how this data is being stored (simplistic explanation without merkle tree) by excluding it from the block.

The positive outcome of this is an effective block-size of 4 MB with a soft fork. With effective I mean that they don't have to change the actual block size (that most people know of today).

And to me as if I'm just born

Read the bolded part. Addition: By changing how the data is stored, they are saving a lot of space (hence the effective block-size of 4 MB).

Oh ok. Now I get it. So they are going to take away the signatures, which in turn will lower the amount taken in a block, and then they are going to make the block-size bigger. That makes a lot sense. What are the downsides of doing this?

[Lauda]

They are totally different, SW is a redesign of bitcoin, while BIP 65 is a planned patch toward lightning network which is easy to understand since it is very similar to a clearing based solution. Lightning network make things more simple (combining thousands of transactions into one) while SW make things more complex (split one transaction into two chains)

No, it is not. Even Pieter said that it was not possible anymore IIRC. If they could redesign it from scratch they would approach it differently than they're going to now. This added complexity is only going to play a downside role on other developers, but that's pretty much it. Users should not feel the difference (aside from the benefits).

Oh ok. Now I get it. So they are going to take away the signatures, which in turn will lower the amount taken in a block, and then they are going to make the block-size bigger. That makes a lot sense. What are the downsides of doing this?

Aside from added complexity, there are no downsides (yet).

[hdbuck]

They are totally different, SW is a redesign of bitcoin, while BIP 65 is a planned patch toward lightning network which is easy to understand since it is very similar to a clearing based solution. Lightning network make things more simple (combining thousands of transactions into one) while SW make things more complex (split one transaction into two chains)

No, it is not. Even Pieter said that they would redesign it if it was possible, but it is not.

Oh ok. Now I get it. So they are going to take away the signatures, which in turn will lower the amount taken in a block, and then they are going to make the block-size bigger. That makes a lot sense. What are the downsides of doing this?

Aside from added complexity, there are no downsides (yet).

removing the cryptography in cryptocurrency would seem a downside to me.

[Lauda]

removing the cryptography in cryptocurrency would seem a downside to me.

They're not doing that. Splitting something up does not mean removing either piece of the original thing.

[hdbuck]

removing the cryptography in cryptocurrency would seem a downside to me.

They're not doing that. Splitting something up does not mean removing either piece of the original thing.

new core nodes won't be sending witness data to old nodes.

[Lauda]

new core nodes won't be sending witness data to old nodes.

That old data already does not get validated, so it's redundant to transfer it.

[spartacusrex]

So, in layman's terms..

They have taken all the script sig data for all the P2SH signatures in a block, and put them in a merkle tree. Only the root hash of that tree is mined into the header.

Then, a week later, way after validation has occurred, you can safely through that merkle tree of data away, BUT still keep all the input/outputs in the blocks, to check that all the numbers add up.

?

If so.. I like it. Well coded!

I've been droning on about putting just the txn hash in the blocks, and using a similar disposable merkle tree of txn data, and squish everything, but I think this is a really nice solution. As you can still check that all the amounts add up.
 
And, who knows, maybe some day they will use this same trick, disposable merkle trees of data, once studied and better understood surviving in the wild, on the entire UTXO set.

 

[RoadTrain]

The best scenario is that all the large players out there have deep IT expertise and can easily get what those new changes' pros and cons, but in my experience it is not the case. Rich people have totally another set of criteria in decision making

If we speak about SW in particular, I don't see it too complex to be understood by miners. The recent BIP65 rollover, which is a necessary step towards fully-functioning Lightning Network, is going very fast. Of course SW is a fair bit more complex than BIP65, I guess it shows us that miners either a) possess enough expertise to evaluate proposals; b) trust core devs' expertise. I'd prefer 'a', to be honest

They are totally different, SW is a redesign of bitcoin, while BIP 65 is a planned patch toward lightning network which is easy to understand since it is very similar to a clearing based solution. Lightning network make things more simple (combining thousands of transactions into one) while SW make things more complex (split one transaction into two chains)

This planned patch is a step towards LN. Judging by its adoption, it seems that miners are favoring LN.

They (SW and LN) are different, yet their complexity is of comparable scale. In fact, what SW does is 'solve' malleability, and thus paves the way for full LN.

Incidentally, I spent more time understanding LN than SW.

What you argue here (as I understand it) is that miners won't be able to 'understand' the SW patch, so they won't run it. I highly doubt both an assertion and a conclusion. I am sure it will be rolled over quite fast. But I have no real proof so we have to wait.