Epic, monstrous post of Jihan Wu (AntPool)

[CryptoGuu]

In case somebody have missed it. He nailed it.

https://www.reddit.com/r/btc/comments/495866/the_rbtc_china_dispatch_11_summary_selected/

source: http://8btc.com/thread-30195-1-1.html

[Quickseller]

I think he made a couple of very good points:

1) Logically the devs should have very little power over the direction of BItcoin, and the users (as a whole) should have a lot of power over the direction of Bitcoin

2) The maximum block size needs to be increased immediately

3) Major Bitcoin related companies (AntPool included) need to carefully consider their position and cannot make any rash decisions

4) That the blockstream core devs seems to have a severe bias when looking at evidence and information

5) The the moderation policies of r/bitcoin and bitcointalk do not reflect the ideals of freedom of expression and the free flow of information that is believed in by much of the bitcoin related community

[HostFat]

Thank you Jihan Wu (and KoKansei for the summary)

[Gleb Gamow]

In case somebody have missed it. He nailed it.

https://www.reddit.com/r/btc/comments/495866/the_rbtc_china_dispatch_11_summary_selected/

source: http://8btc.com/thread-30195-1-1.html

The core thesis of the essay is as follows: the bitcoin ecosystem consists broadly of three different classes of participants: the developers, the miners and the users.

I'm inviting 80 of my friends to a secret Club Med location so to have a discussion and reach consensus that the three different classes of participants outlined is indeed correct. BTW, are we talking about Core Meltdown Users or Classic Coke Users?

[SebastianJu]

2) The maximum block size needs to be increased immediately

Didn't know you think so too. You did not take part in any of these discussions. Though I have to say they are pretty tiring and mostly fruitless. It's better to avoid as long as you don't see someone is really interested into getting informations.

[Jet Cash]

This seems to be yet another attempt to create disruption in the Bitcoin community. He states that there are 3 classes of people/organisations in the Bitcoin world, and then he states that one influential group is the service providers ( a fourth group). These are People who have invested their money because they believe in Bitcoin. He states that most people believe that block size should be increased. I don't think this is true. Most people don't care, and don't understand. It is my impression that more people think that empty/part filled block are more of an issue. Increasing the blocksize will just make matters worse. The path to scalability has many steps, and blocksize is just one of the minor ones. Of course it is a simple concept, and the Bitcoin anarchists can latch onto that to try to pull Bitcoin apart. I start to wonder if they are funded by the banks.

He also states that users don't have a voice, well they do - it's called market forces, and the rise in the price of Bitcoin means they approve of the system.

Remember that I'm a newbie to the world of Bitcoin, so my opinions are almost those of an observer rather than a technician

[Cuidler]

It is my impression that more people think that empty/part filled block are more of an issue. Increasing the blocksize will just make matters worse.

Its just artificial choosing size limits thus regulation, and whenever this regulation is implemented it looses over free market which finds perfectly economic based solutions to block sizes (not limits) dynamically and naturally based how the system evolve.

To just show how any arbitrary artifically choosen size limits to keep block filled all the time is flawed, let choose new limit to 10 KB. Our genial regulators now shrinked the Bitcoin userbase to probably thousands instead of current about million - thats what you get with artifically choosen size limit, cap how many users can conveniently use Bitcoin. Increasing the blocksize will make more adoption possible, there is currently no other provably working solution to allow more people to use Bitcoin in decentralized way.

I start to wonder if they are funded by the banks.

Sure, banks have interest for not capping user capacity so Bitcoin can be used by more people in decentralized way
The other blockstream alternative is capped and always filled blocksize acting as just settlement layer for centralized offchain layer 2 solutions as payment metods that can be instaneous like current exchange trading (though provably fair), but easily regulated. Seems more likely as bank/gov plan to me...

[SebastianJu]

This seems to be yet another attempt to create disruption in the Bitcoin community. He states that there are 3 classes of people/organisations in the Bitcoin world, and then he states that one influential group is the service providers ( a fourth group). These are People who have invested their money because they believe in Bitcoin. He states that most people believe that block size should be increased. I don't think this is true. Most people don't care, and don't understand. It is my impression that more people think that empty/part filled block are more of an issue. Increasing the blocksize will just make matters worse. The path to scalability has many steps, and blocksize is just one of the minor ones. Of course it is a simple concept, and the Bitcoin anarchists can latch onto that to try to pull Bitcoin apart. I start to wonder if they are funded by the banks.

He also states that users don't have a voice, well they do - it's called market forces, and the rise in the price of Bitcoin means they approve of the system.

Remember that I'm a newbie to the world of Bitcoin, so my opinions are almost those of an observer rather than a technician

Some things you correct I can agree, but not all.

Why should empty or partly filled blocks be an issue? They only are an issue when there is a backlog of transactions that is not worked on because of such a block.

If there would be an issue then something bad should have happened when bitcoin implemented 1mb blocksize. Or way more dangerous, the uncapped version of bitcoin before.

Blocksize raise is a simple concept because it is an abitrarely chosen amount that now is raised high as an important setting like 21 mio coins cap and 10 minute blocks. It's simply not.

The rise in the bitcoin price only means that it is the only bitcoin we have. There is not even a choice in switching to a fork of bitcoin or something like that.

It's like giving inmates bad food and say to an observer... see, they eat it... it must be good food. Well... sure, maybe it is not yet as bad but cockroaches are often enough in the bitcoin meal. Surely bitcoiners would like to use a system without regular backlogs.

[Lauda]

1) Logically the devs should have very little power over the direction of BItcoin, and the users (as a whole) should have a lot of power over the direction of Bitcoin

I concur. However, when deciding between proposals developers should have more 'power' (because let's face it, the average human is pretty stupid/ignorant). I hope that you understand what I mean by this.

2) The maximum block size needs to be increased immediately

No. Segwit will be enough for now.

3) Major Bitcoin related companies (AntPool included) need to carefully consider their position and cannot make any rash decisions

Indeed.

4) That the blockstream core devs seems to have a severe bias when looking at evidence and information

False. There isn't much evidence of this.

5) The the moderation policies of r/bitcoin and bitcointalk do not reflect the ideals of freedom of expression and the free flow of information that is believed in by much of the bitcoin related community

There is more than enough freedom on BTCT (can't say anything about reddit).

[franky1]

1) Logically the devs should have very little power over the direction of BItcoin, and the users (as a whole) should have a lot of power over the direction of Bitcoin

I concur. However, when deciding between proposals developers should have more 'power' (because let's face it, the average human is pretty stupid/ignorant). I hope that you understand what I mean by this.

wrong. when the code is easy to program. the things like bloat have been debunked, the things like 16month implementation have been debunked then there ultimately leaves nothing else for the developers to have power over. and then it should be the users (people, miners and retailers) that then decide if they want it.

developers should add the code now, and if people dont want it. they wont download it and if its not downloaded it wont get activated thus no issue.

but if people want it but developers refuse to code it. then by not coding it they are causing the contention. like a self fullfilling prophecy.
if the code is available and enough people use it there wont be no contention because the threshold is high enough to poke the laggers to move over too or be left behind. which is much safer then just not having a implementation for the laggers if the signs of movement did appear. meaning its guaranteed contention because core refuses to give the devoted laggers the update to be part of the majority

[sturle]

2) The maximum block size needs to be increased immediately

He is welcome to do that, but will discover it is impossible.  Bitcoin will split immediately, and he will mine worthless coins.

There are other ways to scale.  E.g. if Coinbase could stop making two transactions on the blockchain for every withdrawal a user makes.  Other exchanges on the other hand joins many withdrawals into one transaction, spending a fraction of the blockspace for each withdrawal.  Coinbase have been very vocal on the capacity issue, and instead of taking very simple measures to increase the capacity, they try to take control over Bitcoin to change it for their own purposes.  Coinbase plays very dirty, and I don't think Coinbase should be rewarded for blocking normal transactions by spamming the blockchain, delaying other transactions on purpose.

[arcticlava]

The elephant in the room is the fact that 75% of all mining is currently controlled by just 4 pools: F2Pool, AntPool, BTCCPool, and BitFury.



So a small number of large mining pools can dictate by consensus among themselves which version is used to mine, and therefore which version is carried forward. The devs, merchants, users, and investors have little to say in this. The pools are only answerable to their clients, who can only vote with their feet and move to another pool. Bottom line: the large mining pools will do what is in their best interest to maintain the status quo and market share.

[European Central Bank]

There are other ways to scale.  E.g. if Coinbase could stop making two transactions on the blockchain for every withdrawal a user makes.  

I think this is a great point. There's a hell of a lot people can do with their normal behavior to clean up transactions. Sadly I don't think the human race is disciplined enough to keep doing it. I guess a lot of people think higher fees will enforce that.

[sturle]

So a small number of large mining pools can dictate by consensus among themselves which version is used to mine, and therefore which version is carried forward.

No, miners have no word in this.  It is what users use and merchants accept that matters.  If those pools decide to use a different consensus, they will just mine invalid blocks, and invalid coins.  The miners can choose to ignore blocks produced by other miners, of course, but stick to the consensus rules.  This is called a 51% attack, and is a real danger.

[arcticlava]

So a small number of large mining pools can dictate by consensus among themselves which version is used to mine, and therefore which version is carried forward.

No, miners have no word in this.  It is what users use and merchants accept that matters.  If those pools decide to use a different consensus, they will just mine invalid blocks, and invalid coins.  The miners can choose to ignore blocks produced by other miners, of course, but stick to the consensus rules.  This is called a 51% attack, and is a real danger.

Thank you sturle. I am just studying and learning about the ecosystem. But mining pools themselves act as users and merchants in terms of creating a very large number of transactions themselves (between the pool and their clients as they claim their share of rewards). I think you are right though, that even if they spam the system with micro transactions, it would be tough to generate a 51% attack.

[Quantus]

The Chines government could easy take over the mining pools inside China and force them to mine empty blocks, they could also force this Jihan Wu to release long winded statements to help direct Bitcoin development in a direction of their choosing. *adjusts tin foil hat* Jihan Wu is ripe for manipulation. If he has not already been turned into a puppet he will be.

[johnyj]

So a small number of large mining pools can dictate by consensus among themselves which version is used to mine, and therefore which version is carried forward.

No, miners have no word in this.  It is what users use and merchants accept that matters.  If those pools decide to use a different consensus, they will just mine invalid blocks, and invalid coins.  The miners can choose to ignore blocks produced by other miners, of course, but stick to the consensus rules.  This is called a 51% attack, and is a real danger.

Without hash power (the cost of mining) any coin's price that merchants and users use will drop like a waterfall until it reaches the production cost, it is called arbitraging: You can always borrow coin and sell and mine it back if the exchange rate is much higher than production cost

This will make sure that any attempt to move away from the major hash power will cause the biggest financial loss. And that's the reason Satoshi said the major CPU vote is the only consensus

[johnyj]

1) Logically the devs should have very little power over the direction of BItcoin, and the users (as a whole) should have a lot of power over the direction of Bitcoin

I concur. However, when deciding between proposals developers should have more 'power' (because let's face it, the average human is pretty stupid/ignorant). I hope that you understand what I mean by this.

In my understanding and also history records, scientists and programmers are very bad at making economics and financial decisions, because they lack of the overview of how human and society works and they all focus on small details while ignoring the most important things

There is no lack of examples: Isaac Newton went flat broke chasing a stock bubble, and a group of Nobel price winners made a hedge fund LTCM, using sophisticated mathematical model to forecast the market, its collapse almost dragged US into recession

Currency's value is all about trust and stability, and so far many things core devs do (like segwit and artificially limiting capacity) are making bitcoin worse in these two aspects. I usually see this kind of stupidity from many developers so I'm not surprised. Maybe in 10 years they will learn

[arcticlava]

So a small number of large mining pools can dictate by consensus among themselves which version is used to mine, and therefore which version is carried forward.

No, miners have no word in this.  It is what users use and merchants accept that matters.  If those pools decide to use a different consensus, they will just mine invalid blocks, and invalid coins.  The miners can choose to ignore blocks produced by other miners, of course, but stick to the consensus rules.  This is called a 51% attack, and is a real danger.

Without hash power (the cost of mining) any coin's price that merchants and users use will drop like a waterfall until it reaches the production cost, it is called arbitraging: You can always borrow coin and sell and mine it back if the exchange rate is much higher than production cost

This will make sure that any attempt to move away from the major hash power will cause the biggest financial loss. And that's the reason Satoshi said the major CPU vote is the only consensus

Thought experiment.  Miners with the major hash power (over 51%, let us even say 75%) have consensus on one fork with 2MB blocks with some arbitrary low fee, however, users and merchants only accept transactions using the other fork, with 1MB blocks and a high enough fee to change the profitability of the mining. Wouldn't this result in the users and merchants in the 25% fork to force the miners in the 75% fork to change, since the miner's clients will demand the higher block rewards?

[kingaltcoins]

Actually the better part is that if the big miners like AntPool start accepting Classic blocks for now then I find no reason for everyone to accept the hard fork rather than going into a deeper controversy.

Well, this will very much happen after the next block halving when there will be a scarcity of miners due to lack of interest in mining.