Epic, monstrous post of Jihan Wu (AntPool)

[Preclus]

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....Bottom line: the large mining pools will do what is in their best interest to maintain the status quo and market share.

Correct. And if you boil it down, what he is really saying is that the miners should have the power to determine what changes to make to the protocol and when to make them. He talks about "the users", but the users have no control over anything.

[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....Bottom line: the large mining pools will do what is in their best interest to maintain the status quo and market share.

Correct. And if you boil it down, what he is really saying is that the miners should have the power to determine what changes to make to the protocol and when to make them. He talks about "the users", but the users have no control over anything.

Any user and any merchant can conduct a transaction, but as far as accepting the transaction and broadcasting the next block: only the miner can do that. The only controversy is if there are various groups of miners with difference versions/consensus on the protocol. If a substantial majority of miner have agreed on a version, that is the version. No amount of lobbying by developers changes that.

[Quickseller]

2) The maximum block size needs to be increased immediately

No. Segwit will be enough for now.

Didn't SegWit just fork on the testnet? Is there even enough support for SegWit for it to get implemented now that much of the chinese have for all intensive purposes withdrawn from the "consensus document"? If you assume that SegWit does get implemented, and that everyone starts using it (unlikely), what growth rate are you assuming will take place in order to make this statement? 

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.

I disagree.

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).

Except when it comes to discussing something that, if implemented would be harmful to blockstream.

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.

It is my understanding that the transactions that coinbase broadcast are a very small percentage of the network. Additionally batching withdrawals like this is severely detrimental to user privacy.

Additionally, I think your proposal is akin to saying that Bitcoin can be scaled if people just make less transactions

[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.

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

In my experience the relationship is opposite.  Back in 2011 the price rised quickly, and people bought large farms of graphics cards to mine coins.  When the price fell back, and FPGAs came to market, people sold their GPUs to gamers.  The hashrate even went down a while after the 32 USD price peak, since the GPUs weren't profitable any more.  If you compare price and hashrate graphs, it is very clear that hashrate lagged the price.

If a lot of hashrate forks out, other people will come in and replace it.  The cost per hashrate hasn't changed.

[NorrisK]

Them asking to immediately increase the blocksize is completely hypocrytical for a mining pool that mines empty blocks frequently.

It is not like they have no influence over what is happening, and one thing they can do is to start include transactions again in all their mined blocks.

Their hypocracy aside, I tend to agree with their points.

[johnyj]

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?

The minority chain will be attacked anytime by major hash power and all the transactions on it will be cancelled after being confirmed, no one will risk real money on that, the amount of cash flow on the minority chain will be minimal

[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

In my experience the relationship is opposite.  Back in 2011 the price rised quickly, and people bought large farms of graphics cards to mine coins.  When the price fell back, and FPGAs came to market, people sold their GPUs to gamers.  The hashrate even went down a while after the 32 USD price peak, since the GPUs weren't profitable any more.  If you compare price and hashrate graphs, it is very clear that hashrate lagged the price.

If a lot of hashrate forks out, other people will come in and replace it.  The cost per hashrate hasn't changed.

The price bubble of course is pushed up by whales, most notably from China (Their whales has pushed up the price of everything that is scarce by at least 100x , from some special kind of wood to some special kind of dog)

But without a healthy fundamental, they can't cash out after the rally, and they risk of helping early adopters to cash out during the rally, so when facing uncertainty, they will stay out until dust is settled. From long term view, the bitcoin will not succeed if it can't prove itself as not controlled by any single entity or a group of powerful players

[Lauda]

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

I wasn't talking about financial decisions.

Didn't SegWit just fork on the testnet? Is there even enough support for SegWit for it to get implemented now that much of the chinese have for all intensive purposes withdrawn from the "consensus document"? If you assume that SegWit does get implemented, and that everyone starts using it (unlikely), what growth rate are you assuming will take place in order to make this statement?  

It did and that is a good thing because it happened on the testnet (it seems to have been caused due to some users running an older version, so you can disregard this already). If anything, there is much more support for Segwit than for a 'fork'. If everyone starts using it we are looking at about 180-190% transaction capacity (I forgot the exact number).

Except when it comes to discussing something that, if implemented would be harmful to blockstream.

You're talking about consensus breaking implementations (i.e. altcoins); they have their own section.

[Kakmakr]

Imagine how foolish these guys will look, after screaming " Increase the Block size now, the sky is falling!!! " and then the new increased Blocks after SegWit will only be 40% full.   I think I will be one of the first people who will be screaming, " I told you so "
I guess a lot of them will be be running anonymous stress test for a while after the upgrade, to prevent people like myself of showing them up as fools and panic nanny's. That is until their money runs out, because a stress test after the block size increase are going to cost them a little more than what it is costing them now. ^smile^

[sturle]

But without a healthy fundamental, they can't cash out after the rally, and they risk of helping early adopters to cash out during the rally, so when facing uncertainty, they will stay out until dust is settled. From long term view, the bitcoin will not succeed if it can't prove itself as not controlled by any single entity or a group of powerful players

This is correct, and for that reason Bitcoin should avoid a hard fork at all cost.  Most users and miners know it.  If the hard consensus rules in Bitcoin change, a hostile takeover by a single entity or group of powerful players already happened.

[johnyj]

But without a healthy fundamental, they can't cash out after the rally, and they risk of helping early adopters to cash out during the rally, so when facing uncertainty, they will stay out until dust is settled. From long term view, the bitcoin will not succeed if it can't prove itself as not controlled by any single entity or a group of powerful players

This is correct, and for that reason Bitcoin should avoid a hard fork at all cost.  Most users and miners know it.  If the hard consensus rules in Bitcoin change, a hostile takeover by a single entity or group of powerful players already happened.

A hard fork is totally harmless if there is no major merchant and user support, someone in china is talking about making a hard fork first to prove that it is harmless

Only a 50-50 divide between users and miners and merchants will be a disaster, and that's why you need at least 75% hash power and major user support

And by not making a hard fork to raise the block size limit (which majority of people want), you also risk heavily affecting fundamentals: 1. people will realize that bitcoin is not capable of doing lots of transactions without third party solutions 2. people will realize that bitcoin programmers can be controlled by enterprises and totally changed to something else. As a result they vote with their feet, and without new buyers every day to absorb those 5000 coins sell pressure, exchange rate will only go down long term wise

[sturle]

But without a healthy fundamental, they can't cash out after the rally, and they risk of helping early adopters to cash out during the rally, so when facing uncertainty, they will stay out until dust is settled. From long term view, the bitcoin will not succeed if it can't prove itself as not controlled by any single entity or a group of powerful players

This is correct, and for that reason Bitcoin should avoid a hard fork at all cost.  Most users and miners know it.  If the hard consensus rules in Bitcoin change, a hostile takeover by a single entity or group of powerful players already happened.

A hard fork is totally harmless if there is no major merchant and user support, someone in china is talking about making a hard fork first to prove that it is harmless

Only a 50-50 divide between users and miners and merchants will be a disaster, and that's why you need at least 75% hash power and major user support

You are contradicting yourself.  Bitcoin is built on consensus.  If a group controlling 75% of hashpower, i.e. four miners, break lose and force a consensus change to Bitcoin, then it shows Bitcoin is under control by a very small group.  Both user support, and the need for a fork, can be faked like Coinbase does.

And by not making a hard fork to raise the block size limit (which majority of people want), you also risk heavily affecting fundamentals: 1. people will realize that bitcoin is not capable of doing lots of transactions without third party solutions 2. people will realize that bitcoin programmers can be controlled by enterprises and totally changed to something else. As a result they vote with their feet, and without new buyers every day to absorb those 5000 coins sell pressure, exchange rate will only go down long term wise

If Bitcoin has to be scaled via hard forks pushed by a small group, or if a small group (i.e. 2 miners) can block scaling by blocking a size change, then Bitcoin has to fall under control of a very few number of players to succeed.  This contradicts your previous stance.

Bitcoin programmers don't have powers.  They can not change the consensus rules without making an altcoin.  This is the primary security mechanism in Bitcoin.  If this wasn't true, Bitcoin would be just as worthless as fiat in a bank on Cyprus.  Just see how the Coinbasecoin known as "Classic" works out.  They have almost no user support, except for sockpuppets on Reddit, and even fakes node support through an attack on the bitcoin P2P insfrastructure, and try to provoke user support by spamming the blockchain with unnecessary transactions.  (The Amazon nodes are an attack due to the built-in sybil-resistance in Bitcoin nodes.  Home nodes will create a connection to at most one of those nodes, since it avoids connecting to more than one node per netblock.  The attack nodes will however make 8 outbound connections to people's home nodes, download blocks and transactions, and use a disproportionate amount of their bandwidth.  I had to throttle my outgoing bandwidth to the attack nodes ("Classic" nodes on Amazon servers) because they were consuming all my outgoing bandwidth, and hitting my incoming transactions limit.  To help the network, nodes must be spread out to all corners of the internet.)

There are plenty of altcoins out there, and very easy to vote by your feet now.  Even Coinbase could be honest about it, and fork off their own Coinbasecoin, or "Classic" as they call it, today.  Yet, I can't see Coinbase following that path.  They want to destroy Bitcoin instead, by showing that a small group of people can take control over it.

[johnyj]

If Bitcoin has to be scaled via hard forks pushed by a small group, or if a small group (i.e. 2 miners) can block scaling by blocking a size change, then Bitcoin has to fall under control of a very few number of players to succeed.  This contradicts your previous stance.

Of course any small group of people do not represent the consensus, that's why we need a large scale vote and count everyone's opinion through miners vote with their hash power, and service providers asking their customers (you can not fake hash power, and you can not fake long term users on platforms)

Currently for those who voted with their hash power, classic has the majority hash power, and even user number is several times more than core users. And for those who don't vote (currently over 90% of mining hash power has not voted yet) it means they don't care, we can assume that they want bitcoin to run on its historical trajectory (non-full blocks and low fee), so they can also be assumed to support classic. Or, we can assume that they don't command enough knowledge to do the vote, so their vote can not be counted. But since in bitcoin's world no one is responsible for your financial loss, I think everyone who is enough serious about his investment should participate in the vote

[Lauda]

Both charts are misleading at best. Even if you consider nodes that haven't updated to 0.12.0 yet as in "don't care", the vote stands at almost 45-55 (I didn't run the numbers; it is an estimation after looking at the image below).

Additionally you have to consider that Classic is basically running a Sybil attack with its Amazon nodes service.

The Amazon nodes are an attack due to the built-in sybil-resistance in Bitcoin nodes. To help the network, nodes must be spread out to all corners of the internet.)

Correct. More than half their nodes are on Amazon apparently.

Imagine how foolish these guys will look, after screaming " Increase the Block size now, the sky is falling!!! " and then the new increased Blocks after SegWit will only be 40% full.   I think I will be one of the first people who will be screaming, " I told you so "

Well, considering that they're the ones that were most likely behind the recent attack, I don't think that they're going to give up just yet. Even if Core agreed to 2 MB block size limit, we would hear the same story some time after its activation asking e.g. for 3-4 MB block size limit (maybe it would be "Bitcoin Reloaded"?).

[franky1]

so is core running a sybil aswell, ill even spoon feed you examples and leave you to look at the rest

here is a majority of core using node hosting services
https://bitnodes.21.co/nodes/?q=OVH%20SAS
https://bitnodes.21.co/nodes/?q=Hetzner%20Online%20GmbH
https://bitnodes.21.co/nodes/?q=Hetzner%20Online%20AG%20RZ
https://bitnodes.21.co/nodes/?q=MCI%20Communications%20Services,%20Inc.%20d/b/a%20Verizon%20Business

and yes core shills also uses amazon.

enjoy counting how many nodes are core

[franky1]

Well, considering that they're the ones that were most likely behind the recent attack, I don't think that they're going to give up just yet. Even if Core agreed to 2 MB block size limit, we would hear the same story some time after its activation asking e.g. for 3-4 MB block size limit (maybe it would be "Bitcoin Reloaded"?).

thats because core started the delay and fud to avoid upgrading even from 2015. and wanted the increase to happen in 2017-18.(2-3 years)
if core implemented the change in summer 2015 with a 6 month grace there would be peace for a couple years.

core wants and loves the endless debate because it makes them feel powerful having people under their thumb pleading for them to do something.

they love and want contention, because it gives them power
they dont like it when we are not asking them to do anything as it makes them feel useless. so ofcourse they want the debate to continue endlessly

[SebastianJu]

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.

I wonde actually in which type of country you live in. A democracy it surely isn't or you are the type that thinks "the guys at the top will do the right thing, they probably know better than me". Which lets me ask what kind of government you would chose.

Core fans always tell everyone that bitcoin is no democracy, well, it should. It has proven way too often that democracy is the best choice of governments. Even though our current democratic countries only have a homeopatic democracy. The democracy is so thin that it is practically not existing anymore. What is it worth when the citicens (demo-cracy = ruling of the citicens) has the right to make a single choice once every couple of years and the rest of the time they have to delegate their voice to others?

Anyway... you surely should have realized that most bitcoiners are not the kind of subservient and obedient citizens you might be.


arcticlava and sturle

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.

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.

These miners are pools too. So the question is what happens when the miners that mine on that pool direct their hashpower elsewhere, if they can? Would that have an effect?

I agree that the users have the power at the end. Though I fear most users are ignorant and would simply use whatever client they get handed out with an update.

Miners mining worthless blocks... well, that would only be true if the price of the bitcoins on that chain is falling down. That only happens by selling. Who will sell? Will the rich guys on one side sell their coins on the other side to bring the chain down? Or the other way? Worthless is only that is not wanted anymore.


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.

I think if the chinese government probably would simply take them out of the game. That would be not a big problem since the only harm that could do would be bigger timeframes between confirmations. It would be a hassle for up to two weeks minimum. The remaining miners would still earn the same that they earned before the pools were taken out. Though with the next diff update they would earn alot more than before. It would mean a new goldrush with miners prices rising very high.

It could not harm bitcoin at all. Only maybe some other forms of attack might be.

If they actually would force them to mine empty blocks then this reminds me of something. Wasn't there a rule of some kind that asic producers would implement a slightly different form of calculation into their miners? That was a precaution in case the algo had to be changed to keep some asics out of the game. I think at the asic goldrush times there was something like that. I'm not sure who dealt with that. The core devs probably.

So it might be possible to keep miners from these producers out.

[Lauda]

I wonde actually in which type of country you live in. A democracy it surely isn't or you are the type that thinks "the guys at the top will do the right thing, they probably know better than me". Which lets me ask what kind of government you would chose.

False interpretation of my words. Look at how wonderful the democracies of today are. Seems to be a system that is working very well (a lot of countries being highly corrupted as a example). My wording may not be the best here as I'm not into politics.

Core fans always tell everyone that bitcoin is no democracy, well, it should. Anyway... you surely should have realized that most bitcoiners are not the kind of subservient and obedient citizens you might be.

So instead of reading, listening and learning the users should complain, spread misinformation and FUD since their technical expertise are severely lacking or non existent? Surely this will be beneficial to the system. I never said that Core should be blindly followed. Nobody should.

[SebastianJu]

I wonde actually in which type of country you live in. A democracy it surely isn't or you are the type that thinks "the guys at the top will do the right thing, they probably know better than me". Which lets me ask what kind of government you would chose.

False interpretation of my words. Look at how wonderful the democracies of today are. Seems to be a system that is working very well (a lot of countries being highly corrupted as a example). My wording may not be the best here as I'm not into politics.

Democracy is not yet strong, I know. But still it has proven as a way better way for now. And the people don't agree to corruption so even lobbyist influence on politicians is a real point of critics nowadays. It goes in the right direction at least.

Core fans always tell everyone that bitcoin is no democracy, well, it should. Anyway... you surely should have realized that most bitcoiners are not the kind of subservient and obedient citizens you might be.

So instead of reading, listening and learning the users should complain, spread misinformation and FUD since their technical expertise are severely lacking or non existent? Surely this will be beneficial to the system. I never said that Core should be blindly followed. Nobody should.

It's good to read that you say no one should follow blindly. Though what you should see is that many people that are screaming on one side or the other actually miss knowledge. I switched sides one time, well, maybe I switch more often on subtopics too. The point is that this happens when my knowledge is rising. So discussing the topics is very important.

But even when all facts are on the table, especially the topic at hand is a topic that leaves ALOT room for interpretation and guessing of the future. So what sounds logical on the one side sounds illogical on the other and vice versa. That surely does not mean that misinformations and FUD are spread out of bad habit but because it is the stand of knowledge or/and because you can ask both sides to the same points and both sides can show that they are right. So it's not really bringing anything forward claiming it is FUD.

[adamstgBit]

If Bitcoin has to be scaled via hard forks pushed by a small group, or if a small group (i.e. 2 miners) can block scaling by blocking a size change, then Bitcoin has to fall under control of a very few number of players to succeed.  This contradicts your previous stance.

Of course any small group of people do not represent the consensus, that's why we need a large scale vote and count everyone's opinion through miners vote with their hash power, and service providers asking their customers (you can not fake hash power, and you can not fake long term users on platforms)

Currently for those who voted with their hash power, classic has the majority hash power, and even user number is several times more than core users. And for those who don't vote (currently over 90% of mining hash power has not voted yet) it means they don't care, we can assume that they want bitcoin to run on its historical trajectory (non-full blocks and low fee), so they can also be assumed to support classic. Or, we can assume that they don't command enough knowledge to do the vote, so their vote can not be counted. But since in bitcoin's world no one is responsible for your financial loss, I think everyone who is enough serious about his investment should participate in the vote

wow

can you post the source of this graph please.