[2017-09-01] F2Pool Reneges: Bitcoin Pool Pulls Segwit2x Support Over Hard Fork

[Iranus]

To understand SegWit block size it's important to recognise that it's an efficiency upgrade rather than a simple block size increase.

By segregating witness data from the rest of the transaction, it manages to include more transactions into a block while legacy nodes still see the block size as being 1MB.  So while it's not a simple block size increase, it's an effective block size increase.

It's also not as simple as "the block size is now 4MB" either.  There may be a limit of 4MB but there's a lower effective limit.  To quote Bitcoin Core:  

Since old nodes will only download the witness-stripped block, they only enforce the 1 MB block size limit rule on that data. New nodes, which understand the full block with witness data, are therefore free to replace this limit with a new one, allowing for larger block sizes. Segregated witness therefore takes advantage of this opportunity to raise the block size limit to nearly 4 MB, and adds a new cost limit to ensure blocks remain balanced in their resource use (this effectively results in an effective limit closer to 1.6 to 2 MB).

So it's neither "still 1MB" nor "now 4MB".

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[DooMAD]

I'm starting to wonder how much influence some pool operators actually have over their pools.  If Wang Chun has gone on record via email stating explicitly that he doesn't support the proposal, why is their coinbase still commenting NYA?  Why is declared intention for 2x not dropping?  F2Pool's latest block utilised some of the witness space, so clearly they're happy with SegWit itself.  But the article clearly jumped to the conclusion that 2x support would be reducing to 85% with F2Pool and Slush Pool "dropping out".  But declared intention is still ~95% and both pools are still commenting NYA in their blocks.  Something doesn't add up.  Either the pool operators have changed their mind, or those who actually contribute the hashpower aren't listening to them.  If it's the latter, then the popular "miner cartel" theory goes out the window.

Is it possible that the scales have tipped so far in favour of 2x that the miners have effectively painted themselves into a corner in that they don't want to risk mining a minority chain even if they now disagree with the idea?  Or are they just waiting before they change their coinbase text to match for other pools to verbally oppose the idea, so they know they aren't alone?  There's possibly some herd mentality going on.  I guess we've had precedents of things changing remarkably quickly in terms of miner support, so perhaps it'll all come to a head soon.

It's also not as simple as "the block size is now 4MB" either.  There may be a limit of 4MB but there's a lower effective limit.  To quote Bitcoin Core: 

Since old nodes will only download the witness-stripped block, they only enforce the 1 MB block size limit rule on that data. New nodes, which understand the full block with witness data, are therefore free to replace this limit with a new one, allowing for larger block sizes. Segregated witness therefore takes advantage of this opportunity to raise the block size limit to nearly 4 MB, and adds a new cost limit to ensure blocks remain balanced in their resource use (this effectively results in an effective limit closer to 1.6 to 2 MB).

So it's neither "still 1MB" nor "now 4MB".

Seconded.  That's an impartial and neutral assessment.  Those who keep describing it as either 1MB or 4MB in absolute terms need to keep in mind how telling their bias now is.

[Samarkand]

It's pretty logical. Bitcoin does need that larger block size now. So do you actually think it's better to stay at 1mb instead increasing to 2mb ?

SegWit already increased the block size limit to 4MB, in case you haven't been keeping up with the latest news.

Please show me a recently mined Bitcoin block that is bigger than 1.1 MB  

I think the 4MB calculation is too optimistic. This would require that blocks are basically full of Segwit
transactions, which is cleary a ridiculous proposition, because a big part of users still wants to use
the "traditional transaction" type and some users still use outdated wallet software, which will never support Segwit.

Nevertheless, I think that Segwit adoption will increase in the long-term and therefore in the future blocks will be bigger than they are now,
but still I expect an average blocksize that doesn´t even get close to 4MB.

[Carlton Banks]

I think the 4MB calculation is too optimistic. This would require that blocks are basically full of Segwit
transactions,

Nope.

They need to be Segwit, but they also need to be signature-heavy. People using Multisig transactions are still pretty rare, and that's the only way to use more than 2MB per block using the Segwit capacity upgrade.

Lightning will bolster this (Lightining involves multi-sig at the blockchain level), but this depends alot on the patterns of usage Lightning attracts. Realistically, alot of BTC will stay permanently hopping around/through Lightning channels, and so the increase in Multisigs may well be a major surge as the Lightning network accumulates it's natural useful quantity of BTC. After that, mined coins will gradually leak in to maintain that balance (whatever it turns out to be), but that doesn't seem to me like a feasible way to fill up an extra 2MB of every block.

After that, other 2nd layer networks (which are planned, but not as well developed as Lightning yet) may well provide the extra. We will see, the 1MB:3MB ratio was apparently chosen very carefully by the Segwit designers, so it's a big test of their engineering analysis.

which is cleary a ridiculous proposition, because a big part of users still wants to use
the "traditional transaction" type and some users still use outdated wallet software, which will never support Segwit.

Nevertheless, I think that Segwit adoption will increase in the long-term and therefore in the future blocks will be bigger than they are now,
but still I expect an average blocksize that doesn´t even get close to 4MB.

I expect that a combination of the lower fees, 2nd layer networks and Bech32 addresses will convince the overwhelming majority to adopt Segwit addresses (Bech32 addresses will be easier to handle, no UPPER CASE lower case distinction, you can almost read them out verbally to someone reliably)

[Samarkand]

...

After that, other 2nd layer networks (which are planned, but not as well developed as Lightning yet) may well provide the extra. We will see, the 1MB:3MB ratio was apparently chosen very carefully by the Segwit designers, so it's a big test of their engineering analysis.


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Once again, you seem to be more knowledgeable than me @Carlton Banks 
Thank you for the detailed reply.

I have a question regarding the statement above. What other 2nd layer networks are you talking about? Rootstock? Merkelized Abstract Syntax Trees?
Something entirely different?

Besides, I was under the impression that Lightning was basically still in an early stage of development as well (i.e. they have not
even a beta on the mainnet right now).

[Carlton Banks]

What other 2nd layer networks are you talking about? Rootstock? Merkelized Abstract Syntax Trees?
Something entirely different?

Mimblewimble is one. There was a payment channels concept that wasn't compatible with Lightning too, but I've forgotten the name :/ It'll pop up again if it's viable tech.

Rootstock is one in a way, but I think it was troubled the last I heard. MAST is complex, I forgot the details totally, someone please fill us all in if it's relevant...


There are bound to be more, I've been lazy keeping up to date over the summer this year.

Besides, I was under the impression that Lightning was basically still in an early stage of development as well (i.e. they have not
even a beta on the mainnet right now).

I think Lightning has been tested on mainnet, but it's don't get me wrong, it's still early on. All I mean is that Lightning is closer to commerical implementations & deployment than other 2nd layer concepts.

[DooMAD]

Declared 2x support still isn't dropping.  NYA text is still present in every single one of F2Pool's blocks today.  I'm now strongly considering the possibility in that Chun is a bit like Trump in that he generally just spouts out the first thought that pops into his head and then completely contradicts himself later.  Anyone remember this little doozy?  And yet they support it just fine now (Size 1000.012 KB, so clearly some Witness space utilised).  Whatever he says he does or doesn't support wouldn't appear to carry much weight.  Yet more reason not to place so much emphasis on the personalities involved in this debate and just go by the numbers.  That's all that really matters.

[Samarkand]

Declared 2x support still isn't dropping.  NYA text is still present in every single one of F2Pool's blocks today.  I'm now strongly considering the possibility in that Chun is a bit like Trump in that he generally just spouts out the first thought that pops into his head and then completely contradicts himself later.  Anyone remember this little doozy?  And yet they support it just fine now (Size 1000.012 KB, so clearly some Witness space utilised).  Whatever he says he does or doesn't support wouldn't appear to carry much weight.  Yet more reason not to place so much emphasis on the personalities involved in this debate and just go by the numbers.  That's all that really matters.

I think the more relevant question is how much influence he actually has as a mining pool operator. Even if he is in favor of something that
doesn´t mean that the users of the mining pool and the hashrate provided by them support the same thing. If Chun would do something that contradicts the
interest of the users of F2Pool, they could easily switch their hashrate to some of the other pools.
This would obviously hurt F2Pool, unless Chun is owning a huge percentage of F2Pool´s hashrate personally.