An Open Letter to The Bitcoin Community

[CoinHoarder]

I just wrote an open letter to the Bitcoin community. Please share it to spread the word. I would appreciate it- thanks in advance! 🙂

You can retweet it here: https://twitter.com/DecentralizTech/status/941853909613711361

Dear Bitcoin Community,
Wow. Who would have imagined Bitcoin would be where it’s at today 5+ years ago (when I first entered the community)? As a community of users, philosophers, speculators, businesses, miners, and developers… we should all be very proud of ourselves. The amount of work it took to get here was quite an astounding amount, but it is nice to see the tremendous success of which we have all collectively worked for. Now the mainstream media, your family, and friends are all talking about Bitcoin more and more. It is truly on the cusp of being a mainstream phenomenon.

However, with such success breeds complications. Bitcoin is effectively software, and scaling software to millions of users online has historically been a challenging subject in computer science. Both hardware and software considerations need to be considered. It is obviously a challenging problem to face, and Bitcoin should be proud that it is making headway with Segwit implementation complete.

Lightning Networks will start popping up in the very near future because they are all effectively competing against each other to be first to market. However, it will take a long time for all services and wallets to implement it. There is still a lot of testing that needs to be done. Knowing Bitcoin’s security conscious developers, there will be many tests before anything goes live at all. Point is that it could take a year or more for all wallets and services to implement LNs.

Because of the network effect, Bitcoin has to scale… and it has to scale fast. Every day Bitcoin takes to do so is another day that at least SOME capital goes into an alternative cryptocurrencies' markets instead of Bitcoin's. It is hurting all of the Bitcoin community participants in the ecosystem because some capital is leaving Bitcoin for other alternative cryptocurrencies both from old Bitcoin stakeholders and new community members. Bitcoin fees are already reaching all-time highs, and with the way adoption is going parabolic, expect transaction fees to go parabolic in the short-to-mid-term too.

Although Bitcoin has had a lot of success, it still has many adversaries to conquer, including nation states that may or may not choose to onerously regulate Bitcoin, bankers that will compete for market share on their own centralized solutions, and alternative cryptocurrencies that are competing for market share. There also exists the possibility that all three of those entities (nation states, bankers, or other alternative cryptocurrencies) will try to kill it via many attacks (51%, spam, ddos, political, social, etc) … if they aren’t already…

Bitcoin is already under attack. We can’t control nation states or banker attacks… they will happen regardless of how we proceed. However, I posit that we can do something about the Alternative cryptocurrencies are trying to kill it economically, socially, and politically. Bitcoin Cash has been the main benefactor of the congestion on the network, but other alternative cryptocurrencies are getting an inflow of capital too from what would have otherwise been capital in Bitcoin. It benefits everyone in the Bitcoin community including users, developers, miners, and companies if that capital stays in the Bitcoin ecosystem rather than shifting over to the alternative cryptocurrency’s ecosystem. Bitcoin’s network effect is under attack, and do not underestimate the power of its adversaries. Things will only get worse from here as all adversaries start to ramp up their attacks.

I think there is one solution that you can implement that will kill the value proposition of Bitcoin’s main competitor... the one alternative cryptocurrency the that the “big blockers” have rallied behind: Bitcoin Cash. The supporters of this resistance have been relentlessly attacking Bitcoin in an attempted coup by claiming they are better, and the “real” Bitcoin- among other things. However, the only advantage it has is that it has a higher 8 Mb block size, and is a lot less popular, which brings its transaction fees down substantially. I know Bitcoin’s plan is to scale via Lightning Networks and I support it, and I also realize that scaling purely by raising the block size infinitely eventually leads to a centralized network. However, at the same time, I would like to ask that the Bitcoin community please consider doing one small increase to Bitcoin’s block size to 8Mb, because Bitcoin’s capacity will be greater than that of Bitcoin Cash’s transaction capacity with the block size increase (plus the efficiencies Segwit affords us).

This will provide temporary financial relief from transaction fees for users and businesses until the Lightning Networks are fully working and implemented into most of the websites, services, and wallets. This will also kill the value proposition of big block solutions because at that point their marketing slogan would be an obvious lie if Bitcoin had the same or cheaper transaction fees. The capital would stop bleeding out of Bitcoin, and stay within the Bitcoin ecosystem. Due to the Network Effect, it is paramount that we retain all of the new users the most current “hype wave” (which people usually call a bubble) is bringing us because the quantity of new users and capital is orders of magnitude more users than the last hype wave.

Again, for emphasis, please consider raising the block size for temporary relief. Even if Lightning Networks are fully implemented, we might still have to increase the block size in order to increase the settling capacity of the network. As Bitcoin garners more and more utility through software innovations, the payment channel settling capacity might need to be scaled similarly to how the transaction capacity has had to with transactions. Also, 8Mb blocks are not really that much bigger than 2Mb blocks. It will hardly affect the decentralization of the network. No one is running full nodes on their phones, modern low-cost desktops and servers can efficiently process 8Mb blocks, and network bandwidth and network latency both are not an issue for most modern ISPs either with only 8Mb blocks.

I understand and totally get that you wouldn’t accept a group of companies’ attempts at doing so (Segwit2x), but surely, we can come together socially in order to come to an agreement. An agreement of which that is made out in the public in between almost all of the community members- not an agreement made behind closed doors by a limited portion of the community (like the Segwit2x agreement was formed). I think that is possibly the main contention the No2x crowd had against Segwit2x… is that it was an agreement formed behind closed doors by a few parties, and not necessarily the concept of a small rise in block size. Let’s test that theory?

Please swallow your stubbornness and pride, admit that there is a problem with high transaction fees, and then take the bull by its horns to fix the problem. Let’s raise Bitcoin’s block size to 8Mb.

A concerned community member,

William Connatser aka. CoinHoarder

Originally posted here: https://www.decentralized.tech/blogs/bigblockers-an-open-letter-to-the-bitcoin-community

[CoinHoarder]

Up

[uobaaagrf]

thank you.
But personally, I think there is a very small chance that this open letter will be adopted, since almost all developers now focus on wealth.
If the core team continues to sink, BTC bifurcations will be more and more.

[hualangktsld841]

This letter is very deep. If this can be spread in the community, is undoubtedly of great help to the community. Indeed, bitcoin is now facing some problems, we hope it won't be long before you can achieve lightning network, reduce bitcoin transfer fee. In addition, we also hope that the national banking bitcoin remain open!

[Shamie1002]

Well, the open letter sum it all up. And everything stated here is true. I think everyone is aware of the problems because they are actually experiencing it. And some are seeking answers here in the forum by making different threads.
I think this would answer it all. I also hope that the lightning network will soon be implemented. I am not into altcoins and willing to stick to bitcoin. Despite the different problems it faces today, users must trust what bitcoin can do. It needs supporters now. I hope none of the users turn their backs at bitcoins.
Those who knows how to help, please hear this letter.

[amishmanish]

Increase in block size is one of the solutions that bitcoin core has not supported. If they do it now, temporarily, then it will be a difficult to defend decision. Increasing the block size will in fact give more legitimacy to BCC.
Personally, I don't understand this fear of competition from other cryptos. If the new capital goes to other cryptocurrencies, that is not necessarily a bad thing.

I am pretty sure that the core developers and early adopters have sufficient capital to keep the developments going. Doing temporary fixes by going back on your own word will only show that Bitcoin is willing to compromise on the values it defended so staunchly at another point of time.

As of now, Bitcoin has already seen huge growth. If the network cannot successfully handle this growth then its better to let the other ecosystems grow while bitcoin comes up with some innovative fixes.

[Jet Cash]

Increasing blocksize is the wrong thng to do in my opinion.

Alternative coins are beneficial for Bitcoin, hopefully they will remove all the dust services like faucets, micro-gambling and scammy/spammy sig campaigns. This will allow Bitcoin to get on with its real purpose, whch is a store of wealth.

[Kakmakr]

I have to agree with you on this, because I am one of the strongest supporters of Bitcoin Core and their roadmap with SegWit and later the Lightning Network, but we are losing people going towards that goal. I did a simple tx a week ago and paid $58 in miners fees on normal rates. <not even priority rates> This is totally unexceptable and some people will migrate to cheaper alternatives, if this continues.

Bitcoin Core should consider a small upgrade of the Block size, until we implement the LN.

[CryptoBry]

People who are in charged in deciding the fate and direction of and for Bitcoin have to realize that they are in fact shooting their own foot or rather that of Bitcoin and this whole thing is not doing good for Bitcoin. With the recent transaction costs escalating to a very ridiculous level, it is time to realize that we are in one ship and this ship has to survive and flourish into the future. There is no other alternative that is acceptable to many Bitcoin holders. The time has come for them to contemplate and think not just of themselves but also all of us in this big ship.

[kevoh]

This opening letter has so many salient points that needs to be acted upon. As it stands, I have a stuck transaction ($50) for over 4 days with a high transaction fee of $17. I tried one of those accelerators pushtx and was asked to pay $64 to get my transaction of $50 confirmed. That's just insane. I will be sharing this open letter on other platform, something has to be done.

[Ruz05]

In this open letter, two Bitcoin Indonesia actors appealed to Bank Indonesia to use the virtual currency to benefit the state.

[rcticoin]

Bitcoin and other virtual currencies pose a direct threat to the status of the US Dollar as the world's currency. The rupiah and the currencies used by other developing countries actually benefit most from the emergence of an alternative currency.

Although policies affecting the US Dollar have international effects, the US Federal Reserve implements monetary policy aimed solely for the benefit of the US economy. The policy of the US Central Bank specifically aimed to control inflation and encourage growth in the US alone. Its side effects for other countries are usually not or very little considered and complaints from other countries are often ignored. During monetary expansion, when the Federal Reserve paid close attention to economic growth in the United States, the currencies of developing countries rapidly strengthened due to the influx of US dollars. Central banks of these developing countries will inevitably have to intervene to prevent the effect of strengthening their currencies. When the US central bank sees the threat of inflation in the US, they turn to give a strict policy that resulted in the sudden release of US Dollar from developing countries back to the US which causes rapidly weakening the currency of developing countries and increasing the threat of inflation in developing countries. As a result, policymakers in the US are effectively exporting inflation to developing countries.

The decentralized nature of bitcoin makes it immune to the manipulation of the interests of one country at the expense of the other. The internal mechanism of the virtual currency is open, transparent and policy governed by mathematical principles, making it a suitable candidate for playing the role of the world's currency.

The benefits of virtual currency are more than just protecting the Rupiah from the effects of other countries' economic policies. Exports for example, will benefit from the use of virtual currency. The lower barrier offered by Bitcoin to receive international payments for small companies will contribute to exports. This diversification makes the sector stronger and reduces dependence on certain exports.

Increasing tax revenues is another part that will benefit Indonesia considerably. Leakage of tax revenues can occur if the public transactions in cash in large portions. While Bitcoin retains many characteristics of cash and offers more convenience than cash. Increased tax revenues will affect the credit rating of Indonesia's debt that resulted in a positive effect on the Rupiah.

However, Bitcoin is not without obstacles and challenges. Two things to note are the wild volatility and the use of Bitcoin as a means of money laundering for illegal activities. But these two challenges can be overcome.

Regarding the issue of volatility, this is one of the properties of the new currency with relatively low liquidity. As this currency gets more and more accepted and the currency becomes more mature, it is expected that wild price movements will occur less frequently.

First, it should be realized that there is a current misunderstanding of the notion that Bitcoin is an anonymous currency. This is not true because all Bitcoin transactions are recorded and publicly viewable. Only the identity of transactions that can not be seen but still can be obtained with little effort. Cash will continue to be the preferred medium for criminal activity as it is more difficult to trace. Secondly, money laundering can be easily controlled by extending the KYC (Know Your Customer) law and the AML (Anti Money Laundering) law for Bitcoin transactions.the

[CoinHoarder]

thank you.
But personally, I think there is a very small chance that this open letter will be adopted by almost all developers now focus on wealth.
If the core team continues to sink, BTC bifurcations will be more and more.

Yes, I agree that there is a small chance that would happen. I am not anyone famous enough to have enough influence. If this were to happen it would take many people pursuing the effort. A grassroots movement like no2x. Most people will probably never read the letter unless others help share. There are also financial adversaries now that have invested into Bcash, who have financial incentive to make sure something like this doesn't happen, such as Bitmain with ASICBoost and BCH Stakeholders.

Increasing blocksize is the wrong thing to do in my opinion.

Alternative coins are beneficial for Bitcoin, hopefully, they will remove all the dust services like faucets, micro-gambling, and scammy/spammy sig campaigns. This will allow Bitcoin to get on with its real purpose, which is a store of wealth.

Who are we to decide what purpose Bitcoin exists for? The store of wealth property of Bitcoin's utility is nice, but being able to transfer it cheaply (or semi-cheaply) is also a nice property of Bitcoin's utility. We can and will likely have both with the Lightning Network, but that will take a lot of time to be implemented with all websites, services, and wallets... even if it is released into the wild soon.

In the meantime, the easiest and safest way to correct the congestion on the Bitcoin network is to increase the block size. A store of wealth is not worth to most of the population if it is really expensive to send and receive. Bitcoin is almost making gold look like a more economically efficient way of transferring wealth is ridiculous because Bitcoin is electronic. It will become a store of wealth for rich people and entities only due to the fees. If you think transaction fees are high now then just wait until the price keeps going up the parabolic curve, because there will be no relief until the LN is ready and implemented everywhere... it will happen slowly, like Segwit implementation.

Once normal average and below average income type people learn how expensive the fees are, then Bitcoin's reputation with most common people is going to be permanently tarnished. First impressions are key. It is these types of people that the traditional banking/investment industry is built off on- controlling, storing, and transferring common people's wealth. Banks can do both the storing and transferring fairly cheaply- so should Bitcoin. They can use LNs when they come out, but in the meantime, Bitcoin is becoming a harder sell with the costs of transaction fees.