Subject: File No. SR-NYSEArca-2017-06 From: Matt Corallo Sep. 11, 2017 I am Matt Corallo, a long-time developer of Bitcoin (around the 10th publicly recorded individual to contribute to the Bitcoin codebase), an expert on Bitcoin's operation, vocal Bitcoin advocate, and strong proponent of the availability of a Bitcoin Exchange-Traded Product (ETP). I have very grave concerns with the proposed rules for the maintaining of Bitcoin deposits and the lack of consumer protection in the event of Bitcoin Network rule changes in the current filings.
Just wtf has Bitcoin got to do with the SEC? Matt Corallo doesn't seem to understand the nature of Bitcoin: 1) "Bitcoin" isn't a registered NASDAQ/NYSE stock, or a legally registered trading instrument in the US. 2) The word "Bitcoin" can't even be copyrighted until Satoshi actually show up as a legal entity. 3) "Bitcoin" was invented and defined by Satoshi, to this date, an unknown entity with a British background. 4) Definition of "Bitcoin" is clearly defined in the whitepaper written by its inventor, it's not up to Matt Corallo or the SEC to change it every time they feel like it. 5) What "Bitcoin" is or isn't, doesn't fall under the jurisdiction of the US government. 6) The logical and mathematical formula defined in the "Bitcoin" whitepaper is enforced by various open source software, these software can exist in any shape or form and operate freely within the US as long as it doesn't break any laws of the US. 7) "Bitcoin" does not belong to the United States, the US government can rewrite the definition of "Bitcoin", they can even ban the use of Bitcoin, but the rest of the world will continue to use it the way it was specified in the whitepaper. 8) The SEC isn't going to get involved every time some random loser write to them to cry about some implementation of a virtual currency, of unknown origin, being updated in a way he doesn't like. 9) There are thousands of virtual currency source code being updated millions of time per year, the SEC doesn't have the legal responsibility, incentive or man power to get involved. Imagine thousands of 10-15yr olds writing to the SEC every time there is a dispute in some random online virtual currency like World of War Craft or Barbie Online. That is how stupid this Matt Corallo letter is. What's next Matt? Write to SEC about "the lack of consumer protection" after your condom broke? Fucking Core idiots.
What Really Happened Behind the Scenes with Segwit2x?
I was having a discussion with u/jstolfi in another thread about the topic of Segwit2x and how to me it seems a lot like its failure represented the total victory of one company (Blockstream) at the expense of every other company in the Digital Currency Group's portfolio. This seems very odd to me. Any insight into why Blockstream was allowed such a long-leash? It seems to me that all the events leading up to Segwit2x's cancellation are shrouded in mystery. Let me give some more backstory for flavour. Before Segwit2x's cancellation I was happily perusing rBitcoin blissfully believing their narrative that everyone on btc was a conspiracy-loving kook and that moderation on Bitcoin was even-handed and they just worked to keep a few trolls out. I didn't start doubting this narrative until Segwit2x's cancellation. When I first got interested in Bitcoin the scaling debate was drawing to a close. Segwit2x was about to happen and all the tumult and conflict was about to have a neat compromise-based resolution. The sentiment I recall around the time Segwit2x was rallying miner support even on Bitcoin was one of jubilation. The community was eager to finally have the Boogeyman of a chain split out of the way, Segwit was going to be introduced so that Greg and co. could work on their vapourware, and the blocks were going to be increased so that Bitcoin would not become a joke with high fees and slow transactions. All the major players seemed on board. I listened to a podcast with Jeff Garzik and Charlie Lee on the scaling debate and they both seemed confident things would resolve smoothly. So I stopped paying attention. Then suddenly a spanner in the works appeared in the form of the BCH split. I didn't know what to make of that at the time, but I still felt the BTC community would rally together once Segwit2x was released in November. Then futures started trading on Bitfinex and HitBTC and to my surprise the ratio was something like 8:1 in favour of Segwit1x. I listened to a podcast with Matt Corallo and Mike Belshe (Bitgo) shortly before Segwit2x was called off. While listening to the Podcast I could not understand why Mike Belshe had any confidence the market would accept Segwit2x considering the state of the futures market. He suggested there was a silent majority that wanted Segwit2x. At the time I thought this was nonsense, now I'm not so sure. As part of DCG's portfolio Belshe might be privy to information about Blockstream's antics that he is unable to make public. More importantly though I am now aware that Blockstream is an investor in Bitfinex, and Bitfinex is a notoriously scammy exchange. They could very easily have leveraged their position with BFX to have them manipulate the market to make it seem as though segwit1x was unanimously favoured which could in part have led to the ultimate cancellation of Segwit2x. I remember being shocked by the narrative shift on Bitcoin from being seemingly pro-2x to "We hate 2x because it would fire the core devs and they're the best custodians of the code." Since at the point I stopped paying attention, when Segwit2x support was rallying among the miners and the community was being prepared for Segwit2x, I thought the debate was between two factions: one faction the btc people with their conspiracy theories and their insistence that evil miners should be able to completely influence the chain at the expense of its users, and on the other side the benevolent Core devs who were doing everything in their power to prevent a takeover by miners and corporations, even agreeing to compromises like Segwit2x. I didn't realise the Core devs were the ones opposed to any sort of compromise as the entire ecosystem bowed under the weight of their 3 year refusal to take any real action. And this alone made me question the entire Core narrative. I'm a developer myself, and I know all the ways that devs can get stuck chasing perfect solutions and stubbornly and dogmatically resist pragmatic solutions because of the Utopian fallacy. So this refusal to compromise was a huge red flag for me. Once I dug deeper into the rabbit-hole I knew I could never support Core or what they are doing because I lost all respect for them as developers. So to reiterate, what was really going on with Segwit2x? That anti-Segwit2x campaign came out of nowhere. It's interesting that there's a sudden narrative shift happening on Bitcoin now too, where suddenly a lot of people are asking for bigger blocks. That's either the narrative shifting again to try to thwart BCH, or the people who got caught in in Blockstream's astroturfing campaign waking up/being allowed to speak again. Was the majority really #NO2X or was that a ruse?
Subject: File No. SR-NYSEArca-2017-06 From: Matt Corallo Sep. 11, 2017 I am Matt Corallo, a long-time developer of Bitcoin (around the 10th publicly recorded individual to contribute to the Bitcoin codebase), an expert on Bitcoin's operation, vocal Bitcoin advocate, and strong proponent of the availability of a Bitcoin Exchange-Traded Product (ETP). I have very grave concerns with the proposed rules for the maintaining of Bitcoin deposits and the lack of consumer protection in the event of Bitcoin Network rule changes in the current filings. As described in the S-1 filing for the "Bitcoin Investment Trust" (BIT), a "permanent fork" of Bitcoin may occur when two groups of users disagree as to the rules which define the system (its "consensus rules"). More specifically, such a "permanent fork" is likely to occur when one group of users wish to make a change to Bitcoin's consensus rules, while another group does not. This leads to two cryptocurrencies, and may lead to significant ambiguity around which should be referred to as "Bitcoin". The latest S-1 filing by the BIT, allows the BIT to, in the event of a permanent fork, "in consultation with the Index Provider, select a Bitcoin Network"; ie they will be allowed to select any cryptocurrency resulting from a permanent fork which they will term Bitcoin, with no clear restrictions. This creates a gaping divergence of interest between the Sponsor and the investors in the proposed ETP. Digital Currency Group ("DCG"), as the sole owner of the Sponsor, in conjunction with TradeBlock (the "Index Provider", in which DCG is an investor) would be enabled to, through such a selection, shift significant value towards one cryptocurrency over another. As an investor in numerous Bitcoin startups, DCG further has a strong incentive to encourage rule changes and adoption of cryptocurrencies which benefit their portfolio companies as well as their own operations, possibly over rule changes which benefit the investors in the proposed ETP. Further, in the currently-proposed rule changes, DCG is not explicitly barred from trading on the value of different cryptocurrencies prior to the announcement of the BIT's decision as to which fork will receive the future attention of the proposed Bitcoin ETP, and its investors' capital. Finally, it is important to note that, in the event of a permanent fork, there is likely to be significant market confusion as investors, businesses, and users decide which cryptocurrency they will term "Bitcoin". During this time period, the BIT is not restricted from selecting a cryptocurrency immediately (as it did on July 28th with respect to the Bitcoin Cash fork two days later ), nor restricted to selecting the cryptocurrency which the majority of the Bitcoin community terms "Bitcoin". In such a scenario, the BIT could cause significant longer-term market confusion, effectively misrepresenting itself to consumers, all while complying with its currently-proposed rules and filings. These scenarios are possibly best illustrated by the case of the Ethereum/Ethereum Classic fork, which the BIT S-1 lists as a prime example of such a "permanent fork". DCG invested heavily on one side of the fork, almost entirely at odds with the remainder of the Ethereum userbase, businesses, and exchanges. While the vast majority of market participants in Ethereum shifted their value to the new Ethereum Network, DCG promoted and invested in Ethereum Classic. If DCG had, at that time, owned the Sponsor of an Ethereum ETP under the proposed rules for the BIT ETP, they would be free to, and perfectly justified under the S-1 in, declaring the ETP to hold only Ethereum Classic, potentially to their own gain, and to significant market confusion. Recently, DCG and some of its portfolio companies have been strongly promoting "Segwit2x" (a proposed rule change to the Bitcoin Network). While it is still months off, the Bitcoin community is already split in whether it should be adopted, very likely leading to such a "permanent fork" and a debate over which cryptocurrency should be termed "Bitcoin" and which should adopt a new name. It is still very much an open question which cryptocurrency exchanges will adopt the BTC ticker symbol for, and whether significant market confusion will result. As a final note, the latest BIT S-1 claims that "as a practical matter, a modification to the source code only becomes part of the Bitcoin Network if accepted by participants collectively having a majority of the processing power on the Bitcoin Network". This may be somewhat misleading as it conflicts with the previous S-1 statements that the BIT is allowed to select a cryptocurrency which results from a permanent fork freely. Additionally, were it to be the case that the BIT simply followed the majority of processing power on the Bitcoin Network, it would likely lead to additional confusion as a significant majority of processing power on the Bitcoin network shifts back and forth between different forks as profitability of mining on each changes. As noted in several other comments provided in regards to SR-NYSEArca-2017-06, the adoption of rule changes to allow the listing of a Bitcoin ETP would be very much in line with the SEC's mission, and to the significant benefit of US consumers. However, additional rules must be put in place to protect investors in the event of a permanent fork of the Bitcoin network such as the one DCG and its portfolio companies is advocating for now, rules I believe to be rather straightforward and simple to write. Matt  While the Bitcoin Cash fork appeared highly unlikely to take the name "Bitcoin" with any large part of the community at the time, several prominent community members had, and have since, indicated that they would refer to Bitcoin Cash simply as "Bitcoin" if certain conditions are met. http://www.prnewswire.com/news-releases/grayscale-investments-llc-statement-regarding-bitcoin-investment-trust-and-bitcoin-cash-300496137.html
The Hong Kong Agreement that has totally been breached by the Bitcoin Core Contributors.
On February 21st, 2016, in Hong Kong’s Cyberport, representatives from the bitcoin industry and members of the development community have agreed on the following points:
We understand that SegWit continues to be developed actively as a soft-fork and is likely to proceed towards release over the next two months, as originally scheduled.
We will continue to work with the entire Bitcoin protocol development community to develop, in public, a safe hard-fork based on the improvements in SegWit. The Bitcoin Core contributors present at the Bitcoin Roundtable will have an implementation of such a hard-fork available as a recommendation to Bitcoin Core within three months after the release of SegWit.
This hard-fork is expected to include features which are currently being discussed within technical communities, including an increase in the non-witness data to be around 2 MB, with the total size no more than 4 MB, and will only be adopted with broad support across the entire Bitcoin community.
We will run a SegWit release in production by the time such a hard-fork is released in a version of Bitcoin Core.
We will only run Bitcoin Core-compatible consensus systems, eventually containing both SegWit and the hard-fork, in production, for the foreseeable future. *We are committed to scaling technologies which use block space more efficiently, such as Schnorr multisig.
Based on the above points, the timeline will likely follow the below dates.
SegWit is expected to be released in April 2016.
The code for the hard-fork will therefore be available by July 2016.
If there is strong community support, the hard-fork activation will likely happen around July 2017.
The undersigned support this roadmap. Together, we are: Kevin Pan - Manager - AntPool Anatoly Legkodymov - CEO - A-XBT Larry Salibra - Bitcoin Association Hong Kong Leonhard Weese - Bitcoin Association Hong Kong Cory Fields - Bitcoin Core Contributor Johnson Lau - Bitcoin Core Contributor Luke Dashjr - Bitcoin Core Contributor Matt Corallo - Bitcoin Core Contributor Peter Todd - Bitcoin Core Contributor Kang Xie - Bitcoin Roundtable Phil Potter - Chief Strategy Officer - Bitfinex Valery Vavilov - CEO - BitFury Alex Petrov - CIO - BitFury Jihan Wu - Co-CEO - Bitmain Micree Zhan - Co-CEO - Bitmain James Hilliard - Pool/Farm Admin - BitmainWarranty Yoshi Goto - CEO - BitmainWarranty Alex Shultz - CEO - BIT-X Exchange Han Solo - CEO - Blockcloud Adam Back - President - Blockstream Bobby Lee - CEO - BTCC Samson Mow - COO - BTCC Robin Yao - CTO - BW Obi Nwosu - Managing Director - Coinfloor Mark Lamb - Founder - Coinfloor Wang Chun - Admin - F2Pool Marco Streng - CEO - Genesis Mining Marco Krohn - CFO - Genesis Mining Oleksandr Lutskevych - CEO - GHash.IO & CEX.IO Wu Gang - CEO - HaoBTC Leon Li - CEO - Huobi Zhang Jian - Vice President - Huobi Eric Larchevêque - CEO - Ledger Jack Liao - CEO - LIGHTNINGASIC & BitExchange Star Xu - CEO - OKCoin Jack Liu - Head of International - OKCoin Guy Corem - CEO - Spondoolies-Tech Pindar Wong - Sponsor
Mining is how you vote for rule changes. Greg's comments on BU revealed he has no idea how Bitcoin works. He thought "honest" meant "plays by Core rules." [But] there is no "honesty" involved. There is only the assumption that the majority of miners are INTELLIGENTLY PROFIT-SEEKING. - ForkiusMaximus
The title of this post is a compressed summary combining some important quotes from several recent comments by u/ForkiusMaximus, which I thought were worth highlighting here in a post of their own. His comments remind us that Bitcoin was already brilliantly designed by Satoshi so that the majority of "honest""intelligently profit-seeking" miners will always be economically incentivized to use their hashpower to vote for the rule changes which will maximize their (and everyone else's) Bitcoin profits - and they will always do this regardless of any censorship or centralized dev teams. Meanwhile, Core/Blockstream (and their supporters) totally fail to understand this subtle but vital point: they think that devs somehow control Bitcoin, by forcing people to run certain code... or moderators somehow control Bitcoin, by censoring certain forums... or now non-mining nodes can somehow control Bitcoin by suggesting a futile and pointless "user-activated soft-fork" (UASF) - ie a fork not supported by actual mining hashpower. This all shows that Core/Blockstream (and their supporters) have a fundamental misunderstanding of the most important aspect of Bitcoin - the fact that:
Bitcoin is controlled by not by devs... or censors... or non-mining nodes.
Bitcoin is controlled by the economic incentives designed by Satoshi, where the vast majority of "honest" "intelligently profit-seeking" miners will always use their hashpower to vote for the rules which will maximize their Bitcoin profits (and our Bitcoin profits as well :-).
This is why the 21 million coin cap will never get increased. And this is why blocksizes will always continue to moderately increase. Not because some dev team made it "hard" to modify these settings in the code. And not because some moderator censored some discussion about some alternative clients. The reason Bitcoin works is simply because the vast majority of miners are "honest" "intelligently profit-seeking". This is why mining support for Core/Blockstream's centrally-planned blocksize has dropped to 2/3 of network hashpower (despite their big team of "experts" and all their censorship and fiat funding). And this is why 1/3 of mining hashpower has already started voting for some form of market-driven blocksizes... ... not because BU or Classic suddenly "gave" them this power (after all, they always had this power themselves)... ... but simply because the vast majority of miners are "honest" "intelligently profit-seeking", and they know that bigger blocks will bring higher profits. So, miners have always been able to use their hashpower (and even modify the Bitcoin client source code if they wanted) in order to vote for rule changes which would support bigger blocksizes and higher Bitcoin profits for everyone - with or without any help from BU, Classic, etc. - and there is nothing that any dev team (or any censored forum) can do to prevent miners from doing this. So it is inevitable that miners will use their hashpower to vote for bigger blocksizes, because this means much higher Bitcoin profits for them (and also bigger Bitcoin profits for the rest of us :-)... simply because (as Satoshi clearly did understand, but most Core/Blockstream devs clearly do not understand):
The vast majority of miners are "honest" "intelligently profit-seeking".
We don't have to trust [miners] to be "honest" as Satoshi unfortunately worded it. Replace the term honest with "intelligently profit-seeking." Bitcoin assumes miners are intelligently profit-seeking, meaning that they have a decent enough read on what the ecosystem wants that they can and will make any necessary changes to please the ecosystem and thus boost their own bottom line. Greg's recent comments on BU totally discredited him, as he revealed himself to have no friggin' idea how Bitcoin works. He actually thought "honest" meant something like "plays by Core rules." That's a completely broken understanding of Bitcoin, and implies centralization. It's the kind of misconception I'd expect from a run-of-the-mill nobody on a forum, not from the mighty leader of Core/BS. I'm kinda pissed I wasted mental clock ticks trying to debate this guy without realizing he has not just a flawed understanding, but zero understanding of how Bitcoin works at all. And of course all his supporters parrot his nonsense view of how Bitcoin supposedly works.
Mining control is the key invention of Bitcoin. It's how it doesn't just devolve into yet another failed subjective monetary scheme. If you don't like it, you should figure out another scheme. Perhaps proof of stake is more your thing? Also, it's pretty amazing that you think just because BU makes it more convenient for miners to do what they always could do, that that somehow dooms Bitcoin. If that dooms it, it was already a dead man walking. How do you propose to stop miners from altering their own blocksize settings? If you have no answer, you have no grounds to attack BU without falling into the category of being a Bitcoin skeptic.
It's actually fairly subtle: mining IS how you vote for rule changes, BUT miners have every incentive to vote with the market, so they DON'T have any meaningful ability to push rules on the community (even under BU). There is no trust or "honesty" involved, as Satoshi unfortunately worded it. There is only the underlying assumption that makes Bitcoin work: the assumption that the vast majority of miners are INTELLIGENTLY PROFIT-SEEKING. The only way this system can break is if the majority of miners seek something other than profit (say a government took the major mining pools over and somehow hashers couldn't switch away in time), or the miners misjudge what the market wants (due to a failure of market communication). However, in this case and on these timescales it is obvious the current crop of miners are generally profit-seeking. And if they are misjudging the market, we have a remedy: we can resolve that through fork futures trading on the exchanges. Note that this is just moving the decision from the first kind of investors (miners) to the general investing public. Miners are a first-line proxy for investors in general. If they fail to reflect investor will, investors are free to take it to the market by forking and trading the two sides of the fork (preferably as futures so as to avoid scrambling to upgrade urgently). Also important would be to maximize freedom of discussion so that market communication is not distorted. Finally, the whole idea of the UASF people, that we would poll the ecosystem somehow to prove the economic majority wants some change, already means that merely showing this proof to the miners should convince them, as they are intelligently profit-seeking. But that obviates the need for a UASF in the first place (!).
I used to think they don't understand markets, but in fact they are stuck at an even more basic level than that. I took a spin through the wreckage of /Bitcoin today for the first time in weeks. It was pleasantly surprising to see how with the ramping up of miner support for BU, the Core arguments have been reduced to obvious fundamental misunderstandings of Bitcoin that are now trivial to rebut. In a word, they haven't actually grasped the concept of incentives. This goes all the way to the top, not just the supporters but the key Core devs themselves. They don't understand markets, yes, but it's not like they are even close. They lack the understanding of even the fundamental building blocks of markets. When you think about it, governance by incentives is pretty subtle. Even if one reads the whitepaper and goes, "Oh yeah I see, miners would be motivated not to kill the golden goose in that situation," it is quite another matter to fully internalize the fact that the only reason Bitcoin is a thing at all is because of the assumption that miners are not idiots. Or more accurately, that miners as a group will never have a gross failure to correctly apprehend the wishes of the market. This is the source of all the weird claims about miners controlling or not controlling Bitcoin. Core and Blockstream dev Matt Corallo thinks that if miners were allowed to (not mentioning how they could be disallowed to), they would mine extra coins for all the "extra profits." Again this goes beyond failing to understand markets, all the way down to failing to understand or take seriously incentives as a concept at all. I'm not blaming him, he's a coder; I blame those who take his commentary on non-coding matters seriously, merely by dint of his coding skill. A constant refrain from Core supporters as BU gain hashpower is that "miners don't control Bitcoin." This is actually correct: miners don't control Bitcoin, they won't act against the economic majority. But not because they can't. They certainly can, just like oncoming traffic can swerve toward you on the freeway. But they don't, because that would destroy them as well. Thus is the subtlety of governance by incentives. Miners have control, but they won't use it to do anything that displeases the ecosystem, on balance. Or they might, but in that case Bitcoin is a failed concept as its fundamental assumption is then proven to be broken. Many or most anti-BU arguments unwittingly take that form: they start with the premise that Bitcoin is broken [i.e., miners are idiots or that they grossly fail to read the market] and reason from there to conclude that BU is broken. Examples include the median EB attack, the various big block attacks, and the bizarre claim that BU has a "new security model" because it "lets miners do something they couldn't before" (ironically implying Core has snuck in a new security model where they try to restrain miners by making it inconvenient for them to change a blocksize setting). Hence we see that it isn't merely a matter of Core and Blockstream people having initially dismissed Bitcoin and then later seeing the light when the price rises forced them to look deeper. They in fact still haven't seen the light. They never fully understood the basic dynamic that makes Bitcoin tick, let alone understanding higher level concepts like markets. This is why they so easily fall into the central planning mindset, seeing Bitcoin as a fragile little thing that must be defended by their wise paternalistic guidance. The Core devs have replaced the fundamental assumption in the whitepaper, that most miners are honest (I prefer "most miners are not idiots" as it is harder to misinterpret), with the fundamental assumption that the right set of people (or the right repository governance structure) is in charge of the "reference implementation." This manifests as a kind of envy toward the miners and comes with all the other curious trappings of the Core worldview: the code is the spec, hard forks are dangerous, Core = Bitcoin, anything that deviates from Core diktats is an "altcoin," it doesn't count as censorship to delete discussion of alternative clients as they are "off topic," nodes > miners, anything that makes it a bit easier for miners to do something Core doesn't like is an "attack" on Bitcoin, centralized control by Core is necessary to preserve decentralization, UASF is a viable idea, Segwit has consensus among "the Bitcoin experts," and so on.
Estimated Core hashrate down below 2/3 already. Core has lost supermajority status, even with all the historical inertia, miner conservatism, and crackerjack programmers they are reported to have on their side. Even with the "consensus" of "the experts." Even with two years of mindbendingly extreme censorship in their favor on the two biggest Bitcoin discussion forums.
The Core devs have directly created this situation by keeping the blocksize cap locked down long after it became controversial. The logic of how users make needed changes to the protocol, as mentioned in the whitepaper, requires that users be able to easily adjust any settings that are controversial, so as to be able to "vote with their CPU" power in a smooth manner. Core tries to leverage their waning "reference implementation" status to rig the vote by deliberately leaving the now maximally controversial blocksize limit hard-coded, forcing the user to venture out into relatively new dev team offerings if they want to cast a vote. This is exactly how you create the conditions for a contentious split. They have brought this upon themselves entirely.
Adam implies BU is pre-alpha, yet it is winning in the only arena where people actually put their money where their mouths are. How pathetic does it make Core that they are losing to a pre-alpha client?
21 months ago, Gavin Andresen published "A Scalability Roadmap", including sections called: "Increasing transaction volume", "Bigger Block Road Map", and "The Future Looks Bright". *This* was the Bitcoin we signed up for. It's time for us to take Bitcoin back from the strangle-hold of Blockstream.
A Scalability Roadmap 06 October 2014 by Gavin Andresen https://web.archive.org/web/20150129023502/http://blog.bitcoinfoundation.org/a-scalability-roadmap Increasing transaction volume I expect the initial block download problem to be mostly solved in the next relase or three of Bitcoin Core. The next scaling problem that needs to be tackled is the hardcoded 1-megabyte block size limit that means the network can suppor[t] only approximately 7-transactions-per-second. Any change to the core consensus code means risk, so why risk it? Why not just keep Bitcoin Core the way it is, and live with seven transactions per second? “If it ain’t broke, don’t fix it.” Back in 2010, after Bitcoin was mentioned on Slashdot for the first time and bitcoin prices started rising, Satoshi rolled out several quick-fix solutions to various denial-of-service attacks. One of those fixes was to drop the maximum block size from infinite to one megabyte (the practical limit before the change was 32 megabytes– the maximum size of a message in the p2p protocol). The intent has always been to raise that limit when transaction volume justified larger blocks. “Argument from Authority” is a logical fallacy, so “Because Satoshi Said So” isn’t a valid reason. However, staying true to the original vision of Bitcoin is very important. That vision is what inspires people to invest their time, energy, and wealth in this new, risky technology. I think the maximum block size must be increased for the same reason the limit of 21 million coins must NEVER be increased: because people were told that the system would scale up to handle lots of transactions, just as they were told that there will only ever be 21 million bitcoins. We aren’t at a crisis point yet; the number of transactions per day has been flat for the last year (except for a spike during the price bubble around the beginning of the year). It is possible there are an increasing number of “off-blockchain” transactions happening, but I don’t think that is what is going on, because USD to BTC exchange volume shows the same pattern of transaction volume over the last year. The general pattern for both price and transaction volume has been periods of relative stability, followed by bubbles of interest that drive both price and transaction volume rapidly up. Then a crash down to a new level, lower than the peak but higher than the previous stable level. My best guess is that we’ll run into the 1 megabyte block size limit during the next price bubble, and that is one of the reasons I’ve been spending time working on implementing floating transaction fees for Bitcoin Core. Most users would rather pay a few cents more in transaction fees rather than waiting hours or days (or never!) for their transactions to confirm because the network is running into the hard-coded blocksize limit. Bigger Block Road Map Matt Corallo has already implemented the first step to supporting larger blocks – faster relaying, to minimize the risk that a bigger block takes longer to propagate across the network than a smaller block. See the blog post I wrote in August for details. There is already consensus that something needs to change to support more than seven transactions per second. Agreeing on exactly how to accomplish that goal is where people start to disagree – there are lots of possible solutions. Here is my current favorite: Roll out a hard fork that increases the maximum block size, and implements a rule to increase that size over time, very similar to the rule that decreases the block reward over time. Choose the initial maximum size so that a “Bitcoin hobbyist” can easily participate as a full node on the network. By “Bitcoin hobbyist” I mean somebody with a current, reasonably fast computer and Internet connection, running an up-to-date version of Bitcoin Core and willing to dedicate half their CPU power and bandwidth to Bitcoin. And choose the increase to match the rate of growth of bandwidth over time: 50% per year for the last twenty years. Note that this is less than the approximately 60% per year growth in CPU power; bandwidth will be the limiting factor for transaction volume for the foreseeable future. I believe this is the “simplest thing that could possibly work.” It is simple to implement correctly and is very close to the rules operating on the network today. Imposing a maximum size that is in the reach of any ordinary person with a pretty good computer and an average broadband internet connection eliminates barriers to entry that might result in centralization of the network. Once the network allows larger-than-1-megabyte blocks, further network optimizations will be necessary. This is where Invertible Bloom Lookup Tables or (perhaps) other data synchronization algorithms will shine. The Future Looks Bright So some future Bitcoin enthusiast or professional sysadmin would download and run software that did the following to get up and running quickly:
Connect to peers, just as is done today.
Download headers for the best chain from its peers (tens of megabytes; will take at most a few minutes)
Download enough full blocks to handle and reasonable blockchain re-organization (a few hundred should be plenty, which will take perhaps an hour).
Ask a peer for the UTXO set, and check it against the commitment made in the blockchain.
From this point on, it is a fully-validating node. If disk space is scarce, it can delete old blocks from disk. How far does this lead? There is a clear path to scaling up the network to handle several thousand transactions per second (“Visa scale”). Getting there won’t be trivial, because writing solid, secure code takes time and because getting consensus is hard. Fortunately technological progress marches on, and Nielsen’s Law of Internet Bandwidth and Moore’s Law make scaling up easier as time passes. The map gets fuzzy if we start thinking about how to scale faster than the 50%-per-increase-in-bandwidth-per-year of Nielsen’s Law. Some complicated scheme to avoid broadcasting every transaction to every node is probably possible to implement and make secure enough. But 50% per year growth is really good. According to my rough back-of-the-envelope calculations, my above-average home Internet connection and above-average home computer could easily support 5,000 transactions per second today. That works out to 400 million transactions per day. Pretty good; every person in the US could make one Bitcoin transaction per day and I’d still be able to keep up. After 12 years of bandwidth growth that becomes 56 billion transactions per day on my home network connection — enough for every single person in the world to make five or six bitcoin transactions every single day. It is hard to imagine that not being enough; according the the Boston Federal Reserve, the average US consumer makes just over two payments per day. So even if everybody in the world switched entirely from cash to Bitcoin in twenty years, broadcasting every transaction to every fully-validating node won’t be a problem.
If BTC1x prevails it will prove that the only way to achieve "consensus" in bitcoin is to make false agreements
If you think about it, it makes perfect sense. If person A and B want different things but want to come to an agreement, then one way to do it is for A to pretend he will give B what he wants and then later retract. so here are some bullet points to think about
it is claimed the majority of bitcoin users want small blocks which will lead to higher fees because they deeply understand bitcoin and understand how the larger bandwidth requirements of block propagation will geographically centralize bitcoin miners because of latency (if you ignore that there are relay networks)
This implies that the supposed centralization of bitcoin miners combined with a larger blockchain from larger blocks (which will result in less people running nodes in theory) outweigh the ways in which small blocks increase centralization and that people are okay with that for some reason.
it demonstrates that even though hard forks and soft forks are both equally powerful (Vitalik once described how you could alter the inflation rate and increase coins past 21 million with a soft fork) , that for some reason exchanges are required to call Bitcoin the one that upgrades through soft forks instead. Notice how coinbase could have said the names could have been S1x and S2x which would have been neutral?
By core developer Matt Corallo's own reasoning when he wrote a letter to the SEC to try to deny the winklevoss ETF... one of his reasons was that the ETF would allow the winklevoss to call an upgraded block size "bitcoin" and this would artificially boost the price and value of that blockchain due to branding and/or confusion. By that logic, coinbase is effectivelly helping to manipulate the bias of the bitcoin blockchain to the one that upgrades through equally powerful soft forks and is run by deplorable core developers. That is probably why the other sub seems so happy despite that they did say they could override this based on the majority choosing the other side
And a final thing to notice is that some of the most vocal supporters of increasing the blocksize are those who actually use bitcoin (for instance bitpay, roger ver... even Erik Vorhees). Many of the core supporters and core themselves have admitted to not even using bitcoin, but simply holding it.
if holding bitcoin and onlly holding is really the best use case for bitcoin and it has the largest segment of support... why does core seem afraid of cryptographically signed voting where you sign with coins?
There are hundreds of developers who contribute to Bitcoin Core. Over 50 of them have 10+ commits to Bitcoin Core.
Blockstream employs 7 of these developers, including Pieter Wuille, Luke Dashjr, Greg Maxwell, Jorge Timon, Patrick Strateman, Warren Togami and Mark Friedenbach.
By number of commits, the developers Blockstream employs are ranked #2, #8, #13, #14, #19, #35, and #50, respectively.
Another company called ChainCode Labs employs 3 of the top 50 developers, including Alex Morcos, Suhas Daftuar, and Matt Corallo (formerly employed by Blockstream).
By number of commits, the developers ChainCode employs are ranked #5, #11 and #12, respectively.
As for SegWit, it is a multi-faceted gold-mine of an update with many, many benefits to scaling, security and efficiency:
It fixes the substantial transaction malleability problem once and for all.
It improves the efficiency of signature-hashing so it scales linearly rather than quadratically.
It 1.7x's the # of single-signature transactions per block and 4x's the # of multi-signature transactions per block.
It enables second-layer scaling solutions like Lightning.
It upgrades pay-to-script-hash transactions from 160-bit hashes to 256-bit hashes.
It makes it safer for hardware wallets to sign transactions by explicitly hashing input values.
It reduces the growth of the system's most burdensome resource: unspent transaction outputs, which are ideally kept in memory.
It introduces versioning for the scripting language to allow for more easy upgradeability.
The trust in the BU development team has faded   . (It's more legit if it looks as if it has sources. You know what I'm talking about... the bugs that have been found, the fact that it can't keep up with Core's commits, the fact that Core developers aren't jumping ship to it, the fact that it looks less active even compared to Classic - which has a smaller "market share").
The trust in the reasons for which some miners were supporting BU has faded  . I'm guessing that we were all hoping that they hate censorship and manipulation, just like we do, but for Jihan for example - the reasons might be different. I first became suspicious of it when he sharedMR_hehe's post, saying this:
If 2nd layer protocols become a reality, many bitcoin transactions will go through 2nd layer networks and not via miners. Miners won't receive transaction fees for them. The mining community obviously feel unhappy about this.
The covert form of ASICBOOST (where they don't use the version field, the form that was only recently publicly discovered) would only show up as a higher than usual number of empty blocks or blocks with reordered or missing transactions (depending on how the attacker implemented it; it's not necessarily both).
IMO, the long term objectives should be:
remove as many of the forms of manipulation as possible (for example censorship from /bitcoin, centralized exchanges, DOS attacks, and so on)
hard fork at some point in the future away from the current repository, hopefully to one that is distributed (updates wouldn't come from a central location - GitHub - and they could be voted on) and add a governance system to Bitcoin, where we can make decisions like paying developers (as DASH does it, or BOScoin in the future)
instantly confirmed transactions (businesses need that)
move to something akin to POS, and the capability of hundreds of thousands of transactions... per second
make running nodes either very light on computing resources or paid somehow
keep convincing businesses to accept cryptocurrencies as a method of payment, because that's how you completely eliminate banks and central banks from the equation
etc. Note that without utility for people and businesses, Bitcoin is just a complex and very effective pyramid scheme. No wonder you're only allowed to post "BUY BUY BUY HOLD!!" in /bitcoin. Also note that DASH is already doing some of the stuff above. Maybe we should just do a Bitcoin genesis block with DASH's source code lol. There's little financial interest in my recommendation, as I've already sold most of my Bitcoins for ETH. I'm sure many others from /btc have done the same. But I still want most cryptocurrencies to succeed, not just the ones I'm "invested" in. I want banks to fail. EDIT: looking at the comments, some people want hard fork SegWit, others want BU, others want soft fork FlexTrans, others want extension blocks... Really, we can't pull in so many different directions. We'll just move slowly somewhere in between, and in the tech word you remain behind when that happens.
PSA: (non) existing Hong Kong agreement expires officially TODAY!
CURRENT DATE IN HONG KONG: SATURDAY, 18 FEBRUARY 2017. THE HK AGREEMENT HAS EXPIRED. Miners, Your Turn! "The undersigned support this roadmap. Together, we are: Kevin Pan Manager - AntPool Anatoly Legkodymov CEO - A-XBT Larry Salibra - Bitcoin Association Hong Kong Leonhard Weese - Bitcoin Association Hong Kong Cory Fields - Bitcoin Core Contributor Johnson Lau - Bitcoin Core Contributor Luke Dashjr - Bitcoin Core Contributor Matt Corallo - Bitcoin Core Contributor Peter Todd - Bitcoin Core Contributor Kang Xie - Bitcoin Roundtable Phil Potter - Chief Strategy Officer Bitfinex Valery Vavilov - CEO BitFury Alex Petrov - CIO BitFury Jihan Wu - Co-CEO Bitmain Micree Zhan - Co-CEO Bitmain James Hilliard - Pool/Farm Admin BitmainWarranty Yoshi Goto - CEO BitmainWarranty Alex Shultz - CEO BIT-X Exchange Han Solo - CEO Blockcloud Adam Back - President Blockstream -> Individual -> President Blockstream Bobby Lee - CEO BTCC Samsung Mow - COO BTCC -> Professional Twitter Troll -> Former COO BTCC 😕 Robin Yao - CTO BW Obi Nwosu - Managing Director Coinfloor Mark Lamb - Founder Coinfloor Wang Chun - Admin F2Pool Marco Streng - CEO Genesis Mining Marco Krohn - CFO Genesis Mining Oleksandr Lutskevych - CEO GHash.IO & CEX.IO Wu Gang - CEO HaoBTC Leon Li - CEO Huobi Zhang Jian - Vice President Huobi Eric Larchevêque - CEO Ledger Jack Liao - CEO LIGHTNINGASIC & BitExchange Star Xu - CEO OKCoin Jack Liu - Head of International OKCoin Guy Corem - CEO Spondoolies-Tech Pindar Wong - Sponsor" source background story
Hi all, I was listening to the Trace Mayer podcast and he was talking about the "HODLERs of last resort". You can listen here: https://www.bitcoin.kn/2018/03/the-bitcoin-hodler-of-last-resort/ I think it's relevant here in BTCP as well. I know things are down and we didn't get our exchange listings yet and coinmarketcap is not showing our market cap and maybe there's some problems on the dev team? But, I wanted to take the time to explain why I'm a hodler of last resort for BTCP. First off, blockchains don't die easy so even if all the devs for BTCP quit and this board dies off, as long as there is a way to sell BTCP and miners keep mining it, BTCP is going exactly no where. I mean Auroracoin and Bitconnect are still alive for crying out loud. The price may decline, maybe even to less than $1, but it's going to be around and it will always have the possibility of coming back to favor. I got into ZCL originally because I saw the potential in BTCP and none of that has changed. In fact, certain aspects of the value prop are even stronger than I would have thought when I first entered my position. I think the biggest thing we have going for us is our community. There's a lot of people here and I don't think we're going to let this thing die easy. Importantly, Bitcoin Private HAS A USE CASE and it's something that Bitcoin doesn't do well at the current time. It's also quite possible that Bitcoin doesn't ever adopt privacy features and even it does, it could take 5 years or more before it's implemented. Even Matt Corallo said he sees confidential transactions a ways out for Bitcoin as the research into how to implement it is still ongoing and they're not even close to consensus. You can also bet there will be a major fight about the best way to implement it just like there was for scaling. So, while things may have not gone our way price-wise, the opportunity for this coin is still exactly the same as it was before the fork. So, all in all nothing has changed and the team has paid $600k to exchanges to be listed already. Do you think the exchanges want to return that money? I don't. Bitcoin private will be listed on larger exchanges, it will be traded, it will be mined. The (mostly volunteer) devs will implement segwit. More stuff will happen. So, I'm a hodler of last resort. Who's with me?
Released List of Satoshi Roundtable Attendees Gathering this Weekend
Satoshi Roundtable II This weekend a group of blockchain and bitcoin industry leaders gather again for the Satoshi Roundtable (satoshiroundtable.org) retreat. Participants in the second Satoshi Roundtable include developers, CEOs, investors, adopters and influencers from the blockchain and bitcoin world. The retreat is limited to approximately 75 attendees and designed to encourage organic, participant-driven discussion free of the distractions of a conference. Sessions include several topics of overall blockchain interest and a roundtable discussion on bitcoin capacity. Please provide any suggestions you have for areas of discussion/ focus. Partial list of confirmed participants: Gabriel Abed, CEO, Bitt Charles Allen, CEO, BTCS Gavin Andresen, MIT / Bitcoin Foundation Adam Back, President, Blockstream David Bailey, CEO, yBitcoins Mike Belshe, CEO, BitGo Patrick Byrne, CEO, Overstock / T0 Michael Cao, CEO, zoomhash Dave Carlson, CEO, Mega Big Power Daniel Castagnoli, CCO Exodus Sam Cole, CEO, KNC Miner Matt Corallo, Core Developer Luke Dashjr, Core Developer Anthony Di Iorio, CDO-Toronto Stock Exchange, Founder-Ethereum/Decentral/Kryptokit Joe Disorbo, CEO, Webgistix Jason Dorsett, Early Adopter Evan Duffield, FoundeLead Scientist, Dash Andrew “Flip” Filipowski, Partne Co-Founder, Tally Capital Thomas France, Founder, Ledger Jeff Garzik, Founder, Bloq Yifo Guo, Tech Develope Early Adopter David Johnston, Chairman, Factom Samy Kamkar, Super Hacker Alyse Killeen, Partner, Venture Capital Investor Jason King, Founder, Unsung Mike Komaransky, Cumberland Mining Peter Kroll, Founder, bitaddress.org Bobby Lee, CEO, BTC China, Vice-Chairman of the Board, Bitcoin Foundation Charlie Lee, Director of Engineering, Coinbase/Founder of Litecoin Eric Lombrozo, Founder, Ciphrex Corp / Developer Marshall Long, CTO, Final Hash Matt Luongo, CEO, Fold Jake Mazulewicz, Ph.D. JMA Associates (guest speaker) Human performance researcher Halsey Minor, CEO, Uphold / Founder of CNet Alex Morcos, Hudson Trading/ Core Developer Neha Narula, MIT, Director of DCI – Digital Currency Initiative Dawn Newton, Co-Founder, COO, Netki Justin Newton, Founder CEO, Netki Stephen Pair, Co-FoundeCEO, BitPay Inc. Michael Perklin, President, C4 – CryptoCurrency Certification Consortium / Board Member, Bitcoin Foundation Alex Petrov, CIO, BitFury Phil Potter, CFA, Bitfinex Francis Pouliot, Director, Bitcoin Embassy, Board Member, Bitcoin Foundation JP Richardson, Chief Technical Officer, Exodus Jamie Robinson, QuickBt Jez San, Angel Investor Marco Santori, Partner, Pillsbury Scott Scalf, EVP/Head of Tech Team, Alpha Point Craig Sellars, CTO, Tether Ryan Shea, Co-Founder, One Name Greg Simon, CEO & Co-Founder Ribbit! Me / President, Bitcoin Association Paul Snow, CEO Factom, Texas Bitcoin Conference Riccardo Spagni, Monero Nick Spanos, Founder, Bitcoin Center NYC Elizabeth Stark, Co-Founder & CEO, Lightning Marco Streng, CEO, Genesis Mining Nick Sullivan, CEO, ChangeTip Paul Sztorc, Truthcoin Michael Terpin, CEO, Transform Group Peter Todd, Core Developer Joseph Vaughn Perling, New Liberty Dollar Roger Ver, CEO, Memory Dealers / Bitcoin.com Aaron Voisine, CEO, Breadwallet Zooko Wilcox, CEO, Z Cash Shawn Wilkinson, Founder, Storj Micah Winkelspecht, CEO, Gem Also, representatives from Blockchain, Bain Capital Ventures, Mycelium, Fidelity Investments and others.
Q: What is your relationship with Blockstream now? Are you in a Cold War? Your evaluation on BS was pretty high “If this amazing team offers you a job, you should take it,” tweeted Gavin Andresen, Chief Scientist, Bitcoin Foundation.” But now, what’s your opinion on BS? A: I think everybody at Blockstream wants Bitcoin to succeed, and I respect and appreciate great work being done for Bitcoin by people at Blockstream. We strongly disagree on priorities and timing; I think the risks of increasing the block size limit right away are very small. I see evidence of people and businesses getting frustrated by the limit and choosing to use something else (like Ethereum or a private blockchain); it is impossible to know for certain how dangerous that is for Bitcoin, but I believe it is more danger than the very small risk of simply increasing or eliminating the block size limit.
Q: 1) Why insist on hard fork at only 75%? You once explained that it is possible to be controlled by 5% if we set the threshold at 95%. I agree, but there should be some balance here. 75% means a high risk in splitting, isn’t it too aggressive? Is it better if we set it to 90%? A: 1)The experience of the last two consensus changes is that miners very quickly switch once consensus reaches 75% -- the last soft fork went from 75% support to well over 95% support in less than one week. So I’m very confident that miners will all upgrade once the 75% threshold is reached, and BIP109 gives them 28 days to do so. No miner wants to create blocks that will not be accepted by the network. Q: 2) How to solve the potentially very large blocks problem Classic roadmap may cause, and furthur causing the centralization of nodes in the future? A: 2)Andreas Antonopoulos gave a great talk recently about how people repeatedly predicted that the Internet would fail to scale. Smart engineers proved them wrong again and again, and are still busy proving them wrong today (which is why I enjoy streaming video over my internet connection just about every night). I began my career working on 3D graphics software, and saw how quickly we went from being able to draw very simple scenes to today’s technology that is able to render hundreds of millions of triangles per second. Processing financial transactions is much easier than simulating reality. Bitcoin can easily scale to handle thousands of transactions per second, even on existing computers and internet connections, and even without the software optimizations that are already planned. Q: 3) Why do you not support the proposal of RBF by Satoshi, and even plan to remove it in Classic completely? A: 3) Replace-by-fee should be supported by most of the wallets people are using before it is supported by the network. Implementing replace-by-fee is very hard for a wallet, especially multi-signature and hardware wallets that might not be connected to the network all of the time. When lots of wallet developers start saying that replace-by-fee is a great idea, then supporting it at the network level makes sense. Not before. Q: 4) . Your opinion on soft fork SegWit, sidechain, lighnting network. Are you for or against, please give brief reasons. Thanks. A: 4) The best way to be successful is to let people try lots of different things. Many of them won’t be successful, but that is not a problem as long as some of them are successful. I think segregated witness is a great idea. It would be a little bit simpler as a hard fork instead of a soft fork (it would be better to put the merkle root for the witness data into the merkle root in the block header instead of putting it inside a transaction), but overall the design is good. I think sidechains are a good idea, but the main problem is finding a good way to keep them secure. I think the best uses of sidechains will be to publish “write-only” public information involving bitcoin. For example, I would like to see a Bitcoin exchange experiment with putting all bids and asks and trades on a sidechain that they secure themselves, so their customers can verify that their orders are being carried out faithfully and nobody at the exchanges is “front-running” them. Q: 5) Can you share your latest opinion on Brainwallet? It is hard for new users to use long and complex secure passphrase, but is it a good tool if it solves this problem? A: 5) We are very, very bad at creating long and complex passphrases that are random enough to be secure. And we are very good at forgetting things. We are much better at keeping physical items secure, so I am much more excited about hardware wallets and paper wallets than I am about brain wallets. I don’t trust myself to keep any bitcoin in a brain wallet, and do not recommend them for anybody else, either.
Q: Gavin, do you have bitcoins now? What is your major job in MIT? Has FBI ever investigated on you? When do you think SHA256 might be outdated, it seems like it has been a bit unsafe? A: Yes, a majority of my own person wealth is still in bitcoins -- more than a financial advisor would say is wise. My job at MIT is to make Bitcoin better, in whatever way I think best. That is the same major job I had at the Bitcoin Foundation. Sometimes I think the best way to make Bitcoin better is to write some code, sometimes to write a blog post about what I see happening in the Bitcoin world, and sometimes to travel and speak to people. The FBI (or any other law enforcement agency) has never investigated me, as far as I know. The closest thing to an investigation was an afternoon I spent at the Securities and Exchange Commission in Washington, DC. They were interested in how I and the other Bitcoin developers created the software and how much control we have over whether or not people choose to run the software that we create. “Safe or unsafe” is not the way to think about cryptographic algorithms like SHA256. They do not suddenly go from being 100% secure for everything to completely insecure for everything. I think SHA256 will be safe enough to use in the all ways that Bitcoin is using it for at least ten years, and will be good enough to be used as the proof-of-work algorithm forever. It is much more likely that ECDSA, the signature algorithm Bitcoin is using today, will start to become less safe in the next ten or twenty years, but developer are already working on replacements (like Schnorr signatures).
Q: It’s a pleasure to meet you. I only have one question. Which company are you serving? or where do you get your salary? A: The Media Lab at MIT (Massachusetts Institute of Technology) pays my salary; I don’t receive regular payments from anybody else. I have received small amounts of stock options in exchange for being a techical advisor to several Bitcoin companies (Coinbase, BitPay, Bloq, Xapo, Digital Currency Group, CoinLab, TruCoin, Chain) which might be worth money some day if one or more of those companies do very well. I make it very clear to these companies that my priority is to make Bitcoin better, and my goal in being an advisor to them is to learn more about the problems they face as they try to bring Bitcoin to more of their customers. And I am sometimes (once or twice a year) paid to speak at events.
Q: Would you mind share your opinion on lightning network? Is it complicated to implement? Does it need hard fork? A: Lightning does not need a hard fork. It is not too hard to implement at the Bitcoin protocol level, but it is much more complicated to create a wallet capable of handling Lightning network payments properly. I think Lightning is very exciting for new kinds of payments (like machine-to-machine payments that might happen hundreds of times per minute), but I am skeptical that it will be used for the kinds of payments that are common on the Bitcoin network today, because they will be more complicated both for wallet software and for people to understand.
Q: 1) There has been a lot of conferences related to blocksize limit. The two took place in HongKong in Decemeber of 2015 and Feberary of 2016 are the most important ones. Despite much opposition, it is undeniable that these two meetings basically determines the current status of Bitcoin. However, as the one of the original founders of Bitcoin, why did you choose to not attend these meetings? If you have ever attended and opposed gmax’s Core roadmap (SegWit Priority) in one of the meetings, we may be in a better situation now, and the 2M hard fork might have already begun. Can you explain your absence in the two meetings? Do you think the results of both meetings are orchestrated by blockstream? A: 1) I attended the first scaling conference in Montreal in September of 2015, and had hoped that a compromise had been reached. A few weeks after that conference, it was clear to me that whatever compromise had been reached was not going to happen, so it seemed pointless to travel all the way to Hong Kong in December for more discussion when all of the issues had been discussed repeatedly since February of 2015. The February 2016 Hong Kong meeting I could not attend because I was invited only a short time before it happened and I had already planned a vacation with my family and grandparents. I think all of those conferences were orchestrated mainly by people who do not think raising the block size limit is a high priority, and who want to see what problems happen as we run into the limit. Q: 2) We have already known that gmax tries to limit the block size so as to get investment for his company. However, it is obvious that overthrowing Core is hard in the short term. What if Core continues to dominate the development of Bitcoin? Is it possible that blockstream core will never raise the blocksize limit because of their company interests? A: 2) I don’t think investment for his company is Greg’s motivation-- I think he honestly believes that a solution like lightning is better technically. He may be right, but I think it would be better if he considered that he might also be wrong, and allowed other solutions to be tried at the same time. Blockstream is a funny company, with very strong-willed people that have different opinions. It is possible they will never come to an agreement on how to raise the blocksize limit.
Q: I would like to ask your opinion on the current situation. It’s been two years, but a simple 2MB hard fork could not even be done. In Bitcoin land, two years are incredibly long. Isn’t this enough to believe this whole thing is a conspiracy? A: I don’t think it is a conspiracy, I think it is an honest difference of opinion on what is most important to do first, and a difference in opinion on risks and benefits of doing different things. Q: How can a multi-billion network with millions of users and investors be choked by a handful of people? How can this be called decentrilized and open-source software anymore? It is so hard to get a simple 2MB hard fork, but SegWig and Lighting Network with thousands of lines of code change can be pushed through so fast. Is this normal? It is what you do to define if you are a good man, not what you say. A: I still believe good engineers will work around whatever unnecessary barriers are put in their way-- but it might take longer, and the results will not be as elegant as I would prefer. The risk is that people will not be patient and will switch to something else; the recent rapid rise in developer interest and price of Ethereum should be a warning. Q: The problem now is that everybody knows Classic is better, however, Core team has controlled the mining pools using their powers and polical approaches. This made them controll the vast majority of the hashpower, no matter what others propose. In addition, Chinese miners have little communication with the community, and do not care about the developement of the system. Very few of them knows what is going on in the Bitcoin land. They almost handed over their own power to the mining pool, so as long as Core controls the pools, Core controls the whole Bitcoin, no matter how good your Classic is. Under this circumstance, what is your plan? A: Encourage alternatives to Core. If they work better (if they are faster or do more) then Core will either be replaced or will have to become better itself. I am happy to see innovations happening in projects like Bitcoin Unlimited, for example. And just this week I see that Matt Corallo will be working on bringing an optmized protocol for relaying blocks into Core; perhaps that was the plan all along, or perhaps the “extreme thin blocks” work in Bitcoin Unlimited is making that a higher priority. In any case, competition is healthy. Q: From this scaling debate, do you think there is a huge problem with Bitcoin development? Does there exsit development centrilization? Does this situation need improvment? For example, estabilish a fund from Bitcoin as a fundation. It can be used for hiring developers and maintainers, so that we can solve the development issue once and for all. A: I think the Core project spends too much time thinking about small probability technical risks (like “rogue miners” who create hard-to-validate blocks or try to send invalid blocks to SPV wallets) and not enough time thinking about much larger non-technical risks. And I think the Core project suffers from the common open source software problem of “developers developing for developers.” The projects that get worked on are the technically interesting projects-- exciting new features (like the lightning network), and not improving the basic old features (like improving network performance or doing more code review and testing). I think the situation is improving, with businesses investing more in development (but perhaps not in the Core project, because the culture of that project has become much less focused on short-term business needs and more on long-term exciting new features). I am skeptical that crowd-funding software development can work well; if I look at other successful open source software projects, they are usually funded by companies, not individuals.
You are one of the most-repected person in Bitcoin world, I won’t miss the chance to ask some questions. First of all, I am a Classic supporter. I strongly believe that on-chain transcations should not be restrained artificially. Even if there are transcations that are willing to go through Lighting Network in the future, it should be because of a free market, not because of artificial restrication. Here are some of my questions: Q: 1) For the past two years, you’ve been proposing to Core to scale Bitcoin. In the early days of the discussion, Core devs did agree that the blocksize should be raised. What do you think is the major reason for Core to stall scaling. Does there exist conflict of interest between Blockstream and scaling? A: 1) There might be unconscious bias, but I think there is just a difference of opinion on priorities and timing. Q: 2) One of the reason for the Chinese to refuse Classic is that Classic dev team is not technically capable enough for future Bitcoin development. I also noticed that Classic does have a less frequent code release compared to Core. In your opinion, is there any solution to these problems? Have you ever thought to invite capable Chinese programers to join Classic dev team? A: 2) The great thing about open source software is if you don’t think the development team is good enough (or if you think they are working on the wrong things) you can take the software and hire a better team to improve it. Classic is a simple 2MB patch on top of Core, so it is intentional that there are not a lot of releases of Classic. The priority for Classic right now is to do things that make working on Classic better for developers than working on Core, with the goal of attracting more developers. You can expect to see some results in the next month or two. I invite capable programmers from anywhere, including China, to help any of the teams working on open source Bitcoin software, whether that is Classic or Core or Unlimited or bitcore or btcd or ckpool or p2pool or bitcoinj. Q: 3) Another reason for some of the Chinese not supporting Classic is that bigger blocks are more vulnerable to spam attacks. (However, I do think that smaller blocks are more vlunerable to spam attack, because smaller amount of money is needed to choke the blockchain.) What’s our opinion on this? A: 3) The best response to a transaction spam attack is for the network to reject transactions that pay too little fees but to simply absorb any “spam” that is paying as much fees as regular transactions. The goal for a transaction spammer is to disrupt the network; if there is room for extra transactions in blocks, then the network can just accept the spam (“thank you for the extra fees!”) and continue as if nothing out of the ordinary happened. Nothing annoys a spammer more than a network that just absorbs the extra transactions with no harmful effects. Q: 4) According to your understanding on lighting network and sidechains,if most Bitcoin transactions goes throught lighting network or sidechains, it possible that the fees paid on the these network cannot reach the main-chain miners, which leaves miners starving. If yes, how much percent do you think will be given to miners. A: 4) I don’t know, it will depend on how often lightning network channels are opened and closed, and that depends on how people choose to use lightning. Moving transactions off the main chain and on to the lightning network should mean less fees for miners, more for lightning network hubs. Hopefully it will also mean lower fees for users, which will make Bitcoin more popular, drive up the price, and make up for the lower transaction fees paid to miners. Q: 5) The concept of lighting network and sidechains have been out of one or two years already, when do you think they will be fully deployed. A: 5) Sidechains are already “fully deployed” (unless you mean the version of sidechains that doesn’t rely on some trusted gateways to move bitcoin on and off the sidechain, which won’t be fully deployed for at least a couple of years). I haven’t seen any reports of how successful they have been. I think Lightning will take longer than people estimate. Seven months ago Adam Back said that the lightning network might be ready “as soon as six months from now” … but I would be surprised if there was a robust, ready-for-everybody-to-use lightning-capable wallet before 2018. Q: 6)Regarding the hard fork, Core team has assumed that it will cause a chain-split. (Chinese miners are very intimitated by this assumption, I think this is the major reason why most of the Chinese mining pools are not switching to Classic). Do you think Bitcoin will have a chain-split? A: 6) No, there will not be a chain split. I have not talked to a single mining pool operator, miner, exchange, or major bitcoin business who would be willing to mine a minority branch of the chain or accept bitcoins from a minority branch of the main chain. Q: 7) From your point of view, do you think there is more Classic supporters or Core supporters in the U.S.? A: 7) All of the online opinion pools that have been done show that a majority of people worldwide support raising the block size limit.
Q: Which is more in line with the Satoshi’s original roadmap, Bitcoin Classic or Bitcoin Core? How to make mining pools support and adopt Bitcoin Classic? A: Bitcoin Classic is more in line with Satoshi’s original roadmap. We can’t make the mining pools do anything they don’t want to do, but they are run by smart people who will do what they think is best for their businesses and Bitcoin.
Q: Do you have any solution for mining centralization? What do you think about the hard fork of changing mining algorithms? A: I have a lot of thoughts on mining centralization; it would probably take ten or twenty pages to write them all down. I am much less worried about mining centralization than most of the other developers, because Satoshi designed Bitcoin so miners make the most profit when they do what is best for Bitcoin. I have also seen how quickly mining pools come and go; people were worried that the DeepBit mining pool would become too big, then it was GHash.io… And if a centralized mining pool does become too big and does something bad, the simplest solution is for businesses or people to get together and create or fund a competitor. Some of the big Bitcoin exchanges have been seriously considering doing exactly that to support raising the block size limit, and that is exactly the way the system is supposed to work-- if you don’t like what the miners are doing, then compete with them! I think changing the mining algorithm is a complicated solution to a simple problem, and is not necessary.
Q: Last time you came to China, you said you want to "make a different". I know that in USA the opposition political party often hold this concept, in order to prevent the other party being totally dominant. Bitcoin is born with a deep "make a different" nature inside. But in Chinese culture, it is often interpreted as split “just for the sake of splitting”, can you speak your mind on what is your meaning of "make a different"? A: I started my career in Silicon Valley, where there is a lot of competition but also a lot of cooperation. The most successful companies find a way to be different than their competitors; it is not a coincidence that perhaps the most successful company in the world (Apple Computer) had the slogan “think different.” As Bitcoin gets bigger (and I think we all agree we want Bitcoin to get bigger!) it is natural for it to split and specialize; we have already seen that happening, with lots of choices for different wallets, different exchanges, different mining chips, different mining pool software.
Q: 1) The development of XT and Classic confirmed my thoughts that it is nearly impossible to use a new version of bitcoin to replace the current bitcoin Core controlled by Blockstream. I think we will have to live with the power of Blockstream for a sufficient long time. It means we will see the deployment of SegWit and Lighting network. If it really comes to that point, what will you do? Will you also leave like Mike Hearn? A: 1) With the development of Blockchain, bitcoin will grow bigger and bigger without any doubts, And also there will be more and more companies related to the bitcoin network. When it comes to money, there will be a lot of fights between these companies. Is it possible to form some kind of committee to avoid harmful fights between these companies and also the situation that a single company controlling the direction of the bitcoin development? Is there any one doing this kind of job right now? Q: 2) My final question would be, do you really think it is possible that we can have a decentralized currency? Learning from the history, it seems like every thing will become centralized as long as it involves human. Do you have any picture for a decentralized currency or even a society? Thanks. A: 2) I think you might be surprised at what most people are running a year or three from now. Perhaps it will be a future version of Bitcoin Core, but I think there is a very good chance another project will be more successful. I remember when “everybody” was running Internet Explorer or Firefox, and people thought Google was crazy to think that Chrome would ever be a popular web browser. It took four years for Chrome to become the most popular web browser. In any case, I plan on working on Bitcoin related projects for at least another few years. Eventually it will become boring or I will decide I need to take a couple of years of and think about what I want to do next. As for fights between companies: there are always fights between companies, in every technology. There are organizations like the IETF (Internet Engineering Task Force) that try to create committees so engineers at companies can spend more time cooperating and less time fighting; I’m told by people who participate in IETF meetings that they are usually helpful and create useful standards more often than not. Finally, yes, I do think we can have a “decentralized-enough” currency. A currency that might be controlled at particular times by a small set of people or companies, but that gives everybody else the ability to take control if those people or businesses misbehave.
Hi Gavin, I have some questions: Q: 1) I noticed there are some new names added to the classic team list. Most people here only know you and Jeff. Can you briefly introduce some others to the Chinese community? A: 1) Tom Zander has been acting as lead developer, and is an experienced C++ developer who worked previously on the Qt and Debian open source projects. Pedro Pinheiro is on loan from Blockchain.info, and has mostly worked on continuous integration and testing for Classic. Jon Rumion joined recently, and has been working on things that will make life for developers more pleasant (I don’t want to be more specific, I don’t want to announce things before they are finished in case they don’t work out). Jeff has been very busy starting up Bloq, so he hasn’t been very active with Classic recently. I’ve also been very busy traveling (Barbados, Idaho, London and a very quick trip to Beijing) so haven’t been writing much code recently. Q: 2) if bitcoin classic succeeded (>75% threshold), what role would you play in the team after the 2MB upgrade finished, as a leader, a code contributor, a consultant, or something else? A: 2)Contributor and consultant-- I am trying not to be leader of any software project right now, I want to leave that to other people who are better at managing and scheduling and recruiting and all of the other things that need to be done to lead a software project. Q: 3) if bitcoin classic end up failed to achieve mainstream adoption (<75% 2018), will you continue the endeavor of encouraging on-chain scaling and garden-style growth of bitcoin? A: 3) Yes. If BIP109 does not happen, I will still be pushing to get a good on-chain solution to happen as soon as possible. Q: 4) Have you encountered any threat in your life, because people would think you obviously have many bitcoins, like what happened to Hal Finney (RIP), or because some people have different ideas about what bitcoin's future should be? A: 4) No, I don’t think I have received any death threats. It upsets me that other people have. Somebody did threaten to release my and my wife’s social security numbers and other identity information if I did not pay them some bitcoins a couple of years ago. I didn’t pay, they did release our information, and that has been a little inconvenient at times. Q: 5) Roger Ver (Bitcoin Jesus) said bitcoin would worth thousands of dollars. Do you have similar thoughts? If not, what is your opinion on bitcoin price in future? A: 5) I learned long ago to give up trying to predict the price of stocks, currencies, or Bitcoin. I think the price of Bitcoin will be higher in ten years, but I might be wrong. Q: 6) You've been to China. What's your impression about the country, people, and the culture here? Thank you! A: 6) I had a very quick trip to Beijing a few weeks ago-- not nearly long enough to get a good impression of the country or the culture. I had just enough time to walk around a little bit one morning, past the Forbidden City and walk around Tianmen Square. There are a LOT of people in China, I think the line to go into the Chairman Mao Memorial Hall was the longest I have ever seen! Beijing reminded me a little bit of London, with an interesting mix of the very old with the very new. The next time I am in China I hope I can spend at least a few weeks and see much more of the country; I like to be in a place long enough so that I really can start to understand the people and cultures.
Q: Dear Gavin, How could I contact you, we have an excellent team and good plans. please confirm your linkedin. A: Best contact for me is [email protected] : but I get lots of email, please excuse me if your messages get lost in the flood. 15. satoshi Q: Gavin, you've been both core and classic code contributor. Are there any major differences between the two teams, concerning code testing (quality control) and the release process of new versions? A: Testing and release processes are the same; a release candidate is created and tested, and once sufficiently tested, a final release is created, cryptographically signed by several developers, and then made available for download. The development process for Classic will be a little bit different, with a ‘develop’ branch where code will be pulled more quickly and then either fixed or reverted based on how testing goes. The goal is to create a more developer-friendly process, with pull requests either accepted or rejected fairly quickly.
I am a bitcoin enthusiast and a coin holder. I thank you for your great contribution to bitcoin. Please allow me to state some of my views before asking:
I'm on board with classic
I support the vision to make bitcoin a powerful currency that could compete with Visa
I support segwit, so I'll endorse whichever version of bitcoin implementation that upgrades to segwit, regardless of block size.
I disagree with those who argue bitcoin main blockchain should be a settlement network with small blocks. My view is that on the main chain btc should function properly as a currency, as well as a network for settlement.
I'm against the deployment of LN on top of small block sized blockchain. Rather, it should be built on a chain with bigger blocks.
I also won’t agree with the deployment of many sidechains on top of small size block chain. Rather, those sidechains should be on chain with bigger blocks.
With that said, below are my questions: Q: 1) If bitcoin is developed following core's vision, and after the 2020 halving which cuts block reward down to 6.125BTC, do you think the block transaction fee at that time will exceed 3BTC? A: 1) If the block limit is not raised, then no, I don’t think transaction fees will be that high. Q: 2) If bitcoin is developed following classic's vision, and after the 2020 halving which cuts block reward down to 6.125BTC, do you think the block transaction fee at that time will exceed 3BTC? A: 2) Yes, the vision is lots of transactions, each paying a very small fee, adding up to a big total for the miners. Q: 3) If bitcoin is developed following core's vision, do you think POW would fail in future, because the mining industry might be accounted too low value compared with that of the bitcoin total market, so that big miners could threaten btc market and gain profit by shorting? *The questioner further explained his concern. Currently, its about ~1.1 billion CNY worth of mining facilities protecting ~42 billion CNY worth (6.5 Billion USD) of bitcoin market. The ratio is ~3%. If bitcoin market cap continues to grow and we adopt layered development plan, the mining portion may decrease, pushing the ratio go even down to <1%, meaning we are using very small money protecting an huge expensive system. For example, in 2020 if bitcoin market cap is ~100 billion CNY, someone may attempt to spend ~1 billion CNY bribe/manipulate miners to attack the network, thus making a great fortune by shorting bitcoin and destroying the ecosystem. A: 3) Very good question, I have asked that myself. I have asked people if they know if there have been other cases where people destroyed a company or a market to make money by shorting it -- as far as I know, that does not happen. Maybe because it is impossible to take a large short position and remain anonymous, so even if you were successful, you would be arrested for doing whatever you did to destroy the company or market (e.g. blow up a factory to destroy a company, or double-spend fraud to try to destroy Bitcoin). Q: 4) If bitcoin is developed following classic's vision, will the blocks become too big that kill decentralization? A: 4) No, if you look at how many transactions the typical Internet connection can support, and how many transactions even a smart phone can validate per second, we can support many more transactions today with the hardware and network connections we have now. And hardware and network connections are getting faster all the time. Q: 5) In theory, even if we scale bitcoin with just LN and sidechains, the main chain still needs blocks with size over 100M, in order to process the trading volume matching Visa's network. So does core have any on-chain scaling plan other than 2MB? Or Core does not plan to evolve bitcoin into something capable of challenging visa? A: 5) Some of the Core developer talk about a “flexcap” solution to the block size limit, but there is no specific proposal. I think it would be best to eliminate the limit all together. That sounds crazy, but the most successful Internet protocols have no hard upper limits (there is no hard limit to how large a web page may be, for example), and no protocol limit is true to Satoshi’s original design. Q: 6) If (the majority of) hash rate managed to switch to Classic in 2018, will the bitcoin community witness the deployment of LN in two years (~2018)? A: 6) The bottleneck with Lightning Network will be wallet support, not support down at the Bitcoin protocol level. So I don’t think the deployment schedule of LN will be affected much whether Classic is adopted or not. Q: 7) If (majority) hash rate upgraded to blocks with segwit features in 2017 as specified in core's roadmap, would classic propose plans to work on top of that (blocks with segwit)? Or insist developing simplified segwit blocks as described in classic's roadmap? A: 7) Classic will follow majority hash rate. It doesn’t make sense to do anything else. Q: 8) If most hash rate is still on core's side before 2018, will you be disappointed with bitcoin, and announce that bitcoin has failed like what Mike did, and sell all your stashed coins at some acceptable price? A: 8) No-- I have said that I think if the block size limit takes longer to resolve, that is bad for Bitcoin in the short term, but smart engineers will work around whatever road blocks you put in front of them. I see Bitcoin as a long-term project. Q: 9) If we have most hash rate switched to classic's side before 2018, what do you think will be the fate of Blockstream company? A: 9) I think Blockstream might lose some employees, but otherwise I don’t think it will matter much. They are still producing interesting technology that might become a successful business. Q: 10) If we have most hash rate still on core's side before 2018, what do you think will be the fate of Blockstream company? A: 10) I don’t think Blockstream’s fate depends on whether or not BIP109 is adopted. It depends much more on whether or not they find customers willing to pay for the technology that they are developing. Q: 11) If we have most hash rate still on core's side before 2018, what do you think will be the fate of companies that support classic, such as Coinbse, bitpay, and Blockchain.info? A: 11) We have already seen companies like Kraken support alternative currencies (Kraken supports Litecoin and Ether); if there is no on-chain scaling solution accepted by the network, I think we will see more companies “hedging their bets” by supporting other currencies that have a simpler road map for supporting more transactions. Q: 12) If we have most hash rate switched to classic's side before 2018, will that hinder the development of sidechain tech? What will happen to companies like Rockroot(Rootstock?) ? A: 12) No, I think the best use of sidechains is for things that might be too risky for the main network (like Rootstock) or are narrowly focused on a small number of Bitcoin users. I don’t think hash rate supporting Classic will have any effect on that. Q: 13) Between the two versions of bitcoin client, which one is more conducive to mining industry, classic or core? A: 13) I have been working to make Classic better for the mining industry, but right now they are almost identical so it would be dishonest to say one is significantly better than the other.
Q: Gavin, can you describe what was in your mind when you first learned bitcoin? A: I was skeptical that it could actually work! I had to read everything I could about it, and then read the source code before I started to think that maybe it could actually be successful and was not a scam.
“Bitcoin enables certain uses that are very unique. I think it offers possibilities that no other currency allows. For example the ability to spend a coin that only occurs when two separate parties agree to spend the coin; with a third party that couldn’t run away with the coin itself.” – Pieter Wui (66 points, 14 comments)
Square Crypto, the division of the publicly traded payment company that focuses exclusively on bitcoin, has just hired one of the world’s most prolific bitcoin developers.. The co-founder of Chaincode Labs and the co-founder of Blockstream, Matt Corallo, was the author of notable efficiency improvements, such as the implementation of rust rays, which makes it easier for users to build and Square Crypto, the division of the Hard cash App corporation targeted exclusively on bitcoin, just hired a person of the world’s most prolific bitcoin builders. Chaincode Labs alum and Blockstream co-founder Matt Corallo earlier authored notable performance enhancements these as the rust-lightning implementation, which tends to make it simpler for people to establish and interact […] Square Crypto, a division of the mobile payments company of the same name co-founded in 2009 by Jack Dorsey, Twitter’s founder recently announced the hiring of Matt Corallo.. Last June, in fact, the company hired its first person to actively contribute to bitcoin. The first member to join the team was Steve Lee, former Google project manager and active bitcoin contributor. By CCN: Matt Corallo, also known as “The Blue Matt,” has blocked Blockstream CSO Samson Mow on Twitter.Mow, according to Corallo, represents a toxic element of the Bitcoin community. Gavin Andresen once called Mow and Gregory Maxwell “toxic trolls.”. Best decision I’ve ever made. I’m honestly pretty embarrassed to have helped cofound @Blockstream. Early Bitcoin Core developer Matt Corallo started working on Bitcoin in 2011. At that time he still attended high school and lived in Germany near Frankfurt am Main. He was a cofounder of Blockstream before he started working on open source projects for Bitcoin at Chaincode Labs in New York. We discuss many different topics, ranging from his interest in Bitcoin at the beginning, to current
SF Bitcoin Devs Seminar A Special Presentation By Matt Corallo of Blockstream
Matt Corallo, one of the developers of Bitcoin Core, has published an early proposal to improve the Bitcoin network (BIP), by decentralizing Bitcoin mining through the adoption of a new protocol. Ley Fintech México - Cómo afecta a los Exchanges de Bitcoin by El Criptógrafo YouTube. 14:29. ... MCC 2019: Matt Corallo - Mining: No Good, The Bad, and The Ugly This feature is not available right now. Please try again later. Matt Corallo-DevCore Draper University The Bitcoin Foundation. ... Matt is a long-time Bitcoin developer who has been working on pioneering sidechain and Bitcoin extensibility technology since its ... Binance DEX - Decentralised Exchange Preview (Preview 2) by Binance. ... How to Tell If You're a Bitcoin Wizard - Matt Corallo by CoinDesk. 6:21. Tears of a Clown - Episode 1 Bitcoin and Friends ...