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What Happened at the Satoshi Roundtable

266 points by pak 11y ago

tobltobs 11y ago
> There are probably a couple dozen qualified computer scientists working on crypto currency research right now, but there are at least tens of thousands of qualified software engineers in the world who are capable of building bitcoin protocol software. Maybe, but the problem is defining the protocol, not building the client.
NelsonMinar 11y ago
The author is the cofounder and CEO of Coinbase. It seems like an important article.
- havelious 11y ago
  Despite the valuation, Coinbase is just a very tiny of the transactions.
- kang 11y ago
  Coinbase centralizes bitcoin by removing it's intended purpose, peer-to-peer cash, altogether. Naive people who do not understand bitcoin, use services that take away ownership of coins, like coinbase, circle, etc. because they achieve a few advantages over traditional bank accounts - its fast, no downtime & without limits. Banks are moving towards digitalization all over the world and these advantages will no longer remain so in future if banks decide on getting their game sorted. Then people who see value in using services like coinbase will go away because banks can provide all advantages of coinbase even today if they decide to, but much better. However, what they can't provide is decentralization & privacy. But people who use coinbase, by virtue of them using it, do not desire decentralization & privacy. Thus, the bitcoin community should not pay attention to these companies or their users (though they might be large in numbers & even be current majority of users) unless decentralization & privacy is no longer desirable in bitcoin.
  - guelo 11y ago
    Before Coinbase I remember spending days navigating dodgy sites trying to exchange dollars for bitcoin and failing.
    - kang 11y ago
      Coinbase still doesn't solve that without compromising decentralization & privacy, no one does. The premise of centralization is achieving security by compromising liberty. When buying bitcoin you are achieving liberty but compromising on peace of mind by being responsible for your own security.
    - bcook 11y ago
      Localbitcoins has been around for years. Even in the early days, when I used the less reputable sites, I always got the bitcoins I paid for.
    - NelsonMinar 11y ago
      I still have some of the MtG cards I got for Bitcoin, before the $450M fraud unwound the largest Bitcoin exchange operating at the time.
  - natrius 11y ago
    Ignoring the companies that onboard almost all new users and process transactions for most merchants sounds like a bad idea. But whatever, it's clear at this point that Ethereum will be how most people interact with blockchains for the first time. Anyone who wants to ignore the drama should pick up the docs and start building cool stuff with us.
    - kang 11y ago
      Yes majority is not always right. Ethereum has no solutions for this 'drama' of decentralization & governance either.
      - natrius 11y ago
sbuttgereit 11y ago
Reading these things I see two dangers in crypto-currencies. 1) it's difficult to know all of the technical nuance that can have significant impact on value. I bet many merchants and bitcoin holders had no idea of any of this was in the offing. Even with research, non-technical people may not have been able to appreciate the risks from specs and tech discussions. And 2) this really doesn't feel decentralized. Sure there may be no formal organization, but with apparently so few people being able to be closely involved, in almost may as well be. Of course, I'm a more casual observer on the sidelines, and maybe my take is wrong as others with closer observations may tell me. But I never heard some of these things being issues until just now... bitcoin is clearly not for casual users.
- sillysaurus3 11y ago
  I've had a few opportunities to see how terrible the finance world's code is. Whether it's banking or trading, as a rule, the code sucks. One place even had a team dedicated to fixing problems by manually editing the database to correct errors that customers call up and report. And yet, all of that crazy, deranged infrastructure is orders of magnitude safer for consumers. It's unfortunate to watch reality bear this out.
- dontscale 11y ago
  Very good articulation. I thought I was in the know of how bad it was as a techie, but it sounds like a giant prank the way it's unraveling.
- austerity 11y ago
  Oh, come on, let's not pretend this is somehow different from the traditional money. I am not particularly ignorant nor reluctant to learn as far as an average person on the street goes and I have no friggin idea how the mechanisms that govern it really work and cannot appreciate the risks. (Nor really can the experts it seems.) It's the basic reality of human existence that we have to get by without having pretty much any control of the complex world around us. Bitcoin may fail any time and as a casual user you cannot help it and cannot predict it. But you can go buy some drugs with it right now without having to roam shady streets and it's all that really matters.
api 11y ago
If Bitcoin governance is miner voting, doesn't that mean the Chinese now effectively control it? Or at least nearly so?
- kevingadd 11y ago
  This has been strongly implied (if not explicitly stated) in some of the previous articles on this subject. The Chinese have a huge amount of hash power and once the difficulty goes up, I suspect they will have an even larger percentage of it because they have access to extremely cheap electricity. Miners in other countries will have a hard time competing. At present, a big part of the resistance to the 2MB blocksize is that the Core people have convinced Chinese miners that they will be unable to cope with the increased bandwidth requirements, IIRC.
  - guelo 11y ago
    The people that built giant hashing factories using custom silicon and dangerous amounts of electricity are not stupid. This idea that core developers have somehow conned the Chinese is almost insulting.
    - kevingadd 11y ago
      I don't understand how you make the leap from "The Bitcoin Core people convinced them that X is true" to "The Chinese are stupid and got conned". This is a difference of opinion between the Core and Classic teams, and both sides have money at stake. That doesn't have to mean that one side is lying and cheating.
- kang 11y ago
  That is a misleading point by Brian here, miners are not the only stakeholders. Eg: Majority of miners may decide on something but the users reject it through their nodes & miners coins & hardware would be rendered valueless.
witten 11y ago
> It is difficult enough to get two people to agree. Three is harder, and four is even harder. Once a community gets to fifty or hundreds of people, getting everyone to agree is an irrational goal. But this is ok. Mechanisms exist to resolve disagreement amongst large groups of people (like voting). Waiting for everyone to agree is the same as saying that nothing will be done. It's almost like we need some sort of mechanism or formal protocol for reaching consensus among a group of geographically distributed people. A kind of.. distributed consensus protocol.
- kang 11y ago
  Bitcoin does not achieve distributed consensus based on choices but distributed consensus based on randomness. Any miner can win a lottery & then everyone agrees on that state. However, this lottery is not totally random since probability of winning is not propotional to hashrate contributed by a miner(mining invariance). That flaw is already a major concern that has led to mining centralization. Bitcoin is not a voting substitute. No such protocol exists yet because sybil attack is unsolved yet without identity.
  - witten 11y ago
    Depends how you want to reach consensus. For instance, if you're going for one-person-one-vote, then yeah, that's gonna be subject to Sybil attacks without identity. But if instead you settle for plutocracy, then you can just use something like proof of burn to tally votes.
    - TD-Linux 11y ago
      Someone actually created something like that using proof-of-stake (proof of controlling Bitcoins): http://bitcoinocracy.com/ http://bitcoinocracy.com/
      - nullc 11y ago
        And the interesting thing about it is that it generally comes out overwhelmingly opposed to these incompatible system rule changes: http://bitcoinocracy.com/arguments/if-non-core-hard-fork-wins-major-holders-will-sell-btc-driving-price-into-the-ground http://bitcoinocracy.com/arguments/if-non-core-hard-fork-win... (the oppose side of that was up to about 4500 BTC at peak but the party providing those coins has since moved them). It's hard to say what it means; I know a lot of people around Bitcoin Core whom won't use it because of the privacy problems with it-- in particular, people on the Bitcoin XT subreddit were previously threatening to retaliate by dishonoring the funds of people that didn't agree with them. But I do think it's quite interesting that opinions seem to swing 179 degree when you switch between very sockpuppetry vulnerable venues and ones which are not.
kevingadd 11y ago
The continued censorship on the main bitcoin subreddit and the main bitcoin forum is ridiculous. It makes the whole bitcoin community and ecosystem look like a joke, which isn't something anyone involved should want. If the currency can't handle an open debate between adults, how do they expect to weather attacks from serious bad actors (criminal, state, or otherwise)? This article is pretty detailed and does a good job of depicting the events of the roundtable - but as someone who didn't attend, I'd be curious to see how a Bitcoin Core member would choose to describe things. I imagine their perspective would be very different. On the other hand, the history of this whole controversy seems to suggest that the Core crew are as bad at communication as Mr. Armstrong suggests, so I doubt we'll ever see that alternate perspective :( The risk of miners dropping out en masse once the difficulty goes up isn't something I've seen mentioned before, and it seems pretty scary. I would have assumed that difficulty adjustment would happen more often, so if it continues to have such a long interval, that seems like a threat to the long-term health of the currency. I can imagine some other event knocking miners out of the network, like a sudden spike in the cost of electricity for large mining operations - so even if the immediate risk is addressed it seems like this is still a threat going forward. Ultimately, it's really sad that what seems to have happened with Bitcoin is that Satoshi put together some really stellar technology and completely overlooked the human component. Handing the project off to a random group of contributors seems reckless under any circumstances, and then it turned out that the random group of maintainers got along poorly. Now the de-facto control of the currency is in the hands of a small group of people with an obvious profit motive, because they have control over the central bitcoin forum and central subreddit. Hindsight is powerful, but it feels like it should have been obvious that the human risks needed to be addressed if Satoshi was serious about constructing a new currency.
- patio11 11y ago
  completely overlooked the human component That's unfair: Satoshi got the incentives for Bitcoin brilliantly right, in such a fashion such that "Satoshi scheme" should replace "ponzi scheme" because it is better in every conceivable way. Ponzi schemes rely on a central operator who has to do their marketing, and who generally can't tell participants "Hey I'm running a Ponzi scheme so bring all your friends because that's the only way you make money." Satoshi schemes use the Internet to set up self-organizing distributed boiler rooms. (Also, mediocre payment networks, but the payment network is not the interesting part of Bitcoin.) They can be totally upfront with participants on exactly what is happening -- early adopters (arbitrarily large number, arbitrarily geographically distributed) get enriched by convincing later adopters that the things the early adopters got for free are a) in fact actually money and b) going to be worth even more in the future. And this empirically works on intelligent people! Very well, in fact! You can even attach it to a memeplex which suggests that you are doing the later adopters a favor by creating a Satoshi scheme!
omarforgotpwd 11y ago
Wow, so Coinbase wants to throw out the Bitcoin core team. Mutiny!
arm 11y ago
Also, see this: https://medium.com/@octskyward/the-resolution-of-the-bitcoin-experiment-dabb30201f7 https://medium.com/@octskyward/the-resolution-of-the-bitcoin...
patio11 11y ago
Miners make money principally through seignorage, but will eventually have to replace it with transaction fees, as Bitcoin is designed to throttle seigniorage down over time and does so in an abrupt, stairstep fashion (50% at a go). Core (a group of people who presently control the code of the only software that matters on the Bitcoin network) has an argument for miners which goes like this: "We believe the space on the blockchain should be scarce. If space is scarce, people will a) conduct transactions offchain, which is conducive to our interests and b) bid up the price of onchain transactions, which is conducive to your interests. You'll shortly receive a counterproposal from another development group which wants space on the blockchain to be abundant. In this case, the price of transactions will go back to ~0 and, with it, your revenue. Make the right choice." The "economic majority" [+] of Bitcoin has an argument for miners which goes like this: "You presently have been given, literally, a license to make money -- substantial CapEx and OpEx, granted, but making money is what you do every day. If you attempt to make the Bitcoin network unreliable to increase fees generated by it, the tokens you are creating daily become not-money. You should prefer your license to make money to the planned future license to make not-money." The economic majority is hoping that miners are long-term thinking entrepreneurs and not, to pick an example totally randomly, slash-and-grab operators taking advantage of a ponzi scheme. [+] Jargon from the Bitcoin community. The Bitcoin "protocol" allows miners to essentially vote with hashpower. The "economic majority" phrasing is an attempt to recenter the notion of votes away from hashpower, by saying that exchanges/retailers/customers/etc are substantial stakeholders in the network even if they do not control a meaningful number of ASICs. In practice, the economic majority is Coinbase, Bitpay, and "the loosely affiliated ecosystem which turns cash to Bitcoins to drugs to Bitcoins to cash."
- kang 11y ago
  > Core believes the space on the blockchain should be scarce The demand for a free replicated database is virtually infinite. Space on blockchain would not be abundant at any blocksize. > Miners presently have been given, a license to make money This is a license anyone took up on themselves & nobody is doing anyone any favors; everyone(users as well as miners) is looking at their own advantages. Rather this "economic majority" (debatable) desires something that is not-money in future because in short-term greed of the insatiable desire for golden egg that is the blockchain-space they will kill the bitcoin goose by centralizing it even further.
746F7475 11y ago
Just by reading the top two points: 1. Some of them show very poor communication skills or a lack of maturity — this has hurt bitcoin’s ability to bring new protocol developers into the space. 2. They prefer ‘perfect’ solutions to ‘good enough’. And if no perfect solution exists they seem ok with inaction, even if that puts bitcoin at risk. I get this bad feeling that someone (author of the article) is planning a takeover and for all the wrong reasons. I've seen this "yeah they are smart guys, but they are introverts and our business needs to be extravert and agile and adaptive and fast moving and all other buzz words", then you introduce some of thous extrovert super agile people who just want to "bang out a solution, since any change is better than no change". Next thing you notice is that the old core team members are leaving after their protests about future of the product fell on deaf ears and these new guys are just pushing their own agenda/vision. Fast forward few years and just 1-2 or most likely none of the original team members are there anymore and cracks start to appear and these cracks are because the "better than nothing" solutions back in the day are found after all flawed, but now you have a lot of work build on top of rotten foundation and since your team now consists only of short sighted: "just fix it" people they are going to try to fix the problem at the top instead of at it's core "because we can't hold bringing in new features".
- smitherfield 11y ago
  Your comment is perhaps true in a general sense. However, in the case of the Bitcoin core team, we're talking about a group of people who richly deserve to be unseated.
  - frankenmint 11y ago
    this is open source software - you act as if the seat can't be earned with enough commits.
    - smitherfield 11y ago
      That's the thing; the core maintainers won't allow anyone new in. At least nobody who disagrees with their pretty much objectively harmful inaction on raising the transaction limit, a stance they've adopted out of extreme stubbornness combined with glaring financial conflicts of interest.
Malician 11y ago
"Some of them show very poor communication skills or a lack of maturity — this has hurt bitcoin’s ability to bring new protocol developers into the space." "Being high IQ is not enough for a team to succeed. You need to make reasonable trade offs, collaborate, be welcoming, communicate, and be easy to work with." The assumption slipped in here is that the writer is, in fact, reasonable with good communication skills - and that those he is addressing are not. He evades evenhandedly discussing their concerns with his proposal or their proposed solution. That's a mark of trickery, not good, honest communication. I don't know about the team in question, and I don't know who's right on this issue, but I am considering leaving Coinbase after reading this article.
KannO 11y ago
The "Genesis" BTC blockchain seems to have its fate sealed. Elements of a genius ponzi scheme mixed with psychology of the limited edition beanie baby craze and enough allure of "technology is magic" created a "valuable" cyber diamond to send hordes of processing power to "mine" and sell off like hot potato stocks. As we begin seeing more viable altcoin systems with practical improvements, "investors" and processing power will jump ship to the improved cryptocoin protocols. Bitcoin and the bandwaggon of investing in a BTC as a currency which inherently encourages not spending that currency (deflation as a fundamental design) is such a paradoxical mind fuck it's one of the most brilliant pieces of art I could imagine. Inflation is incredibly healthy for an economy because it creates an incentive to invest money into new businesses and real goods and services instead of being buried outside of the system where it does no good. The trick is to prevent hyper inflation - and in BTC or other arbitrarily produced currency systems, there should be mechanisms in place to avoid the abuse of the fabrication of the money tokens.
- derefr 11y ago
  I've never understood this argument. There's no person or market for which BTC is their only currency. It doesn't matter if BTC is inflationary or deflationary, because there's never going to be a time when a nation (or corporation, or really really rich person) is holding a non-negligible amount of its wealth in BTC. Most of their money will be denominated in their local currency, and through that, they will be affected by inflation, and driven to invest. The effect of people holding BTC on a given economy's inflationary tendency would, I'd think, be about the same as the effect that people holding EFT funds or gold or permanent stamps has on inflationary tendency—which is to say, negligible. To rebut this, you could measure the inflationary tendency of a made-up virtual market like that of the "deep web"... but we measure inflation to know about things like affordability and livability and nGDP—things that affect the places people live in, and through those, affect people's lives. People don't move their money into investments because Internet marijuanas are inflating in price; they move money to investments because core CPI is going up, and so it's costing more to buy bread and to pay their utility bills. And, unless a nation adopts BTC as its national currency, BTC's fixed monetary policy will never correlate with any core CPI anywhere.
MikeNomad 11y ago
Interesting article. I am not a bitcoin user for a reason that the article seemingly underscores: Bitcoin lacks stability. This makes me sad, because I would very much like bitcoin to succeed. The more I look into it (and I may not be looking at it clearly), the more bitcoin seems like a digitized version of what we currently have in MeatSpace: An unbacked inflationary currency. I think worrying about scaling in mining activity is a problem in search of an audience. If miners hit the wall, and are not able to put more coins into circulation, there is an opportunity to stabilize coin value by having demand tempered by supply. Also, with bitcoin (or any other digital currency) there is the capacity for psuedo-infinite fractionalization of coins.
BoysenberryPi 11y ago
As an outside perspective, the Bitcoin community is one of the most mysterious clusterfucks I've ever seen. Every time I visit the Bitcoin subreddit or any discussion here that has anything to do with Bitcoin it's all arguing over Core vs the world or "we should be using this not that!" The thing that stops me from getting into Bitcoin is the Bitcoin community itself.
- kang 11y ago
  It is easy to game reddit & make it appear so by using sock-puppet accounts which flood that forum these days. This is internet & sybil attack is unsolved. I don't know what you should do but reddit (or no other forum) represents the bitcoin community fairly.
  - BoysenberryPi 11y ago
    Be it reddit, twitter, hacker news, or people I talk to offline. Everything in the bitcoin community seems to be a dispute about something.
    - kang 11y ago
      Yes, what should be a conversation is now a dispute because of polarization tactics deployed. A lot of money has been spent because a lot of money is at stake. This often happens in a winner-takes-all scenario & that is the key difference between bitcoin & other open-source projects.
      - BoysenberryPi 11y ago
        Is this article another "polarization tactic" because it definitely isn't a sock-puppet account
        kang 11y ago
        This is an article by a polarized person who was easy to polarize because https://news.ycombinator.com/item?id=11228638 https://news.ycombinator.com/item?id=11228638
apatters 11y ago
It seems that these problems fundamentally boil down to there being a very small number of people (the five Bitcoin Core developers) who control the destiny of Bitcoin, and who don't represent users of the currency at large. For a currency which purports to be open, transparent, and free from institutional control, this seems like a huge deficiency. Consider that the Federal Reserve's Board of Governors has seven members, all of whom possess decades of experience in fiscal policy, are nominated by the President, and are confirmed by the Senate. These are experts in the field who are selected by a nominally democratic process. And Bitcoin wants to replace this with five random devs that most of us have never heard of? I'm hardly a fan of the Federal Reserve or the US monetary system. But how exactly is Bitcoin offering a more transparent, open, and democratic currency when it can be hijacked by five people?
- TD-Linux 11y ago
  Well, Bitcoin is even less democratic than that - all of the rules were set by only one person, Satoshi Nakamoto. Bitcoin Core has since added additional constraints (which get voted on by miners), but has only in one case ever relaxed any constraints (a fix to a database bug, which was universally uncontroversial).
- maaku 11y ago
  There are much more than five Bitcoin Core developers.
- maaku 11y ago
  There are much more than five Bitcoin Core developers.
- deleted 11y ago
  [deleted]
- nadaviv 11y ago
  Bitcoin Core is really more of a process and a community than it is any specific group of people. There's no set criteria for "being a Core dev" - it is simply the set of people who discuss on the mailing list, send patches to GitHub and participate in the consensus-building process. In my experience, the influence of community members grows organically based on technical competency, domain expertise, track record and personal trust relations between community members - not on some appeal to authority or an organized hierarchical power structure. The decision making process is based on an IETF-like[0] consensus-driven approach, where a very high threshold of rough consensus within the technical community is required for making changes to the protocol. This hardens the protocol rules and helps protect the development process from hasty decisions, political forces and tyranny of the majority situations - with the price of a slower development process and reduced innovation. Overall, I personally think that stability and resistant to change are good things, and prefer to be wrong on the side of defaulting to no-op when there's no consensus, rather than be wrong on the side of making harmful changes. [0] "We reject kings, presidents and voting. We believe in rough consensus and running code" -- David Clark, The Tao of IETF https://www.ietf.org/tao.html https://www.ietf.org/tao.html
rsi_oww 11y ago
For those not following the drama, there has been an organized attempt for the last 6+ months to take over Bitcoin. A fake "grass roots" campaign was started on Reddit, where numerous sock puppet accounts were used to bombard the /r/bitcoin subreddit with calls to change Bitcoin's "block size limit" to a much larger number. This would allow more transactions per second, at the cost of hurting Bitcoin's P2P decentralization (the main thing it is good at). These posters claimed there was a dire, urgent need to do this immediately, and used spam transaction attacks on the network to make it look necessary. They also used downvoting/upvoting scripts to push their posts to the top, and to censor the developer's responses (reddit hides posts with a -5 score; any post by developers instantly would be downvoted to that level). They harassed the developers with constant personal attacks, to the point that it became impossible for them to engage the community. They also flooded the development mailing list, and many developers unsubscribed. As for the "block size increase", an absurd number was picked (20x increase), and knowing that the developers would not go along with it, the "solution" proposed was a fork of the both the software and the network itself called "Bitcoin XT". All but 2 of the 90+ Bitcoin developers thought this was a terrible idea, especially since they have come up with much safer and better solutions to achieve the same goal (scaling up the transactions per second). Yet when this fork attempt failed to gain any support, a better funded, even more aggressive second attempt (oddly named "Bitcoin Classic") started being promoted. It is being pushed by the CEO of Coinbase (the author of this blog post) and backed by some of the other bitcoin exchange's CEOs. I think the creator of bittorrent, Bram Cohen, sums up what developers and the larger technical community are thinking about these takeover attempts- https://twitter.com/bramcohen/status/697705876337995776 https://twitter.com/bramcohen/status/697705876337995776
- gohrt 11y ago
  This story is a beautiful case study of how a pure libertarian democratic community gets what it deserves, no better and no worse.
  - maaku 11y ago
    Bitcoin is not libertarian.
Vozze 11y ago
The problem Bitcoin is facing is not so much the technical question of what blocksize would be best. It's a war about who is in the drivers seat. The current developers of Core want to turn Bitcoin into what they call a "settlement layer" and end its original function as a payment system. Then they want to build new services on top of this "settlement layer". Most (all?) of them are organized in a company called "Blockstream" that received $73 millions in funding to build these new layers. This turns away the original crowd of hackers who liked Bitcoin in the early days. The hackers and users want to keep the original vision of a "Peer-to-Peer Electronic Cash System" as outlined in the original Bitcoin Paper: https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf Also check the discussion about this on reddit: https://www.reddit.com/r/technology/comments/48zggz/a_behind_the_scenes_look_at_how_bitcoin_core/ https://www.reddit.com/r/technology/comments/48zggz/a_behind...
- nadaviv 11y ago
  The Bitcoin development community acknowledges that bitcoin cannot get to VISA-level scale using on-chain transactions, because that would destroy the decentralized nature of the currency. It's not a matter of opinion, its a matter of the technical limitations of the system as being understood by ~all technical experts. Building second-layer solutions such as LN is the only sensible way to grow Bitcoin in the long-term. It'll allow tx capacity to grow by several orders of magnitude with minimal load on the Bitcoin network. > Most (all?) of them are organized in a company called "Blockstream" That's simply not true. Out of tens of developers who contribute on an ongoing basis and hundreds who contributed during the lifetime of the project, there are about 6-7 developers associated with Blockstream. Out of the 6 maintainers with commit access on GitHub, only a single developer is associated with Blockstream. It's also worth mentioning that Blockstream was founded by several prominent Bitcoin developers that have been around for years and have a very strong track record. It's not some company that popped out of nowhere and started hiring Core devs. One of Blockstream's primary goals was to fund development on low-level Bitcoin infrastructure code, which is blessed in my view. Here's what one of their investors, Reid Hoffman (co-founder at LinkedIn), has to say about that: > And that’s why I’m participating in this first-round financing as an individual investor, and why Blockstream itself will function similarly to the Mozilla Corporation. Here, our first interest is maintaining and enhancing Bitcoin’s strong open ecosystem. And the structure we’ve chosen will give us the freedom and flexibility to prioritize public good over returns to investors. https://www.linkedin.com/pulse/20141117154558-1213-the-future-of-the-bitcoin-ecosystem-and-trustless-trust-why-i-invested-in-blockstream https://www.linkedin.com/pulse/20141117154558-1213-the-futur...
kisstheblade 11y ago
Serious question; where does all the money come from to run these operations (eg. the miners)? I mean I haven't seen any legitimate use of bitcoin advertised for consumers. So who is using bitcoins for transactions? Is this like with torrenting where people keep telling "there are legitimate uses for it like downloading linux iso:s" but in reality 99% of the traffic is illegal. I'm thinking that bitcoin is used mainly for money transfer for illegal stuff (drugs etc.), because I haven't read or heard about any legitimate large scale use of it (exept maybe speculation, so does the money for this come from somekind of ponzi scheme then? Or maybe investors really believe that some day this will be a large legal enterprise?)
- yjgyhj 11y ago
  Someone who isn't me is using bitcoin when moving abroad - last few years he's been living in different countries in Asia & Europe. His ATM is localbitcoins.com. Has been nice to meet nerds from all over the world, and way way cheaper than the crazy fees I pay for ATM withdrawals outside of his banking country
cant_kant 11y ago
Did Craig Wright come to the Satoshi Roundtable ?
fsiefken 11y ago
Some other takes on Bitcoin Core: * Double billing is not healthy competition https://medium.com/@bramcohen/double-billing-is-not-healthy-competition-b698c345b11e https://medium.com/@bramcohen/double-billing-is-not-healthy-... * Lesser known reasons to keep blocks small in the words of Bitcoin Core developers https://medium.com/@elliotolds/lesser-known-reasons-to-keep-blocks-small-in-the-words-of-bitcoin-core-developers-44861968185e https://medium.com/@elliotolds/lesser-known-reasons-to-keep-... * The state of the Bitcoin union is strong https://medium.com/@muneeb/the-state-of-the-bitcoin-union-is-strong-3ca9a5f24a7 https://medium.com/@muneeb/the-state-of-the-bitcoin-union-is...
- maaku 11y ago
  Thanks, but seeing as I'm quoted in those articles I think I got it sorted out :)
tobltobs 11y ago
Imagine the internet had been developed by guys like this one. Pushing a agenda instead of looking for best possible solutions. The internet would like teletext/BTX and cost at least an 1$ per hour.
CydeWeys 11y ago
Why should I trust what this guy is saying when he has such egregious misunderstandings about Bitcoin? I expected better from the CEO of Coinbase. The worst one was this: > The next block reward halving is coming up in July. Let’s say that miners on average are able to mine a coin for $250 (I don’t know the exact number, so this is a guess). After the halving in July their cost to mine a coin will double to $500. If the bitcoin price stays around $425, it will be unprofitable for a number of miners to continue mining. You can't just guess about these things! You have to do the math! There are two components to mining costs: The sunk costs (the actual price of the mining equipment), and the oncoming costs (electricity). Once you've already paid the sunk costs, and the miners have, tautologically so, to get to the current network hashrate, you won't turn your miners off unless their yield falls below the cost of electricity. I've done some calculations and, with the current most-efficient generation of ASIC Bitcoin miners, you generate around $0.25 per kWh. So with the halvening, you'll be generating around $0.12 per kWh. But guess what most miners are currently paying for electricity? Around $0.02 per kWh (yes, they're locating their mining operations like Google locates data centers). So while some inefficient miners on the fringes may turn on, the halvening isn't going to come close to causing the majority of miners to become unprofitable. So you're unlikely to see a big drop in hashrate. The most ridiculous part of the catastrophist argument is that we already had a halvening from 50 BTC to 25 BTC, and nothing changed! The hashrate didn't go down appreciably and block finding time didn't suddenly jump up. There was nothing different about that time than now; both are governed by the simple economics of mining profitability, which tends to stay at around the same level above cost -- that is to say there are economic self-balancing forces at work that cause miners to enter/leave the system to keep the hashrate adjusted relative to the mining returns over the long term. So anyone proposing a catastrophe over this halvening has an uphill battle to climb of explaining why it's different than the last one when nothing happened, and that hasn't been done so far.
- ajross 11y ago
  Not being an expert and just trusting your numbers: you're saying that right now the spread between power cost and the best-situated miners using the "most efficient" hardware is a factor of 6. The halvening would make that 3. That doesn't sound like much margin to me. What about all the people still using GPUs or residential power? They certainly seem to be a decent chunk of the mining community, but maybe that's wrong. What if we see another 50% crash in BTC value? That too would take us right down to the edge of failure, right? Like I said, I'm not a miner, own no coins, and am just watching this mess out of macabre voyeurism really. But the concerns certainly sound legitimate to me, and what you posted honestly seems like apologism.
simonebrunozzi 11y ago
Posted 4 hours before this one, here: https://news.ycombinator.com/item?id=11227598 https://news.ycombinator.com/item?id=11227598 Wondering why one didn't pick any interest, and the other picked 160+ comments.
- pak 11y ago
  Interesting. I had no idea you submitted that one. HN seems to be increasingly stochastic these days. When this post fell off the new page last night, I thought it was doomed. Then, it suddenly revived this morning. I did trim the strange hash off of the medium.com URL, because I thought it was a tracker from when I got referred. Perhaps that is why more people eventually found this submission. The de-duping logic on HN is pretty bad.
aminorex 11y ago
Massively bullish on XMR due to the short squeezing.

266 points by pak 11y ago

> There are probably a couple dozen qualified computer scientists working on crypto currency research right now, but there are at least tens of thousands of qualified software engineers in the world who are capable of building bitcoin protocol software. Maybe, but the problem is defining the protocol, not building the client.

NelsonMinar 11y ago

The author is the cofounder and CEO of Coinbase. It seems like an important article.

havelious 11y ago
Despite the valuation, Coinbase is just a very tiny of the transactions.
kang 11y ago
Coinbase centralizes bitcoin by removing it's intended purpose, peer-to-peer cash, altogether. Naive people who do not understand bitcoin, use services that take away ownership of coins, like coinbase, circle, etc. because they achieve a few advantages over traditional bank accounts - its fast, no downtime & without limits. Banks are moving towards digitalization all over the world and these advantages will no longer remain so in future if banks decide on getting their game sorted. Then people who see value in using services like coinbase will go away because banks can provide all advantages of coinbase even today if they decide to, but much better. However, what they can't provide is decentralization & privacy. But people who use coinbase, by virtue of them using it, do not desire decentralization & privacy. Thus, the bitcoin community should not pay attention to these companies or their users (though they might be large in numbers & even be current majority of users) unless decentralization & privacy is no longer desirable in bitcoin.
- guelo 11y ago
  Before Coinbase I remember spending days navigating dodgy sites trying to exchange dollars for bitcoin and failing.
  - kang 11y ago
    Coinbase still doesn't solve that without compromising decentralization & privacy, no one does. The premise of centralization is achieving security by compromising liberty. When buying bitcoin you are achieving liberty but compromising on peace of mind by being responsible for your own security.
  - bcook 11y ago
    Localbitcoins has been around for years. Even in the early days, when I used the less reputable sites, I always got the bitcoins I paid for.
  - NelsonMinar 11y ago
    I still have some of the MtG cards I got for Bitcoin, before the $450M fraud unwound the largest Bitcoin exchange operating at the time.
- natrius 11y ago
  Ignoring the companies that onboard almost all new users and process transactions for most merchants sounds like a bad idea. But whatever, it's clear at this point that Ethereum will be how most people interact with blockchains for the first time. Anyone who wants to ignore the drama should pick up the docs and start building cool stuff with us.
  - kang 11y ago
    Yes majority is not always right. Ethereum has no solutions for this 'drama' of decentralization & governance either.
    - natrius 11y ago

sbuttgereit 11y ago

Reading these things I see two dangers in crypto-currencies. 1) it's difficult to know all of the technical nuance that can have significant impact on value. I bet many merchants and bitcoin holders had no idea of any of this was in the offing. Even with research, non-technical people may not have been able to appreciate the risks from specs and tech discussions. And 2) this really doesn't feel decentralized. Sure there may be no formal organization, but with apparently so few people being able to be closely involved, in almost may as well be. Of course, I'm a more casual observer on the sidelines, and maybe my take is wrong as others with closer observations may tell me. But I never heard some of these things being issues until just now... bitcoin is clearly not for casual users.

sillysaurus3 11y ago
I've had a few opportunities to see how terrible the finance world's code is. Whether it's banking or trading, as a rule, the code sucks. One place even had a team dedicated to fixing problems by manually editing the database to correct errors that customers call up and report. And yet, all of that crazy, deranged infrastructure is orders of magnitude safer for consumers. It's unfortunate to watch reality bear this out.
dontscale 11y ago
Very good articulation. I thought I was in the know of how bad it was as a techie, but it sounds like a giant prank the way it's unraveling.
austerity 11y ago
Oh, come on, let's not pretend this is somehow different from the traditional money. I am not particularly ignorant nor reluctant to learn as far as an average person on the street goes and I have no friggin idea how the mechanisms that govern it really work and cannot appreciate the risks. (Nor really can the experts it seems.) It's the basic reality of human existence that we have to get by without having pretty much any control of the complex world around us. Bitcoin may fail any time and as a casual user you cannot help it and cannot predict it. But you can go buy some drugs with it right now without having to roam shady streets and it's all that really matters.

api 11y ago

If Bitcoin governance is miner voting, doesn't that mean the Chinese now effectively control it? Or at least nearly so?

kevingadd 11y ago
This has been strongly implied (if not explicitly stated) in some of the previous articles on this subject. The Chinese have a huge amount of hash power and once the difficulty goes up, I suspect they will have an even larger percentage of it because they have access to extremely cheap electricity. Miners in other countries will have a hard time competing. At present, a big part of the resistance to the 2MB blocksize is that the Core people have convinced Chinese miners that they will be unable to cope with the increased bandwidth requirements, IIRC.
- guelo 11y ago
  The people that built giant hashing factories using custom silicon and dangerous amounts of electricity are not stupid. This idea that core developers have somehow conned the Chinese is almost insulting.
  - kevingadd 11y ago
    I don't understand how you make the leap from "The Bitcoin Core people convinced them that X is true" to "The Chinese are stupid and got conned". This is a difference of opinion between the Core and Classic teams, and both sides have money at stake. That doesn't have to mean that one side is lying and cheating.
kang 11y ago
That is a misleading point by Brian here, miners are not the only stakeholders. Eg: Majority of miners may decide on something but the users reject it through their nodes & miners coins & hardware would be rendered valueless.

witten 11y ago

> It is difficult enough to get two people to agree. Three is harder, and four is even harder. Once a community gets to fifty or hundreds of people, getting everyone to agree is an irrational goal. But this is ok. Mechanisms exist to resolve disagreement amongst large groups of people (like voting). Waiting for everyone to agree is the same as saying that nothing will be done. It's almost like we need some sort of mechanism or formal protocol for reaching consensus among a group of geographically distributed people. A kind of.. distributed consensus protocol.

kang 11y ago
Bitcoin does not achieve distributed consensus based on choices but distributed consensus based on randomness. Any miner can win a lottery & then everyone agrees on that state. However, this lottery is not totally random since probability of winning is not propotional to hashrate contributed by a miner(mining invariance). That flaw is already a major concern that has led to mining centralization. Bitcoin is not a voting substitute. No such protocol exists yet because sybil attack is unsolved yet without identity.
- witten 11y ago
  Depends how you want to reach consensus. For instance, if you're going for one-person-one-vote, then yeah, that's gonna be subject to Sybil attacks without identity. But if instead you settle for plutocracy, then you can just use something like proof of burn to tally votes.
  - TD-Linux 11y ago
    Someone actually created something like that using proof-of-stake (proof of controlling Bitcoins): http://bitcoinocracy.com/ http://bitcoinocracy.com/
    - nullc 11y ago
      And the interesting thing about it is that it generally comes out overwhelmingly opposed to these incompatible system rule changes: http://bitcoinocracy.com/arguments/if-non-core-hard-fork-wins-major-holders-will-sell-btc-driving-price-into-the-ground http://bitcoinocracy.com/arguments/if-non-core-hard-fork-win... (the oppose side of that was up to about 4500 BTC at peak but the party providing those coins has since moved them). It's hard to say what it means; I know a lot of people around Bitcoin Core whom won't use it because of the privacy problems with it-- in particular, people on the Bitcoin XT subreddit were previously threatening to retaliate by dishonoring the funds of people that didn't agree with them. But I do think it's quite interesting that opinions seem to swing 179 degree when you switch between very sockpuppetry vulnerable venues and ones which are not.

kevingadd 11y ago

The continued censorship on the main bitcoin subreddit and the main bitcoin forum is ridiculous. It makes the whole bitcoin community and ecosystem look like a joke, which isn't something anyone involved should want. If the currency can't handle an open debate between adults, how do they expect to weather attacks from serious bad actors (criminal, state, or otherwise)? This article is pretty detailed and does a good job of depicting the events of the roundtable - but as someone who didn't attend, I'd be curious to see how a Bitcoin Core member would choose to describe things. I imagine their perspective would be very different. On the other hand, the history of this whole controversy seems to suggest that the Core crew are as bad at communication as Mr. Armstrong suggests, so I doubt we'll ever see that alternate perspective :( The risk of miners dropping out en masse once the difficulty goes up isn't something I've seen mentioned before, and it seems pretty scary. I would have assumed that difficulty adjustment would happen more often, so if it continues to have such a long interval, that seems like a threat to the long-term health of the currency. I can imagine some other event knocking miners out of the network, like a sudden spike in the cost of electricity for large mining operations - so even if the immediate risk is addressed it seems like this is still a threat going forward. Ultimately, it's really sad that what seems to have happened with Bitcoin is that Satoshi put together some really stellar technology and completely overlooked the human component. Handing the project off to a random group of contributors seems reckless under any circumstances, and then it turned out that the random group of maintainers got along poorly. Now the de-facto control of the currency is in the hands of a small group of people with an obvious profit motive, because they have control over the central bitcoin forum and central subreddit. Hindsight is powerful, but it feels like it should have been obvious that the human risks needed to be addressed if Satoshi was serious about constructing a new currency.

patio11 11y ago
completely overlooked the human component That's unfair: Satoshi got the incentives for Bitcoin brilliantly right, in such a fashion such that "Satoshi scheme" should replace "ponzi scheme" because it is better in every conceivable way. Ponzi schemes rely on a central operator who has to do their marketing, and who generally can't tell participants "Hey I'm running a Ponzi scheme so bring all your friends because that's the only way you make money." Satoshi schemes use the Internet to set up self-organizing distributed boiler rooms. (Also, mediocre payment networks, but the payment network is not the interesting part of Bitcoin.) They can be totally upfront with participants on exactly what is happening -- early adopters (arbitrarily large number, arbitrarily geographically distributed) get enriched by convincing later adopters that the things the early adopters got for free are a) in fact actually money and b) going to be worth even more in the future. And this empirically works on intelligent people! Very well, in fact! You can even attach it to a memeplex which suggests that you are doing the later adopters a favor by creating a Satoshi scheme!

omarforgotpwd 11y ago

Wow, so Coinbase wants to throw out the Bitcoin core team. Mutiny!

arm 11y ago

Also, see this: https://medium.com/@octskyward/the-resolution-of-the-bitcoin-experiment-dabb30201f7 https://medium.com/@octskyward/the-resolution-of-the-bitcoin...

patio11 11y ago

Miners make money principally through seignorage, but will eventually have to replace it with transaction fees, as Bitcoin is designed to throttle seigniorage down over time and does so in an abrupt, stairstep fashion (50% at a go). Core (a group of people who presently control the code of the only software that matters on the Bitcoin network) has an argument for miners which goes like this: "We believe the space on the blockchain should be scarce. If space is scarce, people will a) conduct transactions offchain, which is conducive to our interests and b) bid up the price of onchain transactions, which is conducive to your interests. You'll shortly receive a counterproposal from another development group which wants space on the blockchain to be abundant. In this case, the price of transactions will go back to ~0 and, with it, your revenue. Make the right choice." The "economic majority" [+] of Bitcoin has an argument for miners which goes like this: "You presently have been given, literally, a license to make money -- substantial CapEx and OpEx, granted, but making money is what you do every day. If you attempt to make the Bitcoin network unreliable to increase fees generated by it, the tokens you are creating daily become not-money. You should prefer your license to make money to the planned future license to make not-money." The economic majority is hoping that miners are long-term thinking entrepreneurs and not, to pick an example totally randomly, slash-and-grab operators taking advantage of a ponzi scheme. [+] Jargon from the Bitcoin community. The Bitcoin "protocol" allows miners to essentially vote with hashpower. The "economic majority" phrasing is an attempt to recenter the notion of votes away from hashpower, by saying that exchanges/retailers/customers/etc are substantial stakeholders in the network even if they do not control a meaningful number of ASICs. In practice, the economic majority is Coinbase, Bitpay, and "the loosely affiliated ecosystem which turns cash to Bitcoins to drugs to Bitcoins to cash."

kang 11y ago
> Core believes the space on the blockchain should be scarce The demand for a free replicated database is virtually infinite. Space on blockchain would not be abundant at any blocksize. > Miners presently have been given, a license to make money This is a license anyone took up on themselves & nobody is doing anyone any favors; everyone(users as well as miners) is looking at their own advantages. Rather this "economic majority" (debatable) desires something that is not-money in future because in short-term greed of the insatiable desire for golden egg that is the blockchain-space they will kill the bitcoin goose by centralizing it even further.

746F7475 11y ago

Just by reading the top two points: 1. Some of them show very poor communication skills or a lack of maturity — this has hurt bitcoin’s ability to bring new protocol developers into the space. 2. They prefer ‘perfect’ solutions to ‘good enough’. And if no perfect solution exists they seem ok with inaction, even if that puts bitcoin at risk. I get this bad feeling that someone (author of the article) is planning a takeover and for all the wrong reasons. I've seen this "yeah they are smart guys, but they are introverts and our business needs to be extravert and agile and adaptive and fast moving and all other buzz words", then you introduce some of thous extrovert super agile people who just want to "bang out a solution, since any change is better than no change". Next thing you notice is that the old core team members are leaving after their protests about future of the product fell on deaf ears and these new guys are just pushing their own agenda/vision. Fast forward few years and just 1-2 or most likely none of the original team members are there anymore and cracks start to appear and these cracks are because the "better than nothing" solutions back in the day are found after all flawed, but now you have a lot of work build on top of rotten foundation and since your team now consists only of short sighted: "just fix it" people they are going to try to fix the problem at the top instead of at it's core "because we can't hold bringing in new features".

smitherfield 11y ago
Your comment is perhaps true in a general sense. However, in the case of the Bitcoin core team, we're talking about a group of people who richly deserve to be unseated.
- frankenmint 11y ago
  this is open source software - you act as if the seat can't be earned with enough commits.
  - smitherfield 11y ago
    That's the thing; the core maintainers won't allow anyone new in. At least nobody who disagrees with their pretty much objectively harmful inaction on raising the transaction limit, a stance they've adopted out of extreme stubbornness combined with glaring financial conflicts of interest.

Malician 11y ago

"Some of them show very poor communication skills or a lack of maturity — this has hurt bitcoin’s ability to bring new protocol developers into the space." "Being high IQ is not enough for a team to succeed. You need to make reasonable trade offs, collaborate, be welcoming, communicate, and be easy to work with." The assumption slipped in here is that the writer is, in fact, reasonable with good communication skills - and that those he is addressing are not. He evades evenhandedly discussing their concerns with his proposal or their proposed solution. That's a mark of trickery, not good, honest communication. I don't know about the team in question, and I don't know who's right on this issue, but I am considering leaving Coinbase after reading this article.

KannO 11y ago

The "Genesis" BTC blockchain seems to have its fate sealed. Elements of a genius ponzi scheme mixed with psychology of the limited edition beanie baby craze and enough allure of "technology is magic" created a "valuable" cyber diamond to send hordes of processing power to "mine" and sell off like hot potato stocks. As we begin seeing more viable altcoin systems with practical improvements, "investors" and processing power will jump ship to the improved cryptocoin protocols. Bitcoin and the bandwaggon of investing in a BTC as a currency which inherently encourages not spending that currency (deflation as a fundamental design) is such a paradoxical mind fuck it's one of the most brilliant pieces of art I could imagine. Inflation is incredibly healthy for an economy because it creates an incentive to invest money into new businesses and real goods and services instead of being buried outside of the system where it does no good. The trick is to prevent hyper inflation - and in BTC or other arbitrarily produced currency systems, there should be mechanisms in place to avoid the abuse of the fabrication of the money tokens.

derefr 11y ago
I've never understood this argument. There's no person or market for which BTC is their only currency. It doesn't matter if BTC is inflationary or deflationary, because there's never going to be a time when a nation (or corporation, or really really rich person) is holding a non-negligible amount of its wealth in BTC. Most of their money will be denominated in their local currency, and through that, they will be affected by inflation, and driven to invest. The effect of people holding BTC on a given economy's inflationary tendency would, I'd think, be about the same as the effect that people holding EFT funds or gold or permanent stamps has on inflationary tendency—which is to say, negligible. To rebut this, you could measure the inflationary tendency of a made-up virtual market like that of the "deep web"... but we measure inflation to know about things like affordability and livability and nGDP—things that affect the places people live in, and through those, affect people's lives. People don't move their money into investments because Internet marijuanas are inflating in price; they move money to investments because core CPI is going up, and so it's costing more to buy bread and to pay their utility bills. And, unless a nation adopts BTC as its national currency, BTC's fixed monetary policy will never correlate with any core CPI anywhere.

MikeNomad 11y ago

Interesting article. I am not a bitcoin user for a reason that the article seemingly underscores: Bitcoin lacks stability. This makes me sad, because I would very much like bitcoin to succeed. The more I look into it (and I may not be looking at it clearly), the more bitcoin seems like a digitized version of what we currently have in MeatSpace: An unbacked inflationary currency. I think worrying about scaling in mining activity is a problem in search of an audience. If miners hit the wall, and are not able to put more coins into circulation, there is an opportunity to stabilize coin value by having demand tempered by supply. Also, with bitcoin (or any other digital currency) there is the capacity for psuedo-infinite fractionalization of coins.

BoysenberryPi 11y ago

As an outside perspective, the Bitcoin community is one of the most mysterious clusterfucks I've ever seen. Every time I visit the Bitcoin subreddit or any discussion here that has anything to do with Bitcoin it's all arguing over Core vs the world or "we should be using this not that!" The thing that stops me from getting into Bitcoin is the Bitcoin community itself.

kang 11y ago
It is easy to game reddit & make it appear so by using sock-puppet accounts which flood that forum these days. This is internet & sybil attack is unsolved. I don't know what you should do but reddit (or no other forum) represents the bitcoin community fairly.
- BoysenberryPi 11y ago
  Be it reddit, twitter, hacker news, or people I talk to offline. Everything in the bitcoin community seems to be a dispute about something.
  - kang 11y ago
    Yes, what should be a conversation is now a dispute because of polarization tactics deployed. A lot of money has been spent because a lot of money is at stake. This often happens in a winner-takes-all scenario & that is the key difference between bitcoin & other open-source projects.
    - BoysenberryPi 11y ago
      Is this article another "polarization tactic" because it definitely isn't a sock-puppet account
      - kang 11y ago
        This is an article by a polarized person who was easy to polarize because https://news.ycombinator.com/item?id=11228638 https://news.ycombinator.com/item?id=11228638

apatters 11y ago

It seems that these problems fundamentally boil down to there being a very small number of people (the five Bitcoin Core developers) who control the destiny of Bitcoin, and who don't represent users of the currency at large. For a currency which purports to be open, transparent, and free from institutional control, this seems like a huge deficiency. Consider that the Federal Reserve's Board of Governors has seven members, all of whom possess decades of experience in fiscal policy, are nominated by the President, and are confirmed by the Senate. These are experts in the field who are selected by a nominally democratic process. And Bitcoin wants to replace this with five random devs that most of us have never heard of? I'm hardly a fan of the Federal Reserve or the US monetary system. But how exactly is Bitcoin offering a more transparent, open, and democratic currency when it can be hijacked by five people?

TD-Linux 11y ago
Well, Bitcoin is even less democratic than that - all of the rules were set by only one person, Satoshi Nakamoto. Bitcoin Core has since added additional constraints (which get voted on by miners), but has only in one case ever relaxed any constraints (a fix to a database bug, which was universally uncontroversial).
maaku 11y ago
There are much more than five Bitcoin Core developers.
maaku 11y ago
There are much more than five Bitcoin Core developers.
deleted 11y ago
[deleted]
nadaviv 11y ago
Bitcoin Core is really more of a process and a community than it is any specific group of people. There's no set criteria for "being a Core dev" - it is simply the set of people who discuss on the mailing list, send patches to GitHub and participate in the consensus-building process. In my experience, the influence of community members grows organically based on technical competency, domain expertise, track record and personal trust relations between community members - not on some appeal to authority or an organized hierarchical power structure. The decision making process is based on an IETF-like[0] consensus-driven approach, where a very high threshold of rough consensus within the technical community is required for making changes to the protocol. This hardens the protocol rules and helps protect the development process from hasty decisions, political forces and tyranny of the majority situations - with the price of a slower development process and reduced innovation. Overall, I personally think that stability and resistant to change are good things, and prefer to be wrong on the side of defaulting to no-op when there's no consensus, rather than be wrong on the side of making harmful changes. [0] "We reject kings, presidents and voting. We believe in rough consensus and running code" -- David Clark, The Tao of IETF https://www.ietf.org/tao.html https://www.ietf.org/tao.html

rsi_oww 11y ago

For those not following the drama, there has been an organized attempt for the last 6+ months to take over Bitcoin. A fake "grass roots" campaign was started on Reddit, where numerous sock puppet accounts were used to bombard the /r/bitcoin subreddit with calls to change Bitcoin's "block size limit" to a much larger number. This would allow more transactions per second, at the cost of hurting Bitcoin's P2P decentralization (the main thing it is good at). These posters claimed there was a dire, urgent need to do this immediately, and used spam transaction attacks on the network to make it look necessary. They also used downvoting/upvoting scripts to push their posts to the top, and to censor the developer's responses (reddit hides posts with a -5 score; any post by developers instantly would be downvoted to that level). They harassed the developers with constant personal attacks, to the point that it became impossible for them to engage the community. They also flooded the development mailing list, and many developers unsubscribed. As for the "block size increase", an absurd number was picked (20x increase), and knowing that the developers would not go along with it, the "solution" proposed was a fork of the both the software and the network itself called "Bitcoin XT". All but 2 of the 90+ Bitcoin developers thought this was a terrible idea, especially since they have come up with much safer and better solutions to achieve the same goal (scaling up the transactions per second). Yet when this fork attempt failed to gain any support, a better funded, even more aggressive second attempt (oddly named "Bitcoin Classic") started being promoted. It is being pushed by the CEO of Coinbase (the author of this blog post) and backed by some of the other bitcoin exchange's CEOs. I think the creator of bittorrent, Bram Cohen, sums up what developers and the larger technical community are thinking about these takeover attempts- https://twitter.com/bramcohen/status/697705876337995776 https://twitter.com/bramcohen/status/697705876337995776

gohrt 11y ago
This story is a beautiful case study of how a pure libertarian democratic community gets what it deserves, no better and no worse.
- maaku 11y ago
  Bitcoin is not libertarian.

Vozze 11y ago

The problem Bitcoin is facing is not so much the technical question of what blocksize would be best. It's a war about who is in the drivers seat. The current developers of Core want to turn Bitcoin into what they call a "settlement layer" and end its original function as a payment system. Then they want to build new services on top of this "settlement layer". Most (all?) of them are organized in a company called "Blockstream" that received $73 millions in funding to build these new layers. This turns away the original crowd of hackers who liked Bitcoin in the early days. The hackers and users want to keep the original vision of a "Peer-to-Peer Electronic Cash System" as outlined in the original Bitcoin Paper: https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf Also check the discussion about this on reddit: https://www.reddit.com/r/technology/comments/48zggz/a_behind_the_scenes_look_at_how_bitcoin_core/ https://www.reddit.com/r/technology/comments/48zggz/a_behind...

nadaviv 11y ago
The Bitcoin development community acknowledges that bitcoin cannot get to VISA-level scale using on-chain transactions, because that would destroy the decentralized nature of the currency. It's not a matter of opinion, its a matter of the technical limitations of the system as being understood by ~all technical experts. Building second-layer solutions such as LN is the only sensible way to grow Bitcoin in the long-term. It'll allow tx capacity to grow by several orders of magnitude with minimal load on the Bitcoin network. > Most (all?) of them are organized in a company called "Blockstream" That's simply not true. Out of tens of developers who contribute on an ongoing basis and hundreds who contributed during the lifetime of the project, there are about 6-7 developers associated with Blockstream. Out of the 6 maintainers with commit access on GitHub, only a single developer is associated with Blockstream. It's also worth mentioning that Blockstream was founded by several prominent Bitcoin developers that have been around for years and have a very strong track record. It's not some company that popped out of nowhere and started hiring Core devs. One of Blockstream's primary goals was to fund development on low-level Bitcoin infrastructure code, which is blessed in my view. Here's what one of their investors, Reid Hoffman (co-founder at LinkedIn), has to say about that: > And that’s why I’m participating in this first-round financing as an individual investor, and why Blockstream itself will function similarly to the Mozilla Corporation. Here, our first interest is maintaining and enhancing Bitcoin’s strong open ecosystem. And the structure we’ve chosen will give us the freedom and flexibility to prioritize public good over returns to investors. https://www.linkedin.com/pulse/20141117154558-1213-the-future-of-the-bitcoin-ecosystem-and-trustless-trust-why-i-invested-in-blockstream https://www.linkedin.com/pulse/20141117154558-1213-the-futur...

kisstheblade 11y ago

Serious question; where does all the money come from to run these operations (eg. the miners)? I mean I haven't seen any legitimate use of bitcoin advertised for consumers. So who is using bitcoins for transactions? Is this like with torrenting where people keep telling "there are legitimate uses for it like downloading linux iso:s" but in reality 99% of the traffic is illegal. I'm thinking that bitcoin is used mainly for money transfer for illegal stuff (drugs etc.), because I haven't read or heard about any legitimate large scale use of it (exept maybe speculation, so does the money for this come from somekind of ponzi scheme then? Or maybe investors really believe that some day this will be a large legal enterprise?)

yjgyhj 11y ago
Someone who isn't me is using bitcoin when moving abroad - last few years he's been living in different countries in Asia & Europe. His ATM is localbitcoins.com. Has been nice to meet nerds from all over the world, and way way cheaper than the crazy fees I pay for ATM withdrawals outside of his banking country

cant_kant 11y ago

Did Craig Wright come to the Satoshi Roundtable ?

fsiefken 11y ago

Some other takes on Bitcoin Core: * Double billing is not healthy competition https://medium.com/@bramcohen/double-billing-is-not-healthy-competition-b698c345b11e https://medium.com/@bramcohen/double-billing-is-not-healthy-... * Lesser known reasons to keep blocks small in the words of Bitcoin Core developers https://medium.com/@elliotolds/lesser-known-reasons-to-keep-blocks-small-in-the-words-of-bitcoin-core-developers-44861968185e https://medium.com/@elliotolds/lesser-known-reasons-to-keep-... * The state of the Bitcoin union is strong https://medium.com/@muneeb/the-state-of-the-bitcoin-union-is-strong-3ca9a5f24a7 https://medium.com/@muneeb/the-state-of-the-bitcoin-union-is...

maaku 11y ago
Thanks, but seeing as I'm quoted in those articles I think I got it sorted out :)

tobltobs 11y ago

Imagine the internet had been developed by guys like this one. Pushing a agenda instead of looking for best possible solutions. The internet would like teletext/BTX and cost at least an 1$ per hour.

CydeWeys 11y ago

Why should I trust what this guy is saying when he has such egregious misunderstandings about Bitcoin? I expected better from the CEO of Coinbase. The worst one was this: > The next block reward halving is coming up in July. Let’s say that miners on average are able to mine a coin for $250 (I don’t know the exact number, so this is a guess). After the halving in July their cost to mine a coin will double to $500. If the bitcoin price stays around $425, it will be unprofitable for a number of miners to continue mining. You can't just guess about these things! You have to do the math! There are two components to mining costs: The sunk costs (the actual price of the mining equipment), and the oncoming costs (electricity). Once you've already paid the sunk costs, and the miners have, tautologically so, to get to the current network hashrate, you won't turn your miners off unless their yield falls below the cost of electricity. I've done some calculations and, with the current most-efficient generation of ASIC Bitcoin miners, you generate around $0.25 per kWh. So with the halvening, you'll be generating around $0.12 per kWh. But guess what most miners are currently paying for electricity? Around $0.02 per kWh (yes, they're locating their mining operations like Google locates data centers). So while some inefficient miners on the fringes may turn on, the halvening isn't going to come close to causing the majority of miners to become unprofitable. So you're unlikely to see a big drop in hashrate. The most ridiculous part of the catastrophist argument is that we already had a halvening from 50 BTC to 25 BTC, and nothing changed! The hashrate didn't go down appreciably and block finding time didn't suddenly jump up. There was nothing different about that time than now; both are governed by the simple economics of mining profitability, which tends to stay at around the same level above cost -- that is to say there are economic self-balancing forces at work that cause miners to enter/leave the system to keep the hashrate adjusted relative to the mining returns over the long term. So anyone proposing a catastrophe over this halvening has an uphill battle to climb of explaining why it's different than the last one when nothing happened, and that hasn't been done so far.

ajross 11y ago
Not being an expert and just trusting your numbers: you're saying that right now the spread between power cost and the best-situated miners using the "most efficient" hardware is a factor of 6. The halvening would make that 3. That doesn't sound like much margin to me. What about all the people still using GPUs or residential power? They certainly seem to be a decent chunk of the mining community, but maybe that's wrong. What if we see another 50% crash in BTC value? That too would take us right down to the edge of failure, right? Like I said, I'm not a miner, own no coins, and am just watching this mess out of macabre voyeurism really. But the concerns certainly sound legitimate to me, and what you posted honestly seems like apologism.

simonebrunozzi 11y ago

Posted 4 hours before this one, here: https://news.ycombinator.com/item?id=11227598 https://news.ycombinator.com/item?id=11227598 Wondering why one didn't pick any interest, and the other picked 160+ comments.

pak 11y ago
Interesting. I had no idea you submitted that one. HN seems to be increasingly stochastic these days. When this post fell off the new page last night, I thought it was doomed. Then, it suddenly revived this morning. I did trim the strange hash off of the medium.com URL, because I thought it was a tracker from when I got referred. Perhaps that is why more people eventually found this submission. The de-duping logic on HN is pretty bad.

aminorex 11y ago

Massively bullish on XMR due to the short squeezing.