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> SegWit2x is an attempt to remove control from the core dev team I disagree. SegWit2x is a misguided attempt to make Bitcoin "more efficient" without realizin

by hudon 9y ago

> SegWit2x is an attempt to remove control from the core dev team I disagree. SegWit2x is a misguided attempt to make Bitcoin "more efficient" without realizing that it puts at risk the core value proposition of Bitcoin: censorship resistance. At the root of this debate is a disagreement about what the blockchain is for. On one side, you have all the developers working on the Core project and activists like Amir Taaki or "crypto-economists" like Paul Sztorc (creator of the decentralized prediction market which Augur is trying to re-implement), who believe the blockchain is for financial sovereignty. Bitcoin mining is a way to decentralize transaction validation, after all, such that no central authority can tell you which transaction is valid or not. Therefore, if you cannot run a full node and validate the mined blockchain yourself, Bitcoin is basically pointless because you have lost your ability to transact with censorship resistance. Increasing the size of blocks makes full blockchain validation more difficult. The risk then is miners mining a blockchain and you are not being able to contest it. The miners can decide not to include your transaction, they can require KYC for you to submit a transaction, etc., and you will have little leverage against this because you won't be able to validate the work they are doing. On the other side, you have businesses and corporations (BitPay, BitMain, etc.) who believe that the blockchain can replace VISA, essentially, so they will do anything to make the system more efficient. This includes sacrificing decentralization and making it more difficult for users to validate the blockchain. They believe that being a full node doesn't matter and all that matters is replacing whatever current financial institutions are running with a blockchain. What the second side of the debate is missing, however, is that the blockchain will never be as efficient as VISA. There is a reason why when over 70 of the world's largest banks got together at R3 and assessed how Bitcoin can help them transact, they came up with a distributed database called Corda and not a blockchain: blockchains are not efficient [1]. They are inefficient but they are useful because they are decentralized and enable permissionless transactions. [1] https://www.corda.net/2016/10/r3-corda-makes-different/ https://www.corda.net/2016/10/r3-corda-makes-different/

buttershakes 9y ago
Why do you say it's an attempt to make Bitcoin more efficient? It's essentially exactly the code base of Bitcoin core with some very minor changes including a block size commitment in the future. Seems pretty clear that it is about control of that code base, and not really the technical underpinnings which are almost identical. I think the issue is that people have a vision of what Bitcoin is, that doesn't align with the reality of a proof-of-work system with a computation bound hash. The block size is basically orthogonal to the proof-of-work, and the proof-of-work is distributed in the sense that anyone can do it. There is nothing stopping any entity from doing the proof-of-work if they have the resources and capabilities. So this idea that there will be one company that is the only one doing Bitcoin doesn't really make sense if it's cost competitive for other companies to be involved, regardless of the computation or bandwidth requirements. End users can still validate transactions via SPV, which is completely valid and provable without storing the entire block chain. Consensus relay nodes can do the same thing, although they will start dropping off the network when the bandwidth costs become prohibitive. So in a small block system we have an extremely limited amount of space for transactions, which means the cost will eventually be excessively high and result in settlement between big players. That's the choke point that allows for KYC and AML. You can submit a transaction to the network, but you can't afford to because there isn't enough bandwidth to service your request so you are forced into regulated channels, onto exchanges, or through third party choke points that can be audited. To a certain extent this is already happening. People who want small blocks for Bitcoin really need to be thinking about using an Alt coin, it was never in the plans to have an extremely low bandwidth pipe to keep things decentralized when the proof-of-work is by default a centralizing force.
- kanzure 9y ago
  > End users can still validate transactions via SPV, which is completely valid and provable without storing the entire block chain fraud proofs don't work because if you want to prevent someone from creating a fraud proof, you never send them the data that would be necessary to prove a fraud ("the block is too big! nobody (but some list of companies) have the bandwidth to support the enormous bitcoin network!"). SPV users don't require (nor check) the block data-- exactly the kind of scenario where you need in place so as to hide fraudulent double spends or other rule violations. > the proof-of-work is by default a centralizing force sounds like a good argument for regular pow change hard-forks. also to be watchful for economies of scale-- but economies of scale can hide pretty well i think, even after significant capital accumulation, it's an interesting problem.
  - buttershakes 9y ago
    SPV does absolutely check the block headers, which is all you need to do the proof. You can say that transactions could be omitted from the actual block chain, but not that invalid header data could be served that let someone believe they were paid when they were not or some other falsification.
    - kanzure 9y ago
      you're talking only about SPV proof of transaction inclusion, not about the other fraud proofs necessary for the version of SPV theorized in bitcoin.pdf here's a recent one: https://github.com/bitcoin/bips/blob/master/bip-0180.mediawiki https://github.com/bitcoin/bips/blob/master/bip-0180.mediawi... But why would a miner give an SPV user the data that proves a fraudulent double spend in the same block?
      - buttershakes 9y ago
        Blocks aren't valid with double spends in them. You are saying the miner makes an invalid block by the rules in order to have a double spend transaction and then mislead the spv client with that information? I'm not making the argument that relay nodes are useless just that their security is being over stated, it catches this particular issue.
curyous 9y ago
Big blocks increase decentralization and censorship resistance by allowing many more transactions and many more users.
- PKop 9y ago
  Therefore Visa is decentralized? Bitcoin as a high throughput transaction network for buying things like coffee is not a good goal. It should be for much larger transactions, but optimized for decentralization and sound money. Derivative blockchains can be spun off of Bitcoin, and settled periodically to the "reference" blockchain, which is Bitcoin, through lightning networks or other off chain developments (perhaps some sort of forked derivative pegged chains). Bitcoin only has value as either a distributed non-centrally controlled international settlement network for countries and large banks [0], and/or as a digital Gold. Optimizing this value out of bitcoin to achieve transaction throughput destroys the necessity of Bitcoin for existing. Bitcoin proper should remain resistant to change, distributed, unable to be coopted or controlled by a few organizations, and above all, to have the properties of sound money (so resistant to changes to expand the money supply). If it doesn't have these qualities, it has no reason to be valuable. It cannot be all things to all people, but it can to "one" thing very well. [0] https://thesaifhouse.wordpress.com/2017/05/19/economics-of-bitcoin-as-a-settlement-network/ https://thesaifhouse.wordpress.com/2017/05/19/economics-of-b...
  - gcb0 9y ago
    good luck reasoning that to any of the current userbase...
gcb0 9y ago
how can't you validate a block if that is trivial, even with the changes? honest question. does the proposal screw things up that much that you need to do a trillion hashes to validate instead of one?
- hudon 9y ago
  A bigger block requires at least as many resources as a smaller one to receive, validate and store the data. I am not saying we should never increase the block size, but I am saying we should try all alternatives that make the network more efficient (more tx throughput for same total resource cost) without making it harder for users to validate the blockchain.
astrodust 9y ago
Maybe the problem with Bitcoin as it stands is it's trying to do too many things at once. If you separated the transactional component from the value store you could have two independent but inter-related systems and consumers could elect to use the one that best fits their needs. Maybe Ethereum will pick up the slack on the transactional side and Bitcoin will be only for "investment".

by hudon 9y ago

buttershakes 9y ago

Why do you say it's an attempt to make Bitcoin more efficient? It's essentially exactly the code base of Bitcoin core with some very minor changes including a block size commitment in the future. Seems pretty clear that it is about control of that code base, and not really the technical underpinnings which are almost identical. I think the issue is that people have a vision of what Bitcoin is, that doesn't align with the reality of a proof-of-work system with a computation bound hash. The block size is basically orthogonal to the proof-of-work, and the proof-of-work is distributed in the sense that anyone can do it. There is nothing stopping any entity from doing the proof-of-work if they have the resources and capabilities. So this idea that there will be one company that is the only one doing Bitcoin doesn't really make sense if it's cost competitive for other companies to be involved, regardless of the computation or bandwidth requirements. End users can still validate transactions via SPV, which is completely valid and provable without storing the entire block chain. Consensus relay nodes can do the same thing, although they will start dropping off the network when the bandwidth costs become prohibitive. So in a small block system we have an extremely limited amount of space for transactions, which means the cost will eventually be excessively high and result in settlement between big players. That's the choke point that allows for KYC and AML. You can submit a transaction to the network, but you can't afford to because there isn't enough bandwidth to service your request so you are forced into regulated channels, onto exchanges, or through third party choke points that can be audited. To a certain extent this is already happening. People who want small blocks for Bitcoin really need to be thinking about using an Alt coin, it was never in the plans to have an extremely low bandwidth pipe to keep things decentralized when the proof-of-work is by default a centralizing force.

kanzure 9y ago
> End users can still validate transactions via SPV, which is completely valid and provable without storing the entire block chain fraud proofs don't work because if you want to prevent someone from creating a fraud proof, you never send them the data that would be necessary to prove a fraud ("the block is too big! nobody (but some list of companies) have the bandwidth to support the enormous bitcoin network!"). SPV users don't require (nor check) the block data-- exactly the kind of scenario where you need in place so as to hide fraudulent double spends or other rule violations. > the proof-of-work is by default a centralizing force sounds like a good argument for regular pow change hard-forks. also to be watchful for economies of scale-- but economies of scale can hide pretty well i think, even after significant capital accumulation, it's an interesting problem.
- buttershakes 9y ago
  SPV does absolutely check the block headers, which is all you need to do the proof. You can say that transactions could be omitted from the actual block chain, but not that invalid header data could be served that let someone believe they were paid when they were not or some other falsification.
  - kanzure 9y ago
    you're talking only about SPV proof of transaction inclusion, not about the other fraud proofs necessary for the version of SPV theorized in bitcoin.pdf here's a recent one: https://github.com/bitcoin/bips/blob/master/bip-0180.mediawiki https://github.com/bitcoin/bips/blob/master/bip-0180.mediawi... But why would a miner give an SPV user the data that proves a fraudulent double spend in the same block?
    - buttershakes 9y ago
      Blocks aren't valid with double spends in them. You are saying the miner makes an invalid block by the rules in order to have a double spend transaction and then mislead the spv client with that information? I'm not making the argument that relay nodes are useless just that their security is being over stated, it catches this particular issue.

curyous 9y ago

Big blocks increase decentralization and censorship resistance by allowing many more transactions and many more users.

PKop 9y ago
Therefore Visa is decentralized? Bitcoin as a high throughput transaction network for buying things like coffee is not a good goal. It should be for much larger transactions, but optimized for decentralization and sound money. Derivative blockchains can be spun off of Bitcoin, and settled periodically to the "reference" blockchain, which is Bitcoin, through lightning networks or other off chain developments (perhaps some sort of forked derivative pegged chains). Bitcoin only has value as either a distributed non-centrally controlled international settlement network for countries and large banks [0], and/or as a digital Gold. Optimizing this value out of bitcoin to achieve transaction throughput destroys the necessity of Bitcoin for existing. Bitcoin proper should remain resistant to change, distributed, unable to be coopted or controlled by a few organizations, and above all, to have the properties of sound money (so resistant to changes to expand the money supply). If it doesn't have these qualities, it has no reason to be valuable. It cannot be all things to all people, but it can to "one" thing very well. [0] https://thesaifhouse.wordpress.com/2017/05/19/economics-of-bitcoin-as-a-settlement-network/ https://thesaifhouse.wordpress.com/2017/05/19/economics-of-b...
- gcb0 9y ago
  good luck reasoning that to any of the current userbase...

gcb0 9y ago

how can't you validate a block if that is trivial, even with the changes? honest question. does the proposal screw things up that much that you need to do a trillion hashes to validate instead of one?

hudon 9y ago
A bigger block requires at least as many resources as a smaller one to receive, validate and store the data. I am not saying we should never increase the block size, but I am saying we should try all alternatives that make the network more efficient (more tx throughput for same total resource cost) without making it harder for users to validate the blockchain.

astrodust 9y ago

Maybe the problem with Bitcoin as it stands is it's trying to do too many things at once. If you separated the transactional component from the value store you could have two independent but inter-related systems and consumers could elect to use the one that best fits their needs. Maybe Ethereum will pick up the slack on the transactional side and Bitcoin will be only for "investment".