A Thinking Person's Guide to the Latest Bitcoin Drama
hackingdistributed.com
hackingdistributed.com
If, like me, you didn't understand any of that sentence, I've found what I think is a more useful guide: https://bitcoinmagazine.com/articles/breaking-down-bitcoins-...
-Andreas Antonopoulos : http://i.imgur.com/UzMFKgZ.jpg
I don't think of the larger names in the Bitcoin community are anywhere close to unbiased, and the divides between them are only getting worse over time.
https://medium.com/@jimmysong/mining-profitability-and-asicb...
Right when I started, a vote had begun on Litecoin (or LTC, which is a cryptocurrency which is mostly based on Bitcoin code) to decide on the adoption of this Segwit technology; the vote required miners to "signal" their support for the tech. Adoption would lock in if the signaling stayed over 75% of the "hashing power" for one full voting period (around 2 weeks), and was necessary to breathe new life into LTC, which had stagnated for a long time.
There were a couple websites to track this vote, but no one had a time chart, so I hacked one together and decided to published it (1). As you can see from the chart, in the first few days, support for Segwit quickly grew to just above 20%, and then pretty much stalled there for almost two months.
This is where things got interesting. At the beginning of April, support shot up to just below 70%, as some major mining pools decided to signal for Segwit. Litecoin price also shot up... but then, very quickly, it dipped by 10%.
What had happened? As I learned from reddit, some mining pools opposing Segwit had increased their hashrate. The price of litecoin, of course, crashed. You can bet those same actors who controlled the hashing power made a pretty penny from these ups and downs...
A few days passed. On r/litecoin, there was fury against the offending pools. But then, a new biggish pool starts signaling, bringing the value above 75%, and then even 80%. Prices boom. People rejoice. Segwit adoption looks like a done deal for the next voting period.
But when the period actually starts, the non-signaling pools brutally increase their hashing power, bringing down the value to 60%. Rage, insults, cries to start a UASF (search on google if you're curious to know what this is).
So, who can so easily swing the hashing power of a pretty big coin? The community is 100% certain: it's Jihan Wu, founder of Bitmain, the biggest maker of those same chips that allow the ASICBOOST trick the article writes about. And which can also be used to mine Litecoin.
It's easy to imagine what happens to LTC prices with this second manipulation - and, again, to imagine the money those in the know could make. But the big question is: is this just a big manipulation to make money, or is Jihan Wu actually dead set at blocking Segwit also on Litecoin?
The last twist in this plot comes after a meeting in China, between the top miners and the creator of LTC, Charlie Lee. There they find an agreement and Jihan Wu starts signaling for Segwit, bringing the percentage to 98% and locking in adoption during the last period. This happened a week ago; one more LTC price boom, one last big opportunity to make easy money, and, at last, the end for this drama.
So, in a week, litecoin will deploy this famous Segwit code, and it will be possible to see if this brings any changes to how miners with ASICBOOST enabled chips mine.
I personally have conflicting sentiments about cryptocurrencies, but one thing is sure: right now they offer a very interesting experience, both for the technologies they use, and for the opportunity to see something very similar to what I had read about the stock market during the gilded age. Keep your popcorn ready.
-Theymos (Michael Marquardt) controls all the major bitcoin communication channels from r/bitcoin, to bitcointalks, as well as the core slack channel, and the bitcoin mailing list (being the person who sniped bitcoin.org).
- Every Bitcoin Improvement Proposal (BIP) used to have some specs to follow before being introduced to the community to be discussed and possibly merged in. This is how things have always been since the start. That is, until SegWit (a softfork implementation by Blockstream that fundamentally changes Bitcoin to benefit Blockstream ).
- SegWit gets its own website, it's own logo, and if you have been following the news the past 5 or 6 months, you'll also notice its been shoved down the community's throat as if it were god's gift to man.
- Segwit is a solution to fit whatever narrative needed at the time. From a "blocksize increase" to the scaling debate, to a "malleability fix" to a "quadratic hash fix" to blah blah blah.. It's a fix for all the things for all the things except the one thing we need right NOW, and that is a scaling fix.
- New Users are tricked into believing that the "economic majority" are in support of segwit, but this is due to not being able to speak out against segwit (see point 1 about major communications being controlled ).
- All the drama is actually about forcing segwit into bitcoin.
- Blockstream owns patents which they claim they have no plans on using offensively.
- If Segwit were introduced as a softfork (dangerous), it would be almost impossible to undo in the future versus a hard fork (which requires consensus).
2. Despite CTO Grerg Maxwell making a "Pledge" to only use the patents "defensively" there is nothing stopping the company from trying to monetize their patents on a portion of the Bitcoin code once the Code is implemented.
3. They would begin to sue large US based exchanges for infringement and demand a small percentage of transfer fees from any exchange using Bitcoin or any part of the "SegWit" code.
4. Companies would slow Bitcoin support and the Crypto community would be further segment, delaying adoption overall but making massive amounts of money for BlockStream.
5. Option 2 is that with their code in Bitcoin, they will be able to sell their services for a much higher price and it will give them a huge amount of leverage in the future.
6. The "Soft" forking and the "User Activated" forking mechanisms devised by BlockStream to get their code into Bitcoin is devious to say the least. They both set the stage for further manipulative changes to the code base, this part of the work is mostly done by one user, BS hired hand, Luke Jr.
7. And finally, as users are pushed off the Bitcoin network due to High Fees and Slow Transactions, BlockStream is supporting development of a "2nd layer" network (patented) from which Node owners will earn the transaction fees and not the Miners, the way it is now, this type of setup would be more like a shared Google Doc or SQL file rather than a blockchain as it is not blocked by computing power.
Despite CTO Grerg Maxwell making a "Pledge" to only use the patents "defensively" there is nothing stopping the company from trying to monetize their patents on a portion of the Bitcoin code once the Code is implemented.
Do you have a cite for either of these? Someone mentioned them downthread. It sounds ridiculous that someone would commit code into the Bitcoin client which some third party has copyrighted (what OSS project permits this?) and I can't find any evidence that Blockstream holds any relevant patents. I can only find them saying once that they don't [0].
I downvoted you because saying a bunch of false stuff confidently seems really bad, but I will take it away if it seems like I was wrong.
2, 3. What patents exist for segwit that Blockstream owns?
4. Why?
5. Their code is already in Bitcoin. They have a bunch of the core developers on their payroll.
6. How does it get around anything? Can you explain the difference between a soft fork and a hard fork and why the later is better?
> SegWit contains copyrighted code from the privately funded company BlockStream
If by "copyrighted code" you mean the standard copyright and MIT license at the start of every piece of code in Bitcoin Core, sure. That's how open source software works -- you copyright it and use that copyright to place it in a permissive license. Segwit doesn't make any modifications to the copyright status of Bitcoin Core in any way. It is exactly the same!
> Despite CTO Grerg Maxwell making a "Pledge" to only use the patents "defensively" there is nothing stopping the company from trying to monetize their patents on a portion of the Bitcoin code once the Code is implemented.
There is in fact a lot stopping that from happening, such as the innovator's patent agreement.
But this is a distraction anyway because this thread is about segwit, and Blockstream has no patents, provisional patents, or anything else on that technology. And the time period for filing such patents has expired. It's hard to monopolize and monetize a patent that doesn't exist.
> They would begin to sue large US based exchanges for infringement
Infringement of what? Again, there are no patents!
> Companies would slow Bitcoin support and the Crypto community would be further segment, delaying adoption overall but making massive amounts of money for BlockStream
...How? How does Blockstream, a bitcoin services company, benefit from a dying bitcoin?
> Option 2 is that with their code in Bitcoin, they will be able to sell their services for a much higher price and it will give them a huge amount of leverage in the future
It's FOSS. They have no special privileges over anyone else.
> The "Soft" forking and the "User Activated" forking mechanisms devised by BlockStream to get their code into Bitcoin is devious to say the least. They both set the stage for further manipulative changes to the code base, this part of the work is mostly done by one user, BS hired hand, Luke Jr.
Soft forks are how every single change to bitcoin consensus logic has been deployed since the very early days (2011+) and predates Blockstream by a laaaarge margin. The founding of Blockstream is closer to today than the first use of soft forks by the bitcoin development team.
User activated soft forks have nothing to do with Blockstream. Blockstream's CTO has even come out against the UASF on the mailing list. It's a complete red herring to bring it up here. Luke-Jr hasn't done any work on the UASF, just provided some technical peer review, as he has for many proposals, including ones he disagrees with.
> BlockStream is supporting development of a "2nd layer" network (patented)
Again please provide some facts to backup your assertions. I can only assume you are talking about Lightning, which Blockstream has no patents on, and for which the window for filing patents has pretty much closed. Do your research: go type "Blockstream" into your favorite patent search engine. The only hits you find will have to do with sidechains and confidential transactions, neither of which have anything to do with segwit or lightning.
Please come back to reality. Base you opinions on fact and stop spouting conspiracy nonsense. HN is better than this.
How does it benefit Blockstream?
So explain to me how Blockstream benefits?
That is their entire business model. If the lightning network doesn't come to fruition, their company is screwed.
https://mobile.twitter.com/Satoshi_N_/status/855852865151172...
Regard LN, there are fees to make transactions, so whoever is facilitating the transactions will make money.
LN fees are optional and if blockstream wanted to charge them for facilitating transactions they would have to provide a service to make it worth while our the transactions would just route around them.
SegWit was first proposed by Pieter Wuille, a core developer. And it's supported by many core developers several of which who work at Blockstream.
Bitcoin Unlimited is currently running ads on Reddit and elsewhere to encourage people to use it.
The two main supporters of Bitcoin Unlimited are Roger Ver and Jihan Wu, who owns Bitmain. Jihan's company manufacturers the most successful ASICs for bitcoin and litecoin. They've invested hundreds of millions of dollars in bitcoin mining operations.
Roger Ver also has recently launched a cloud mining service on Bitcoin.com which many view as a scam. This is weeks after speaking on camera while deleting an old tweet criticizing Bitclub, a similar MLM cloud hashing service. This speaks to Roger's judgement especially after his Mt. Gox video.
Several dirty tactics have been employed by both sides.
Roger, Jihan and Bitcoin Unlimited proposes to create a President of Bitcoin and some confederation. Jihan on twitter stated he misunderstood the open source community:
"I regretted one thing. In China, open source culture is not popular. I did not understand it. We put too less or 0 money into community."
Segregated Witness does fix transaction malleability which has been a problem for 3+ years.
Nick Szabo, Adam Back (CEO of Blockstream) and 8+ bitcoin core developers support SegWit.
Yes Blockstream has taken $65 million in venture capital, which should be questioned, but Bitman has hundreds of millions invested.
I am unsure who to trust but it's a much more complicated situation than your comment suggests.
Roger Ver, proponent of Bitcoin Unlimited, owns Bitcoin.com. He also runs r/btc. Not as many bullet points as Theymos, but pretty clear that the major channels of communication in Bitcoin are all controlled by parties with specific agendas.
How much less voting should the "economic majority" get on how the network votes on process changes if they don't participate in the processes themselves? Perhaps developers with understanding matter more than any "economic majority" as this is truly cutting edge and screw up once and burn matters of network consensus and in large part computer science.
Your statement that we need a scaling fix now, more than other fixes could be biased. Millions of dollars have been lost to malleability, I'm not sure how many millions have been lost to scalability or potentially to the the quadratic hashing or the potential DOS attack vector larger script sizes allows creating transactions that take exponentially longer to confirm.
Just thinking scalability is the biggest problem doesn't make it so. It might be, but I'd like to see some numbers on it.
Now if someone comes up with a way that gives a much larger improvement, like an order of magnitude or two, that's a game-changer. But 20% is not.
They are trying to make it seem like Miners are Evil, therefore Segwit is good... as if they are related.
One of the largest chip manufactures in the Bitcoin space supports Bitcoin growing on its own and not depending on a 2nd layer support system that is known as "SegWit". This is why Greg and his company are spending untold sums (like hiring Twitter hype man Samson Mow recently) pushing SegWit Code (which is copyrighted by BS) onto bitcoin, by trying to destory the competitioin with bull shit like saying there is a remote access bug, or some miners are "cheating" by optimizing their chips...
Bottom Line. ALL of the superficial infighting you see in the Bitcoin space right now is over scaling on chain as inventor Satoshi Nakamoto intended or using a patented second layer developed by BlockStream, Greg Maxwell's company. Most devs in the know, of course, support Bitcoin scaling on its own, but Blockstream is well funded and laser focused on getting their patent code into the Bitcoin codebase and any cost necessary.
Remember when you guys accidentally DDoSed your own network with an assert statement
My experiance is that a lot of "Core/SegWit supporters" don't really understand at first that Unlimited is trying to help Bitcoin continue what Satoish intended. They have been feed lies through the toxic reddit/r/bitcoin site that they assume if you are against "Core" you are attacking their beloved Bitcoin.
Just like Trump, Core has cornered the market on support from the under-educated and in both cases the tactic seems to be working.
No one ever lost betting against the stupidity of people.
https://falkvinge.net/2017/05/01/blockstream-patents-segwit-...
I get that the author is describing that Blockstream's behavior to promote Segwit is evidence, but did that need an explanation? Their business gets way easier if Segwit turns on. Of course they would like to promote it.
1. Developers
2. Miners
3. Users
4. Hardware manufactures
ASIC optimizations against BTC were an early complaint, and that's a major reason for LiteCoin and other cryptocoin designs attempt to solve in various ways.
Even if the developers choose not to address this exploit, the users and miners could just jump ship to any of the other more advanced cyptocoin designs.
Yes, just like Americans will jump ship to the SUDO-Dollar, because its printing presses have a technically better implementation then the US-Dollar. People who own billions in US-Dollars are probably chomping at the bit to transact in a technically better currency. :)
They most certainly could, but unless their investment in BTC will become worthless tomorrow, they most probably won't.
Different cryptocoin designs have very significant differences in feature sets and algorithms. There is much more difference than name, or "printing press implementation(..?)"
So basically, the reason some people are mad is, a thing that fixes a longtime problem in bitcoin that has been preventing taking advantage of some of the more advanced features of bitcoin, is being blocked because it breaks some crooks' unfair advantage.
caveat: IANABE (I am not a bitcoin expert)
1. dramatic change to bitcoin network, doesn't matter what it is for this argument except it includes also bundles some fixes to the network so it will work.
2. bug in bitcoin transaction specification, transactions transmitted to the network are hashed for identification, but not all data in the transaction is hashed and some people found ways to forge fake duplicate transactions with the same hash but differing on other critical (unhashed portion) information, to steal money and make certain advanced features of bitcoin worthless.
3. custom hardware "mines" bitcoins by doing transactions, ASICs have been made that do this faster, therefore they get more rewards, and raise barrier of entry to mining. "fair" enhancements do more verification faster, you get the reward. ASICBOOST just exploits the algorithm to get more reward without making the network better. And it doesn't work when a (2) is fixed.
> Building more efficient mining chips is what miners are supposed to do, as it secures the blockchain.
The first part (each miner has motivation to mine as efficient as possible) is obvious. But how does that benefit the blockchain as a whole?
So a miner implements a way to find, with fewer operations, a hash with the required difficulty properties. Next iteration, the system adjusts the difficulty to keep the number of signed blocks per time unit roughly the same, effectively undoing the optimization.
If each miner had their own blockchain (with the new difficulty) then an optimizing miner could now sign about as many blocks as they could before while a non-optimizing miner could mine less blocks.
Because in reality, they all share the same blockchain, the optimizing miners instead take over the blocks that the non-optimizing miners are not anymore able to sign.
Woudn't that lead to more centralisation of miners in the end?
This happened long ago. These days you need chip designers to compete.
Empty blocks are almost equivalent to a successful 10 min DOS attack on the network. The Poisson distribution and network hasing power overshoots affect whether it is really likely to be 10 minutes of DOS or not, plus a very small amont for empty blocks not being orphaned as often. Then you could subtract from the harm that a block even empty has perhaps the smallest of value for burying the last block, while still being a denial of service to the new blocks that some other block would have loved to have buried the transactions of.
It takes a twisted logic to love ones denial of service.
The original vision was that end users would do Bitcoin mining as a background task on their CPU, and mining would be highly distributed. That's totally dead.