Block size: We have consensus! Or do we?

It seems the row between the Bitcoin conservatives and the Bitcoin progressives are widening much as you would expect Liberals to disagree with Conservatives, Democrats against Republicans.

Teenagers hands playing tug-of-war with used rope

I am a pragmatist first and foremost.  The only thing that I am vehemently against is fanatics and zealots.  Unfortunately you will find them in either camp in spades.  I suppose that is the curse of politics.  It is the science of influence and manipulation after all (if I may be excused in dirtying the word ‘science’ in that manner for but one illustrative instance).

I will be upfront.  I really didn’t like XT.  I thought Gavin was a bit cheeky in the way he just left the table and tried to convince many exchanges and wallets providers to support Mike Hearn’s upstart rebellious XT fork of Bitcoin.  It seemed rash, unwarranted, and generally an attempt to ‘rock the boat’.

I lambasted XT for disturbing the peace, and put my faith in the fact that time will tell what the obvious consensus choice will be in terms of block size.  I withheld any judgement until Scaling Bitcoin.  After Phase 1 of the conference in Montreal, it looked as if there was a general consensus about the issues and everyone wanted to address them.  Then came Scaling Bitcoin Phase 2 in Hong Kong, and the mood electric with many interesting proposals all of which were applicable to Bitcoin and my faith in crypto-currencies in their eventual ability to match the dominant payment systems of today was confirmed.  Very encouraging, was the Segregated Witness proposal by Pieter Wuille, which promised to significantly reduce the traffic that needs to be sent across the network.

Most significantly, was hearing from all the miners.  Unanimously, they told us that they don’t really care which of the scaling block limit BIP proposals is implemented, (they will defer to developers to advise them on this) but they all wanted an increase in size, because they recognize that the most important thing Bitcoin needs right now is more users.  More users means more viable use cases for businesses, and more individual wallets, and extending the integration of Bitcoin into the common fabric of everyday society.  Let’s be frank, the miners just care about their income stream (this is by Nakamoto’s design) and the best way to protect that income stream is ensuring that there will always be liquidity in BTC that the miners can sell into.  That means getting BTC into as many individual hands as possible.  It doesn’t help miners if most of the BTC holdings are concentrated into a small set of die hard libertarians who are hoarding them like gold for the time when the governments of the world collapse.  (not that there is anything wrong with that, it is a valid use of bitcoin after all).  The best way to encourage more popular uptake of the currency is by making sure that fees stay low and the tx/s increased moderately to meet demand.  The key to keeping fees low is to ensure that the hard limit on blocks not be hit.  Jeff Garzik summarized the situation best in this post to the bitcoin-dev mailing list.

I happen to agree with Jeff on this, and would like to see an Economic Fee Event (one where the fees in Bitcoin is abruptly increased due to the limit of a block being hit) delayed until we have a significant portion of the world economy using bitcoin for daily transactions.

Add to this the fact that a small bump was verbally agreed upon by the all the miners, along with the agreement of most of the exchanges and online wallets in this industry letter which they all agree to BIP101 (which increases a lot more than 2mb) should mean that we have consensus among all the ‘users’ of Bitcoin that we should not force a Economic Fee Event now and instead push forward with a conservative limit increase, right?

Unfortunately, the roadmap recently published by Greg Maxwell here seems to have completely ignored that consensus, and focuses only on the scaling initiatives that directly play to the bigger initiatives of Blockstream (which is a private company).  Don’t get me wrong, I like SegWit, and IBLTs, and the other scaling solutions.  But they all seem a bit farther out in terms of time scale.  I also don’t think that being selective about only promoting the solutions that play to increasing the usability of Sidechain Elements is a fair decision to be making as a core developer of Bitcoin.  It seems more likely that a lot of the core developers (who are also Blockstream employees) are falling into the trap of ‘wall crossing’. Wall-crossing is the term used in Wall Street to describe roles vis-a-vis the information barrier between the public side of the company (trading, equities, bond markets) from the private side (advisory, corp banking, M&A).  Information exchange between either sides are tightly controlled, with huge penalties (and possibly jail time) if information is leaked.   The term for this information divide is “Chinese Wall”.  Those who had a role which involved working on both sides of the wall were call “wall-crossed”, and required somewhat of a ‘security clearance level’ with special training on how to maintain the proper isolation of information. Basically, you had to mindful about your role in any given day, and make sure that you properly represent that role faithfully and keep your information and intentions properly silo’d.  One day you could be the salesperson leading the deal with a corporation, and the next you need to be the person advising the trading desk on the corporations bond offering. The roles normally involved a conflict of interest, and thus only more senior employees were trusted to be ‘wall-crossed’.  If one is not careful, they could let their goals and agendas in one role affect their behaviour in the other role.

Core has already taken the stance that they don’t want to be in a position to dictate consensus rules, and given that it seems a majority of the actual users of Bitcoin (miners and exchanges) want an immediate conservative bump in block size, it seems remiss for the 2016 roadmap to ignore it.  To do so, would seem to be dictating consensus rules of Bitcoin, if only by deliberate lack of action.

If you disagree with this policy, you should run an alternative Bitcoin node.  If enough people do so, then miners will be willing to mine blocks that these nodes will support.

Bitcoin XT

Bitcoin Unlimited

These are not alt-coins.  These are alternative implementations of the Bitcoin protocol with slightly different consensus rules.  By running them you do NOT endanger your Bitcoins.  Each is a vote.  If a majority of the market prefers one implementation over the rest, then miners may start to follow that ruleset.  Freedom of Choice is what keeps Bitcoin decentralized.

I’m sure that a lot of reasonable developers in Core will be willing to change their mind if they realize that a majority of the market feels the same way.  This is not meant to be divisive, this is meant to be a exercise in democracy.  Bitcoin is a grass roots initiative after all, so every individual vote counts.

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