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’.

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Maybe it is too late to save Ethereum

Several months ago I reposted an article about the troubles that Ethereum were facing.  At the time I thought that it may still be possible to salvage something out of this generic turing complete smart contract platform.  Well, I finally spent a some time to figure out how Ethereum works in order to convince myself about it’s technical merits.  I had in the past spoken to its technical head Gavin Wood, and on occasion debated some economic issues with Vitalik on social forums but I had never really put in the time to learn about Ethereum myself, so refrained from making any critical opinions on it.  After having done some preliminary research, I am of the opinion that it may be too late to save it.  Too ambitious of goal(s), too complex a system to get it done, and too much money squandered on someone who has little business experience.  [every miner runs every contract in the platform in strict order without any concurrency? How is this efficient? How can this scale?]  And what we pay for in the loss of efficiency is … erm… censorship resistance?  Additionally, I don’t see how a trust-less smart contract is practical, considering you always need a trusted third party to mediate disputes and settlement of the contract.  (when we are talking about settlement in anything other than the native token).

This excellent article by Gideon Greenspan pretty much sums it up succinctly with a lot more background and supporting links than I can give. 😉

Smart contracts makes for slow blockchains

Dr. Bitlove* (or how I learned to stop worrying and love XT)

Ok.
So with such a contentious title which is sure to be an attention grabber aside, let me explain:

I don’t *love* XT, I love what it represents. Not specifically small blocks vs large blocks, but a counter voice in a collective democracy which is the Bitcoin community. I believe that we as a community need to have contrary views and healthy debates which voice all sides of an issue, so that we can remain impartial and objective, and resist becoming an echo chamber of unified thought, which is just another form of centralization.

In my previous writings I warned against moving into a dictatorship like model, where we blindly follow leaders.  What we must also be wary of is the propensity to naturally devolve into such a situation when all counter viewpoints are forced from the public discourse.

That unfortunately seems to be the case with Mike Hearn leaving XT, along with a lot of anti-XT vibes I felt at Scaling Bitcoin.  I think that I feel as many do, that the consensus was that a small bump in block size is not contentious, and such a hard fork should be pursued in parallel with other non-block size scaling initiatives (such as SegWit), if for nothing else but to collect data on how a non-contentious hard fork would propagate through the network, and to prove that the network has the resiliency to execute such a change if and when it is needed.

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About Me

Aside

I’m a ex-Wall Street Techie, 11 years at Goldman Sachs, 3 years at JPMorgan.  I’ve worked with some of the smartest people that I have ever known.  Then I discovered Bitcoin, and that’s when I really started to learn about money, and how the economy really works, (and why it doesn’t)* — Jerry David

*a nod to Irwin Schiff

2015 is upon us, and where is the price of BTC?

As 2014 draws to a close, it is time to reflect upon the year of crypto-currencies and consider what we have to look forward to in the coming year.

The price of BTC is not at the 2000 USD that some people have been predicting since August, most likely due to a lot of speculator volume leaving Bitcoin and flowing into China’s Alipay which became the biggest IPO in all of history.  Alipay, which allows mainland chinese to spend their RMB outside of the country (and pays the foreign merchant in their local fiat) took a lot of the spotlight from BTC as a method of global exchange, at least for affluent Chinese.

Ripple, the exchange platform for value over the internet has been quietly gaining traction and now is the second largest crypto-currency by market cap, while Litecoin and Dogecoin drop in popularity.  Stellar, the Ripple clone, comes in at 6th place.

MtGox investigations have started, well, at least they are ready to start, with the industry experts appointed to investigate the loss of coins being named as Payward (who owns the popular exchange Kraken)

China still views Bitcoin suspiciously, though some proponents say that the government may only crack down on Bitcoin if it sees that its effects are disruptive to the economy.  Some even argue that China may embrace Bitcoin eventually and have a much easier time doing so due to the fact that a lot of the laws governing money exchange and governance simply don’t exist in China, whereas in the US, every state has its own licensing requirements for money exchangers, making doing a Bitcoin exchange business in the US a much more costly affair.

Japan’s national elections for parliamentary members are finished, and Mr Fukuda, the pro-Bitcoin cabinet minister has regained his seat in the House.  Hopefully this means that 2015 may mark the year that Japan finally casts off its MtGox cross that it has been carrying for the last year.

In Korea new players have emerged, such as Coinplug to challege Korbit for the korean market share, they have even started developing their own two-way Bitcoin ATMs.

Remittance has made a resurgence in interest, with companies like Remit and Coins.ph teaming up with exchanges in Hong Kong in order to bridge the gap from remitters to recievers using Bitcoin.

The price of BTC has dropped below 300 and was defended to settle into a new band between 310 and 330.  This, by some analysis, is still high if we consider the quantitative model of money, and the number of transactions that are currently being processed using BTC.  I would look to see this stay in this range, without more merchant acquisition, which is slowly climbing, but for which has not caught up to the current price point of BTC yet.

2015 is going to be a year of more Bitcoin companies coming up and solving more and more issues that currently plague our money system and payment infrastructure.  It will be the year of regulation and government attention to crypto-currencies, further public adoption, and micro-payments.  It is something that I am very proud to have a part to play in.

Modus Operandi

Most manifestos start with a bang, while some with a whisper, some with cries to ideology, others with just appeals to common sense.  My manifesto is to be the frank voice of a technologist who has been working on Wall Street for over 12 years.  I pledge to “keep it real” and tell it like it is.  A cigar, Freud would argue is symbolic of many things.  None of which terribly interests me at all.  So if you are of the kind of person who enjoys waxing philosophical opinions without supporting facts rooted in science, then my writings will no doubt be annoying to you at best, aggravating at worst.  This is how I operate.  This is what over a decade working in the fast paced, pure, feral bastion of capitalism that is Financial institutions have taught me to become.  This is my modus operandi.

Look at me, I have completely forgotten my manners.  Please allow me introduce myself, my name is Jerry and I joined Wall Street straight out of college.  Armed with nothing else but an engineering degree, a penchant for computers and gaming, and big dreams of money growing on trees, I moved to New York from the rural north.  Working at one of the top 3 investment banking houses on the street for 10 years, I started first as a technologist in the Commodities trading desk, moving later on to the Foreign Exchange desk, Structuring, GUI systems, Equity algo trading, then finally back to FX.  Over the years, I have garnered a very varied experience with different technologies used at banks and have dealt first hand with the issues that arise from running systems upon which the basis of our capitalist society depends upon.

It is my endeavour to add comment and colour to the on-goings of banks and Wall Street, on the topics that I feel I am qualified to comment on.  And it is my hope that you will find the information provoking at worst, enlightening at best.