Doesn't this all seem a bit dramatic? Throwing away the baby with the bathwater? Cryptocurrency is still in its infancy, and BitCoin is the first cryptocurrency. It's a little early to declare the project a "failure," throw up your hands and walk out of the room, just because a few people haven't acknowledged the urgency of a (very fixable) technical problem.
People disagree about the reality of global warming. Does that mean we throw out the entire system of laws of the United States and other world powers because it hasn't yet addressed this problem?
This is exactly why I never bought the concept of BitCoin as a 'libertarian' currency. There's always politics, there's always governance. It becomes political as soon as more than one person is involved. And as soon as it's political, institutions, processes, procedures, and laws become necessary - also known as "government."
I still believe in BitCoin, however. Ultimately, there's a way out of this tangle, and like with most political problems, it's a political solution. BitCoin will either adapt and scale up or stay the same and scale (way) down.
I'm not sure why you think bitcoin is the first cryptocurrency, things like digicash existed since the early 90s. In any case, did you even read the post? The author explicitly describes the failings of bitcoin's political processes. His concerns weren't some hypothetical issues of ideology, they were concrete examples of how those who control bitcoin are preventing it from growing in a very technical sense, and refuse to engage in any sort of compromise because it's not within their (business) interests.
edit: To clarify, I'm not trying to say I agree or disagree with the author, as I don't know anywhere near enough about the bitcoin community to say either way. I'm merely pointing out that the OP was talking past the author's points, not addressing them. (In particular, they built a strawman against governance and political solutions.)
Ok, I'll add some modifiers: BitCoin is the first global peer-to-peer distributed cryptocurrency actually in use.
And yes, I did read it.
Step A is realizing that the political processes aren't working, and Step B is figuring out a way to make them work. Step B is not throwing up your hands and quitting.
Mike Hearn has been doing all the quite politicking, technical writing, code prototyping, message board and mailing list discussion, and etc that you would expect a mature OSS project to require to do a technically contentious change. He lost the argument, decisively, but not for lack of trying reasonable steps. This is not Step A nor Step B. This is not even Step F ("fork the codebase and network with the idea of forcing Bitcoin Core to accept a new ground truth"), which he and collaborators tried unsuccessfully. Quitting is Step Q.
It may be helpful in evaluating the above to note that I'm an open and notorious critic of Bitcoin and believe efforts to save it are poorly advised, but I'll happily function as a world-readable notary to say "Yep he really did try doing that; I watched it happen."
Either way it will be left to people other than Hearn to decide. I admire Hearn for his very many hours spent on this seemingly intractable problem, and I understand his frustration. I just think it's premature to declare this undertaking a failure.
XT may still be the go-to option when scale and transaction bandwidth actually starts being an existential problem.
You'll find that people rarely react as urgently as they need to until the problem starts making their wallet lighter. But for the last year Bitcoin has increased both in popularity and price. And even at their slowest, actual settlement times of transferring monetary value on the BitCoin network are still lifetimes faster than clearances on ACH or other traditional financial networks, which means Bitcoin still has a competitive advantage over the traditional financial system. When that competitive advantage starts going away, I have an intuition that the block size will suddenly increase. I don't know for sure, but I have a feeling.
That's the genius of it all. Even the governing body doesn't prevent people from running the existing patches. As soon as the impasse becomes an existential threat, we already have a solution, and anyone who wants to run it can run it. Downloading and running the new Bitcoin is kind of like voting.
XT was intentionally designed to split the Bitcoin transaction history into two rapidly-diverging versions - the XT and official chains - each with enough support to continue to exist for some time. This would have killed Bitcoin - and I mean actually killed it, complete with plummeting exchange rate and termination of trading and acceptance all over the place, not just caused a disgruntled ex-developer to write blog posts about how it was dead. Even supporters of larger blocks were largely unwilling to support it for this reason.
This was a deliberate design decision. Mike Hearn didn't think he was going to get widespread support, so he set the threshold for it to fork Bitcoin at 75% of the last 1000 blocks indicating support, which actually means it would activate with less than 75% support from miners due to variance and the fact that he was retesting the condition every block until it succeeded. Potentially quite a lot less, if I remember correctly, maybe even a minority.
Enough miners did not in fact do so, and the "centralized control over miner software" was anything but - bitcoin.org pulled links to the one or two services that used XT because there was a huge amount of demand from Bitcoin users to do so, and they were making the same demands of everyone else. Also, part of the problem was that the threshold for enough miners was intentionally set dangerously low. If it had succeeded then I'd say it would be a sign that Bitcoin was fundamentally broken and couldn't survive without centralized control, but it didn't.
His concrete examples are of problems, but not of "those who control bitcoin preventing it from growing". The block size debate is ongoing and the work on it is widespread. Just a few days ago Bitcoin Classic was announced with wide miner support.
Bitcoin doesn't move fast and break things-- and that's one of its strengths, not a weakness.
Also, its inherently democratic- those with the hashing power , and thus the most on the line, determine its future. IT's in their best interests to find solutions-- in a considered way.
I don't see that this system has broken down at this point.
People can do things that serve their best interests in the short term but happen to hurt other people. Additionally, short term value is highly emphasized over long term value when most people make decisions. Just because the people with the most bitcoin mining power have the majority vote doesn't by default make their decisions good for the unrepresented miners in the short term, or even their own selves in the long term.
Small quibble. To me, that spelling of Bitcoin signals a speaker's lower familiarity with the bitcoin community and subject matter. Akin to using the word "CyberSpace".
Apologies for the mistake, but I'm quite familiar with Bitcoin (and also have a financial stake in this matter). You can see my past comments here on the subject (many of which, regrettably, also contain the capitalized C)
Not just directing this at you as numerous people have pointed this out, but it seems awfully pedantic to quibble over my capitalization of a letter than to address the substance of the point which is that the technical issue here is quite fixable and that the political will to fix it is not impossible.
Actually it shows the author knows the bit-coin community very well indeed, and knows that they freak out and write pointless posts like yours about trivialities... you are well-trained.
This seems like someone saying "I don't agree with the direction that BitCoin is heading in" and then taking his ball and going home. A bit dramatic yes, but not uncommon in open source projects. It's like someone saying "Linux is dead because it doesn't confirm to XYZ principle", which seems to occur every other Tuesday. Forks happen.
It seems like he makes some cogent criticisms, for which the best solution seems to be to fork the project, or begin developing for any of the other *coins that were so popular a couple of years ago. But BitCoin has the dominant brand and the people who control the mining and the source code can do whatever they want. Something tells me that bitcoin itself isn't dead because there's been too much invested in it by too many people, whatever the problems. But it's dead in the eyes of the author and maybe for several others, and that's all that matters in the context of his blog.
He did fork. He's the creator of Bitcoin XT, which was trying to bring light to the blockchain issues he discussed. He was met with DDOS attacks, and was banned from several bitcoin communities.
When the BTC community has become so hostile to literally attack those who criticize it, it becomes hopeless to resist. The best you can do is walk away until the community stops being so hostile.
That's the discussion. Technical hurdles appear to be solvable. The core concept should still be sound. It's the political structure around Bitcoin that appear to be killing it.
Fixing Bitcoin would be the best solution, but the politics and governance structure aren't letting this happen. Aside: As I age I'm understanding more and more how critical leadership is. All of the pieces are there for Bitcoin to succeed, but they aren't organized correctly.
The second option is the community choosing to change to a different client, so that by a grassroots movement, eventually the blockchain moved in the right direction. It would likely be a rough transition for uneducated people, companies, and software for businesses that use Bitcoin, but if it can't be official, it would have to be something done similarly to XT.
The last solution is to switch to another cryptocoin and blockchain entirely. I don't keep up with news, so hopefully some of the smaller coins have implemented fixes. This would set back blockchain-based cryptocurrency a few years, though. If the whole community abandoned Bitcoin and moved to Vertcoin or Dogecoin, companies that went out of their way to support Bitcoin might be reluctant to follow.
> "Something tells me that bitcoin itself isn't dead because there's been too much invested in it by too many people, whatever the problems."
So in other words, too big to fail? I don't necessarily disagree with you, but that sure seems to support the argument that the Bitcoin ecosystem as a whole isn't in a very healthy place.
Additionally, what does it say about the managers of the project when the Bitcoin Core people decide that (because ever-shrinking available capacity means ever-more unpredictable [and gradually-upward-trending] transaction fees) it's better to allow a transaction partner to silently reverse a transaction they made, rather than increasing the maximum block size to keep up with the ever-growing (due to Bitcoin's increasing popularity) transaction volume?
It means that the fundamental innovation of Bitcoin - peer-to-peer, trust-less, distributed concensus - is a solid one, even a technological breakthrough. And it means as first-mover in implementing that innovation, Bitcoin will have continued life. It also means that the problem has not reached a sufficient level of urgency that the scales have tipped to the pro-block-size-increase camp, but that I believe it will.
> It means that the problem has not reached a level of urgency that the scales will tip to the pro-block-size-increase camp.
Hmm. That's one way to interpret it.
Is it true that that -without a max block size increase-, Bitcoin can't process a higher volume of transactions than it processes now? [0] That -in fact- the unpredictable -and generally increasing- transaction fees are a feature of the network designed to shed load -by discouraging "less important" transactions- when the network is at or near capacity?
[0] Which is -apparently- somewhat less than three transactions per second. [1]
> like with most political problems, it's a political solution
I don't know anything about Bitcoin but the promise seemed to be to invent a technical form of money, with limited supply, that would be free of politics and interference from governments.
To quote the beginning of the article:
> What was meant to be a new, decentralised form of money that lacked “systemically important institutions” and “too big to fail” has become something even worse: a system completely controlled by just a handful of people.
You cannot have a human system that is free of politics. This is one of the great techie fantasies, that messy human need can be eliminated from the system, where in fact it's at the root of why people do things.
Bitcoin became valuable enough to attract people with a lot of real money on the wrong side of the Chinese capital controls, who've taken it over as their major use case.
It's not just that a few people haven't acknowledged the technical issue though - it's also that 95% of mining capacity is now held by a handful of people and they don't want to change it either.
with the mining capacity mostly in the hands of china, i'm not surprised of DDOS attacks and censorship behavior against XT proposals. bigger blocks would put out of competition the majority of chinese miners unable to support the network with their crappy uplink and criminal attacks keep the situation unchanged, they are going to milk the cow as long as possible
There's no such thing as a libertarian currency. Money was invented to provision government. Everything else is a commodity. Currencies can only be issued by a sovereign with the ability to impose taxes to drive the value of the currency
You have a bunch of down-votes, but you're right. Taxes are the best driver of demand since they force the currency to be the unit of account in a country. In essence, any bitcoin transactions in the US will need to be accounted in USD in order to taxes to be paid. Thus, bitcoin is, as you say, commodity money.
Bitcoin can only operate as a stand-alone medium of exchange in regions without taxes (or in transactions where taxes are ignored).
Countries without a "sovereign" or other government, like Somalia, still use money. Some people have been known to use laundry detergent as a currency since it lasts for a long time, is relatively expensive, and is inherently useful.
Shrug. And which central government issues laundry detergent? Your argument is circular-- if it's issued by a government, you call it a currency. If it's not, you don't, regardless of how people use it.
By the way, the position that you're taking that taxation creates money is called monetarism. It peaked in the 1970s and has been discredited in mainstream economics ever since. The reality is that people create government, and people create money, not the other way around.
Just to be clear, I'm not some big bitcoin propnent. Bitcoin is an interesting experiment but I'm keeping my US dollars.
No, the position that I'm taking that taxation drives demand for currency is a core tenet of Modern Monetary Theory which is starkly in opposition to Monetarism on almost all issues[1][2].
Monetarism is the basis of the neoliberal agenda which enjoys near perfect adoption all over the world. It is the mainstream. Austrian economics is mainstream amongst "conservatives" and MMT is on the fringe of everything because it sounds too conservative to be progressive and too progressive to be conservative (and yet contains the most complete description of how currency works out of any of them!)
It is only dramatic because you seem to think that Mike Hearn declared the cryptocurrency experiment a failure - but he did not. Bitcoin is the first decentralized cryptocurrency - if it fails because of some social dynamic issues - there will be others.
Precisely. I find amusing how every time there is a trend up in the price, there is a flood of doom sayers, as though they want to force the price down...
I think the bitcoin network is fine. These issues will eventually be resolved, although not likely to OP's satisfaction or the way he wants to solve them.
People disagree about the reality of global warming. Does that mean we throw out the entire system of laws of the United States and other world powers because it hasn't yet addressed this problem?
This is exactly why I never bought the concept of BitCoin as a 'libertarian' currency. There's always politics, there's always governance. It becomes political as soon as more than one person is involved. And as soon as it's political, institutions, processes, procedures, and laws become necessary - also known as "government."
I still believe in BitCoin, however. Ultimately, there's a way out of this tangle, and like with most political problems, it's a political solution. BitCoin will either adapt and scale up or stay the same and scale (way) down.