Topic: The Barry Silbert segwit2x agreement with >80% miner support. - page 37. (Read 120014 times)

There are no barriers to entry. There is a cost to enter profitably, which is gladly rising, and it filters unlegitimate or undercapitalized from entry. If you however have the labor capital to bear the cost and provide an efficient service, noone is stopping you. The rising cost in an unregulated and blind free market from my view increases security for all users. Also, you are free to mine at a loss too.


You have a monopoly in hardware production because it's the best. This is an unregulated market. Users have a choice. Bitmain competed and is reaping the rewards. It was free for anyone.

As far as obscurity in China. You might argue that Bitmain is being subsidized by some other interests in order to be able to mine efficiently when hardly anyone else can. But you can also argue that they simply made it more effficient than the rest. We simply don't know and we should not care. Bitcoin does not care. It is blind. This would effectively mean someone is mining at a loss which consequently means someone is paying out of their pocket for added value of your Bitcoins.

And actually, as far as Companies are concerned, I reckon selling hardware or hash rate is an important part of hedging their Bitcoin investment and I don't envision Bitmain to stop selling it. If they did, a whole new Market would be created for it anyway. Future Bitcoin mining value is already encompassed in Hardware pricing. So they get today, free of interest, what could or could not be gotten tomorrow, without obsolescence. Essentially passing on the risk at the cost of very few returns. If Bitmain were to stop selling equipment, they would start carrying all the risk of a highly volatile asset. Decentralization is actually in their favor.

For Legitimate Cloud Based Mining is even better. They effectively create a subsidy whereas with rising difficulty or rising electricity price, your contract is unprofitable, but they can keep mining for themselves with your rented hashpower because effectively you subsidized it. It is unprofitable for you, but not for them. It's a question of Risk. You are betting on rising prices to support difficulty, they are hedging on the eventuality of falling prices.

In the end, you have choice, which is what is important in a free market. We do not need to use any of these services. They are only as profitable as we demand them.


I am sorry. Probably this wasn't the best place to bring up these issue.

As for scalability, I honestly do not think we need to make choices on what Bitcoin can or should be. As I said, I am not a technical expert, so which technology is used for scaling is outside my expertise.

I will say however that Bitcoin can be everything at once. There is really no need to discuss whether we want it as a settlement layer, a store of value, a medium of exchange, a payment processing network, whatever...

It’s simple if you imagine Bitcoin as Gold. And you can easily imagine Bitcoin as Gold on Steroids. I am pretty sure that Satoshi Nakamoto envisioned it like that, because he solved all the problems that Gold had as Sound Money and made it so that we would not need to follow the same path Gold did.

a)   Bitcoin Vs Gold
•   Divisibility
Much better than Gold. Easier to divide, virtually costless to do so.
•   Fungibility
Much better than Gold. All Bitcoins are truly equal. No quality differences.
•   Easy Transport
Goes without Saying
•   Store of Value
Probably on par. Remember, talking about Bitcoin Vs Gold in a non-Fiat world.
•   Ownership
This is where Bitcoin clearly beats Gold. You can exercise and maintain effective ownership. No confiscation risks. Nothing.

I reckon that even the bigger fees and delays should not be dramatized when you are comparing Bitcoin with Gold or any other Money. In a sane world, Bitcoin would do its job Better than Gold. Better yet, it would free Gold to its other relevant uses, rather than being hoarded, which effectively inflates its price, which then gets reflected in the goods where Gold is necessarily present, thus increasing efficiency and bringing value to everything and everyone down the chain.

Forget comparing it to FIAT. FIAT has no value other than being Legal Tender. The reality is, right now, you are better off getting immediate value for your paper money rather than hoarding it and I further postulate it has always been like this since the implementation of FIAT. Money has lost its essential quality as store of value. The better thing to do is receive a paycheck, keep what you need for day to day and just go buy a store of value or get immediate value out of it. My tactic? Just leverage. Get as much debt as you can, buy a store of value, like Real Estate, Gold, Bitcoin, whatever. Pay it back with the same worthless shit money they give you and keep the good.

I postulate that Bitcoin can be an entire Monetary System.

b)   Bitcoin as a Monetary System:
•   Medium of Exchange
We’ve already checked this.
•   Bank
Each participant can be its own Bank and have Ownership of his coins. The capability of offering Bank Services by each person is also there, and is transparent. Furthermore, for true free banking, each person also has the capacity to issue their own notes backed by their public Bitcoin Holdings. Although this would be pointless if everyone used Bitcoin. In the current circumstances, I see it as a bonus. It brings hedging opportunities.
•   Clearing House
If sidechains are implemented, the main chain has this property.
•   Central Bank
Bitcoin, or the main chain, is in fact a Central Bank. Regardless of the decentralization of its participants.

There is no need to choose a path. Bitcoin can have it all and does it more efficiently than anyone.
 
Bitcoin can be a Dollar, a Bar of Gold, a Certificate, a Clearing House, a Bank, a Central Bank. Everything in a Monetary System can be encompassed by Bitcoin. More efficiently, more transparently, more democratically and more secure. And essentially, all at once.

My main point is Proof of Work should not be changed. Ever. Bitcoin needs to be backed by Energy, otherwise it has no value in the real world other than speculative.

The market will work itself out in what regards monopolies, provided Cryptography continues its job as a Guarantor of Democracy and Transparency. The reality is: How worthless would a 100% Chinese Miner Monopoly make Bitcoin, in a free market where we can just fork it or simply use another Cryptocurrency. Unless Bitcoin turns into Legal Tender and all other Currencies are outlawed. Which in itself would require an impossible consensus.

For scaling, it doesn't really matter to me whether unlimited blocksize or not. It matters that usability improves and that transactions are processed efficiently which from my understanding, all proposed solutions guarantee. Gold would not lose its properties as a store of value if we could infinitely divide it and transact it frictionlessly. And Bitcoin will not as well.

As for the average Joe, which constantly keeps being brought up, he has no usefulness. His energy is better expended providing other labour more efficiently. You do not need to impose a Quota that NFL teams play with an Amateur. It is a professionalized business.

Do not tax Bitcoin. This is not a Welfare State.

This viewpoint seems a tad bit too naive. There are big barriers to enter this "free market" and it appears to me that the mega miners have already won the game. They will be the only ones left standing. I also get the feeling that there is battle raging now between the "landed gentry" (what I'd call the mega miners) and the average bitcoin user/small stake holder. These two (or more) groups have obvious diverse interests at heart. The rich and powerful will always seek more power and control. Huge mining conglomerates based out the Far East control the lion's share of the network hashing power. There is no transparency in the way business in conducted in China, so I don't really trust that all the various Chinese mining pools aren't controlled by the same small group of people.

Also, we already have a near monopoly on mining hardware production by the likes of Bitmain (this is in the SHA256 space that is). If this isn't centralization I don't know what is. If there were a group of say 5 to 10 companies producing chips AND selling to the average Joe miner than your point about fears of centralization being "completely unwarranted" would be far more believable. I sincerely worry about the current situation and it sucks big time that we have to be at the mercy of Bitmain's good dispositions. Thankfully they still sell hardware to the general public, but technically they don't have to. I would not seem logical that they would kill the golden goose but they will sure try to keep it busily laying as many golden eggs for themselves as possible.

I hope I don't sound too pessimistic, but I sure hope some of those free market forces would be more active.

The exchanges and wallet providers don't have as much power as you think they do. Mining is the heart of bitcoin. The exchanges and the rest act as the arms and legs of the bitcoin organism.

Anyways, I feel we are derailing this thread. Let's get back to constant back and forth about the scaling challenge

If this problem gets solved without a major btc price crash or loss of confidence I'm going to be drinking a shit ton of beer to celebrate!

This is your first post, and you are bringing up all kinds of deep philosophical shit.

Can't you just discuss some of this in terms the more immediate theme of this thread and maybe speculate how some of your ideas might play out in terms of the various BIPs and maybe some of the game theories of the BIPs, including how much support they might need to get in various regards in order to push bitcoin in one direction or another. 

For a while it was seeming like seg wit was going to be a kind of "done deal," but with the passage of time and my reconsideration of how the signaling of intentions and the actual running of the software are two different matters that can end up causing quite a bit less certainty that segwit is going to come through this whole process and within a reasonable time and without first crashing the price.

There have been a lot of talks about Centralization. From my point of view, completely unwarranted. The truth is, this was already taken care of. Free Market Forces provide for decentralization. Transparency through Cryptography guarantees it.

Its contrary to efficiency to protect the average Joe in his basement, as I hear a lot. Decentralization is achieved not only from different Mining Pools Market Share, but also from other big participants like Exchanges, Wallets and whatnot. For a 100% Market Share Mining Pool to game the system, it needs the consensus from the rest of these participants who guarantee the money flow. And bear in mind, that in a Global Currency, this is always a lot of participants with different interests and different geographical targets, cultures, needs, and outlooks.

I hear a lot of Gold Rush from users with PoW change to return to CPU and GPU mining. Artificially guaranteeing profitability of inefficient endeavors. Effectively subsidizing it.

Once you do this, you are creating regulation and outside incentives which for the most part, create inefficiency. Bar a lot of speculation or sudden steep increase of utility, Bitcoin price would have to fall. It’s the difference between Mining Gold and Mining Sand. Furthermore, the Higher it costs to Mine, the Higher it costs an attacker, so the higher cost arguably also increases security as far as I get it. It’s up to the miner to increase efficiency so he can maintain his returns. This has been done, in a free market, by specializing equipment, by pooling resources, etc...

Gold value, or anything else for that matter, is the intersection of minimum value the seller is willing to get for it and the maximum value the buyer is willing to pay for it. This sounds easy enough but the conclusions of many a post, point to an unclear understanding about this.

Because the minimum value a seller is willing to get for his good, is correlated to how much work he put into it, or the cost it took him to obtain it, price of goods, bar speculation or sentimentalism (aesthetic value) effectively encompasses Proof of Work. Digitally, this proof is achieved Cryptographically. Physically, although we are subject to falsification, in a credible world it is safe to assume that the existence of a certain good encompasses its Proof of Work.

If we want Gold, which we do, there is no reason to wish that the Gold Miner have no profit. Or otherwise, we wouldn’t get Gold. Anyway, if the Gold Miner has no profit, it effectively means that we don’t want Gold. Or instead, he stops mining it, we still want Gold, the price rises and he mines profitably again. Since this is a Censorship free market, if he profits, so might others, which without barriers to entry would make it very difficult to sustain a monopoly.

The best about this is that people will look for efficiency. Bitcoin is making people think and be creative. Looking for better ways to spend energy in order to get Bitcoins. Let’s also not forget that for the most part, it’s in fact Energy expended that defines the price of something. Or the value of said energy. Gold was backed by energy, by the cost of labor it took to mine. We then decided that Gold had value to back something else, which is not entirely true if demand and supply is volatile. This is however, always true for Energy.

Also, you must take into consideration, that should we not attribute any value to Gold, then no one would mine it. Not even with slave work. As this slave energy could be used for other more valued labor. So, since the beginning of times, all true value is backed by Energy. Energy is the currency of the Universe and Satoshi Nakamoto clearly understood that by implementing his proof of work.

I am no technical expert by any means, so please enlighten me if I am wrong. Let’s postulate that someone gets an absurd Market Share of 100% and gets to decide what and how to mine. What would this mean for Bitcoin?

In my view, one of 3:
a)   The complete bankruptcy of the Miners, because in a censorship free market this market share would mean they are mining at a loss. Difficulty would decrease, Market would readjust.
b)   The spectacular life of Bitcoin, because in a censorship free market, this would mean no one mines more efficiently, and thus it would be better for users and everyone else. The value should also be rising for holders.
c)   A complete fuck up of the system. Which in a censorship free market would mean either a fork from other miners, or a loss of users, thus decreasing the value of Bitcoin, thus decreasing the value of mining, thus reverting to a) or b). 

Centralization is not all bad. Regulation and Censorship is. Barriers to entry are. If someone rises to the top of Market Share in a completely free market, it is only because they are more efficient, thus bring better value. In bringing better value, probably either other actors have monetary incentive to enter the market or the users get more utility from their Bitcoins.

O.k... then BIP91 signaling has to reach 80% in order for the causing of a lock-in incentive to achieve the 95% + segwit

Why not? It's a question of initiative. If these companies stay together supporting Segwit2x, they have the big chance to get influence on the - likely - new reference implementation of Bitcoin. They wouldn't benefit at all if they change their mind just before the deadline.


80% must signal for BIP91 - if this happens, then Segwit's activation is almost sure, because like in BIP148, all clients running this patch regard non-Segwit signalling blocks as invalid and will orphan them. Segwit at the end will be activated with 95% signalling for it - but if non-Segwit blocks are orphaned by 80% of the miners, it will be almost for sure 100%.

Neither of both "models" would work - because 80% is only sufficient if BIP91 goes through. If BIP91 fails, 95% must signal for BIP141 ("traditional Segwit"). The current "NYA" signalling has no practical effects - the decisive phase will start with BIP91 signalling in mid-July.

That theory only holds if one considers Core-sponsored segwit to be "segwit" and any other deployment of segwit to be "notsegwit".  

I think that we have to watch this signaling versus running the code fairly closely,  no?    

Does anyone really believe that more than 80% are actually going to run Segwit 2x..  Seems really questionable to achieve that level.

In the past several days we had intention hovering between about 80% and 90% - but when the rubber hits the road, how many are they going to get?  Also, what percentage is needed to get segwit activation?

Currently, there is nearly 40% signaling actual segwit?  would 40% + 40% be enough?  or do we need 40% segwit and 55% segit2x?  And, looking at USAF, I remain unclear how that combines into adding all of the percentages and to see if we get a lock in of segwit at a certain point by putting the combination of percentages together  - sure it is clear about 95%, but if we are short of 95%, then which combination of percentages and from which ones would actually cause the same locking in effect?

Hopefully Bitmain don't pull the rug out at the last minute killing SegWit but leaving the hard fork. There's been a great surge in anti-SegWit rhetoric lately. Lukejr seems to think SegWit2x is just a ploy to stop 148 and delay SegWit.

So these companies signed an agreement without really knowing what was in the code? Very disappointing.
Just because they are already rich does not mean they do not need to be cautious, especially when it is the future of Bitcoin that is at stake.

Why on earth IS there so much room left for that drama ?    Is it because tech = 'computers don't do that'  or  human ?

It still nothing only some more drama to be putted on us. This is still no concluded yet tomorrow will be something else. Think that they test our patience.
Or will this innovation take aggressive actions to ensure a hard fork would enforce a 2 MB upgrade, and if this is true how many mining pools will run this resolution?

One major criticism toward the Bitcoin Scaling Agreement was the unrealistic deadline proposed by the 57 companies and miners. According to Bitcoin Core developer Greg Maxwell, Segwit as proposed on the Bitcoin Scaling Agreement can’t be activated by September with a changed activation threshold.
I think it will not be activated soon 

The 89% rate which you are mentioning is just the "intention". They are not implementing it right now. The implementation date is still a few weeks away. I hope that the support levels will remain at this level until the implementation is finished, but yesterday I noticed it dipping below 80% for a few hours.

You want drama and doomsayers, go and read reddit...

It can't get activated since they won't officially be running it till July 14, for activation at July 21. That doesn't preclude them from running it earlier but nothing will happen till then.

SegWit2x intention peaked at 89% today. I hope it gets activated soon. This drama is reaching diva proportions.

Again, once segwit2x activates segwit then BIP148 has nothing to do and becomes irrelevant. There is nothing to activate or deploy from BIP148 if segwit has been activated since the BIP148 endpoint is segwit activation.

I agree with your description a proof-of-work change as a nuclear option. Similar to the deployment of nuclear weapons in war it will hopefully be something that functions only as a deterrent. Should we reach a point where the "nuclear" option is deployed we all lose big time.

Consensus is very hard and takes time. Bitcoin itself has no inherent value. Its value comes from the network of individuals that transact in and use it. Fracture that network into pieces and the value of the parts will not add up to the whole as the scope of possible economic interactions narrows but that's not the worst of it.

A fractured bitcoin would damage the core of what bitcoin is. Bitcoin is an overarching consensus system organized around the concept of sound money. Those voluntarily participating in this consensus are required to behave transparently and do work with the ultimate aim of ensuring all network participants abide by the greater consensus.

Bitcoin as an generalized economic entity is subject to group selection. With group selection the group behavior be referenced to something outside the group. This something outside is the general goal and idea groups cohere and organize around. It is what they cooperate to promote. In the case of bitcoin the referenced object is the conceptual idea of a sound and ideal money.

The ideal of bitcoin as a sound money would be significantly damaged by a contentious hard fork. Damaged in such a way the two broken pieces of bitcoin would be worth less then the original as their fundamental essence would be called into question. There would be no winners in such a scenario only losers.

For some interesting info on the general topic of Group Selection see:
General properties of Group Selection
http://iqpersonalitygenius.blogspot.com/2015/11/general-properties-of-group-selection.html?m=1

Valid points. I think the miners primarily want to remain invisible and make money quietly.  I don't see that miners have a public face (other than Wu), and many don't speak English. The blocksize nonsense has reached epic proportions, and is strangling their profits (inb4 "but high feez", fees are 10% of mining revenue, so don't bother).  So I don't think that maintaining credibility is important factor when weighing these decisions. After all, look at how much Core's reputation has suffered over the past few years of their hardline "small blocks or die" stance.

Blocks being full right now is not a huge problem because the mempool spamming has subsided. Not too many unconfirmed transactions and fees are dropping. Whoever was doing the spamming stopped.

Segwit2x with more than 80% majority has already shown the intent to start signalling Segwit2x by July 21, with the current situation it is  obvious that Segwit would get activated through Segwit2x before August 1 so would BIP148 still be deployed on August 1with a low majority?

Secondly if Segwit activates either through Segwit2x or BIP148, I guess still there would be a hard fork three months down the lane, right? According to NYA Segwit needs to be activated to do a hard forking.

Yeah either a compromise or some big miners backing out of NYA.