Topic: The fork (Read 5058 times)

Bristol Bay is a perfect example of a forcible ban on ownership, exactly opposite to the situation with Bitcoin: there are laws preventing anyone from owning or homesteading any part of the fishing waters. This is what causes the tragedy of the commons and artificially removes the incentive of each user to maintain the resource. Commons (in the economic sense) are always created by government fiat.

This is why Bitcoin has no commons. Each node is self-owned. Each can do whatever it wants. There is never anything forced on anyone, unlike in a commons. The organism will adapt in accord with its interests.

I say you are missing the forest for the trees.  The entire Bitcoin economy and ecosystem forms a very viable and very real 'commons'.


In Libertarian fantasy-land it sounds good, but in the real world there are countless examples of unmitigated disasters when the commons are divied up (or simply taken by those with the means to do so) and extracted out of existence.

One of the first which comes to mind is the salmon fishing in Bristol Bay which I participated in for many years.  You won't find a bigger set of right wingers and libertarians than commercial fishermen, but every one of the recognized the value of treating the resource in a sustainable and managed way.  Especially those who had been around in the bad old days.


When only .0001 percent of the community has the realistic ability to operate a node (much less a mining setup) the system will be for all intents and purpose operated at the pleasure of a very small group of very probably like-minded people.


I the open source world of Bitcoin, the protocol is the law.  And the users are those who enforce the law.  To the extent that it is practical at least.

Indeed, having a "commons" is the problem in the first place: no commons, no tragedy of the commons.

Bitcoin has no commons. Every node is owned by someone and they control it, therefore no commons, therefore no tragedy.


That's good, because most economic reasoning seems exactly backwards from common sense.


Only the nodes are owned, not "Bitcoin" (the system).

WTF?!?

For one, if someone takes ownership or control of the commons, they are not the commons any more.

For two, it is very much the case that the 'tragedy' occurs absent a mechanism to prevent it.  'forcible ban' or otherwise.  You seem utterly backward on the whole 'tragedy of the commons' principle.  To me.

For three, a lot of us, and especially myself, are pretty leery about individuals 'taking ownership or control' over the certain aspects of Bitcoin's function.  Indeed, the difficulty of doing this is a major 'selling point' of the Bitcoin solution.  In part because of the ill effects of such control in other solutions.

The well heeled elite's "norm" is likely to be out of reach of some people somewhere, but being the entitled, the elite, with their natural disdain of anyone who cannot afford enough sufficiently weighty law firms or enough sufficiently advanced ASICs or enough well enough armed troops or whatever to defend themselves are natural prey, the commons belongs to whoever has the troops to seize it, and if having your and your peers', your similarly elite, similarly entitled buddies' troops actually come to blows cuts into profits well maybe it is better to simply co-operate in having them keep lesser beings out instead of raising your corporate health plan costs by wasting your troops on each others' troops.

Gosh when I think of it this way I start to think the middle east is a commons of oil, and remember hearing of various send in the marines type of stories... Get those ragheads out of the commons because the commons contains something we have the brute force / violence capability to seize regardless of what the ragheads want or do not want...

Heck the ragheads are maybe not even rapiing the planet's resources at max possible speed, a real outfit needs to get in there and get all that oil out and burn it quick to maximise profits because profit now is better than profit later...

-MarkM-

I just don't see why widespread norms wouldn't emerge to have the blocksize be within a certain reasonable range at any given time (the norms would change dynamically/organically as the mining community sees fit), with the result that rogue miners would be more or less completely isolated.

Tragedies of the commons only happen if there is a forcible ban on anyone taking ownership or control of any part of the commons. Since each node is in control of itself, at least, I don't see how this situation can be subject to a tragedy of the commons. It seems that if any behavior was know to be harmful it would become taboo and miners would understand that to protect their long-term investment they had better reject rogue behavior.

Isn't the debate then a matter of how many people would reject? My sense based in economic reasoning suggests that norms like this could cover much more than 5%.

Doesn't Ripple basically make every normal user a fidelity-bonded bank, with the "gateways" as the fidelity-bond vaults?

I say this because it seems to me one can regard a "gateway" to be functionally equivalent to, or at least quite akin to, placing a fidelity bond sum of value somewhere. Any of the IOUs backed by that "bond" can be made good at the fidelity corp aka "gateway" instead of by the "bank" (the person who actually transfered to you such a "fidelitous" IOU instead of one of their person IOUs).

Or is the key distinction in your "fidelity bond" concept a kind of "fractional fidelity" system wherein the amount of IOU "insured" by the bond can exceed the amount of the bond itself?

-MarkM-

Rejections are is not a significant risk for miners. That's the whole point of my original post on the issue. If your blocks are built upon by the majority of hashing power, you come out ahead in the long run. Your orphan rate does increase proportionally, but if, say, 5% of the hashing power never sees your blocks, the increase in varience is low, yet you get the very real benefit of 5% less competition. In the long run there is no "might" - it's simple statistics, and I haven't seen anyone offer a rebuttal based on analysis rather than hand-waving.


I agree with you there. But if large blocks turn out to not be an option, for whatever reason, we need alternatives, and creating those alternatives take time. We've probably got two or three years before the limit becomes a big issue, maybe less, and as you know raising the limit will take at least a few months for the consensus to be achieved among all users. Right now what I'm hearing from you and Mike Hearn is a defacto "yeah, we'll just keep upping the blocks size, I just don't know yet by how much or if it'll be one-time thing or a floating limit". This attitude leads to people not working on alternatives and if alternatives don't exist by the time the limits are reached, like it or not, raising the limit will be the only option regardless of the downsides.

You already know about the fidelity-bonded banking stuff I'm working on, but it really bothers me that I don't seem to have much competition. Frankly I'd be happy to see someone else come up with an even better idea that I haven't thought of, or just come up with a better implementation of bonded banks than me. That outcome is much more likely to happen if you make it clear that if off-chain value transfer systems are developed not raising the limit is an option.

Loonies aren't legal tender where you're from, eh?

-MarkM-

Yes, I believe they would. So far, most miners and pools are VERY conservative; I think the idea that they will create huge blocks that have a significant risk of being rejected, just so they MIGHT get an advantage over marginal miners that can't process them fast enough, is loony.

But I might be wrong.

So I'd like to wait a little while, think deeply some more, and see how miners and merchants and users react with the system we've got as transaction volume increases.

The cool story isn't when the miners bravely reject the large blocks, it's when the users of Bitcoin bravely reject large blocks, by doing nothing more than not installing any version of Bitcoin that removes the current 1MiB block limit.

Bravery by doing nothing; kinda anti-climatic really.

Read my post on the subject.

Isn't part of this whole cool story the tale of the brave defenders of the original one true bitcoin who will do just that?

-MarkM-

Why wouldn't miners reject interactions with miners who set the block size too high, for instance?

While I understand what you're getting at and it may be a concern if we are to have a single fork, in terms of economics you're talking about virtual oligopolies, not actual ones, because the "barriers to entry" you mention are not barriers to entry into the cryptocurrency market proper, but barriers to entry into mining in a certain implementation of Bitcoin. That is, there is still no barrier to creating a Bitcoin fork that has low/high barrier to entry for mining.

My point is that as long as there is no actual oligopoly - no actual barrier to entry into the market itself - natural order should sort everything out.

"Let a thousand forks bloom!"

...keeping in mind that forks will only arise when and if there is an insurmountable lack of unanimity in the system, which should only happen if there is a huge fundamental rift in terms of vision or application, such as it in fact turning out to be infeasible to have a single Bitcoin that is optimized as both as payment system and a store of value. This can only happen once or perhaps twice, I would think, and if it needs to happen I think it should. Take the bitter medicine if it's really needed; hopefully it isn't.

Exactly. For mining itself, 1MiB blocks ensure that the barriers to entry are very low, and thus an oligopoly of miners won't form.

Increasing the block size, and especially allowing miners themselves to determine by how much, increases the barriers to entry, allowing for an oligopoly to form.

Bitcoin itself may be an oligopoly, but we really, really do not want Bitcoin mining to become an oligopoly.

An oligopoly is a situation where there are very high barriers to entry.

With Bitcoin, anyone can participate. The only thing resembling a monopoly situation is the core dev team, but that resemblance is only superficial: it's a natural monopoly for the moment, but the barrier to entry is not prohibitive since other, possibly even more capable software engineers could form their own team or even their own Bitcoin fork and it's possible that the majority would eventually support their fork.

This is the free-est market in the history of the world, because there is no coercion in it at all. It is entirely voluntary.

So we are faced with the seemingly paradoxical situation wherein we have a completely free market yet there is a natural monopoly development team. This means that, in the short term, the dev team has a lot of power and can seemingly maintain a uniform set of rules by "fiat."

But I think it's a myth that this ability to quasi-legislate is what underpins the uniformity and solidity of the Bitcoin protocol. The existence of this debate shows that many will not automatically follow the core devs (even if they were unanimous). Rather, the source of the uniformity is the belief each node has in the core protocol rules, with the hard BTC limit being the most staunchly supported. Adherence to the original protocol in all aspects seems to be supported as well, but to a lesser extent, and may be amenable to persuasion.

In other words, Bitcoin as a system has always been underpinned by the beliefs and wills of its participants, including the belief that the original protocol should not be changed lightly. The only way to make changes, then, is by convincing people to go along with them, and although the dev team may be in the best position to do that, there is no monopoly on persuasion.

Don't forget: (mining or by maintain a full node, even if not mining)

Bitcoin itself is an oligopoly. What are Bitcoins made of anyway? They're just bits, information, and by themselves information is incredibly, ridiculously cheap. Of course the incredibly low price of information is made possible by the free market itself, specifically the amazingly successful computer industry.

Bitcoin is a system by which every participant creates a shared oligopoly on a particular set of information, the blockchain. From day #1 Bitcoin was about taking information that, if subject to free market forces, would be so incredibly cheap that it'd be basically free and artificially making it expensive. This shared oligopoly, achieved through the rules set out by Satoshi, makes this information incredibly expensive, so much so that 32 bytes of information, a private key, can now be worth millions of dollars.

Basically the decision about how big our shared oligopoly should allow blocks to be is just a decision about what rules we'll follow to make our little bits of otherwise worthless information as valuable as possible. Myself, gmaxwell, and many others happen to think that if we limits blocks to 1MiB each, keeping the regulations as they are, our little oligopoly will maximize the value of that information. Gavin, Mike Hearn, and many others happens to think that if blocks are allowed to be bigger than 1MiB, thus changing the regulations, our little oligopoly will maximize the value of that information.

Don't for a second think any of this discussion is about free market forces. Bitcoin is about artificially subverting free market forces through regulation, for the benefit of everyone participating in the oligopoly that is Bitcoin. It just happens to be that the way to become part of this oligopoly isn't by, say, living in a certain part of the world that's mostly desert, it's by either buying entrance (buying some Bitcoins) or by doing a completely made up activity that has no purpose outside the oligopoly. (mining)