Topic: the real Bitcoin debate and why the market always wins (Read 2068 times)

Maybe sensible heads will prevail:

http://www.coindesk.com/major-bitcoin-scaling-meeting-take-place-may/

Yes, but that assume there will not be major financial loss in Bitcoins Market Cap
due to allowing two separate coins on two separate chains to "fight it out". You are
assuming that the prices of both coins will either be leveled or higher than the
current Bitcoin Total Market Cap. Some do not think this will happen and we will
have major losses for a few months to years.

Don't compare Altcoin splits being traded on exchanges to Bitcoin splits traded on
exchanges. In the Altcoin version, the average person doesn't care, but in the Bitcoin
version, it is a possible coin failure from the foundational Satoshi principals. That is 
why it is important there is no two fighting chains. It damages the whole ecosystem.

Exchanges are forced to accept a split because of profits and demand, but it could
cause them all to go out of business within the next year if things go very bad. Their
companies success assumes Bitcoin will not be a failed coin in the future.

Exchanges make profits if people EXCHANGE coins.  The more you can exchange coins, the more profits they make.  They don't care about "picking the right coin" - they don't speculate on coins, they win from users exchanging coins.

The day bitcoin splits, every bitcoin holder will have two coins, one on both chains.   Most users will be polarised, and want to get rid of one to obtain more of the other.   Essentially the WHOLE BITCOIN MARKET CAP will be exchanged.  No exchange wants to miss out on such an opportunity of exchanging coins !

Crypto is a joke where there is fresh meat (called "users") paying for a whole ecosystem of industrials, from miners to exchanges.  And the funny thing is, the users pay for all this because they think they will get rich that way!

In theory you are correct.
The issue is that exchanges are incentivized by profits.
So, is it more profitable for them to have one token on their exchange or two tokens?
Some may choose only to list one token because of future value loss/belief/ideology,
but other exchanges may not.

Exchanges will follow what their users would "want", and that is usually "choice".
So Exchanges do not need to follow miners, but they do need to follow their users.

The miners are not the markets, it is the exchanges and users.

For me this questions pertains to why markets always wins, it's because in business you don't wanted that your capital to sink down to profit loss; that's why market always balanced the rule of supply and demand. As the result of reality market always prevails in the long journey of price fluctuations beyond the entire bitcoin price history since last year's colorful world of digital currency.

It is my first time reading this kind of information and it enables me to think deep and do some research. If the exchanges have a validator nodes then there is no need for the core developers and BU to go against its other and there is no longer need for a consensus. If the exchanges can make the miner follow by the rules then the exchanges should set one universal code so that the miners will not have a conflict anymore.

This is causing a lot of controversy, and a lot of different opinions are raised around the issue of segwit and bitcoin unlimit. And I think you are right, the market always wins, when miners have the right to choose their own form of investment and investment, the market has the power to decide the level of supply and demand they can choose from. Buyers, and miners will have to accept a bitcoin discount to a certain level, which they can sell their product, which is a disadvantage, bitcoin unlimit is a greed and they will have to pay the price. If the market refuses. The market always wins.

Well, I really don’t see it that way, big Chinese companies through their moneys to the bitcoin market trying to dominate the mining  market which means that they control the exchanging services.

It is true that it is not controlled by the Chinese government in specific but that still means that they affect the prices of the bitcoin by some way, like what happened in February when the Chinese government made some regulations on the exchanges we witnessed a change in value of the bitcoin.

This isn't going to be a very long post right here as I have just one question.

Do you guys think the block halving has alot to do with the increase in fees ? Some interesting opinions here though. I'm interested to see how you all feel about that.

Really good, he has some points. This problem should be resolved since last year before those transaction out of capacity.
I just realize that : Bitcoin was meant to hard fork from time to time as a full-node referendum aka hard fork (or simply via a flag day - which Satoshi proposed years ago in 2010 to remove the temporary 1 MB limit). Mr. Satoshi has mentioned about this problem, why we should wait for years to move forward. Bitcoin need to be adjusted according to the market demands regards transaction.

In the situation that you describe, that would be a "Non-Contentious Hardfork",
and previously if something like this was to occur, people wished that the activation
threshold would be over 90% to ensure a single chain. That would basically be that
the whole community is essentially in mass agreement. The 10% loss would be
considered a very low risk and worthy of the dice roll.

The hypothetical situation I was considering is one where you have unanimous agreement between miners and business of a protocol change, but a majority of users do not upgrade their software because they are unaware of the change. You can't send them an alert any more. The result is still one chain, but inefficient propagation through the user validating node relay network.

Obviously. But FYI, directly connecting and trusting a miner goes against Bitcoin. We are here with
Bitcoin so that we do not need to trust any single entity, but the validated ledger itself.

In addition, why would Business Nodes that are Validators want to join the Miners into unknown territory?
By the nature of markets and businesses, they want a sure bet, not a gamble. You going to rely
your business on something that could collapse and possibly never recover from?

To Join the miners who wish to perform a contentious hardfork, would be shooting yourself in the foot.
In fact, that is why the exchanges recently made statements about how they would handle the chains.
They did not say "we will follow", they said, "we will do both to protect users from this violation of Consensus".
If everything was done as Satoshi "envisioned" there would always be one chain, as thus no violations.

Yes, but this kind of collusion could exist using -connect option for example.



In this case I should have said 'validating user nodes' to be clear.

So what I am trying to say is non-upgraded validating user nodes do not have a strong effect on consensus, as long as the main economic players can find each other.

Of course, but that is not what is occurring now and is purely hypothetical.

First, businesses and miners are not "directly" connected.
They only "connect" through interpretation of the ledger data that is enforced by the protocol.
The nodes enforce this protocol. Your situation doesn't exist yet and hasn't in the past.

You are essentially describing collusion and manipulation between the miners and the markets
in order to circumnavigate the remaining Consensus Mechanism. It is form of breaking Bitcoin.
Bitcoin was intended to allow for changes by Consensus, not by going outside Consensus.




You are mistaken.
Business Nodes are all Validating Nodes, they cannot defer to Miner Nodes ever.

In your statement above, if Business Nodes connected to SPV Nodes (user Nodes), then
Business Nodes would be vulnerable to attacks and false chain info and so they can never
defer as well. Business Nodes are by their financial and legal nature need all to be Validators.
Any business node that is not a validator is at risk for attack or legal liabilities depending on
the business that they provide.

No one needs to "connect" to miners, they are only performing work to build valid blocks.
The Valid blocks are approved to the current blockchain version by the Validating Node network.
If a miner builds a bad block, Validators reject it and the miner loses any incentive.

For Miners to have a new protocol, they need Nodes to support them, not follow them.
Nodes do not follow by their nature since they are incentivized by Ideologies and not profit.

If that were true, we wouldn't need proof of work.  We could use proof-of-non-sybil-node.  Now *that*'s a boy of a consensus algorithm 

In fact, we should have a guy with a web site that publishes the IP of all the good nodes (according to him) that are entitled to vote, what about such a consensus system ? 

I'm talking about a specialised situation here, where the miners and businesses are directly connected to each other. If the miners and businesses are running the same new consensus protocol, any valid blocks created by miners will be validated by the business nodes. User nodes will reject them unless they upgrade to the new consensus protocol.
If however, business nodes are connecting to the miners through user nodes, then the user nodes may invalidate the miner blocks and not pass them onto the business nodes.

No, Validating nodes and/or Business nodes have no reason to follow the miners.
In fact, the miners are following them. If the miners do not, that is called a contentious
hardfork or an accidental hardfork. One will reorg and the other is a new protocol chain.

If the miners goes off track, Business nodes and/or validating nodes won't follow the miner.
That would defeat the purpose of having a distributed decentralized validation network.

BU nodes, that exist today, exist to support a contentious hardforked chain.
in normal situations where everyone is happy, you don't need BU nodes since the CORE or
OTHER nodes would implement signaling for a very long time before the hardfork.

The term "hardfork" is from the perspective of the nodes, not the miners. So for example, if
Miners had the power to hardfork at will and nodes must follow, then a hardfork does not exist
since there is always one chain in almost all cases. "Hardforks" exist because Business nodes
and/or Validator nodes have some influence and/or power.

What I am trying to say, is that even if validating user nodes reject blocks produced by the miners, as long as the miners and businesses are well connected and working on the same consensus protocol, the validating user nodes just become unsynced (They no longer have the longest chain). They then upgrade to be compatible with the network and catch up with the full chain.

So full node consensus is not required, as long as there is consensus between miners and businesses, a protocol upgrade can go ahead.

Correct, and this is all that I was trying to say above, but didn't include
SPV nodes because those are not validating and don't even store the blockchain.

So either some Bitcoin community members in general do not understand that difference
between SPV Nodes and Validating Nodes, or are trying to confuse it for others as
it relates to the current hardfork issue. Nodes are not worthless compared to Miners,
unless those people are referring to SPV Nodes in comparison to Miners.

(My only issue with above quote is that for #3, some are based on the validating of #2.
Also, #3 could be a few validators, but of course most are surely using SPV today and
likely very into the future.)