BitcoinZH Introduction: On Bikeji, a popular Bitcoin technical forum, a user questions the motives behind reluctance to increase block size and shows the extreme measures being proposed by alienated Chinese bitcoin users

###Core devs aren’t refusing block size increase due to bandwidth, it’s to add fees

About the author: I took an interest in Bitcoin and have held a few coins since early 2013, when under this username I began lurking around forums here and overseas. I wanted to say a few words about block expansion. This is the first time I’ve posted.

Proposal to 51% attack Bitcoin


Yesterday on Reddit someone posted that for one core developer, Greg Maxwell, the main reason not to increase block size isn’t bandwidth, it’s because he thinks fees are too low.

r/btc post on Greg Maxwell’s motives

r/btc post on Thinblocks

Moving one stone causes a thousand waves. Immediately there was a surge of comments. Not only that, surprisingly even there was even a post on a Chinese forum.

This post suggests that you could keep the block size at 1MB to force Bitcoin to become a fee network. Within China, it didn’t attract much attention.

###Two Quite Different Posts

Reddit is mainly for passing stories on, and because it’s repeating news obviously there’s some level of distortion. The users checked out the claims regarding what Greg Maxwell had said, and found it wasn’t:

the main reason not to increase block size isn’t bandwidth, it’s because the fees are too low

but rather:

The block-size limits the rate of new transactions entering the system as well… because the fee required to entire the mempool goes up with the backlog.

This was interpreted to raise the issue of whether limiting block size was for the express purpose of raising fees. Although it was raised by a few people, Greg was particularly sensitive on the issue (and has since revealed himself as leading opponents of block expansion, saying in the end only Google will be able to run a full-node).

After this there was no further response from Greg, although he continued to leave messages on other forums. The news began to spread. A few hundred responses came in, seemingly all in opposition. One was a thousand-word essay, earnestly advising saying Greg just to carry on coding, keep at his mastery of C/C++, not to worry about Bitcoin’s future strategy and commercial development. It really seemed like Greg had already become the most malignant tumor within Core. At this point I had to laugh a bit. The writers were, in the face of Greg’s consistent opposition to block expansion, certainly not happy, but many recognized the contributions he has made, and continues to make, to Bitcoin.

When I came back to look at the Chinese forum post again, it too said support for 1MB hadn’t changed, that it was to increase fees. Among the comments, one said if fees rose 10 times then mining profits would increase 10 times, so the emperor was in no rush to help his courtiers. If that really were the case, why have the world’s miners one by one declared support for 2MB? Because in their hearts, everyone understands that simply raising fees would be tantamount to killing the golden goose. High fees would deter new users from joining the network, which could kill Bitcoin. The different altcoins mentioned in the article using spam attacks with dust transactions could use much better methods, such as a fixed minimum fee, and not sacrifice everything at the altar of block expansion. It’s simply not worth the cost. Currently, the Bitcoin network runs on fees. Transferring bitcoin certainly involves sending fees. What should be done is to minimize fee increases to the greatest degree possible, even reduce fees (this was the aim of a previous hard fork). By attracting more users and growing transaction volume, total fee income will also increase, and with the new cashflow generated, the bitcoin price would also go up. One proposal is to increase fees even in an unhealthy state, one is to gradually increase fees over time. It’s clear at a glance which of the proposals is preferable.

Although a forced fee market is a good idea, it wouldn’t be possible with just 1MB. The entire Bitcoin network still looks pretty small, it definitely needs to be given space, whatever it requires in the course of its development. And it won’t lurch forward on unsteady wings, too easily cut down on its way.

According to Satoshi Nakamoto, the most important thing is the final outcome. The final outcome. The final outcome. The most important thing is that fees maintain the security of the Bitcoin network, which doesn’t need intermediaries.

###Why Core oppose a hard fork

The only reason for block size expansion, the only one, the only one, the only one (say the important things three times), is that there isn’t capacity to increase the number of users. There are many reasons why Core oppose block expansion. There are many reasons why Core oppose block expansion. There are many reasons why Core oppose block expansion. Say the important things three times. Do you know why there are so many? That’s simple. Each time one is criticized, they can produce another reason, among which some are for opposing block expansion. Their words and actions are clear enough, their basic premise is opposition of block expansion. Their arguments all serve this end. At the moment, the latest argument is consensus. This was also the reason for a united post on behalf of the Chinese bitcoin community. Its author also wonders, if consensus is finally reached, then what reason will Core provide for refusing?

###Why is Core’s basic premise not to increase block size?

There’s no harm in looking again at the article Mike Hearn wrote some three months ago. Mike may now be considered the traitor of the Bitcoin community, but the commenters believe he must been extremely disappointed to have taken this path.

Some concerns were also raised around Blockstream’s 2015 fundraising round, which means that within a few months its investors will be looking for an increase in value. By using this crisis to ensure their technology is essential, they’ll be able to increase their valuation for the next funding round. And an increase in block size would also mean a reduction in Blockstream’s value (just a small laugh for this, because it’s just a doubt). But if it’s true that Blockstream controls Core, then Blockstream’s future also depends on Bitcoin’s future.

###Is there any hope left of a Core hard fork?

Their previous statements show not all Core members are as obstinately anti-expansion as Greg. Some have even issued their own proposals for expansion, although stressing they were individual proposals. But Core has slowly been taken under the control of Greg, representing the views of Blockstream. So the commenters think the only hope is to reach a consensus and thereby force Core into doing the hard fork for an increase. They hope that once they’ve reached consensus, Core won’t produce any further arguments against expansion.

###Either you advance or you withdraw. Putting excellence first isn’t everything.

A lot of people think, Bitcoin stands for excellence first. However we to and fro, the status of Bitcoin among digital currencies can’t change, isn’t it? If we don’t act now to increase block size, by mid-2016 saturated blocks will be the norm. Users will face fees as the norm. Another article looked at how fees are calculated. When we think of future application uses, like McDonald’s supporting payment by digital currency, where the item cost may be around $2 dollars and the fees are around 20 cents or more, if there’s a cheaper alternative such as Litecoin which supports bigger blocks, then people will prefer to use that. In an era when market cap determines winners, one can imagine Litecoin would then have a bigger market cap than Bitcoin. Ok, it might be an extreme example, but remember the scale of the crisis. Bitcoin’s ambition isn’t just to be a clearing network, it’s to incorporate everyday transactions onto the network too. If the ambition lies only in clearing, it’s highly possible we’ll crash during take-off. Because currently Bitcoin is too highly controlled as a clearing network. But if take a longer view, then even if we don’t become a regular everyday payments system, we’ll be astonished to discover we actually have something that goes a long way beyond just clearing.

One more thing. Bitcoin is a technological product. To a certain extent, it’s also the product of our conviction. And having higher ambitions can give other network participants more conviction.

In the same way, Bitcoin is also a product of the internet and there are examples of products which were excellent but failed. A few decades ago, just before http, people went online using gopher, and http was just a gopher rip-off. Just like Bitcoin, gopher had over 90% market share. But gopher asked for fees and everyone knows how that story ends. If one these altcoins that exists today can be used for transactions tomorrow, and Bitcoin fees are high, as a regular or new user, why would I use bitcoin?

Other examples include Myspace, Xiaomi’s MiTalk, FlashGet, Microsoft’s MSN. Too, too, many.

###The Bitcoin white paper

The three things that make Bitcoin unique according to

  • Fast peer-to-Peer transactions
  • Worldwide payments
  • Low processing fees

If 1MB blocks are maintained, we’ll lose two of these:

  • Fast peer-to-Peer transactions
  • Low processing fees

Is that the kind of Bitcoin we want?

###What exactly should we do?

It’s still about consensus. And the foremost consensus is among miners. In a crisis, consensus among miners alone is enough. So the miners must be active, communicate within the industry, build a community of over 95% of miners, set up a hotline.

We need deeds and not just words. Commenters are just common holders, they don’t have any hashing power just the hope that the miners will act quickly. In the event of the last hope, a hard fork, most of the hashing power will shift to the chain with big blocks. A 51% attack would depose the other chain, thereby maintaining the unicity of the blockchain.

Word of the Day

51%攻击 | 51% Gong Ji | 51% Attack

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