“There seems to be a considerable amount of confusion among Bitcoin users regarding the nature of the process underlying changes to the Bitcoin protocol. In an earlier post I described the process for making code changes to the Bitcoin Core software repository. In this post I’ll go over the far more intricate process underlying changes to the consensus rules that ensure everyone ends up on the same blockchain and sees the same ledger and transaction history”
Jeff interviews crypto-expert, Trace Mayer, in a TDV subscriber first release interview, topics include: BTC segwit adoption, user activated BIP148 softfork to force segwit, BIP 148 coming ready or not, bitcoin scalability, the risks of forking the blockchain, community power, the true value of miners, securing your bitcoin through the upcoming fork, big BTC losses through poor security technique, don’t mix politics with investment, high transaction fees could be about to change, an examination of certain ‘altcoins’, and a hot tip on an altcoin with huge upside potential yet to take off.
Great article, also follow @beautyon_ who has done excellent commentary on this topic.
“Political compromises have no place in bitcoin protocol development. I have my full faith in the consensus-driven scientific process that’s based on open communications, technical merit and peer review. A top-down imposed agreement based on closed-doors lobbying that overrides the technical community consensus process and the established FOSS practices would severely undermine the value proposition of bitcoin and its long-term viability”
Allowing political compromises to shape bitcoin protocol development sets a dangerous precedent, constitutes a moral hazard and erodes the established FOSS practices and consensus-driven decision making.
“At its most basic, a fork is what happens when a blockchain diverges into two potential paths forward — either with regard to a network’s transaction history or a new rule in deciding what makes a transaction valid”
Hard Fork: A hard fork is a software upgrade that introduces a new rule to the network that isn’t compatible with the older software. You can think of a hard fork as an expansion of the rules. (A new rule that allows block size to be 2MB instead of 1MB would require a hard fork).
Soft Fork: A soft fork, by contrast, is any change that’s backward compatible. Say, instead of 1MB blocks, a new rule might only allow 500K blocks.
“We have a standoff. Core is not willing to compromise on larger blocks, given further risks of centralization and miners are not willing to adopt Segwit and impact their fees”
“I’m a big believer in Free Markets. The market will decide which flavor of Bitcoin it wants to back. Right now, I think the market is just waking up to the reality that high prices will ultimately result in a hard fork. Conversely, if the miners realize that the market doesn’t believe that the current path they are taking is acceptable, they will be punished by the price”
“It’s inarguable that Bitcoin is the single strongest brand in the crypto space. I believe it probably received $2–5bn in free media exposure over the years. A Hard Fork would create 2 brands of Bitcoin ” “The moment there is a hard fork, we are going to allow brand confusion to step in. This is a HORRIBLE idea”
“Creating two networks destroys network effects (payment providers, merchants, etc) and the Bitcoin price is non-linear to size of network, so the two coins combined will not equal the same price”
“In Bitcoin, code is law, so the Developers are like the legislative branch. Miners execute the law (or not) through activating (or ignoring) the features developed, so they’re like the executive branch (note the veto power). Users ultimately have the power to walk away from Bitcoin at any time by selling their holdings or they can voice their enthusiasm by buying more. Users adjudicate new features through price signals. In that way Users are the judicial branch”
“If you’re missing any one of these groups, Bitcoin’s value proposition drops very quickly”