ASICBoost, the reason why Bitmain blocked Segwit.

Of course this happened while I was sleeping, but Greg Maxwell sent a very interesting mail.

Source: https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2017-April/013996.html

What exactly does this mean? Bitmain had an advantage to keep things as it is. ASICBoost is not compatible with Segwit.

While Timo Hanke and Sergio Demian Lerner claim to have the pattent, interestingly Bram Cohen found the pattent in China registered by Bitmain:

Why is this so important? First of all Bitmain produces around ~70% of all miners and put quite a few companies out of business. The former CEO of KNCMiner pointed out something interesting out in an old article:

Source: https://news.bitcoin.com/chinese-bitcoin-miner-might-be-trying-to-corner-asic-chip-market/

Mining is a small profit margin business, if 1 company can boost its profits by 30% that is significant and get up to an extra $100 million per year.

TLDR; Bitmain wanted to push Segwit either through a hard fork, or in Extension Blocks which would be compatible with their ASICBoost. A soft fork of Segwit, which is by far the safest option, isn’t compatible and they would lose their advantage over other miners.

Think about it:

  • Jihan didn’t support Segwit, was spreading lies in China about Core, which stalled the activation of Segwit.
  • When pressure started building he started supporting Bitcoin Unlimited, even though everyone knew that it was buggy and would destroy Bitcoin.
  • Yesterday BCoin’s proposal came with Extension Blocks which is compatible with ASICBoost. BCoin didn’t follow the normal rules of Bitcoin proposals but got the media immediately involved. EB was nothing new, they just needed another excuse to stall.

As you can see this was all just stalling. People have said it before that his behavior was irrational and now we know why. When you make $100 million extra it wouldn’t be too much trouble to hire an astroturfing company either.

Conclusion:

There are a couple of ways we can avoid this deadlock, I would very much propose to support UASF ( http://www.uasf.co/ ) since that’s the most obvious and fastest way forward. I rather hope we don’t have to change PoW but if bad actors keep stalling and even attacking Bitcoin, that might be the only (nuclear) option.

PS: If you enjoyed reading this feel free to donate something at 1FMy1kpeCY7BESwUaVcM5XAy1bmaWJaXKv. With the previous donations my wife was able to buy toys for 7 children in an orphanage for Christmas. Everything is greatly appreciated, but I don’t do it for the money. Sometimes I get asked by people how they can donate :).