Why I’m Leaving Bitcoin Unlimited

A few weeks ago, I joined Bitcoin Unlimited. It is now clear that the real issue never was big blocks or small blocks. The real issue all along was ASICBOOST. I now believe it is highly probable that a minority fraction of Bitcoin miners have held a secret 20–30% advantage. With the advantage, a rational miner would want to halt any technical progress in Bitcoin and keep the status quo as long as possible.

I believe Bitcoin Unlimited was likely set up not to succeed, but simply to block any other progress from happening with Bitcoin.

Recap of Past 72 Hours

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“We’ve got new information. Certain things have come to light. She kidnapped herself, man.”

People are free to believe whatever they think is happening at this point. Keeping in mind that there is no legal restriction that would stop Bitmain from lying about whether they used ASICBOOST in production or not, given the evidence we have: BitMain’s admission that they built ASICBOOST into their hardware, their empty block mining, their strange transaction shuffling, their patent on ASICBOOST, I think it’s more likely than not a group of miners somewhere is secretly using ASICBOOST.

Miners Should Try To Gain Secret Advantages

To be clear, I don’t think there is anything wrong with a miner using ASICBOOST, or any other possible secret advantage. We want miners to be competitive and try to do this. By operating the Bitcoin network with secret advantages, it keeps the network strong from possible attackers with other secret advantages.

However, now that the majority of miners know that a minority of mining hardware was possibly mining with a secret advantage, it’s in the majority of miners’ rational self interest to do one of two things.

  1. Also invest in hardware to gain the same ASICBOOST advantage.
  2. Patch Bitcoin consensus so no one has the advantage.

Why I Joined Bitcoin Unlimited

As a software engineer who has worked with Bitcoin, Ethereum, Zcash, and many other blockchain projects, I know that developers are hoping for upgrades to the Bitcoin protocol. If upgrades never happen, progress in Bitcoin will stagnate, and developers will migrate to other ecosystems.

After much development and testing the Bitcoin Core development team delivered SegWit as their recommended approach. SegWit is highly lauded in the bitcoin community for being a “Soft Fork”, but as Vitalik Buterin explained, there are many different types of “Soft Forks” or “Hard Forks” which mean different things to different people.

Bitcoin Core outlined that there are major risks associated with trying to launch SegWit without vast network majority consensus, which is part of why they required a high 95% signalling percentage before activation. After being live for 4 months, we can see that it’s unlikely SegWit will reach this activation before missing an activation deadline in November of this year.

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I believe miners are critical to the Bitcoin ecosystem. Unlike some people who believe Bitcoin is owned by the “users” and miners only exist to distribute coins and order transactions, I think they play a much more essential role in the network security, operation, and economy. Therefore, I think it’s critical that developers listen to what the miners want with respect to any protocol upgrade.

Additionally, I respect the opinion of people like Roger Ver when it comes to considering what is best for Bitcoin. He was an early investor, enthusiast, and he is clearly motivated to want Bitcoin to succeed. I don’t think anyone is more passionate about Bitcoin than Roger.

I still respect people like Roger, and I think it’s highly unlikely he knew anything about miners using ASICBOOST. Honestly, I think that he just wanted bigger blocks. As a power-user with many different wallets, it’s possible that someone like Roger often needs to create transactions that combine many UTXO’s. This explains that when he complains on a podcast “Transaction fees are $5 or $10 or sometimes!” and the rest of us are thinking, “it’s only ever maybe 50 cents for me”, it’s because most of us only ever send basic transactions from one address to another.

Of course, we do know the history that Roger was fooled by Mt. Gox and told everyone it was OK. Gavin was probably fooled by Craig Wright in a hotel room. These people aren’t flawless, but I think they genuinely want to see Bitcoin succeed and still make valuable contributions.

To be clear, I never received any funding or financial incentive from Bitcoin Unlimited, Bitcoin Core, Blockstream, Miners, or any other party involved in this debate.

Moving Forward

I think we now know that the past few years never were about big blocks or small blocks. A small group of miners was hoping to stall all progress in Bitcoin for as long as possible to maintain a secret advantage. Even before the advantage miners were in place, they were anticipating the advantage for possibly a year in advance. Now that we know what the real problem was, the Bitcoin community can start forming a plan to address the real issue.

Thank you to Thomas Hunt of MadBitcoins https://twitter.com/MadBitcoins for discussion and helping me come to my senses.

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