Why We Must Oppose Core’s Segwit Soft Fork, Bitcoin Miner Jiang Zhuo’er Tells You Why!
Translated from the original by Jiang Zhuo’er.
In the post, “Why We Must Support Segwit, BTCC’s Samson Mow Tells You Why!,” BTCC chief operating officer Samson Mow wrote only about the Segregated Witness technology while conveniently ignoring the real issue at hand: Bitcoin Core’s post-Segwit roadmap. In this article I will explain the things that Mr. Mow neglected.
The real issue: Core’s roadmap
Mr. Mow used his article to ramble on and on about the benefits of Segregated Witness, and then proceeded to criticize the pro-scaling camp as a bunch of political troublemakers. But the truth is that the pro-scaling camp also supports Segwit and Lightning Network, they merely oppose Bitcoin Core’s roadmap. Bitcoin Core plans to implement Segwit as a soft fork, and then to forever limit the block size to a piddling 1MB, turning the blockchain into a settlement network that is hard to distinguish from SWIFT. Bitcoin Core envisions the Bitcoin blockchain becoming a high-cost ledger used only for high-value money transfers, while all consumer users will be forced onto the Lightning Network.
Why is Core’s plan incorrect? The logic is simple: More is better than less, and having one more option is better than having one less option.
“I believe I am correct, therefore I will take away your rights” is an extremely dangerous way of thinking. How dangerous? Countless “red” political regimes have repeatedly caused the deaths of millions, even tens of millions, of people. Ultimately, this is the consequence of this type of thinking. Why did the Great Leap Forward lead to the unprecedented starvation deaths of tens of millions of people? Because through the tight control exercised by the government, the people lost their right of movement. In earlier times of famine, those affected could simply flee and become refugees, but during the Great Leap Forward they were now stuck where they were and forced to starve to death.
Can anyone guarantee that their method is correct? What happens if they are wrong? Who can take responsibility for the starvation of tens of millions of people?
Can Bitcoin Core guarantee that their way is correct? What happens if they are wrong? What right do they have to deprive me from using the original blockchain? Can Core take responsibility for the failure of Bitcoin?
The weak Lightning Network
Second layer solutions like the Lightning Network can only ever be supplementary to the blockchain. In no way can they be a substitution for the blockchain. Lightning Network’s largest hub operators will have a very apparent advantage of both resources and scale. The premise of Lightning Network relies on the assumption that there will always and forever be some number of small nodes, that always and forever are looking out for the little guy — this is an extremely naïve assumption. The Matthew effect will certainly still apply, and the big fish will gobble up the little ones. The Lightning Network, in the end, is guaranteed to turn into another Alipay or a Wechat Wallet, dominated by a few large players. When this inevitably happens, will you still talk of “decentralization”?
Not long ago there were rumors that the Chinese Bitcoin exchanges would be forced to restrict the sending of Bitcoins overseas. Everyone had a good chuckle about this, but when the exchanges all join the monopoly-controlled Lightning Network, will you still be laughing then?
Indeed, Lightning Network hub operators cannot steal your funds, but they can be compelled by governments to perform KYC/AML on their users. You say, “that doesn’t matter, I’ll just move back to the blockchain!” But Core already made the decision for you: 1MB blocks are for supporting a “settlement layer” for high value transactions, and the transaction fees will follow accordingly. When one transaction costs 500RMB to make, will you still use it?
The dangerous Segwit soft fork
Core’s plan to implement segregated witness with a soft fork relies on deceiving old nodes into thinking that the new transaction type is legitimate. This carries with it massive technical risk, and an incredible amount of technical debt.
Core’s plan is to restructure transactions from the ground up, while deceiving old nodes into believing that the new transactions are of the same format as the old transactions. The problem with this is like the distorted hand in the image above. The technological risk and the technical debt go without saying. With every future change, the reflection of the distorted hand will need to be preserved.
Why do the Bitcoin Core developers say that “the Segwit soft fork basically fixes every line of Bitcoin’s code”? (Answer: the real intention was to show off their own engineering skills.)
The Hong Kong roundtable consensus promised the delivery of Segwit in April 2016 and the implementation of Segwit in July 2016. With the agreement looming over them, and under great pressure from the mining pools, why is that it took until November to finally be released?
Because Core’s plan is exactly like the distorted hand.
As the complexity of a system increases, it follows that the stability of that system must decrease. What was the cost of Ethereum’s so-called “Turing-completeness?” One hard fork after another and nodes under constant attack.
Bitcoin is currently a system that is used in the real world, and with a market cap of over $10 billion. Can bitcoin afford that cost? Can Core take responsibility for this?
Block space: enough and then some
If the current network is incapable of supporting blocks larger than 1MB, then Core’s insistence on the block size limit is understandable. But actually, even with the Great Firewall in place, Chinese mining pools have all said they want an 8MB block size. (See June 2015 mining pool statement below)
Unlike the “mother knows best” attitude of Bitcoin Core, the Bitcoin Unlimited team does not seem so rude and aloof.
- How is block size decided? Give the responsibility to those who are already responsible for producing the blocks. It is highly unlikely that more than 50% of mining pools would produce blocks so large that the network could not handle them (or else they would be punishing themselves with orphan blocks).
- How are transaction fees decided? Let the market decide. If the Bitcoin network truly cannot handle big blocks, then the limited block space will naturally cause fees to rise until an equilibrium is reached.
- Should we use Lightning Network? Let the transaction fees make this decision. If the Bitcoin network cannot handle large blocks, and LN is both fast and cheap, and on-chain transactions are expensive, why wouldn’t people use LN?
Although I don’t believe that #2 will happen — when I was in junior high school we accessed the internet with 56k modems, right now I am using a 200 Mbit fiber connection that costs me 150 RMB a month (~$22). My internet connection scaled 4,000 times over — but I don’t oppose #3 in the slightest. But Bitcoin Core believes that #2 is inevitable, and Mother knows best, of course. First they want to castrate the blockchain, and then they will make the decision for you that you must use the Lightning Network to transact.
Why the urgency? Who rules bitcoin, Core or the market? Or is it because Core’s sugar daddy Blockstream decided that we must use Lightning Network?
Who is qualified to take responsibility for bitcoin?
Bitcoin Core took this amazing thing called Bitcoin and has run it into the ground, and what repercussions do they face? The ability to slip away and take another high paying job at a tech company?
Only miners, only those who have invested real money in the Bitcoin system, only those who have real skin in the game, only those who are not “weak hands” who will sell their bitcoin at the first sign of trouble — only these people have the qualifications to take responsibility for Bitcoin’s safety. The MTGox exchange suppressed the bitcoin price because they were in debt, but the mining business model fundamentally depends on Bitcoin being a success. They want Bitcoin to attract more users, they want the price to go up.
I will take responsibility for the following verdict: Core’s Segwit soft fork will never activate. It’s not a question of 95% support, or even 75%, or even 51%. It has no hope of activation.
How can I be so certain of this? Because I am a miner, and I am a mining pool operator. I’ve invested tens of millions of RMB, real money, in the future of Bitcoin.
Disagree? Put your money where your mouth is.
As the wheels of history keep on turning, there will always be some whose legacy it is to be remembered as a shameful disgrace.