The Scaling Debate is finally Over. Bitcoin “Core” Lost.
It has been over 4 years since I have been following The Great Bitcoin Scaling Debate, when I got involved starting with the Bitcoin XT debate and what historians will call Bitcoins “First Fork Trial”. This was back in 2015 when Gavin and Mike Hearn, frustrated with the luddites who were in the Bitcoin developer team (who would later rename themselves Bitcoin Core in order to elevate their perceived level of expertise and authority), split off a fork of the project called Bitcoin XT and attempted to get the miners to join them. This resulted in a split in the developer community and one half of them started to enlist the help of social media and the propensity for humans to err or the side of caution in order to scare the populace into ostracizing Mike and Gavin and their ‘attempt to take over the project’. The rest is history. (well documented history at that)
Since then, Bitcoin has suffered through a further 5 major “ Fork trials”, 2 of which failed to produce a viable fork of the network, and 3 which did. The account of those trials I will not labour you with here, but needless to say, at each successive fork, a part of the unwanted community and supporters were pruned off, finally resulting with a galvanized community of capitalist, free-market, pragmatic advocates which all believe that the network and coin is worthless if it is not used and no, ‘store of value’ is not a use case of money. (it is actually just a natural consequence of a money’s acceptability as a medium of exchange).
Only one remaining fork of Bitcoin preserves the original intent and economic model of the original Bitcoin 0.1.0, which is a stable protocol, and unconstrained growth of transactions which will provide a basis of value which can drive the platform to organically grow to become the ONE ledger which every human on the planet can use. That fork is BitcoinSV.
Today we can collectively say that this claim has been objectively proven in the real world. In a real world situation in real world test conditions, as a 128mb (max present limit) block is BSV was mined a couple of days ago. The latter condition is important, because Bitcoin, being an economic platform, cannot be understood fully in lab conditions or staged tests, anymore than an economy can be said to be fully characterized by data and models collected from economists. If it could be, then rest assured central bankers would have an easier time determining what inflation rate to target, or by extension, Stalin’s central commitee planners would have had an easier time determining how many boots to make vs screws to produce in Soviet Russia and maybe less people would have died in the cold winters of Siberia. But oh well, lessons learned.
While those in the Segwit (2nd layer) BTC fork of Bitcoin are afraid of ANY live tests on the network completely, the BCH fork folks were at least open to testing the limits of the blocksize for a time, at least until their main developers were shown to possess the same nepotistic desire to hold the reigns of power themselves by monopolizing the roadmap of BCH to support only their own academic features at the expense of scaling the capability of the network to sustain more txn/s, which is the ONLY important scaling initiative at present, and will remain to be, until the halvening that is scheduled to occur in 2020. Indeed until Bitcoin can process 1GB blocks every 10 min, we should not diverge or lose our focus on this goal. For this is the BASE level of scaling that MUST be achieved in order for Bitcoin to survive in the long run. All other scaling initiatives or cool gimmicks and features such as MAST or Schnorr can simply WAIT. If you don’t understand WHY, I would emplor you to do some research yourself, as those who try to push these academic features have their own agendas, which may not include Bitcoin being used as the global public ledger of Truth for the world’s population.
Today I would like to point out one simple lie that was propagated by the Bitcoin Core team, and by extension Blockstream and their investors, is that too large a block would be impossible and cause orphans or smaller miners to drop off (or the lie that if that happened, the network would die somehow). I normally don’t name names but I think that the evidence now is so overwhelmingly stacked against them that I feel okay to point fingers of blame at those who propagated this falsehood. To be fair, they were perhaps convinced of what they were saying at the time. So this is not meant to be an accusation of disingenuity or malfeance but just at statement of facts that those that are seeking the truth should be aware of. Aware of such facts, means that perhaps one should be more critical (something that smart readers should be already!) of what these people say going forward. With that long disclaimer stated, the folks who were ‘warning’ everyone against hard forks or block sizes getting too big for propagation were (in no particular order) — Peter Todd (Blockstream, Viacoin), Adam Back (BlockStream), Greg Maxwell (Blockstream), Amaury Sechet (ABC), Mike Toomin (Bitcoin Classic), Jorge Timon (Blockstream), Alex Petrov (BitFury), Tuur Demeester (Media propagantist), Samson Mow (ex-BTCC, Blockstream), Jimmy Song (alledged Bitcoin expert), James Hilliard (self-proclaimed Bitcoin miner), Leonard Wesse (Bitcoin HK Association). No doubt there may be more, antd the internet does not forget, but these are the ones that I personally have debated with on the matter. Let me be clear, many of these folks are good people, smart people, and likely had the best intentions in their hearts, but at the end of the day, THEY WERE WRONG. We are human, we are wrong quite often. What is important is that we recognize when we are wrong, and exercise corrective measures to mitigate the situation. Many of these people listed likely already do, and therefore they should be given a pass. But it should be recorded what their stances were, so that history does not forget. (that’s why we have blockchain to record such things for the future!)
One of the biggest argument against larger blocks was that big blocks would put too much burden onto miners, eliminating the small miners at the expense of bigger, well capitalized ones. Well that argument isn’t based on any reality at all. At current writing, the cost of storing 1GB on amazon a month is 2.3 cents a month and including bandwidth costs of $45 a month (based on the reasonable assumption that miners only need to forward blocks once discounting the fact that they don’t need to retransfer blocks too far in the past) and that means a total of $56 a month. With the rate of 128MB block created by recently, of which $60 of fees were collected, as that was organic volume from a business that was willing to pay for the transactions, we could assume that at that rate (and the current BSV price) that the miners would be able to make around $8640 a day, or $260k a month in revenue. This would be plenty enough to cover the storage and bandwidth costs. If we were to assume that the power costs were to be covered by the mining subsidy, then this means that the idea that after mining rewards diminish in 2020, that the mining industry would be able to support their businesses as long as real organic transaction flow exists.
This underlines the fact that the only way that a public open blockchain can sustain itself is through real transaction volume. That is, in the long run, the only thing that the blockchain is useful for, after all.
Originally published at https://www.wallstreettechnologist.com on April 1, 2019.
