In a recent blog post, Peter Todd, one of the more active bitcoin developers, raised the prospects of an amicable end to the so-called “civil war”. Setting out a condition, Todd states:
“If major industry players were willing to commit to layer 2 solutions, I’d be willing to support something like a forced soft fork, and I’d be willing to support a coin voting hard fork even if they didn’t.”
A forced-soft-fork is similar to an ordinary soft fork, but unupgraded clients won’t be able to spend their funds until they upgrade. However, in an email response, Todd states:
“[F]orced-soft-forks raise serious questions about the control miners have over Bitcoin; accepting them as a mechanism is sending a very dangerous message.”
Coin Voting is a mechanism proposed a month ago at the Satoshi Roundtable. It allows bitcoin users to indicate “in transactions themselves that they are both ready, and approve of, an upcoming hard-fork.” We asked whether it would not be far too easy to game coin voting by simply endlessly moving bitcoins around:
“No, because the proposed voting is based on coin-days-destroyed. Basically if you have 1BTC for 1 day, whether you spend that BTC in one transaction or twenty, it counts for 1BTC*day worth of coin-days-destroyed, and thus has equal weight in the voting scheme.”
Lightning and Segwit
Lightning has been proposed as a solution to bitcoin’s scalability. Initially designed for micropayments, it may decrease blockspace demand as lower value transactions, approximately 70,000 daily with a value of less than $5 according to Rusty Russell, may use the Lightning Network instead of bitcoin’s blockchain. In the post Todd states:
“[I]f major industry players were willing to make a clear and credible commitment to layer 2 solutions like Lightning that have genuine scaling, without compromising on decentralization, I think it’d be reasonable for developers like myself to be willing to support a higher risk approach to hard-forks, with shorter time-lines, as an interim measure to give the industry some breathing room.”
We asked whether he has any reason to suspect “industry players” are not committed to “layer 2 solutions”:
“Yes I do. For example, the Lightning Network inherently means that less information about transactions ends up in the public blockchain, which makes anti-privacy coin tracking efforts like Chainalysis much less effective; Chainalysis is a perfect example of a company whose business will likely be wiped out entirely by Lightning.”
Chainalysis is a company that aims to “spot connections between digital identities” with products that “allow financial institutions to develop trust lines between them as well as identify malicious actors” according to their website. However, the privacy benefits of Lightning are uncertain and depend on how it operates in practice. In a recent study by the Initiative for CryptoCurrencies and Contracts (IC3) at the Jacobs Technion-Cornell Institute authored by Christian Decker, Ittay Eyal, Andrew Miller and Emin Gün Sirer, they state:
“Payment channels may embody a similar tradeoff between performance and centralization in the payment network; a centralized hub-and-spoke topology that simplifies routing embodies inherent problems with centralization, such as loss of privacy.”
Regarding segwit, we asked whether he expects it to be delayed as he raised the prospects in the blog post:
“As in, delayed from the “probably end of April” rough timeline mentioned in the Hong Kong agreement, likely. But it’s unlikely to be delayed more than a short period of time past that based on the current rate of progress; I still think we’re likely to see a pull-req for it for Bitcoin Core by the end of April.”
When we asked Eric Lombrozo, one of the main developers of segwit, whether segwit was delayed as Peter Todd seemed to suggest it in a blogpost, Lombrozo stated in an email:
“Peter Todd is not working on segwit at the moment… the segwit team is very much focused on delivering it ASAP and everything so far is going smoothly. No delays.”
Can Real Consensus Be Reached?
The bitcoin scalability debate began as soon as bitcoin was announced, but became heated over the past year to the point where some have called it an outright civil war. Many now recognize that the division itself, far more than any scaling method employed, is highly damaging to bitcoin and its reputation. A reconciliatory tone has therefore surfaced from both sides with Lombrozo seemingly extending an olive branch and Todd raising the prospects of a solution that can keep us all united as one.
Currently, there is widespread consensus on the benefits of Lightning, with both Gavin Andresen and Jeff Garzik stating support. Likewise, segwit, as well as a maxblocksize increase which is currently planned for activation around July 2017 according to the Hong Kong agreement, has widespread support.
The question thus is one of timing. Specifically, whether segwit is ready to go first or, considering the halving, whether a different method should be employed so as to give “industry some breathing room”. Either way, transaction capacity will be increased to almost double, likely before the halving. Segwit will most probably be deployed due to its many benefits. We certainly will, at some point, have a Lightning Network and maxblocksize too is to increase according to the current plans of both sides.
Consensus and compromise, therefore, at this point, seems highly likely as both sides are largely in agreement with the only outstanding question being which goes first. A tiny, immaterial detail as they all will probably be implemented.
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