As Segwit stalls while Bitcoin Unlimited sees increased adoption, it appears that the scalability debate may be returning once more with Gang Wu, HaoBTC’s CEO, a mining business that controls around 6.3% of bitcoin’s network, launching a scathing attack.
According to a translation, he blames developers for tearing up the Hong Kong agreement to force segwit, he calls on miners to move to pools which “represent the long-term interest of bitcoin,” and even seemingly hoped for BTCC to be shut down by PBOC. Wu
Developers and miners reached a Hong Kong consensus which clearly stated that segwit and a 2MB hardfork will both be deployed. Developers have unilaterally torn up the agreement to force the adoption of segwit. Certain pools do not cherish the obligations that come with hashpower and do not consider the benefits of bitcoin’s progress, even betrayed to force segwit. Miners should choose pools that represent the long-term interest of bitcoin.
Wu further quoted Jihan Wu, Bitmain’s co-founder, currently the biggest miner with around 20% of the hashrate, who stated:
“If only the PBOC inspection could end up with a certain dumb *** exchange that endorses segwit getting closed down.”
He is probably referring to BTCC, which currently controls around 5.8% of the network and is mining segwit. Presumably, Wu is of the opinion that they are not standing by the Hong Kong consensus and, instead of demanding that agreement is upheld, have broken rank with other miners and adopted segwit.
The Hong Kong agreement was reached at the height of the scalability debate when miners almost unanimously rejected Bitcoin Classic in favor of binding themselves to Bitcoin Core on the condition that a maxblocksize increase is merged in the Bitcoin Core client at or around the same time as segwit.
Although this agreement was signed by Gregory Maxwell’s employer, Adam Back, Maxwell rejected it, insulting all those attending, including a number of bitcoin core developers and most miners. This appears to have shelved the agreement, with a soft fork segwit proposed without any maxblocksize increase.
The nature of the agreement, as it pertains to its legal standing, is not clear, but it appears miners, based on their behavior, feel bound by it, potentially raising questions on whether there was any secret agreement in the closed-door meeting where no journalists or independent observers attended.
In any event, the outcome of this breach, by whichever party, seems to be that of established miners neither upgrading to segwit nor adopting Bitcoin Unlimited. A risky strategy as new miners have now entered the scene to take advantage of the apparent inefficiency created by this agreement, quickly gaining currently around 20% of the network, with most calling Blockstream bluff and mining on Bitcoin Unlimited.
A potential compromise would be on the basis of a maxblocksize increase to 4MB, which a scientific study has found to be safe, together with segwit as a hard fork, both deployed at the same time.
This, however, appears to be unlikely for unclear reasons as a number of Blockstream employees, instead of suggesting any compromise or any solution on how bitcoin can now move forward, have puzzlingly stated that a non-upgrade to segwit would somehow show there is no need for increased capacity. On the other hand, Luke-Jr, a Blockstream contractor, has threatened a PoW hardfork, presumably with the backing of Blockstream, if the maxblocksize is increased.
Unfortunately, this stubbornness means that it appears either bitcoin or Blockstream has to go bust before the matter is resolved. Fortunately for bitcoin, monetary mismanagement worldwide and increased political uncertainty has led to increased adoption. Meanwhile, Blockstream, founded in 2014, has many employees, which means they are probably burning through a lot of money, while likely having insignificant revenue from its one product, Liquid, a mechanism that uses sealed black boxes for instant transfers between five participating companies: Bitfinex, BTCC, Kraken, Unocoin and Xapo.
More likely, however, the longer this continues, the more both Blockstream and established miners lose as entrepreneurs, either due to greed or based on intellectual reasons, enter the market and take advantage of the inefficiencies created.
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Last modified: May 21, 2020 10:05 AM UTC