Bitcoin segwit

Another year, another consensus on the never ending scalability “debate.” Almost all bitcoin companies you can name, almost all the miners, have agreed to segwit + a 2MB maxblocksize hardfork upgrade in some months.

But, no one really cares anymore as far as the vast majority are concerned. The market has plenty of real alternatives now and plenty of people are using them. Time for voice was long ago. People and businesses started choosing exit some months ago.

Now that they’ve seen the alternatives, the scalability “debate” to them is more of a reminder that bitcoin is far too slow, way too expensive, far too limited in its functions, but remains a pioneer as it has gone mainstream, thus an ally of all digital currencies.

To Voice or To Exit?

There continues to be a dwindling number of people who do still care about this debate. The vast majority of them are probably individuals who can’t quite exit, so they have to keep going on and on with voice.

Of those who do care, none of them like this agreement. For big blockers, this agreement is just confirmation they have lost. For small blockers, it would be accepting defeat. And they both are right, they both have lost.

Bitcoin doesn’t inspire anymore. It doesn’t make you sit and wonder how it may change the world any longer. There is no burst in creativity, there is no confidence in persuasion, there is no bitcoin, but a relic, as far as the tech is concerned.

Harsh, but they all were warned that if this kept on the best would leave and they have. I called for “peace” a year ago and since then things have only gotten worse to the point where businesses have left because their customers have pivoted.

That the creativity level in the bitcoin space has fallen so low cannot be shown any better than by this very “consensus,” which is no different whatever than last year’s consensus with its terms as good as identical.

The Broken Tape Re-Run

And in an identic form, Blockstream employees are already rejecting it, giving us a lot of reasons, but we all know there are none on a technical level. On other levels there may be all sorts of reasons. Selfish ones – providing a solution to a problem you created and control is the oldest business trick in the book – ideological ones – no hardforks ever – and conceptual ones.

Because bitcoin does not incentivize nodes. Now, in 2014 or 2015 one could have argued that businesses and miners have to run them, but with limited on-chain capacity their incentives might be limited too especially when you consider that Ethereum will actually pay people to run nodes once they move to Proof of Stake, so solving the so called scalability problem.

As bitcoin doesn’t pay them, maybe the chain should be kept tiny with the payment system moving on to what they now call the Lightning Network but what should really be called just ripple because it’s pretty much the same thing on the payments aspect.

If not, then bitcoin needs to scale properly with on-chain capacity being above demand, something which won’t happen with segwit or 2MB by the end of the year unless it is caused by lack of demand.

Bitcoin, Frozen in Time?

Segwit around summer then 2MB by the end of the year is basically full blocks throughout. Which makes one wonder why Blockstream employees object to it, but you don’t have to wonder for too long since it is fairly simple.

They want to say that firstly bitcoin is difficult to the point of impossible to upgrade and secondly that it shouldn’t upgrade at the protocol level. It should instead be frozen in stone and in time. With all features on top or on sidechains which are yours for a consultation fee.

It’s not a completely bad idea. Eventually there may come a point when the protocol just works, doesn’t need much else except for maybe small tweaks here and there no one cares about, with all the innovation and creativity moving to apps on top, but if that comes to pass it would be an organic process and right now we are a very long way from there.

So to say that hardforks are change, but softforks are not, is sophistry which fools nobody with a bit of intelligence, however often it is repeated. Still, worth a try presumably, so they are trying.

The Bitcoin Test

Which means that whether intentionally or unintentionally they are fully testing this idea of bitcoin consensus as it may well be the case that bitcoin had one ring, the so called “Core,” which perhaps gives the ability to rule to whoever controls it.

Here things get conceptual, but at a different scale, at the scale of freedom or slavery, because if bitcoin does come to rule the world in a situation where you can’t fork it, then there would be no liberty.

You would not be able to choose your money, but forced to use only one, and if you thought you had a better idea, you can’t fork bitcoin, so you can’t implement your better idea. Making it one chain to rule all men.

But that is not true and will never be true however much some may want it. Bitcoin has forked and bitcoin has chain split. Some miners back in 2012 at the first bitcoin halving decided to stay on a bitcoin chain which continues to give them a 50 bitcoin reward, in effect creating two bitcoins.

Of course no one followed them because the idea was bad, but nothing stops anyone from forking bitcoin, they just run a different client. And if it so happens that many others do follow them, either that new client becomes dominant, has around the same level of attention, or is a minority like many digital currencies which have a lower market cap than bitcoin.

That, of course, might have an effect on price in the short term, but we’ve seen how it plays out in the only example so far. Eth is now worth nearly $200 while even ETC is now worth almost as much as eth back then.

Either Fork or Don’t Fork

But if the bitcoin industry does reach consensus and they do go ahead despite Blockstream and the likely short term mess, doing so for a mere two megabytes, which would probably not even clear the backlog, doesn’t make much sense since the issue of capacity would not be addressed.

Either bitcoin increases on-chain capacity above demand, meaning no full blocks, or it doesn’t. Increasing on-chain capacity above demand means having a mechanism through which it does so without two years of petty minute never ending “debate.”

This, “consensus,” doesn’t do so. Firstly, it doesn’t increase capacity above demand because demand is now probably above 2MB. Secondly, once it does increase it, it barely does so. Thirdly, it offers no mechanism of further increasing it later on.

So if full blocks are to be maintained throughout, then just get on with segwit. What’s the point?

Bitcoin v Ethereum

Then we can have bitcoin the ripple and ethereum the bitcoin. A complex expensive mess on one hand with developers who don’t care about users, and the ethereum dream on the other with Proof of Stake and sharding, plus blackjack and hookers.

A settlement system on the one hand which introduces intermediaries and unlimited on-chain scapability on the other with no intermediaries, fully permissionless, plus cool smart contracts.

Because that might be how we reach so called “consensus.” Not by secret meetings where independent reporters are not invited, not by smoke filled rooms or because some guy who believes in absolute monarchy objects to something, but by the judgment of the free market which, when there is demand finds its way of providing it.

In 2008 the free market demanded bitcoin. In 2017 the free market demands ethereum. And what bitcoin does or doesn’t do to resolve the so called “debate,” is now of real relevance to only history and those who have no choice, like Blockstream and miners and whatever bitcoin business is left.

The rest are only curiously on-looking to see whether there will ever be a decision with many of them far too preoccupied trying to figure out just how high bitcoin’s market cap will be when eth overtakes it.

Disclaimer: The views expressed in the article are solely that of the author and do not represent those of, nor should they be attributed to CCN.

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