Blockchain CEO talks about roundtable: Bitcoin expansion and options

Like many others, I attended the Satoshi Roundtable with some of the key players in the Bitcoin community, developers, investors, and entrepreneurs. The entire conference was a great experience, and I support anything that brings people in the industry closer together (Fun fact: my co-founder Nic helped start last year’s roundtable).

In the main conference room, we all got together for a lot of group discussions. This was the highlight of the whole event for me. Seeing the passion of like-minded friends and listening to everyone discussing new projects really motivated me.

Unfortunately, the side discussions at the conference were very concerning, as most of the industry seemed to have lost a shared vision and unwilling to make compromises to avoid the risk of running out of fuel before reaching orbit.

There are a lot of articles out there about what the future Bitcoin protocol should look like, and I think the authors of these articles are much better at discussing this than I am. I especially encourage everyone to read the article written by Mike Belshe (CEO of Bitgo.com).

With that said, I wanted to share with you my thoughts on a few issues: the current state of the network, the dangers of centralized schemes, and how we can make choices.

Higher price for lower value

Last week, the surge in transaction volume on the Bitcoin network gave us a sneak peek at the serious problems we are about to face: what the network will look like as blocks become fuller and the memory pool becomes more backlogged. The data shows that the block congestion problem is trending, and it is very likely to continue to worsen.

The figure shows the average time and cost of each transaction

In short, despite significantly increasing the average transaction fee per transfer, transactions are taking longer. Meanwhile, the price of Bitcoin is still going down. Higher fees do not make transactions faster, and the backlog is still as long as before.

If we compare this time with a typical day in May last year, what do we find? The poor network status has become more and more obvious since then.

Left: Blue is the average fee, green is the fee required for each block. Right: The time required to confirm each transfer

It’s clear that Bitcoin users are paying more for less. At Blockchain.info, where I’m the CEO, we’ve historically had very few complaints about transaction times or fees. But now the number of complaints in this category is hitting new highs every day, and is actually growing 10x per week. This is currently the biggest problem for our support department.

What is most worrying is that this short busy period is just a microcosm of what will happen if this trend continues and the network becomes overwhelmed. But we should not exist just to survive, nor just to catch up with the previous prices, we are working hard to enable millions of people to quickly join the Bitcoin community and economy.

About spam

Whenever the network is congested, the conclusion often heard is that it is under attack or there are junk transactions. This was true in the past when there were only small transactions. However, during the period of deteriorating network conditions in the past, there was simply no room for such dust transactions, and there was also insufficient evidence to support the claim that network congestion was entirely due to large-scale attacks.

Yes, when someone pointed out that there was an address that seemed to be "attacking the network" (this video is also circulating on reddit, ** requires a VPN), the transfers made by this address were indeed similar to those in the video, but it only accounted for a negligible 0.275% of all transactions during that period (February 28-March 2) - in other words, only 2,859 transactions. This is like a drop in the bucket, because the bucket (the Bitcoin system) had 1,042,993 transactions during the same period.

In fact, the surge in trading volume during that period was actually related to the transfer of a large number of bitcoins from wallets to exchanges, suggesting some early signs of capital transfer, with Bitcoin holders transferring bitcoins from where they were stored to exchanges in preparation for the subsequent reduction or reconstruction of positions.

Centralization Plan

Dismissing the network's problems as simply spam is like leaving the future of the entire Bitcoin network to a very limited group of people. But more importantly, this is a dangerous game because the message it implies is far-reaching. Because it means that developers or the community need to distinguish between what is a "good" transaction and what is an attack among all transactions. If the Bitcoin network is intended to be a public network, then it is unacceptable for a centralized scheme to decide which types of transactions are allowed and which are not.

We’ve known for years that Bitcoin would need to scale in order to support more on-chain transactions. In fact, the first discussions about this date back to 2010, when Satoshi wrote that “the final solution will not [need to] consider how large the block size will be.” In a mailing list post, he elaborated on his point, stressing that ultimately most users will only need to use (light node) simple payment verification (SPV) and will not need to store the entire blockchain, leaving this functionality to “professionals with server farms.”

Some Bitcoin core developers chose not to implement Satoshi Nakamoto's vision, but instead unilaterally and centrally determine the entire Bitcoin economy without consensus, reducing and eliminating various types of transfers, attempting to push the entire industry into a new security and business model, making Bitcoin simply a layer of the clearing system .

From day one , the vision of Bitcoin was clear: Bitcoin was to be a peer-to-peer internet money transfer system that served “people.” Satoshi was forthright about this vision and designed a system that, while imperfect, was proven to make good tradeoffs. If Satoshi had waited to resolve all possible attack variables before launching, there might not have been a Bitcoin community and Bitcoin economy. Sometimes having a system (that does some things) is enough — perfection is often the enemy of getting something done. If you want proof, look at the earliest codebases.

If the current core Bitcoin developers are standing in the way of Satoshi’s original vision of scaling Bitcoin because they have better plans, they have an obligation to proactively gain the necessary support from the community. However, the community has no responsibility to go out of their way to gain their approval in order to achieve the original vision of Bitcoin. In fact, the current Bitcoin core developers are centrally planning the Bitcoin economy by setting new rules, even by inaction, which is extremely dangerous.

choose

It’s been almost a year since I participated in this discussion. What has surprised me most is that, while the Bitcoin community is full of people who believe in free market principles, there are some who believe that free market principles do not apply to Bitcoin itself.

I cannot agree with this view. I believe in the free market, because the implementation of Bitcoin will encourage the pace of innovation, bring more and better options, and verify the advantages of decentralization. As a community and an economy, we should start to get used to making decisions between different options and visions. In this matter, we can choose the original P2P cash system or a new clearing system. If you believe in the first one, then I urge everyone to go to BitcoinClassic as soon as possible in the near future, just like I did.

Adopting classic is an easy approach, it is already developed and ready to run in production. This project is led by Gavin Andresen , the only developer who had full authority over the codebase before Satoshi Nakamoto retired from the community.

However, the market is not limited to just one version of Bitcoin. In the coming decades, distributed systems, starting with cryptocurrencies and blockchains, will reshape the delivery of finance and digital assets. For consumers in this new market, there are many other options besides Bitcoin.

As a community and an economy, we are not just competing with other cryptocurrencies, there are other private chains, other joint ventures, and many new things are emerging. In fact, it seems that many users have chosen to move to other new assets.

I hope more of the community and the economy will choose to stand with Bitcoin's original vision (a currency rather than a settlement system). The time to decide has come. We can start scaling Bitcoin to become a truly global system with millions of users. A better financial system that is transparent, fair, efficient, and open to everyone. This is what I am excited about, and what excited me a few years ago.

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Original article: https://medium.com/@OneMorePeter/bitcoin-scaling-and-choices-bed96a76e637#.bwx0wp628
By Peter Smith
Source: Zhong YincnLedger
BTC: 1JpazvbnCqFzhLvaVncoCkbWXNoWbgeS6Q