Chapter 0 Introduction

Classic can fork with 75% computing power support. This 75% threshold has been criticized by many people, who claim that 75% computing power will cause social division and may lead to the long-term existence of two chains.

I have never had a clear logic for the threshold of computing power support for hard forks. When classic was first released, I thought 75% was desirable. Later, when representatives of Chinese miners in Hong Kong and representatives of Core dev reached a consensus, I thought 90% made more sense. Until recently, when blocks were filled up and caused serious network delays, and the community still couldn't reach a consensus, I felt that the 75% computing power threshold fork was reasonable.

After reading @BitcoinQQagent's new article "Analysis of the Governance Structure of the Bitcoin Ecosystem", I suddenly understood the logic behind the fork computing power threshold.

Chapter 1 Coin holders and miners have developed into two groups

There is no doubt that POW is one of the cornerstones of Bitcoin’s success. Satoshi Nakamoto also clearly emphasized that the development of the Bitcoin protocol should be determined by computing power voting.

When Satoshi Nakamoto was considering whether to use the one CPU one vote system or the one IP one vote system, he mentioned that the latter is conducive to those who control a large number of IPs to control the rules, while those who hold CPUs are more dispersed. Using CPU voting is more conducive to the democratization of Bitcoin decision-making.

Chapter 4 of the Satoshi White Paper describes mining as follows:

“The proof-of-work mechanism also solves the problem of who is the majority in collective voting. If the majority is determined based on IP addresses, one IP address one vote, then if someone has the power to allocate a large number of IP addresses, the mechanism is broken. The essence of the proof-of-work mechanism is one-CPU-one-vote.”

One of the basic logics of using the POW mechanism is that people who invest real wealth are generally a more rational group of people, and such people have no motivation to launch an attack that destroys their own wealth. This mechanism also positively affirms that most people are kind, and vetoes the possibility of a minority of people doing evil through the deliberative mechanism.

Mining has now developed to the ASIC method, and it is no longer the era of CPU mining. I don’t know if Satoshi Nakamoto anticipated this development. In the current POW mining, people with a large amount of computing power and people with a large number of IP addresses mentioned in Satoshi Nakamoto’s white paper have the same ability to discuss Bitcoin.

Of course, there are differences between the two. The most important difference is that the owner of computing power has invested a lot of real wealth to own it, while IP addresses are allocated by an international organization. This international organization holds significantly more IPs than others, and they are not obtained in exchange for money.

Regardless of motivation, both have the same destructive power in the Bitcoin deliberation mechanism. If the deliberation rules further grant computing power veto power, it will go against the original intention of the white paper.

The original one CPU one vote system can be roughly considered as the coin holders, that is, the miners. Now these two groups are completely separated. The users of the Bitcoin network (coin holders) and the computing power holders are two different groups. The interests of two different groups must be different. No matter what the miners' motivation is, the interests of miners and users are different. Users do not have direct voting rights to change the voting weight of the Bitcoin protocol. They only have the right to choose after the voting results are produced or the expected results are produced. This choice will in turn affect the value of the voting results, and users can only influence the protocol in the direction they want.

Chapter 2 Conflicts of Interest between Miners and Bitcoin Users

Block expansion is very different from the perspective of miners and users. For miners, large blocks directly increase network bandwidth and server costs, and lead to an increase in the orphan block rate. Therefore, from a cost perspective, miners tend to prefer small blocks.

For Bitcoin users, the most important thing they care about is whether the transfer will be delayed and whether the handling fee will be higher. The smaller the block, the more Bitcoin transactions can be processed, so it is more likely to cause confirmation delays. In order to speed up the confirmation, higher handling fees need to be paid. Therefore, users hope for larger blocks.

The hashrate voting mechanism determines that miners can directly influence the development of the Bitcoin protocol, while users influence the development of the protocol by voting with their feet. But what makes users headache is that unless the vast majority of users veto a rule and leave the Bitcoin protocol if they fail to achieve their goal, miners have the right to decide the Bitcoin protocol. When miners maintain or change the rules, they are mainly afraid of users running away, causing the price of the currency to fall and the mining machine to be discounted.

This is where the interests of the two groups conflict.

But this conflict of interest is not so great that short-sighted people would think that such interests must be irreconcilable. The common interests of the two parties far outweigh the differences in interests.

Users need miners to keep the Bitcoin network working, and miners need users to maintain the value of Bitcoin. The two must be a community. If they split due to conflicts of interest, it will cause Bitcoin to discount.

Chapter 3: The 15% computing power gap is the user’s choice weight gap

The difference between the 75% hashrate fork and the 90% hashrate fork is only 15%, but this 15% is not just for miners. The most important reason for this 15% difference is the weight given to the choice of coin holders.

The adoption of a 90% computing power fork means that the choice of Bitcoin fork is completely given to miners. The entire community must first reach a consensus on the computing power holders, at least find more than 90% of the computing power holders, and encourage them to reach a fork intention, and then it is possible to upgrade the network. Before finding 90% of the computing power holders, no users have a penny to play. As long as you have 10% of the computing power, or have a 10% computing power alliance, you can deny users the option.

The 75% hash rate fork gives users more power, because only those who hold 25% of the hash rate have the ability to ignore the user's choice.

Theoretically, unless 100% of the computing power reaches a consensus and executes a fork, the Bitcoin blockchain will inevitably split into two chains. After splitting into two chains, the user's choice becomes the decisive force in determining the value of computing power. In other words, users have the right to choose only when two chains are generated or there is an expectation of splitting into two chains.

No matter how large the fork threshold is, the lower the threshold, the greater the pressure on the computing power outside the threshold to join during the buffer period after the hard fork is activated, because the user's right of choice is likely to abandon these computing powers that are not joined, making them worthless.

Conversely, the higher the threshold, the greater the miner's right to choose. As long as the computing power exceeds the threshold, it is equivalent to having the power to reject the user's choice. Or in other words, having computing power outside the threshold means having a veto.

On the other hand, based on the principle that computing power can guarantee security. The lower the computing power threshold for activating the fork, the more likely it is that after the fork forms two chains, the computing power value on each chain cannot be underestimated. It is impossible for users to unanimously abandon one of them, and there is a greater chance of disagreement on which chain is valuable. Once this happens, the result will be devastating. Users on the two chains will go to war and attack each other through the market. The final outcome will definitely be a huge drop in the price of the currency. This is also why everyone tends to activate the fork with the maximum computing power, and the expansion has been delayed again and again. Everyone is looking for some kind of most widespread consensus.

Chapter 4 Only a dictatorship can achieve broad consensus

The Bitcoin community is decentralized. This currency system is not controlled by any person or organization. Users participate voluntarily, and miners also voluntarily spend money to buy mining machines to join and maintain this network. Any attempt by a powerful center to control it will cause some users to worry about this system and will definitely lose some users.

Under this premise, we have every reason to believe that consensus among all members cannot be reached. Therefore, we have to settle for the next best option, which is to use the hashrate holders as agents to reach consensus.

Even if consensus is reached through the use of computing power holders as agents, it is impossible to reach a 100% consensus. This is the current fact.

For example, there are definitely people who short the market and hope to see the community split to prevent the price of the currency from rising. There are also Bitcoin financial projects with too high leverage. Once users expect a fork, they will go for a run. Therefore, high-leverage financial projects will also tend to prevent low-computing threshold forks and tend to favor the most widely agreed forks. There are also some people who have different ideas about the future development path of Bitcoin, which also leads to the inability to reach a broad consensus.

Therefore, some people proposed to adopt a 90% consensus fork, while others proposed to adopt a 75% consensus fork. Both have their own reasons.

As far as the current situation is concerned, it is completely unrealistic to reach a 90% consensus in the short term. The blocks are now full, and the median size of nearly 1,000 blocks has reached more than 0.99M.

However, although the computing power cannot reach a 90% consensus, if the stalemate continues, Bitcoin will never be able to upgrade, and we will have to let users leave Bitcoin in disappointment.

It's time to empower users with choice.

Chapter 5 Summary

I know that whether to use 75% or a higher computing power consensus to activate the fork is a very heated debate. In fact, I myself have a strong fear of this, fearing that choosing either side will cause irreversible effects. Therefore, I don’t have a very strong opinion, and I really don’t know. I can only express the logic of my thinking.

My logic is this:

Miners are the maintainers of the Bitcoin network. The stability of Bitcoin requires miners. It is reasonable for the Bitcoin protocol to give miners greater weight.

Users are the core of Bitcoin's value, so the Bitcoin protocol rules require user participation. It is wrong to completely exclude users' right to choose.

A high percentage of consensus is almost impossible to achieve, and we must be careful to avoid adopting a protocol that makes it impossible to achieve consensus.

Improving the user's right to choose can prevent a small number of malicious computing forces from vetoing consensus, thereby greatly promoting consensus.

Thanks for reading.

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Author: tan90d (Weibo @LightningHSL WeChat tan90d)
My BTC address: 14mhzjkJ71oMAMkKu3dy98dnUpkyQBHL1r
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