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My Dinner with Adam Back

Fri May 13, 2016 5:15 am

About a week ago, at the NYC Consensus conference I was fortunate enough to get to spend four hours over dinner with Adam Back of Blockstream, and Kristov Atlas of Blockchain.info
I'll do my best to summarize the topics of conversation over those four hours, although I'm sure I will miss some important points.

Firstly, Adam Back, Kristov, and myself share very similar end goals. We each want to see a world in which Bitcoin rivals, and then supplants the Dollar, the Euro, and the Yen. None of us signed up to create Paypal 2.0. We all want to see a world in which individuals have complete control over their own money, and there is nothing anyone can do to stop them. The conflict arrises because we have very different strategies on how to best achieve that goal.

Strategy #1
This strategy is supported by myself, and I think many of the other big block supporters.
If I'm to be very generous with the numbers, I think we can say that Bitcoin currently has about 10M users.
This trivially small compared to existing organizations like Bank of America, Wells Fargo, What's App, SnapChat, FaceBook, etc.
Because Bitcoin is currently the largest crypto currency, we have the strongest network effect, the most attention, the most developers, and the best chance of growing to become a currency used all over the world. Bitcoin also currently has most of the properties that make its use attractive to me, and make it far superior to the traditional financial system that people are using now.
Bitcoin's supply is limited, it can't be controlled, it can be decently private, and is accepted at a some number of companies around the world, etc.
But we can't rest on our laurels, the world is looking closely at Bitcoin and block chain technology, and it is just a matter of time until someone else decides to enter the space in a big way.
For all we know, the Federal Reserve is already planning how to make sure they don't lose control of the money supply, and I think the best way for them to do it would be to partner with someone like any of the companies I mentioned above. They would create their own crypto-coin with properties individualists like myself won't be a fan of. They will have the ability to monitor people's transactions, perhaps blacklist certain coins, or prevent certain transactions, or do who knows what. They would then launch this service as an integrated wallet with Snapchat, Twitter, Facebook, a bank, or just about any major company, and then instantly have ten times the network effect that Bitcoin has. Bitcoin would lose all of it's momentum, it would lose it's first mover advantage, it would become relegated on the sidelines due to the new crypto currency that has more than ten times as many users, and a much more powerful network effect because of it. The crypto anarchists among us would still be able to use Bitcoin, or crypto-anarchy-coin, but the rest of the world will have moved on to government-controlled-spy-coin. This is a nightmare scenario for me in which we have squandered our opportunity to move the entire world in a positive direction by supplanting government money with Bitcoin. Today, Bitcoin is so much better than the traditional financial system that we have a very good chance of drawing the rest of the world into using it, but if another government approved coin comes along and manages to get the world using it, Bitcoin will only have some modest advantages, and likely not nearly enough to get the world to switch.
Image

To avoid this scenario in which some government approved coin supplants Bitcoin, we must grow Bitcoin as quickly as possible, until it will be impossible for anyone else to supplant our network effect.
I understand that there are some risks to growing so quickly via on chain scaling. The block chain will take up more space, and the hardware to run a full node will be more substantial. As I've mentioned previously, I think there are lots of reasons to think that the number of full nodes around the world will increase even if the block chain is much larger due to on chain scaling. The short version is that if more people are using Bitcoin, there will be more companies involved, and if there are more people and more companies to draw from, a larger absolute number of full nodes will be running on the network. Even today, for less than $100, anyone can easily run a full node.

A few months ago I also said that the absolute number of full nodes is more important than the percentage of people running a full node. https://twitter.com/rogerkver/status/683677986630033408
Peter Todd todd vigorously disagreed: https://twitter.com/petertoddbtc/status ... 7086536704
Adam also chimed in as well: https://twitter.com/adam3us/status/683678942398644224
https://twitter.com/adam3us/status/683680261607960576
I've still been thinking about this issue over the last few months though, and over time I've become more convinced that the number of full nodes actually acting as wallet for individual users isn't very important.
I view full nodes similarly to people seeding a file in a bit torrent. The more seeders there are, the more robust the torrent, and the more difficult it would be to stop. I don't see a problem with SPV wallets, and other light clients that depend on full nodes to be informed of the status of the block chain. So long as these light clients have a wide choice of full nodes to obtain this information from, it will force all of the nodes to report the correct information. If there was ever an attack in which some full nodes were reporting false information to the thin clients, people would quickly discover this, and all the active Bitcoin users would switch to a different node run by an entity or person viewed as having some integrity. The light clients could even check with multiple "trusted" full nodes to verify them against each other.

In short, even if it makes running a full node more expensive, I think the risk is worth it in order to make sure Bitcoin maintains its first place position in the crypto currency world, and continues to benefit from its network effect. If this strategy of rapid growth results in Bitcoin becoming centralized and controlled, we are no worse off than we would have been if government-controlled-coin had surpassed us early on. People who are interested in the same things that motivated early bitcoiners to get involved will always have alt coins available for them to use, but I think we only have one shot at getting the entire world to adopt a crypto currency with the freedom aspects of Bitcoin. Time is of the essence, and we must scale as quickly as possible before someone passes us up.

Strategy #2
This strategy is generally supported by Adam Back and many other small block proponents.
Please forgive me if I misportray any aspect of it.
The most important aspect of bitcoin is that it remains uncontrollable by anyone due to its decentralized nature.
The best way for Bitcoin to remain decentralized is to keep the block size small, so that it is very easy to run a fully validating node anywhere on the planet, even with poor internet connectivity. We should focus on using the existing block space more efficiently, and optimizing the amount of computing resources that are required to relay, store, and validate each block. If we can create this solid technical foundation for the Bitcoin block chain, many future block chain uses will be built directly upon it including things like the lightning network, side chains, and more. If we grow like this, we will all be able to continue to use the freedom oriented Bitcoin that we all know and love.

While I think that strategy #2 is likely to work in preserving the freedom oriented Bitcoin that we all know and love, I think it is also likely to cause Bitcoin to be usurped by some other crypto-currency that is more to the liking of the status quo. The cat is already out of the bag regarding crypto-currencies. Freedom oriented people are always going to have a freedom oriented coin that they can use, so I don't think we need to be overly cautious with Bitcoin becoming overly centralized and controlled along the way. I think we should be focused on having the fastest adoption possible so it will be too late for anything to supplant it later.

I see four possible scenarios, and all of them lead me to believe that fast, on chain scaling is the smart thing to do today.
  1. If we successfully scale Bitcoin quickly enough, and it doesn't become centralized and controlled, we have won!
  2. If we scale Bitcoin quickly, but it becomes centralized and controlled, all the people who care, will switch to the new freedom-coin.
  3. If we scale Bitcoin too slowly, and it is overtaken by government-control-coin, we are in the exact same situation as the end result in example #2.
  4. We scale Bitcoin slowly, but somehow manage not to be overtaken by government-control-coin, and a decentralized and free Bitcoin becomes the bedrock for the world's financial system, we have won!
Of the four options above, I see #4 as being the least likely path to be successful.
Of course I hope that whatever strategy we take, we end up with Bitcoin being free and uncontrolled, and in use a substantial potion of the world's population, but to me it seems that option #1 is the most likely path to success.

I also pointed out that I was feeling a bit betrayed by the whole situation. Satoshi Nakamoto was very clear with his words regarding his original vision for Bitcoin and scaling:
https://twitter.com/rogerkver/status/707251173942796289
https://twitter.com/rogerkver/status/707609221320220672

When I got involved in Bitcoin, there were no other established businesses of any notable size involved, and there was not a single person on the planet investing capital in any significant amount into bitcoin.
I poured into the ecosystem a huge amount of savings that I had amassed before I had even heard of Bitcoin, and I've poured in millions of dollars since. I've spent nearly every waking moment for the last six plus years working on this, and all of this was due to the original vision that Satoshi laid out. Today that vision is being morphed into something that I didn't sign up for, or agree with when I got started six years ago.

In addition to the above discussions, I was wowed by many of the clever ways that Adam had in mind for making bitcoin more scalable, flexible, and censorship resistant. One of the clever ways he mentioned was by having miners not know what the content of each block is by encrypting each block, but with the key to be released a few (six) blocks later. This would make it impossible (very difficult?) for miners to censor transactions. If they suddenly saw that a transaction they didn't like was included in a block, they wouldn't be aware of it until six blocks later, and in order to exclude it from the blockchain, they would have to undo six blocks worth of work! In effect, they would have to be mining against themselves. I thought this was super clever. He also had ideas on how to scale by using pointers in the current sized blocks to point to additional external data that would be stored as well.

There was actually quite a bit more discussed, but I think I've covered the major points, and this post is already quite long.
A few points that were also discussed that I may cover later are:
  • The Fidelity effect
  • SNS adoption of Bitcoin
  • Transaction Fees
  • Unconfirmed transactions
  • Birds.bitcoin.com may need to use something other than Bitcoin because the blocks are full.
  • "F**k Satoshi" comment from a Bitcoin Core Panelist at the conference
  • Moore's Law
  • The ever changing reasons for why bigger blocks are a bad idea
At the end of the night, I was amazed at how quickly the time had passed, but I had learned lots of interesting things.
I think Adam, Kristov, and I were all glad to know that we all shared very similar end goals, even if we liked different strategies to get there.

I'd love to have some additional feedback on the four possible scenarios I outlined. Which do people think is the smart path assuming our goal is to supplant the Dollar?
Help spread Bitcoin by linking to everything mentioned here:
topic7039.html

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Re: My Dinner with Adam Back

Fri May 13, 2016 3:56 pm

While I appreciate your line of reasoning with your blitzkrieg strategy, there are many flaws within and the most prominent one is the assumption that "Bitcoin" has the network effect for digital or crypto-currencies. The USD, EURO, Yuan have most of the marketshare for network effect in this category and even if these aren't POW blockchain cryptocurrencies , they are digital currencies that heavily depend upon cryptography. You appear to be implying that a government based non-POW "blockchain" based cryptocurrency will have some tremendous advantage over traditional banking fintech and this is another flaw in your reasoning. Most, if not all of these private blockchains will eventually throw away the blocks altogether and go back to sending encrypted messages on audited ledgers between databases.(It is already happening with Hyperledger ). Thus Bitcoin has an insignificant marketshare and is very slowly growing.

Another major flaw in your line of reasoning is that simply keep raising the blocksize limit to drop the price of txs from 5-8 pennies to 0-4 pennies per tx will get extremely rapid adoption. This isn't what attracts people to use bitcoin. The average consumer doesn't care how much txs cost either as they don't pay any directly with credit or debit cards. (In fact some get up to 2% cash back with credit cards so even if bitcoin fees were 0 they still will choose to use their credit card. ) What attracts people to use bitcoin is its technical capabilities, fungibility , and monetary sovereignty. Thus what banks and governments offer will never be able to compete with bitcoin directly. Bitcoin cannot even begin to compete on price with traditional banking until we add layer 2 solutions like the lightning network because the current solutions just don't scale. If you are willing to risk a paypal 2.0 than why not just allow an influx of clients to use off chain solutions as a temporary overflow during spikes of traffic as well and than we don't even have to risk a paypal 2.0.

I appreciate the hard work you do, and will work with you in solidarity to making sure bitcoin continues to grow, but your unhealthy optimism isn't helping matters. The fight is going to grow more difficult in the coming years and this is just the start of a long and difficult battle ahead.
Last edited by inBitweTrust on Fri May 13, 2016 4:01 pm, edited 1 time in total.

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Re: My Dinner with Adam Back

Fri May 13, 2016 3:58 pm

A higher level concern you should discuss with Adam: The decision making mechanism

An idea, no matter how brilliant or terrible each person think it is from his own point of view, should only enter the bitcoin implementation through a formal decision making process, e.g. consensus based or democracy based voting, otherwise it is just a matter of how each individual view the future of bitcoin and does not represent the interest of economy majority of bitcoin ecosystem

And people will not wait for the Government coin to overtake bitcoin, they are already moving into ethereum which does not have these artificial problems that is created by core devs

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Re: My Dinner with Adam Back

Fri May 13, 2016 4:02 pm

What attracts people to use bitcoin is its technical capabilities, fungibility , and monetary sovereignty. Thus what banks and governments offer will never be able to compete with bitcoin directly.
What attracts people to use bitcoin is that it is not controlled by any single person, or a group of person. But the reality is that now the decision making process is totally broken and a group of handful guys in a backroom can decide where bitcoin goes, it is already much worse than the Federal Reserve system we had, just a Blockstream company coin with blockchain technology

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Re: My Dinner with Adam Back

Fri May 13, 2016 4:06 pm

A higher level concern you should discuss with Adam: The decision making mechanism

An idea, no matter how brilliant or terrible each person think it is from his own point of view, should only enter the bitcoin implementation through a formal decision making process, e.g. consensus based or democracy based voting, otherwise it is just a matter of how each individual view the future of bitcoin and does not represent the interest of economy majority of bitcoin ecosystem

And people will not wait for the Government coin to overtake bitcoin, they are already moving into ethereum which does not have these artificial problems that is created by core devs
Fiat is democratic currency; do we want to turn bitcoin into a democratic currency as well? Please be specific as to how this decision making mechanism is supposed to work?

No government is moving to use ethereum and it is doubtful any large bank or corporation will be buying into the ethereum token. Ethereum has many flaws and banks and governments will not need to buy off early ETH investors when they can simply clone BTC or ETH , make their adjustments and issue out their own premine to all of their customer base(remember, bitcoin doesn't have the largest digital currency marketshare , banks and governments do. ) The run up in price for Ethereum is principally due to the winklevoss twins frontrunning ETh so they can profit off of it when they sell it on their exchange.

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Re: My Dinner with Adam Back

Fri May 13, 2016 4:15 pm

What attracts people to use bitcoin is its technical capabilities, fungibility , and monetary sovereignty. Thus what banks and governments offer will never be able to compete with bitcoin directly.
What attracts people to use bitcoin is that it is not controlled by any single person, or a group of person. But the reality is that now the decision making process is totally broken and a group of handful guys in a backroom can decide where bitcoin goes, it is already much worse than the Federal Reserve system we had, just a Blockstream company coin with blockchain technology

You are assuming the miners control Bitcoin which is deeply flawed and I can provide evidence by looking at the thousands of alts that split off of bitcoin because one person or a group of people decided they didn't agree with the status quo. If a cartel of miners or a company like blockstream implemented anything I disagreed with I would do the same. The users are ultimately in control. You are only looking at this decision making process as an either or option when the reality is much different. We already choose to use both bitcoin and fiat simultaneously even though fiat is a corrupt currency we prefer not using. The same could be said if bitcoin became corrupt and why anyone who disagrees with the current status quo should immediately fork off because they can simultaneously use Bitcoin Core and Bitcoin classic at the same time.(although some temporary security adjustments would likely need to be implemented)

Example - Say most of the core developers created a cartel with the 3 largest mining pools and decided to implement blacklists to fight "terrorism, and protect the children". I as a bitcoin user and investor would not be at risk if I switched to an alt or forked the bitcoin chain from losing my investments. I could slowly divest my investments to insure profitability in the compromised chain while simultaneously using a new uncompromised chain and convince my community to do the same over time.

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Re: My Dinner with Adam Back

Fri May 13, 2016 4:49 pm

What attracts people to use bitcoin is its technical capabilities, fungibility , and monetary sovereignty. Thus what banks and governments offer will never be able to compete with bitcoin directly.
What attracts people to use bitcoin is that it is not controlled by any single person, or a group of person. But the reality is that now the decision making process is totally broken and a group of handful guys in a backroom can decide where bitcoin goes, it is already much worse than the Federal Reserve system we had, just a Blockstream company coin with blockchain technology

You are assuming the miners control Bitcoin which is deeply flawed and I can provide evidence by looking at the thousands of alts that split off of bitcoin because one person or a group of people decided they didn't agree with the status quo. If a cartel of miners or a company like blockstream implemented anything I disagreed with I would do the same. The users are ultimately in control. You are only looking at this decision making process as an either or option when the reality is much different. We already choose to use both bitcoin and fiat simultaneously even though fiat is a corrupt currency we prefer not using. The same could be said if bitcoin became corrupt and why anyone who disagrees with the current status quo should immediately fork off because they can simultaneously use Bitcoin Core and Bitcoin classic at the same time.(although some temporary security adjustments would likely need to be implemented)

Example - Say most of the core developers created a cartel with the 3 largest mining pools and decided to implement blacklists to fight "terrorism, and protect the children". I as a bitcoin user and investor would not be at risk if I switched to an alt or forked the bitcoin chain from losing my investments. I could slowly divest my investments to insure profitability in the compromised chain while simultaneously using a new uncompromised chain and convince my community to do the same over time.
Of course you can sell your coins and leave anytime, but just like when your government went bad, you can always migrate to another country, but that does not mean you have any control at all, in fact that means you are exiled

With the invention of segwit softfork, core devs have demonstrated that they only need to collude with miners and then push out softfork with whatever change they like. Just like a virus/Trojan on your computer, you can't prevent soft fork(Luke-Jr's word), rest of the miners are forced to upgrade to the new soft fork otherwise all their mined blocks will be orphaned, and nodes just become SPV nodes if they don't upgrade

As a result, previous bitcoin investors can only sell their coin and leave if they do not agree with this soft fork, they don't have any control to the situation, just like when your computer is infected by lots of virus, you can only delete the infected file. Of course those have enough knowledge will immediately seeking for a hard fork, but just like many people still use their virus infected machine daily, most likely majority of the users are unaware of the situation and still blindly upgrade, just like core devs planned, so your minority hard fork will not bring you any support from major exchanges and service provider, these centralized service providers are large and a few, BS will surely take them down one by one like they did to chinese miners

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Re: My Dinner with Adam Back

Fri May 13, 2016 5:02 pm


Fiat is democratic currency; do we want to turn bitcoin into a democratic currency as well? Please be specific as to how this decision making mechanism is supposed to work?
Fiat is not democratic currency, I first saw this statement from the Adam Back's slides, I immediately understand that he has very poor knowledge in economy, especially finance and monetary system. But spreading lies really works isn't it? You bought into it

Fiat is a monopoly currency, monetary policy is decided by a few FED officials, there is no democracy or consensus feedback from average people at all. And because that is the only format of the currency most of the people know, they naturally bring their experience into bitcoin, like using centralized exchanges and service providers, seeking expert advice like in a bank, blindly trust authorities etc...

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Re: My Dinner with Adam Back

Fri May 13, 2016 5:06 pm

Another major flaw in your line of reasoning is that simply keep raising the blocksize limit to drop the price of txs from 5-8 pennies to 0-4 pennies per tx will get extremely rapid adoption. .
I don't think that is the assumption at all. People don't care so much about the price per txn, anything below 10 cents is fine for most people in the world (though this does push developing countries out of the network) Businesses do, although, care about txn/s. And doesn't matter how healthy of fee market you have, when the limit is too low, no matter how much you pay, it won't be enough to ensure quick confirms. Block space is a closed bidding system. There is no limit to how high the bids can go for the same space, it all depends on the flow at any given time.

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Re: My Dinner with Adam Back

Fri May 13, 2016 5:08 pm


Of course you can sell your coins and leave anytime, but just like when your government went bad, you can always migrate to another country, but that does not mean you have any control at all, in fact that means you are exiled

With the invention of segwit softfork, core devs have demonstrated that they only need to collude with miners and then push out softfork with whatever change they like. Just like a virus/Trojan on your computer, you can't prevent soft fork(Luke-Jr's word), rest of the miners are forced to upgrade to the new soft fork otherwise all their mined blocks will be orphaned, and nodes just become SPV nodes if they don't upgrade

As a result, previous bitcoin investors can only sell their coin and leave if they do not agree with this soft fork, they don't have any control to the situation, just like when your computer is infected by lots of virus, you can only delete the infected file. Of course those have enough knowledge will immediately seeking for a hard fork, but just like many people still use their virus infected machine daily, most likely majority of the users are unaware of the situation and still blindly upgrade, just like core devs planned, so your minority hard fork will not bring you any support from major exchanges and service provider, these centralized service providers are large and a few, BS will surely take them down one by one like they did to chinese miners

If the majority of users want larger blocks than the old chain will quickly crumble. The naïve users you claim are more likely to follow Coinbase, circle , bitcoin.com , Blockchain.info, Xapo, ect. Look at the list of companies that support classic , They specialize in serving naïve users and can get all of these users to upgrade without any action or vote on their part simply because most naïve users use SPV wallets or web wallets through these companies. With bitcoin core a naïve user has to run a full node , know to upgrade , and manually download and install that upgrade which is far more effort. So why do all these exchanges and bitcoin processors and banks care what the core developers think if they disagree with them? They certainly aren't being held hostage by the miners either, They can instantly force the miners hand if they all collaborated, set a date, and if the miners didn't agree than overlay some checkpoints as Hearn was suggesting with XT and /or include another POS layer to make their chain POW /POS. If this is such an urgent issue than just do it already!

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Re: My Dinner with Adam Back

Fri May 13, 2016 5:10 pm


Fiat is democratic currency; do we want to turn bitcoin into a democratic currency as well? Please be specific as to how this decision making mechanism is supposed to work?
Fiat is not democratic currency, I first saw this statement from the Adam Back's slides, I immediately understand that he has very poor knowledge in economy, especially finance and monetary system. But spreading lies really works isn't it? You bought into it

Fiat is a monopoly currency, monetary policy is decided by a few FED officials, there is no democracy or consensus feedback from average people at all. And because that is the only format of the currency most of the people know, they naturally bring their experience into bitcoin, like using centralized exchanges and service providers, seeking expert advice like in a bank, blindly trust authorities etc...
To echo johnyj, fiat is NOT a democratic currency. You have been fooled by the mass media and the powers that be. Ask yourself when was the last time that you voted on Federal Reserve economic or monetary policy? Or whether you voted for any of the members of the Federal Reserve Board of Governors?

Fiat is a money created and governed by an oligarchy.

(I also cringe every time Adam Back uses his "do you want Bitcoin to be a political currency like USD?" which suggests how little he knows about how the current money system works. He is brilliant crypto guy, but he should stick to his area of expertise.
Last edited by djc on Fri May 13, 2016 5:14 pm, edited 1 time in total.

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Re: My Dinner with Adam Back

Fri May 13, 2016 5:14 pm

Another major flaw in your line of reasoning is that simply keep raising the blocksize limit to drop the price of txs from 5-8 pennies to 0-4 pennies per tx will get extremely rapid adoption. .
I don't think that is the assumption at all. People don't care so much about the price per txn, anything below 10 cents is fine for most people in the world (though this does push developing countries out of the network) Businesses do, although, care about txn/s. And doesn't matter how healthy of fee market you have, when the limit is too low, no matter how much you pay, it won't be enough to ensure quick confirms. Block space is a closed bidding system. There is no limit to how high the bids can go for the same space, it all depends on the flow at any given time.
Exactly, bitcoin has been working without touching the limit for 7 years and so far has achieved great adoption and also value appreciation. By artificially limiting the transaction capacity, thus create a large impact to the existing time and market tested model is extremely risky, it will prevent adoption and also create a downward pressure for price at the same time, and a lower price will further discourage adoption, once a negative feedback established, another tough period ahead. And this all can be avoided by simply raise the blocksize and buy more time for a more long term solution and build more enterprise level full nodes

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Re: My Dinner with Adam Back

Fri May 13, 2016 5:15 pm

Fiat is a monopoly currency, monetary policy is decided by a few FED officials, there is no democracy or consensus feedback from average people at all. And because that is the only format of the currency most of the people know, they naturally bring their experience into bitcoin, like using centralized exchanges and service providers, seeking expert advice like in a bank, blindly trust authorities etc...
It is the State that enforces the principal of legal tender that the private banks print and the state that will rob you and kidnap you if you create a competing currency and don't play by their rules. Fiat is indeed monopoly currency voted in democratically. Democracy has decided that it approves of these monopolies whether from their own ignorance or because of the subservient nature. This is what happens when you allow the majority to unethically violate the sovereignty of the minority.

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Re: My Dinner with Adam Back

Fri May 13, 2016 5:19 pm


If the majority of users want larger blocks than the old chain will quickly crumble. The naïve users you claim are more likely to follow Coinbase, circle , bitcoin.com , Blockchain.info, Xapo, ect. Look at the list of companies that support classic , They specialize in serving naïve users and can get all of these users to upgrade without any action or vote on their part simply because most naïve users use SPV wallets or web wallets through these companies. With bitcoin core a naïve user has to run a full node , know to upgrade , and manually download and install that upgrade which is far more effort. So why do all these exchanges and bitcoin processors and banks care what the core developers think if they disagree with them? They certainly aren't being held hostage by the miners either, They can instantly force the miners hand if they all collaborated, set a date, and if the miners didn't agree than overlay some checkpoints as Hearn was suggesting with XT and /or include another POS layer to make their chain POW /POS. If this is such an urgent issue than just do it already!
You have already seen how core devs scare the chinese miners with the hard fork dooms day scenario, I'm not sure every large service provider will be brave enough to enforce a hard fork without major hash rate support (change PoW/PoS? Another even larger risk).

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Re: My Dinner with Adam Back

Fri May 13, 2016 5:20 pm

Im not sure i see the imminent division , im for big blocks but see the current core path as a good compromise and a more efficient road map. efficiency modifications such as segwit make much more sense before throwing the kitchen sink at the block size. Core does have 2mb block size hardfork in the pipeline and segwit will scale the block size to 1.8-3mb so this combined we are looking at 1.8-3mb blocks by this summer and 4-6mb blocks with segwit after the 2mb block HF next year. Along with that, the updates with bip9 and segwit will allow the adoption of other solutions and faster deployments. We could also see confidential transactions by this time next year which is large in demand for potential large coin adopters and businesses.

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Re: My Dinner with Adam Back

Fri May 13, 2016 5:26 pm

Exactly, bitcoin has been working without touching the limit for 7 years and so far has achieved great adoption and also value appreciation. By artificially limiting the transaction capacity, thus create a large impact to the existing time and market tested model is extremely risky, it will prevent adoption and also create a downward pressure for price at the same time, and a lower price will further discourage adoption, once a negative feedback established, another tough period ahead. And this all can be avoided by simply raise the blocksize and buy more time for a more long term solution and build more enterprise level full nodes
At the risk of sounding like an echo chamber, the issue is that the current core dev mentality is one of paranoid conservative secretive cypherpunks. I'm not saying there is anything wrong with that. It is, as Roger put it, -a- valid strategy for Bitcoin. But it is one that is heavily reliant on the belief that Bitcoin is first and foremost a technological breakthrough that all people will eventually want to use. If you believe that everyone will eventually want to use the system for it's unique properties willingly (even if it is made illegal, and under threat of violence), then it make sense to go slow and steady.

But if you believe that Bitcoin is more significant as an economic breakthrough, (the network effect being a large part of its value, not the tech) then you want to get as many people using it unwillingly sooner rather than later, because once a 'legal' alternative is made available then most law abiding citizens will use that instead. (and at that point, the network effect will deflate, and Bitcoin will go to zero). Once you get more people using it (for its qualities or not) this make it harder politically for the gov's to outlaw.

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Re: My Dinner with Adam Back

Fri May 13, 2016 5:27 pm

It is the State that enforces the principal of legal tender that the private banks print and the state that will rob you and kidnap you if you create a competing currency and don't play by their rules. Fiat is indeed monopoly currency voted in democratically. Democracy has decided that it approves of these monopolies whether from their own ignorance or because of the subservient nature. This is what happens when you allow the majority to unethically violate the sovereignty of the minority.
You never vote for interest rate or money supply, all the other things you vote do not matter. Governments are broke, they have to borrow money from those bankers, and pay them back by taxing their people. Bankers are international, their power is much larger than any single sovereign

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Re: My Dinner with Adam Back

Fri May 13, 2016 5:28 pm


If the majority of users want larger blocks than the old chain will quickly crumble. The naïve users you claim are more likely to follow Coinbase, circle , bitcoin.com , Blockchain.info, Xapo, ect. Look at the list of companies that support classic , They specialize in serving naïve users and can get all of these users to upgrade without any action or vote on their part simply because most naïve users use SPV wallets or web wallets through these companies. With bitcoin core a naïve user has to run a full node , know to upgrade , and manually download and install that upgrade which is far more effort. So why do all these exchanges and bitcoin processors and banks care what the core developers think if they disagree with them? They certainly aren't being held hostage by the miners either, They can instantly force the miners hand if they all collaborated, set a date, and if the miners didn't agree than overlay some checkpoints as Hearn was suggesting with XT and /or include another POS layer to make their chain POW /POS. If this is such an urgent issue than just do it already!
You have already seen how core devs scare the chinese miners with the hard fork dooms day scenario, I'm not sure every large service provider will be brave enough to enforce a hard fork without major hash rate support (change PoW/PoS? Another even larger risk).

There are absolutely no risks if your assumptions are true that a majority of users support larger blocks or just are naïve and don't care. The miners would quickly have to fork over to bitcoin classic because none of the banks /exchanges would process their bitcoins and the economic majority would be on the chain with larger blocks. Timestamping would only need to be a short term security measure as Hearn suggested you wouldn't even need to change the security algo.

The only risk is if your assumption is flawed and most of the economic majority of users actively want to follow cores scalability roadmap. The miners and developers simply have to follow the economic majority and have little control in the direction that users want .
It is the State that enforces the principal of legal tender that the private banks print and the state that will rob you and kidnap you if you create a competing currency and don't play by their rules. Fiat is indeed monopoly currency voted in democratically. Democracy has decided that it approves of these monopolies whether from their own ignorance or because of the subservient nature. This is what happens when you allow the majority to unethically violate the sovereignty of the minority.
You never vote for interest rate or money supply, all the other things you vote do not matter. Governments are broke, they have to borrow money from those bankers, and pay them back by taxing their people. Bankers are international, their power is much larger than any single sovereign
The electorate certainly can vote in representatives to adjust the money supply or take away power from the banking cartel or audit the fed but they choose not to as they are easily manipulated, don't really care about those issues, and hopelessly naïve. This is what you get with a democracy. Good luck.

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Re: My Dinner with Adam Back

Fri May 13, 2016 5:32 pm

Im not sure i see the imminent division , im for big blocks but see the current core path as a good compromise and a more efficient road map. efficiency modifications such as segwit make much more sense before throwing the kitchen sink at the block size. Core does have 2mb block size hardfork in the pipeline and segwit will scale the block size to 1.8-3mb so this combined we are looking at 1.8-3mb blocks by this summer and 4-6mb blocks with segwit after the 2mb block HF next year. Along with that, the updates with bip9 and segwit will allow the adoption of other solutions and faster deployments. We could also see confidential transactions by this time next year which is large in demand for potential large coin adopters and businesses.
Segwit is a trap, it is an anti-onchain-scaling mechanism, for each 1MB transaction, miners would have to prepare 4MB bandwidth because it allows 25% discount on the fee of signature data (To bribe the exchanges and wallet service providers). So for 2MB transactions, you would need 8MB bandwidth, and so on... So this basically make any future on chain scaling magnitudes more difficult than the other route by simply raise the block size

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Re: My Dinner with Adam Back

Fri May 13, 2016 5:35 pm

But if you believe that Bitcoin is more significant as an economic breakthrough, (the network effect being a large part of its value, not the tech) then you want to get as many people using it unwillingly sooner rather than later, because once a 'legal' alternative is made available then most law abiding citizens will use that instead. (and at that point, the network effect will deflate, and Bitcoin will go to zero). Once you get more people using it (for its qualities or not) this make it harder politically for the gov's to outlaw.
Im for its economic breakthrough, but a bump with the block size to 2mb will not be enough if it becomes massively adopted. For mass adoption it really does need something like LN for instant payments . I would rather have segwit and LN this year and 2mb block next year than 2mb blocks this year and segwit+LN next year.

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Re: My Dinner with Adam Back

Fri May 13, 2016 5:40 pm

At the risk of sounding like an echo chamber, the issue is that the current core dev mentality is one of paranoid conservative secretive cypherpunks. I'm not saying there is anything wrong with that. It is, as Roger put it, -a- valid strategy for Bitcoin. But it is one that is heavily reliant on the belief that Bitcoin is first and foremost a technological breakthrough that all people will eventually want to use. If you believe that everyone will eventually want to use the system for it's unique properties willingly (even if it is made illegal, and under threat of violence), then it make sense to go slow and steady.

But if you believe that Bitcoin is more significant as an economic breakthrough, (the network effect being a large part of its value, not the tech) then you want to get as many people using it unwillingly sooner rather than later, because once a 'legal' alternative is made available then most law abiding citizens will use that instead. (and at that point, the network effect will deflate, and Bitcoin will go to zero). Once you get more people using it (for its qualities or not) this make it harder politically for the gov's to outlaw.
Bitcoin doesn't have a network effect for being a digital currency. It only has a network effect for features that no government or bank will adopt , ever. Do you really think that governments or banks are going to create fungible and private immutable blockchain currencies? Really?

It is extremely naïve to believe bitcoin has any chance of making fiat currencies obsolete any time soon (100+ years). This is a delusional optimism that is really hurting us from realistic goals and the harsh struggle ahead. I do admit we may see a slightly larger adoption rate by bumping the blocksize limit immediately , but nothing like Ver is insinuating.

Yes, lets work together to make bitcoin grow as fast as possible in solidarity, but kicking the can with blocksize increases is a Trojan horse which will be bitcoins undoing. We need to make bitcoin more secure and reverse the centralization trend now.
Im for its economic breakthrough, but a bump with the block size to 2mb will not be enough if it becomes massively adopted. For mass adoption it really does need something like LN for instant payments . I would rather have segwit and LN this year and 2mb block next year than 2mb blocks this year and segwit+LN next year.
Exactly. We are so close to LN rolling out (later this year ) and that will solve so many problems which are far worse than capacity like the fact that Bitcoin is completely broken for instant secure confirmations. We really just need to rally behind Segwit and the LN and all of this infighting is slowing down the development of true scalability and security.

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Re: My Dinner with Adam Back

Fri May 13, 2016 5:44 pm

Im not sure i see the imminent division , im for big blocks but see the current core path as a good compromise and a more efficient road map. efficiency modifications such as segwit make much more sense before throwing the kitchen sink at the block size. Core does have 2mb block size hardfork in the pipeline and segwit will scale the block size to 1.8-3mb so this combined we are looking at 1.8-3mb blocks by this summer and 4-6mb blocks with segwit after the 2mb block HF next year. Along with that, the updates with bip9 and segwit will allow the adoption of other solutions and faster deployments. We could also see confidential transactions by this time next year which is large in demand for potential large coin adopters and businesses.
Segwit is a trap, it is an anti-onchain-scaling mechanism, for each 1MB transaction, miners would have to prepare 4MB bandwidth because it allows 25% discount on the fee of signature data (To bribe the exchanges and wallet service providers). So for 2MB transactions, you would need 8MB bandwidth, and so on... So this basically make any future on chain scaling magnitudes more difficult than the other route by simply raise the block size
But it will let miners put more transactions in their blocks increasing per block revenue , so there is a give and take here. It will not just increase bandwidth for nothing. The benefits of malleability fixes seqwit brings will also allow much more possibilities in the near future.

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Re: My Dinner with Adam Back

Fri May 13, 2016 5:45 pm

Im not sure i see the imminent division , im for big blocks but see the current core path as a good compromise and a more efficient road map. efficiency modifications such as segwit make much more sense before throwing the kitchen sink at the block size. Core does have 2mb block size hardfork in the pipeline and segwit will scale the block size to 1.8-3mb so this combined we are looking at 1.8-3mb blocks by this summer and 4-6mb blocks with segwit after the 2mb block HF next year. Along with that, the updates with bip9 and segwit will allow the adoption of other solutions and faster deployments. We could also see confidential transactions by this time next year which is large in demand for potential large coin adopters and businesses.
Segwit is a trap, it is an anti-onchain-scaling mechanism, for each 1MB transaction, miners would have to prepare 4MB bandwidth because it allows 25% discount on the fee of signature data (To bribe the exchanges and wallet service providers). So for 2MB transactions, you would need 8MB bandwidth, and so on... So this basically make any future on chain scaling magnitudes more difficult than the other route by simply raise the block size
The discount is primarily intended to remove UTXO bloat which is of critical technical importance in bitcoin scaling.

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Re: My Dinner with Adam Back

Fri May 13, 2016 7:14 pm

I respect Roger for restraining himself and not serving a round kick for Adam after all the drama and lies he contributed to the ecosystem.

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Re: My Dinner with Adam Back

Fri May 13, 2016 9:44 pm

Adam Back's clever mechanism to prevent miners from censoring transactions

https://www.youtube.com/watch?v=3dAdI3Gzodo&feature=youtu.be&t=3438

switch to 57:20 min
********************************************
More informations about Bitcoin and scaling BTC on

bitcoin.org/en/

https://bitcoincore.org/en/2015/12/23/c ... reases-faq

&
reddit.com/r/Bitcoin/

iFixBTCmemoryIssues
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Re: My Dinner with Adam Back

Sat May 14, 2016 12:39 am

A bank doesn't invest $100M unless there are ulterior motives.

A bank that does invest this is looking to recoup between $1B and $10B or more from this investment.

You should be worried about people being able to seize your Bitcoin with this type of power.

Bitcoin Core - keep telling the community that you are doing this for the people and your technology will benefit everyone. The only gullable people are your victims.

That being said, stay far away from Bitcoin Core.

Kudos to you Roger, I would not have given Adam the time of day besides calling him a scammer and that he should be ashamed of himself for what he has done.

I am off to play a late game of golf, enjoy your weekend!
Image

If you are running a version of Bitcoin Core, stop using it. Upgrade to Bitcoin Unlimited or Classic immediately.

Fix Your Unconfirmed Transaction.

Vote for the future of our Bitcoin network!

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Re: My Dinner with Adam Back

Sat May 14, 2016 2:01 am


The electorate certainly can vote in representatives to adjust the money supply or take away power from the banking cartel or audit the fed but they choose not to as they are easily manipulated, don't really care about those issues, and hopelessly naïve. This is what you get with a democracy. Good luck.
Ok, then we shall take the non-democracy way, so who have the right to decide what goes into the bitcoin implementation?

Obviously the core devs are not qualified, since they have demonstrated that they don't have slightest idea how a monetary system works, or how society works at all. Besides, they are so poor that they can not even afford their rent (Adam Back's words), of course you can't put the fate of a monetary system in the hand of a few poor guys that can't even pay their rent.

So the only one that can decide is some one with enough degree in economy and finance. Technology is just a means to achieve certain target, the target of the monetary system should be defined by the qualified economy and financial experts, not computer programmers

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Re: My Dinner with Adam Back

Sat May 14, 2016 2:13 am

Im for its economic breakthrough, but a bump with the block size to 2mb will not be enough if it becomes massively adopted. For mass adoption it really does need something like LN for instant payments . I would rather have segwit and LN this year and 2mb block next year than 2mb blocks this year and segwit+LN next year.
Right now, there is no evidence that a bump with the block size to 2MB will not be enough. On the other hand, we have clear evidence that LN is not going to be adopted: 21inc's LN has already been published for 3 months, if there is any slightest market demand for LN, then we will see 21inc's computer getting much more popular. But there is almost no one interested in their LN solution

Why? Because LN is an obsolete financial model (payment channel/prepaid card) from 1950s, many telecom operator have already abandoned this billing method due to too much accounting overhead and replaced it with fixed fee regardless usage model. This is a very simple logic: If you frequently and repeatedly purchase something from one merchant, what do the merchant usually do? They let you buy large amount at a discount rate, or even sign a contract with you providing unlimited usage at a fixed rate, thus combine hundreds or thousands of transactions into one. You don't need LN to do this simple math

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Re: My Dinner with Adam Back

Sat May 14, 2016 2:25 am


The discount is primarily intended to remove UTXO bloat which is of critical technical importance in bitcoin scaling.
Again, this is a decision that makes economic impact, and as previously demonstrated, core devs are lack of basic understanding of economy and finance, so they should not make arbitrary decisions in changing the fee structure. Because any of the market intervention will create winners and a losers, it is political, core dev's action again proved that they know nothing about modern economy principles

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Re: My Dinner with Adam Back

Mon May 16, 2016 4:02 pm

First let me congratulate you Roger. All this angel money invested came back in the form of the Bitcoin price increase even if I guess you didn't make a return on many of these investments. I think now you should be worry free.

In fact at this moment you strangely sound like someone who would be overinvested in an asset class and is experiencing loss aversion. You once told me you were all Bitcoin no fiat. I hope it's not true for someone who has accumulated so much wealth. My advice anyway would be sell some more and you will feel much more peaceful and less worried about Bitcoin's future. It reminds me of when Gavin was making desperate blog posts about altcoins back then with Litecoins. Maybe you are starting to tire after all these intense years. Maybe it's time to take a step back and spend more of your time spending these hard earned Bitcoins. Buy a few more appartments or shares if you don't want to hold fiat!

Your scenario of a Govcoin replacing Bitcoin doesn't make enough sense for me because first of all iit would never be a proper store of value, resistant to devaluation and that is one of the main appeal of a decentralized currency anyway.

Besides this I'm happy the two sides are making progress in talking to each other.

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