How to de-anonymize Bitcoin
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The opposing views of those advocating for bitcoin block size change font color the current implementation of Bitcoin Bitcoin Coreand those who believe that the block size needs to be increased immediately to overcome scalability challenges, has balkanized the Bitcoin developer community into mainly two camps.
It has failed because the community has failed. Worse bitcoin block size change font color, the network is on the brink of technical collapse. Alternatives have emergedsuch as Bitcoin Unlimited, which has no hard coded block size limit; Bitcoin Classic, which would bitcoin block size change font color the blocksize to 2 megabytes; and BitPay Core, which would have an adaptive block size limit. Earlier this month, the various factions convened the Satoshi Roundtablean invitation-only gathering of fifty or so people, who turned out to be a collection of many of the most important people behind Bitcoin.
An unlikely man with an unusual background, Bruce Fentonconceived and organized the roundtable. Fenton is a self described freedom-loving techno geek. Like many in the blockchain industry he is a free-market economist and advocate for lower regulations.
Leading up to the event, the community appeared to be supportive. Who do they think they are, the Illuminati? There were CEOs of important Bitcoin companies including exchanges, wallets, alternative bitcoin block size change font color and cryptocurrencies.
Both contingents of the major rift were amply represented. On one side of the rift is the Bitcoin Core team, who are contributors to the bitcoin block size change font color Bitcoin source base, and take the responsibility of maintaining and enhancing it, and more importantly, prioritizing the numerous suggestions for enhancement. For over a year, they have taken the stance that making a one-off enhancement to increase the blocksize does not serve Bitcoin well; that yes the block size needs to be increased, but it should be done later, perhaps second or third or fourth, as part of a larger set of important changes.
Most importantly, bitcoin block size change font color prioritize high consensus among miners and safety i. As Matt Corallo put it: At this point, however, the entire Bitcoin community seems to have unified bitcoin block size change font color a single vision — roughly 2MB of transactions per block, whether via Segregated Witness or via a hard fork, is something that can be both technically supported and which adds more headroom before second-layer technologies must be in place.
Additionally, it seems that the vast majority of the community agrees that segregated witness should be implemented in the near future and that hard forks will be a necessity at some point. With the apparent agreement in the community, it is incredibly disheartening that there is still so much strife….
After being unsuccessful in convincing the Bitcoin Core team to prioritize increasing the blocksize, Gavin has created an alternative implementation, called Bitcoin Classic.
Bitcoin Classic makes only that one change of increasing the blocksize; some miners think this is thus the safer alternative, purely by virtue of the fact that it consists of vastly fewer changes. Tensions had been high prior to the Roundtable, but the conversation started off constructively. The group began by finding common ground around two things: There was agreement that the rift was hurting everyone.
There was also agreement that Bitcoin splitting into two blockchains would be very, very bad; transactions would be lost or duplicated; that it would be unclear what the real Bitcoin was; that the reputational damage would be significant. Everyone agreed that the problem started off over blocksize and that still is the immediate problem but the inability of the community to resolve that problem has surfaced a larger problem: But this is a seriously hard problem to solve because a bitcoin is all about decentralization bitcoin block size change font color not having the need to trust a central entity, b Bitcoin is not controlled by any one body or even jurisdiction and c this group, and the community in general, reacts very negatively to any suggestions for a governance structure or body.
The fifty or so people broke up into seven different subgroups which at times came together and at times separately over lunches, dinners and drinks. A group which included a large miner and a large exchange operator felt that the Hong Kong agreement was fine, as long as the timeline bitcoin block size change font color the block size increase was moved up.
Another group felt that the go-forward goals should be to encourage more companies to mine, to contribute to the decentralization of Bitcoin, with two distinct sub-goals: Periodically the groups reminded each other that they have a credibility problem and that outsiders looking in are not impressed by the impasse.
Over the course of the group discussions, some called for a more civil discourse among the two sides of the debate, while others said that the divergent approaches were not actually mutually exclusive and that both approaches could be executed if the factions could agree upon a timeline. They pointed out that some were short-term goals block size and some were long-term goals governance, and how we decide these things in the future. Consensus rules bitcoin block size change font color the code that determines whether there is consensus among the miners, a tallying of votes if you will, which can be used to decide many things, including… wait for it… which fork bitcoin block size change font color the Bitcoin code to run.
This had been discussed prior to the Roundtable and most people seemed to think that the idea had legs and a variation of the idea could work; but debating which variation was another governance issue.
I am convinced that I was the only one amused by the fact that in the real world, minors cannot vote; while in Bitcoin, only miners can vote. We do need standardization of the protocol and a widely-accepted roadmap for implementing and releasing improvements.
This is hard without a leader, a governance model, or other form of consensus. Perhaps we need to establish a protocol or accepted way of choosing the path forward so we can make progress as a group. Others were adamant that that was very narrow thinking. The bitcoin block size change font color present at the Roundtable, interestingly, did not debate this, and did not bitcoin block size change font color to disagree.
The game is over if we have do that. Bitcoin will never be the same. Brian Armstrong, CEO of Coinbase, warned that Bitcoin as a protocol and as an industry is in a bad place, a dangerous place.
And then he went on to articulate a very, very strong and controversial stance: Bitcoin Core is a good team. Bitcoin Classic is a good team. But we need bitcoin block size change font color better team — a great team — working on the protocol. I felt comfortable mentioning him by name because he blogged about it later otherwise we had agreed that we could write about what people said, without mentioning them by name: They view themselves as the central planners of the network, and protectors of the people.
I find the stance impressive and I admire him taking the bull by the horns. Just because we upgrade to Bitcoin Classic now, does not mean we need to stay with Classic forever. It is a risk mitigation option. Particularly, what I think is the crux:. It is unlikely this will be done in time to avoid the scaling issue we are currently facing.
The number of lines of code that need to be written for this across the entire industry will be several orders of magnitude more than a scaling solution of changing 1MB blocks to 2MB blocks. Strong reactions and flames were inevitable.
Bitcoin may be the most important thing happening in fintech right now. The problem of how to govern a cryptocurrency that was explicitly designed to not have a central controlling authority is philosophically intriguing. I believe that the players involved are well-intentioned reasonable people.
All of them have a common goal: They just disagree very, very strongly on how to get there. There is some ego involved. There is some jockeying for power or control. I bitcoin block size change font color blockchain technology into two categories: Category 2 is interesting, and there will likely be a few billion-dollar companies created there. I liken companies in this category to companies such as Docusign or Salesforce. In bitcoin block size change font color United States and in western Europe we take for granted the luxury of having institutions — the Federal Reserve and the European Central Bank respectively — that have central banking skill, experience, credibility and competence.
Other central banks are less competentless independent, more political or corrupt, and most importantly cannot undo the errors of their sovereigns, such as autocratic nationalism, and running economies that are overly dependent on a commodity. This is more readily evident in small sovereigns, often in Africa or Latin America, as their economies fail or currencies devalue.
Central banks are run by people and thus will always be susceptible to such errors, which is why non-fiat representative stores of value such as gold, have a place. And for this reason I continue to think that non-fiat stores of value that are more convenient to manipulate and transport than gold will have a bigger place in the future. Are the reasoned albeit heated discussions we are having about the Bitcoin protocol preferable to inexperienced, incompetent, and often opaque central banking?
Salil Deshpande serves as the managing director of Bain Capital Ventures. He focuses on infrastructure software and open source. More posts by this contributor After the Satoshi Roundtable, is there a way to bridge the bitcoin divide?
The Holy Grail of Web Scale.
