Bitcoin SV is a safety beacon in the turbulent tides of the cryptocurrency chaos

Bitcoin SV a safety beacon in the turbulent tides of cryptocurrency chaos

There is a lot going on in the Bitcoin ecosystem right now. So much that it is sometimes hard to keep up. There are multiple scandals popping up constantly – OneCoin is being sued by an investor after it was revealed that the cryptocurrency was nothing more than a Ponzi scheme and another fraudster used crowdfunding investments to purchase Bitcoin Core (BTC). As scandalous and embarrassing as these two are, though, they still pale in comparison to what has been making crypto headlines every day for the past week. The Bitfinex/Tether debacle, which has now potentially ensnared Binance, is taking center stage and shows how the top cryptocurrencies are apparently willing to play their own games in order to maintain their control and positions. All the top cryptocurrencies – except one.

Bitcoin SV (BSV) has stayed its course, ensuring that the original Bitcoin stays alive. While everyone else goes off to create their own crypto solution, ignoring the fundamentals of digital currency established by Satoshi Nakamoto, BSV is proudly not veering away, understanding completely what’s at stake.

To that end, BSV has had to suffer in certain aspects. It hasn’t seen the monumental price increases that many incorrectly associate with a crypto’s true value. In fact, BSV is now trading below its utility value, but this is still not a foreboding of rough seas ahead.

BSV is doing what no other digital token is doing. It is scaling to levels that BTC and Bitcoin Cash (BCH) developers said weren’t possible or weren’t needed on an active blockchain. However, the ability to scale results in BSV having real, tangible utility value. By contrast, those digital currency platforms that are not scaling – including BTC and BCH, among others – have become 100% speculative offerings. As such, they are all subject to the whims of traders and could crash to almost zero at any time. This has already been seen on more than one occasion.

The surest guarantee against speculative trading is a utility token. This translates into BSV being the only safe haven in the current uncertain environment and the only alternative that is safe from tanking as a result of the Binance and Bitfinex fiascos that are sure to turn the crypto market upside down.

Crypto crash creating credibility, not chaos

Crypto crash creating credibility, not chaos

The cryptocurrency sell-off has a number of investors singing the blues. More than a handful of individuals bought into crypto following Bitcoin Core’s (BTC) massive price gains last year, expecting to see the same explosive growth in 2018. It hasn’t happened; in fact, the numbers are down significantly from the beginning of the year with many digital currencies losing as much as 75% of their value. However, instead of looking at this as a glass-half-empty scenario, it needs to be seen as a glass-half-full situation that is going to produce great things for cryptocurrency.

Many people have forgotten why cryptocurrency was created. They have become blinded by the dollar signs, hoping to be able to convert a few Bitcoin into a new Lamborghini or oceanfront party house by seeing substantial returns. What was presented by Satoshi Nakamoto about ten years ago was designed to be a currency, a form of money that was peer-to-peer, not controlled by a central bank and which allowed for instant transactions. A currency is only good if it can be spent; as long as there are any obstacles that prevent it from reaching widespread mainstream adoption – such as massive volatility – it can never flourish. 

The sell-off is a good thing. It is helping a great number of people to begin to take cryptocurrency more seriously. It is eliminating the get-rich-quick scammers operating through initial coin offerings (ICO) and new – but worthless – digital tokens that provide no utility. 

It has also produced a market that is, on some levels, cleaner than before. Despite wild fluctuations, price volatility has been less than what was seen last year, meaning there is more stability in the markets. This is going to help produce an ecosystem that is able to thrive and provide the results that everyone should desire to see – a world that accepts digital currency as a legitimate currency and which removes the ability for central banks or countries to whimsically manipulate prices. 

Those behind Bitcoin SV are not looking to create a cryptocurrency that sees its price head to the moon one day, only to come crashing back down the next. Instead, the goal is to create a sustainable cryptocurrency that is a viable alternative to fiat. Despite the actions of some individuals to try and derail the train from the tracks, Bitcoin SV has been able to remain true to the original Satoshi’s Vision and create a cryptocurrency that is not only looking at the long-term prospects, but which, in a sea of wanna-be digital currencies, has true, tangible utility value. 

New Bitcoin Core algorithm seeks to ‘tidy up’ coin selection code

New Bitcoin Core algorithm seeks to ‘tidy up’ coin selection code

Coin selection, one of the key technical processes for facilitating Segwit-Coin BTC payments, looks set for a major overhaul, as part of ongoing attempts to reduce transaction fees.

On Monday, CoinDesk reported that a new algorithm called “Branch and Bound” (BnB) is being developed to take coin selection’s place, resulting in improved transaction times and reduce fees from their current levels.

However, concerns were raised over the new model’s impact on BTC fungibility, with Bitcoin Cash (BCH) already offering more effective mechanics than the new algorithm could deliver.

At present, coin selection is regarded as overly ‘convoluted’, pulling together packets of blockchain data to make up nominal transaction amounts.

The process is similar to overpaying in cash and receiving change, with the algorithm pooling several smaller ‘chunks’ of Bitcoin to total the amount of any transaction, rather than simply sending payments in a single chunk.

This can also lead to scenarios where a transaction of 0.05 BTC is comprised of 0.06 BTC, with 0.01 BTC given as ‘change’. While the algorithm works in its current form, most experts agree it is far from optimal.

Andrew Chow, a contributor to Bitcoin Core, described the inefficiencies of the current algorithm in an interview with CoinDesk: “Bitcoin Core’s original coin selection algorithm actually needs a lot of reworking, especially with regards to transaction fees. It’s inefficient and it ends up doing a weird loop to try to guess the amount of transaction fees that are needed.”

Unnecessary change outputs are problematic, both in terms of transactional inefficiencies, as well as occupying unnecessary space on the blockchain. The Branch and Bound algorithm aims to eliminate the need for change outputs, by looking for exact match chunks first. According to Chow, this will make for smaller transactions, thereby saving on fees.

“Transactions where an exact match was found, will generally be smaller than ones where there is change, so this will also save on transaction fees for the user and free up a few more bytes of block space to fit in other transactions,” Chow told the news outlet.

However, Bitcoin Core’s proposed algorithm is aimed at correcting a problem that only applies to BTC—the issue, after all, has already been resolved by BCH, which currently offers faster transaction times and lower fees, without the need for this kind of structural overhaul.

It remains to be seen where Branch and Bound will deliver any significant improvement, in light of the more fundamental issues with the BTC blockchain.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

source: https://coingeek.com/new-bitcoin-core-algorithm-seeks-tidy-coin-selection-code/

'Satoshi is a G': Canadian artist raps about Bitcoin Cash in new song

‘Satoshi is a G’: Canadian artist raps about Bitcoin Cash in new song

About two weeks ago, Bitcoin Cash (BCH) got a little boost from the music world when rapper Lil Windex released a video about the cryptocurrency. The story is one of rags to riches, starting with the rapper’s time living on the streets cleaning car windshields for change, before he hit the big time after investing in Bitcoin Cash. He also talks down about legacy Bitcoin (BTC) and its supporters, at one point saying, “Hey, f— bitcoin core.”

The video has become somewhat of an Internet success, with two decidedly different camps—those that understand and enjoy the message, and those that blankly stare at it wondering how to recuperate the 3 minutes and 15 seconds they lost watching it. Love it or hate it, the video has garnered Lil Windex a lot of attention, and Business Insider recently was able to interview the rapper to discuss his thoughts on Bitcoin BCH and the whole cryptocurrency revolution.

When asked why Bitcoin Cash was better than the rest, Lil Windex told the news outlet that he believes in the principles behind the cryptocurrency. He added that having control over his money, as opposed to giving it up to the banks, was a huge benefit. One of the biggest advantages, though, is the ability to send money immediately from one wallet to another.

In the video, Lil Windex and an associate can be seen throwing around serious amounts of cash.  Business Insider asked the 25-year-old rap artist if this could potentially send a mixed message, since cryptocurrency is a digital currency with no tangible form. Lil Windex responded by saying that it’s a rap video so it has to have cash. He closed the topic by pointedly asking, “Are people confused when Bitcoin millionaires cash-in for fiat so they can buy [Lamborghinis]? I don’t think so. It’s called flexing.” Touché.

Closing out the interview, Lil Windex was asked about his comments in the rap talking down on Core group. His response spoke volumes:  “…Sounds like they’re being all weird about Bitcoin and censoring people for having opinions…Sounds lame, so if they’re doing that, then yeah, they’re a bunch of lames. Satoshi is a G. Respect your elders. RIKIKI!”

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

Bitcoin Core 0.16.0 is finally released with full Segwit support

It’s been a long time coming, but last week, Bitcoin Core, the development team responsible for the Segwit fork of Bitcoin, finally released an update to their client, featuring full support for Segregated Witness.

In short Segregated Witness was touted as a scalability fix in itself, but as BTC found heavy usage during the 2017 run to its ATH (all-time-high), fees shot up to astronomical heights, and congestion levels reached unprecedented levels, forcing users to wait up to and over a week at times for transactions to confirm. The aftermath of which gives strong evidence for a false news media campaign concerning the scalability capability of Segwit.

However, Segwit’s true capacity increase which is only expected to provide a mere 1.7-1.8MB on average effective blocksize (or, 5-6 transactions per second throughput), will be made apparent only when the vast majority of the eco-system adopts ‘Segwit’ transactions.

Because of the way Segwit was introduced as a soft-fork, it allows Bitcoin legacy transactions, while incentivising the newer ‘Segwit’ transaction format. Thereby, encouraging users and businesses to switch to Segwit transactions, over time. As more and more wallets, exchanges, and businesses adopt Segwit, the blockchain slowly finds itself migrating over to “Segregated Witness” addresses and transactions, abandoning the original Bitcoin transaction format as laid out in the Satoshi Nakamoto whitepaper of 2008.

While many adherents to the ‘Core’ faith have been loud in the condemnation of entities like ‘Coinbase’, for whom it took 6+ months to implement Segwit, it ought to be equally observed, that Core themselves, have taken just as long to release full native support for Segwit in their own client.

It is most pivotal that Core released this as soon as possible given that so much of the rest of the eco-system is depending on them to move first. Take for example, the major exchange Kraken, which tweeted the following:

Sounds reasonable.

Certainly, the Segwit soft-fork will now have its engine roaring a little louder, as evidenced by the below graph illustrating the rising number of Segwit transactions over-time (particularly since Coinbase and Core announced support). Take note of the rise from block number 511075 (27th of Feb 2018) onwards.

Bitcoin Core 0.16.0 is finally released with full Segwit support.
source: Segwit.party

As ascertained above, at 6+ months following the activation of Segwit on the BTC chain, the adoption rate for Segwit transaction still sits at only marginally over 30%. In order for the new capacity limits of 5-6 transactions per second to be realised, it requires near universal adoption of Segwit.

What does ‘Native Support for Segwit’ mean?

Upgrading to support Segwit transactions can be a technically tedious task, hence why many businesses have been waiting on Core to move first with their client, which in turn makes implementation a little easier for everyone else. A large part of the BTC eco-system already supports Segwit transactions, although this is done in a non-native, backward compatible manner.

The way non-native Segwit addresses work, is that they use former lead developer Gavin Andresen’s P2SH (pay-to-script-hash), which always start with a “3” instead of a “1”. Because the Bitcoin client already accepts P2SH, using it for Segwit in an effort to on-ramp usage quickly, made sense. But it has many drawbacks.

Using Segwit through P2SH is inefficient, and wastes in the mempool, and it therefore can contribute to rising fees. Native Segwit addresses are known as bech32 addresses, and they start with “bc1”. Native use of Segwit works a little more directly and more efficiently as bech32 has no non-witness SigScript (Signature Script).

However, because native Segwit addresses are a new bech32 format and “look different”, older wallets do not recognise them, and users that don’t upgrade such wallets won’t be able to send to these addresses.

What else comes with “Bitcoin Core 0.16”

Segwit Wallets aside, two very notable changes are:

– HD Wallets are the default! HD Wallets (Hierarchical Deterministic Wallets) are type of wallet that changes address every time it is used for receiving funds. HD wallets have been used for quite a while now, and all major wallets utilise this functionality.
– The highly controversial RBF is default in the GUI. Core’s “Replace By Fee” feature is now on by default.

There are a host of other changes introduced, most which will make little impact to the end user. For a full list of changes, check out the release notes.

Eli Afram
@justicemate

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Core Dev Peter Todd admits Lightning Network has issues

Core Dev Peter Todd admits Lightning Network has issues

It takes a lot for a staunch advocate of a technology to question its capability. Very recently, Bitcoin Core developer Peter Todd, made an admission that Lightning Network is full of holes.

Praised by many as being the scalability fix for the Segwit chains’ scaling woes, Lightning Network has indeed come short on many fronts, and many people are beginning to question if it really is up to the task, including one prominent contributor to BTC’s code.

Core Dev Peter Todd admits Lightning Network has issues

“Segfaults” (or Segmentation faults) are generally quite common when programming in C. But the more complex a program, the more chance of there being such instances of these bugs.

Segfaults are generally caused by a badly written program that tries to read or write to memory locations that are out of range. A common segfault for example is an out of bounds array, or a variable that has not been declared properly.

The problem with coding in C++, is that it is an extremely powerful language that gives full control of the mechanics of the application to the developer. This can be a very good thing, but it can also be terribly dangerous. The compiler assumes the developer knows what they are doing, and it will not try to ‘guide’ the user, as is the case with modern programming languages.

On one hand, Peter Todd is right. “Writing it in C, is a notoriously dangerous language”. But on the other hand, we have to question the logic both ways. If the coding language of choice was right, then why are there so many holes in the application, which are apparently very difficult to identify and resolve? If the coding language of choice was incorrect, then how much faith should we be putting in the leadership of this project?

Lightning is still far from ready on all accounts, many have already lost funds in testing Lightning Network on the main. In the same thread, Peter mentions that he’s lost funds testing “Éclair” – an android, “lightning ready Bitcoin wallet”.

He goes on to mention “As for the Lightning protocol, I’m willing to predict it’ll prove to be vulnerable to DoS attacks in its current incarnation, both at the P2P and blockchain level… While bad politics, focusing on centralized hub-and-spoke payment channels first would have been much simpler.”

Let’s ignore the ‘centralized hub-and-spoke’ comment there…

In my other life I am a business analyst and a developer. A BA role entails identifying business needs, and determining solutions. One of the most common project management methods out there is known as PRINCE2. It is used across a multitude of industries for the delivery of projects. But one interesting concept that I find myself drawn to regarding PRINCE2 is the tenet of “continuous justification”. If at any point of the project lifecycle, the outcome can no longer be justified, then the project is dropped.

As far as LN is concerned, at no point have we seen those steering the ship, reassess the viability of the project. In PRINCE2, one of the initial documents coming out of the process is the business case itself. Let’s suppose for a moment, that the Lightning Network whitepaper fills this gap. The paper identifies Bitcoin’s scalability problem, and makes a proposal for off-chain channels that can be settled on the Blockchain afterwards.

At some point after, it was then identified that it cannot scale to the desired level, and that there are some fundamental problems with the funding of channels. So then a ‘third layer’ was introduced, to scale funding capability of channels.

Another problem still open is how channel updates can be broadcast to everyone, particularly at a global adoption level. At 1 million channels, things can get very ugly.

The problem we are facing, is that this is patch work, after patch work, after patch work… At what point does project leadership, take a step back and reassess the viability and feasibility of LN as a global scalability solution?

Entities like Blockstream who are in part sponsoring the development of Lightning Network, have a lot to lose. There’s a reason that PRINCE2’s “continuous justification” principle became a thing…  there are indeed many businesses that are guilty of throwing more and more money at a project in an attempt to save it, than to go back to a drawing board. Some people just want to save face.

Eli Afram
@justicemate

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

Lightning Network can’t scale, needs another layer

Devs propose yet another layer to save the legacy chain.

Correction: Jameson Lopp’s analysis of the Lightning Network were incorrectly interpreted in the original post. These have been removed.

How the Lightning Network works

In the Lightning Network—Bitcoin Core’s scaling solution of choice for the legacy chain, users do not transact on the blockchain directly. Two users open a “payment channel” and transact through that channel or second layer (Lightning Network) on top of the blockchain. The only time anything is recorded on the blockchain after opening this payment channel is when these two users are done transacting for the time and “close” the payment channel, at which point the final balances of the two parties are recorded on the blockchain, using it only as a “settlement layer.”

Such a system would off-load regular transactions between two parties to the Lightning Network and take off some of the load from the blockchain. It also saves users from having to pay transaction fees over and over. But this only works economically if the two users intend to have multiple or repeating transactions, otherwise, they’re better off just transacting on-chain for one-time transactions. Why?

For a one-time transaction with a user who does not have a direct connection or open payment channel with you, one can pass through or “hop” through their connections’ channels or “branches” to get to their intended recipient—provided that each of the users between you have enough balance to pass on the funds. It’s not as simple as money passing from one hand to another, however. It’s actually a simultaneous handoff: the person who has an open channel with the intended recipient has to send him the funds and sort of get “reimbursed” the exact same amount from the original sender.

Imagine a row of people and I’m trying to pass $100 to a person sitting five people away from me to my right. Instead of asking people to simply pass my $100 bill to him, each person between us will have to take out $100 from his own wallet, and simultaneously pass it on to the person to their right while also receiving $100 from the person to their left. They all end up with $100 except for me, the original sender.

So in such a scenario, a user is better off saving himself the trouble and just transact on-chain, since they would still need to “open” and “close” a channel—both instances would take time on the legacy chain to be confirmed, as opposed to simply sending their funds directly to each other and just having to wait once for that transaction to be confirmed, paying only one transaction fee as well.

Lightning Network can’t scale on 1Mb blocks

In mid-2017, Electron Cash wallet developer Jonald Fyookball posted a mathematical proof debunking the Lightning Network as a decentralized scaling solution.

Lightning Network can’t scale, needs another layer

 

According to his post, at one million users LN becomes an “unworkable system,” where the only way it could work is either everyone deposits more money than their anticipated transactions into the channels (so they can also route other users’ transactions), or everyone relies on large centralized hubs.

“To reach anyone in a big network with a series of branching channel connections, you either need a large number of channels, or a large number of hops.

Both are a huge problem. A large number of channels means users have to divide up their funds and can’t do anything except tiny purchases. And a large number of hops means everyone’s money will be tied up routing everybody else’s money.”

Jonald Fyookball cites Lightning Network’s promise as a scaling solution:

“using a network of these micropayment channels, Bitcoin can scale to billions of transactions per day”

And goes on to say that the promise fails to mention a major detail:

“What it doesn’t tell you is that this can only be accomplished by using large, centralized ‘banking’ hubs.”

Since then, a simulation of LN with 10 million users has been conducted, and it shows that it is technically possible—but it would require 200 million channels and at least 1,400,000 BTC locked up in the payment channels for routing at a given time. But if there are more transactions going on, more funds would need to be locked up. And some argue that the longer the routes are, the more vulnerable it is to attack.

The case for Lightning Network is further weakened by this problem: Blockstream core tech engineer Christian Decker himself admitted that there is a limit to the number of payment channels that can be made on top of the legacy chain, which ultimately renders Lightning Network’s promise (above) false.

Talking about how many payment channels can be built on the legacy chain’s 1Mb per block limit, he wrote:

“It turns out, it’s not that many. It’s a few million every week, which is still a long ways from serving the full Earth’s population.”

Moreover, Lightning Network does not relieve the skyrocketing transaction fees, as Decker’s message to the mining community reveals. In his effort to appease miners, Decker committed the same fatal error majority of HODLers are guilty of: he simultaneously alienated users by focusing on high profits in fees for the miners—which will be coming out of users’ pockets.

In case many have forgotten, these users are the entire population Bitcoin was made to primarily serve.

Lightning does not reduce the fees that the miners may collect, it increases their reach into transactions that they could not otherwise serve.

The transaction fees are high because an on-chain payment requires a lot of resources, i.e., storage, processing and bandwidth. These applications suddenly become possible with L2 protocols, so this adds to the reach of Bitcoin itself.

…On the other hand Lightning requires strong guarantees that the transactions will be settled in a certain timeframe, for its security. Hence, Lightning will always attach higher than average fees to the on-chain transactions for setup and settlement of its channels. This is okay since coins on these channels may have been transferred hundreds if not millions of times back and forth, so the these high on-chain fees have been amortized over time, and we happily pay them.

With the (1) extension of Bitcoin’s reach and (2) the higher than usual fees for setup and settlement, I’m absolutely convinced that miners will have a net gain when Lightning rolls out. Lightning is not cutting into the miner’s profit, it opens up new possibilities. Christian Decker on the mailing list.

In the message above, he goes on to explain why transaction fees are high. Although it’s hard to justify how storage, processing and bandwidth (plus electricity) that blockchains incur would trump the expenses of the traditional banking industry and lead to equal or even higher transaction fees. And it definitely defeats the main purpose of the blockchain—quick, cheap, trustless transfers.

Still no block size increase, but an entire additional layer—and the same high fees (possibly more)

Instead of conceding to the need for both on and off-chain scaling, Core devs are persistent in doing everything and anything but upgrade the core infrastructure—the blockchain that is the backbone of all these.

To solve the problem, Decker along with ETH Zurich researchers Conrad Burchert and Roger Wattenhofer released a new paper, proposing an entire new layer to be added between the legacy chain and Lightning Network, bumping LN from being “layer 2” to being “layer 3.” And this new layer would supposedly enable up to 15 users to be in the channel so any two of them can transact on the now higher layer, Lightning Network.

In a Medium post, security researcher Egor Homakov criticizes the Lightning Network (LN) and its Ethereum counterpart, the Raiden network. According to Homakov, although the Lightning Network is definitely not vapourware, the economic incentive to use Lightning Network is in fact, non-existent.

With Bitcoin’s original protocol, as Dr. Craig Wright wrote in his paper, Proof of Work as it relates to the Theory of the Firm, the security mechanism is not just cryptographic but economic. There is economic incentive to use the system and keep it secure, whereas attacking the system is too expensive and has very little benefit. To amass enough hash rate for a 51% attack, one has to spend billions of dollars on processors, electricity, and other overhead expenses, and will gain very little from the attacks they can instigate. Most importantly, if someone theoretically was willing to spend billions of dollars to gain that percentage of the network, it would be exponentially more profitable to just use that hash rate to mine the Bitcoin blockchain rather than attack it. Efficiency and security in the Bitcoin blockchain (or its original state, at least) results in bigger rewards for miners. It is this economic incentive that helps direct the motivations and actions of actors within the Bitcoin ecosystem, and therefore keep the blockchain secure.

We have yet to delve into the entirety of the new layer proposal—what the topology of the legacy chain will look like with the new layer—because it most definitely will not look anything like the distributed, peer-to-peer network envisioned in the original Bitcoin white paper.

Ultimately, from a mass adoption point-of-view, the main thing that matters is how fast this process is, how secure, and how much it costs. On top of that, how soon will all this be deployed? With several blockchains and cryptocurrencies on the race, every month of delay makes a huge difference.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

Lightning Network can’t scale, needs another layer

Devs propose yet another layer to save the legacy chain.

Correction: Jameson Lopp’s analysis of the Lightning Network were incorrectly interpreted in the original post. These have been removed.

How the Lightning Network works

In the Lightning Network—Bitcoin Core’s scaling solution of choice for the legacy chain, users do not transact on the blockchain directly. Two users open a “payment channel” and transact through that channel or second layer (Lightning Network) on top of the blockchain. The only time anything is recorded on the blockchain after opening this payment channel is when these two users are done transacting for the time and “close” the payment channel, at which point the final balances of the two parties are recorded on the blockchain, using it only as a “settlement layer.”

Such a system would off-load regular transactions between two parties to the Lightning Network and take off some of the load from the blockchain. It also saves users from having to pay transaction fees over and over. But this only works economically if the two users intend to have multiple or repeating transactions, otherwise, they’re better off just transacting on-chain for one-time transactions. Why?

For a one-time transaction with a user who does not have a direct connection or open payment channel with you, one can pass through or “hop” through their connections’ channels or “branches” to get to their intended recipient—provided that each of the users between you have enough balance to pass on the funds. It’s not as simple as money passing from one hand to another, however. It’s actually a simultaneous handoff: the person who has an open channel with the intended recipient has to send him the funds and sort of get “reimbursed” the exact same amount from the original sender.

Imagine a row of people and I’m trying to pass $100 to a person sitting five people away from me to my right. Instead of asking people to simply pass my $100 bill to him, each person between us will have to take out $100 from his own wallet, and simultaneously pass it on to the person to their right while also receiving $100 from the person to their left. They all end up with $100 except for me, the original sender.

So in such a scenario, a user is better off saving himself the trouble and just transact on-chain, since they would still need to “open” and “close” a channel—both instances would take time on the legacy chain to be confirmed, as opposed to simply sending their funds directly to each other and just having to wait once for that transaction to be confirmed, paying only one transaction fee as well.

Lightning Network can’t scale on 1Mb blocks

In mid-2017, Electron Cash wallet developer Jonald Fyookball posted a mathematical proof debunking the Lightning Network as a decentralized scaling solution.

Lightning Network can’t scale, needs another layer

 

According to his post, at one million users LN becomes an “unworkable system,” where the only way it could work is either everyone deposits more money than their anticipated transactions into the channels (so they can also route other users’ transactions), or everyone relies on large centralized hubs.

“To reach anyone in a big network with a series of branching channel connections, you either need a large number of channels, or a large number of hops.

Both are a huge problem. A large number of channels means users have to divide up their funds and can’t do anything except tiny purchases. And a large number of hops means everyone’s money will be tied up routing everybody else’s money.”

Jonald Fyookball cites Lightning Network’s promise as a scaling solution:

“using a network of these micropayment channels, Bitcoin can scale to billions of transactions per day”

And goes on to say that the promise fails to mention a major detail:

“What it doesn’t tell you is that this can only be accomplished by using large, centralized ‘banking’ hubs.”

Since then, a simulation of LN with 10 million users has been conducted, and it shows that it is technically possible—but it would require 200 million channels and at least 1,400,000 BTC locked up in the payment channels for routing at a given time. But if there are more transactions going on, more funds would need to be locked up. And some argue that the longer the routes are, the more vulnerable it is to attack.

The case for Lightning Network is further weakened by this problem: Blockstream core tech engineer Christian Decker himself admitted that there is a limit to the number of payment channels that can be made on top of the legacy chain, which ultimately renders Lightning Network’s promise (above) false.

Talking about how many payment channels can be built on the legacy chain’s 1Mb per block limit, he wrote:

“It turns out, it’s not that many. It’s a few million every week, which is still a long ways from serving the full Earth’s population.”

Moreover, Lightning Network does not relieve the skyrocketing transaction fees, as Decker’s message to the mining community reveals. In his effort to appease miners, Decker committed the same fatal error majority of HODLers are guilty of: he simultaneously alienated users by focusing on high profits in fees for the miners—which will be coming out of users’ pockets.

In case many have forgotten, these users are the entire population Bitcoin was made to primarily serve.

Lightning does not reduce the fees that the miners may collect, it increases their reach into transactions that they could not otherwise serve.

The transaction fees are high because an on-chain payment requires a lot of resources, i.e., storage, processing and bandwidth. These applications suddenly become possible with L2 protocols, so this adds to the reach of Bitcoin itself.

…On the other hand Lightning requires strong guarantees that the transactions will be settled in a certain timeframe, for its security. Hence, Lightning will always attach higher than average fees to the on-chain transactions for setup and settlement of its channels. This is okay since coins on these channels may have been transferred hundreds if not millions of times back and forth, so the these high on-chain fees have been amortized over time, and we happily pay them.

With the (1) extension of Bitcoin’s reach and (2) the higher than usual fees for setup and settlement, I’m absolutely convinced that miners will have a net gain when Lightning rolls out. Lightning is not cutting into the miner’s profit, it opens up new possibilities. Christian Decker on the mailing list.

In the message above, he goes on to explain why transaction fees are high. Although it’s hard to justify how storage, processing and bandwidth (plus electricity) that blockchains incur would trump the expenses of the traditional banking industry and lead to equal or even higher transaction fees. And it definitely defeats the main purpose of the blockchain—quick, cheap, trustless transfers.

Still no block size increase, but an entire additional layer—and the same high fees (possibly more)

Instead of conceding to the need for both on and off-chain scaling, Core devs are persistent in doing everything and anything but upgrade the core infrastructure—the blockchain that is the backbone of all these.

To solve the problem, Decker along with ETH Zurich researchers Conrad Burchert and Roger Wattenhofer released a new paper, proposing an entire new layer to be added between the legacy chain and Lightning Network, bumping LN from being “layer 2” to being “layer 3.” And this new layer would supposedly enable up to 15 users to be in the channel so any two of them can transact on the now higher layer, Lightning Network.

In a Medium post, security researcher Egor Homakov criticizes the Lightning Network (LN) and its Ethereum counterpart, the Raiden network. According to Homakov, although the Lightning Network is definitely not vapourware, the economic incentive to use Lightning Network is in fact, non-existent.

With Bitcoin’s original protocol, as Dr. Craig Wright wrote in his paper, Proof of Work as it relates to the Theory of the Firm, the security mechanism is not just cryptographic but economic. There is economic incentive to use the system and keep it secure, whereas attacking the system is too expensive and has very little benefit. To amass enough hash rate for a 51% attack, one has to spend billions of dollars on processors, electricity, and other overhead expenses, and will gain very little from the attacks they can instigate. Most importantly, if someone theoretically was willing to spend billions of dollars to gain that percentage of the network, it would be exponentially more profitable to just use that hash rate to mine the Bitcoin blockchain rather than attack it. Efficiency and security in the Bitcoin blockchain (or its original state, at least) results in bigger rewards for miners. It is this economic incentive that helps direct the motivations and actions of actors within the Bitcoin ecosystem, and therefore keep the blockchain secure.

We have yet to delve into the entirety of the new layer proposal—what the topology of the legacy chain will look like with the new layer—because it most definitely will not look anything like the distributed, peer-to-peer network envisioned in the original Bitcoin white paper.

Ultimately, from a mass adoption point-of-view, the main thing that matters is how fast this process is, how secure, and how much it costs. On top of that, how soon will all this be deployed? With several blockchains and cryptocurrencies on the race, every month of delay makes a huge difference.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

Legacy chain BTC transaction fees reached a record-breaking $200,000 for one block

If a collapse happens, HODLers will be pitted against each other in an expensive bidding war to get out. 

User Plesk8 posted on Reddit channel r/bitcoin that on a particular block on the legacy chain (BTC), transaction fees exceeded the block reward. As you can see on blockchain.info’s monitoring page, block number 500,439 was mined with 2,335 transactions, 12.5 BTC in rewards, and 13.014 BTC in transaction fees.

BTC Block 500439 contains 13.01 BTC worth of tx fees, exceeding the 12.5 BTC Block reward. That is approx $200k USD in fees per block. from Bitcoin

At the time it was received (2017-12-21 20:17:20), BTC was trading at over $15,000—which means the total transaction fees charged for this particular block was around $200,000—or over $85 per transaction on average. If banks charged this high, people will pissed.

Bilderberg > AXA > Blockstream > BTC. How could this not worry you?

To kill off competition, it is standard practice for giant corporations to buy off smaller companies as soon as they start becoming a threat. The acquisition could then either continue a smaller company’s operations to take over their share of the market, or they could just halt operations entirely and snuff out the competition in a snap.

It’s hard not to wonder how some still manage to keep a straight face and say there’s nothing wrong with this. At this point, most are just wondering what the Core development team’s plans are to correct the legacy chain’s problem, with some mounting evidence that Core may end up having to follow Bitcoin Cash’s footsteps and increase the block size—which they have been contradicting for years.

Unless the legacy chain fixes these problems—and soon, more companies may opt out of using BTC for their transactions. Earlier this month, video gaming platform Steam already ditched BTC due to rising transaction fees. More can follow suit.

Eventually, this can result in a massive selloff and HODLers will be pitted against each other in a bidding war for miner processing. An ugly race to bail their funds out as a result of replace-by-fee (RBF), where users can practically cut in on the transaction queue if they offer more money for transaction fees.

Some argue that Lightning Network is not forcing itself onto anyone, and that people are still “free” to decide on the fees they want to pay for their transactions. Saying people are still “free to choose” how much they want to pay to get their transactions processed, but then putting them behind hundreds of thousands of other people who paid more than they did is a sinister, deceptive use of the word “freedom.” Thank the blockchains this isn’t how hospitals are run!

It’s also the kind of stuff dystopian movies are made of. Speaking of dystopian movies, I was just recently imagining a real-life (as in physical world outside of blockchains) analogy of this in a previous article, where hypothetically our lives are literally decided by RBF. Maybe someone should make this movie happen.

On another note, instead of bashing/trolling other chains like blind fanatics, why aren’t HODLers badgering their dev team to fix the issues in their chain? Shouldn’t that be their priority—you know, like normal, non-lunatic stakeholders?

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

Legacy chain BTC transaction fees reached a record-breaking $200,000 for one block

If a collapse happens, HODLers will be pitted against each other in an expensive bidding war to get out. 

User Plesk8 posted on Reddit channel r/bitcoin that on a particular block on the legacy chain (BTC), transaction fees exceeded the block reward. As you can see on blockchain.info’s monitoring page, block number 500,439 was mined with 2,335 transactions, 12.5 BTC in rewards, and 13.014 BTC in transaction fees.

BTC Block 500439 contains 13.01 BTC worth of tx fees, exceeding the 12.5 BTC Block reward. That is approx $200k USD in fees per block. from Bitcoin

At the time it was received (2017-12-21 20:17:20), BTC was trading at over $15,000—which means the total transaction fees charged for this particular block was around $200,000—or over $85 per transaction on average. If banks charged this high, people will pissed.

Bilderberg > AXA > Blockstream > BTC. How could this not worry you?

To kill off competition, it is standard practice for giant corporations to buy off smaller companies as soon as they start becoming a threat. The acquisition could then either continue a smaller company’s operations to take over their share of the market, or they could just halt operations entirely and snuff out the competition in a snap.

It’s hard not to wonder how some still manage to keep a straight face and say there’s nothing wrong with this. At this point, most are just wondering what the Core development team’s plans are to correct the legacy chain’s problem, with some mounting evidence that Core may end up having to follow Bitcoin Cash’s footsteps and increase the block size—which they have been contradicting for years.

Unless the legacy chain fixes these problems—and soon, more companies may opt out of using BTC for their transactions. Earlier this month, video gaming platform Steam already ditched BTC due to rising transaction fees. More can follow suit.

Eventually, this can result in a massive selloff and HODLers will be pitted against each other in a bidding war for miner processing. An ugly race to bail their funds out as a result of replace-by-fee (RBF), where users can practically cut in on the transaction queue if they offer more money for transaction fees.

Some argue that Lightning Network is not forcing itself onto anyone, and that people are still “free” to decide on the fees they want to pay for their transactions. Saying people are still “free to choose” how much they want to pay to get their transactions processed, but then putting them behind hundreds of thousands of other people who paid more than they did is a sinister, deceptive use of the word “freedom.” Thank the blockchains this isn’t how hospitals are run!

It’s also the kind of stuff dystopian movies are made of. Speaking of dystopian movies, I was just recently imagining a real-life (as in physical world outside of blockchains) analogy of this in a previous article, where hypothetically our lives are literally decided by RBF. Maybe someone should make this movie happen.

On another note, instead of bashing/trolling other chains like blind fanatics, why aren’t HODLers badgering their dev team to fix the issues in their chain? Shouldn’t that be their priority—you know, like normal, non-lunatic stakeholders?

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

Is Core laying the groundwork for a blocksize increase?

Where there’s smoke there’s fire. There’s been no official word from Core devs, but there have been undeniable signs brewing. An increase in Segwit1x (BTC) blocksize means a hard fork. The one thing that Core have often stated is a “dangerous” thing to do. For years, the community was told that hard forks were dangerous, and this was the reason Segwit was done as a ‘soft fork.’

Evidence: Peter Todd explaining why hard forks are dangerous in this piece titled: Soft forks are safer than hard forks.

Evidence 2: Core aligned Paul Sztorc wrote in detail how “a hard fork breaks Bitcoin’s contract, risks users funds, and puts developers in danger.”

There are countless many other sources with similar content, and Google is your friend if you feel the itch to do some digging. But of course, there were many on the big blocker camp that could see through the double speak and would question the rhetoric.

But is Core now about to do the unthinkable and do two things which they were not only particularly against, but also caused a major divide in the eco-system over? Some signs are pointing to yes.

Firstly, bitcoin.org and bitcointalk forum co-founder/owner “Cobra” has recently had a major turn in sentiment. Tweeting such things as:

Is Core laying the groundwork for a blocksize increase?

But also recently putting pen to paper on a Medium blog post titled, “Thoughts on Bitcoin as a settlement layer,” where he states:

It’s well known that block chains have terrible scaling attributes. You basically have two choices if you want to scale to millions of users; 1) you push everyone on to secondary or tertiary layers and have the base layer have a smaller block size and high transaction fees which allows you to have a decentralized and censorship resistant network at the base layer, or 2) you do *everything* on chain and have massive centralization and trust in miners, with very few people running full nodes.

Many people in the Bitcoin community advocate for the first choice, they say Bitcoin should remain as decentralized as possible at the base layer and “coffee transactions” should happen on the other layers. The Bitcoin Cash community goes to the other extreme and talk about things like 1GB block sizes. I’ve always preferred the first choice, but lately I’ve been starting to lose faith in it.

Almost reassuringly, Cobra concludes with, “We never have these discussions because everyone is so focused on attacking the Bitcoin Cash people for how stupid it is to have huge blocks, and how this will lead to centralization, but we don’t ever talk about how ‘layer 1 as a settlement layer’ will also lead to centralization in its own way.”

But do notice the very closing comment: “Transaction fees should always remain low enough such that ordinary users can use and access the block chain for medium to large purchases.” Notice, he never says “small” purchases. We will get back to that in a moment.

The thing with Cobra is that he still insists that Satoshi Nakamoto’s whitepaper should be re-written to accommodate the Blockstream narrative.

Is Core laying the groundwork for a blocksize increase?

Re-writing someone else’s academic paper is so unethical, it is immorality of the highest order in academia. This sort of speech, should be shut down immediately. I believe the tweet was calculated. I also believe the tweet was designed to measure the social response.

Cobra and Theymos are integral to the censorship and BTC narrative. Not only do they control the two biggest forums for Bitcoin, they also hold the most visited site. This is where the information war is won.

Never forget that Theymos famously once stated: “In particular, posts about anything especially emotionally-charged will be deleted unless they introduce some very substantial new ideas about the subject. This includes the max block size debate (any side) and /r/Bitcoin moderation.”

That was the beginning of the censorship campaign. That was also two years ago now. The blocksize was never allowed to be mentioned again. In particular, if you even suggested raising the blocksize, your post would get deleted, and some would get banned. If you were really unlucky, you’d get “shadowbanned” (only you can see anything you post).

Across Twitter and across forums now however, there’s been a change in tone. Various users, suggesting that a blocksize increase may be needed to save Bitcoin from $72 average fees as witnessed in block #500322, are now making their voices heard. The fact that campaigns suggesting these things in such circles is one thing, but the fact that these are actually being “allowed” and “discussed” is an altogether different thing. It is a significant departure of policy.

Heavily censored forum r/bitcoin has suddenly opened channels of discussion of the blocksize recently. The one thing they vowed to never discuss. In fact, a recent discussion on the forum suggested a mild blocksize increase, to keep the fees at $10-$20, the most upvoted comment—which was neither deleted nor censored—said, “I think the world is not black or white. It’s not 1MB decentralized or 1GB centralized.”

What’s happening now is that talk of blocksize is being permitted again. Talk of raising the blocksize is being permitted (even from notable Core members). This will be allowed in order to gain traction until there appears to be sufficient support. At which point CEO of Blockstream Adam Back may come out and tell the world something to the effect of “it appears that there is overwhelming support for a hard fork to increase the blockweight on Segwit (BTC)… although I may not agree that this is the best way forward, I will not however, stand against a consensus ruling.” Sure enough BTC will get the hard fork. In fact it is absolutely necessary for its own survival. $100 fees are not in any way, shape, or form, sustainable.

So what’s the problem? There is none. It’s great news that Core sentiment is changing…  It’s great that they now see hard forks, and blocksize increases as important steps to upgrades, scaling, and maintaining the survivability of BTC. It’s what big blockers have been trying to argue for years. The issue with this dilemma is that it could have all been avoided. If instead of being reactive, had they been a little more proactive and foreseen these troubles that many of us and, most notably, Mike Hearn, saw, Bitcoin may not have needed to split in the first place.

If the BTC hard fork does happen, it throws into question everything concerning the leadership and the credibility of Core, who by their own failure to see the chaos of $50 fees, are being forced to eat their own words.

There’s a consistent theme from the echo chamber however. Every voice requests a “mild” blocksize increase… one that would enable “medium to large” purchases as Cobra stated, and one that would keep fees between $10 and $20. This mild blocksize increase is exactly what Segwit2x would have provided… yet Core were passionately against any such thing. How times have changed – just a little over a month onwards. But the moderate fees are crucial to Blockstream’s business model.

In the interview below, CEO of Blockstream, Adam Back told Laura Shin, and the world, outright why this is the case. Blockstream’s business models must ensure Bitcoin has moderate fees. Not high enough to scare moderate users, but also not low enough to make the below business incentive, void.

Is Core laying the groundwork for a blocksize increase?

The above quote was so outlandish, that some Core aligned fans questioned its authenticity:

Is Core laying the groundwork for a blocksize increase?

Like Cobra, I’m also changing my tune. I wish BTC the best. My frustration will always come from the damage their firm stance has caused, in dividing the community unnecessarily. Bitcoin Cash will continue the big blocker roadmap. We have two competing ideologies. Off-chain every day transaction with a store of value base layer, versus, a frictionless, instant, simple one chain that does the job efficiently. One truth that is now undeniable, is that the main chain cannot be forever restricted to a static variable. Not for big blockers, and apparently not for small blockers either.

Eli Afram
@justicemate

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

Is Core laying the groundwork for a blocksize increase?

Where there’s smoke there’s fire. There’s been no official word from Core devs, but there have been undeniable signs brewing. An increase in Segwit1x (BTC) blocksize means a hard fork. The one thing that Core have often stated is a “dangerous” thing to do. For years, the community was told that hard forks were dangerous, and this was the reason Segwit was done as a ‘soft fork.’

Evidence: Peter Todd explaining why hard forks are dangerous in this piece titled: Soft forks are safer than hard forks.

Evidence 2: Core aligned Paul Sztorc wrote in detail how “a hard fork breaks Bitcoin’s contract, risks users funds, and puts developers in danger.”

There are countless many other sources with similar content, and Google is your friend if you feel the itch to do some digging. But of course, there were many on the big blocker camp that could see through the double speak and would question the rhetoric.

But is Core now about to do the unthinkable and do two things which they were not only particularly against, but also caused a major divide in the eco-system over? Some signs are pointing to yes.

Firstly, bitcoin.org and bitcointalk forum co-founder/owner “Cobra” has recently had a major turn in sentiment. Tweeting such things as:

Is Core laying the groundwork for a blocksize increase?

But also recently putting pen to paper on a Medium blog post titled, “Thoughts on Bitcoin as a settlement layer,” where he states:

It’s well known that block chains have terrible scaling attributes. You basically have two choices if you want to scale to millions of users; 1) you push everyone on to secondary or tertiary layers and have the base layer have a smaller block size and high transaction fees which allows you to have a decentralized and censorship resistant network at the base layer, or 2) you do *everything* on chain and have massive centralization and trust in miners, with very few people running full nodes.

Many people in the Bitcoin community advocate for the first choice, they say Bitcoin should remain as decentralized as possible at the base layer and “coffee transactions” should happen on the other layers. The Bitcoin Cash community goes to the other extreme and talk about things like 1GB block sizes. I’ve always preferred the first choice, but lately I’ve been starting to lose faith in it.

Almost reassuringly, Cobra concludes with, “We never have these discussions because everyone is so focused on attacking the Bitcoin Cash people for how stupid it is to have huge blocks, and how this will lead to centralization, but we don’t ever talk about how ‘layer 1 as a settlement layer’ will also lead to centralization in its own way.”

But do notice the very closing comment: “Transaction fees should always remain low enough such that ordinary users can use and access the block chain for medium to large purchases.” Notice, he never says “small” purchases. We will get back to that in a moment.

The thing with Cobra is that he still insists that Satoshi Nakamoto’s whitepaper should be re-written to accommodate the Blockstream narrative.

Is Core laying the groundwork for a blocksize increase?

Re-writing someone else’s academic paper is so unethical, it is immorality of the highest order in academia. This sort of speech, should be shut down immediately. I believe the tweet was calculated. I also believe the tweet was designed to measure the social response.

Cobra and Theymos are integral to the censorship and BTC narrative. Not only do they control the two biggest forums for Bitcoin, they also hold the most visited site. This is where the information war is won.

Never forget that Theymos famously once stated: “In particular, posts about anything especially emotionally-charged will be deleted unless they introduce some very substantial new ideas about the subject. This includes the max block size debate (any side) and /r/Bitcoin moderation.”

That was the beginning of the censorship campaign. That was also two years ago now. The blocksize was never allowed to be mentioned again. In particular, if you even suggested raising the blocksize, your post would get deleted, and some would get banned. If you were really unlucky, you’d get “shadowbanned” (only you can see anything you post).

Across Twitter and across forums now however, there’s been a change in tone. Various users, suggesting that a blocksize increase may be needed to save Bitcoin from $72 average fees as witnessed in block #500322, are now making their voices heard. The fact that campaigns suggesting these things in such circles is one thing, but the fact that these are actually being “allowed” and “discussed” is an altogether different thing. It is a significant departure of policy.

Heavily censored forum r/bitcoin has suddenly opened channels of discussion of the blocksize recently. The one thing they vowed to never discuss. In fact, a recent discussion on the forum suggested a mild blocksize increase, to keep the fees at $10-$20, the most upvoted comment—which was neither deleted nor censored—said, “I think the world is not black or white. It’s not 1MB decentralized or 1GB centralized.”

What’s happening now is that talk of blocksize is being permitted again. Talk of raising the blocksize is being permitted (even from notable Core members). This will be allowed in order to gain traction until there appears to be sufficient support. At which point CEO of Blockstream Adam Back may come out and tell the world something to the effect of “it appears that there is overwhelming support for a hard fork to increase the blockweight on Segwit (BTC)… although I may not agree that this is the best way forward, I will not however, stand against a consensus ruling.” Sure enough BTC will get the hard fork. In fact it is absolutely necessary for its own survival. $100 fees are not in any way, shape, or form, sustainable.

So what’s the problem? There is none. It’s great news that Core sentiment is changing…  It’s great that they now see hard forks, and blocksize increases as important steps to upgrades, scaling, and maintaining the survivability of BTC. It’s what big blockers have been trying to argue for years. The issue with this dilemma is that it could have all been avoided. If instead of being reactive, had they been a little more proactive and foreseen these troubles that many of us and, most notably, Mike Hearn, saw, Bitcoin may not have needed to split in the first place.

If the BTC hard fork does happen, it throws into question everything concerning the leadership and the credibility of Core, who by their own failure to see the chaos of $50 fees, are being forced to eat their own words.

There’s a consistent theme from the echo chamber however. Every voice requests a “mild” blocksize increase… one that would enable “medium to large” purchases as Cobra stated, and one that would keep fees between $10 and $20. This mild blocksize increase is exactly what Segwit2x would have provided… yet Core were passionately against any such thing. How times have changed – just a little over a month onwards. But the moderate fees are crucial to Blockstream’s business model.

In the interview below, CEO of Blockstream, Adam Back told Laura Shin, and the world, outright why this is the case. Blockstream’s business models must ensure Bitcoin has moderate fees. Not high enough to scare moderate users, but also not low enough to make the below business incentive, void.

Is Core laying the groundwork for a blocksize increase?

The above quote was so outlandish, that some Core aligned fans questioned its authenticity:

Is Core laying the groundwork for a blocksize increase?

Like Cobra, I’m also changing my tune. I wish BTC the best. My frustration will always come from the damage their firm stance has caused, in dividing the community unnecessarily. Bitcoin Cash will continue the big blocker roadmap. We have two competing ideologies. Off-chain every day transaction with a store of value base layer, versus, a frictionless, instant, simple one chain that does the job efficiently. One truth that is now undeniable, is that the main chain cannot be forever restricted to a static variable. Not for big blockers, and apparently not for small blockers either.

Eli Afram
@justicemate

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.