Subject: Re: [bitcoin-dev] Hard fork proposal from last week's meeting

From: Luv Khemani <[email-masked]>
Date: Fri, 31 Mar 2017 04:21:17 +0000

> Nodes don't do politics.  People do, and politics is a lot larger with a lot more moving parts than just node operation.

Node operation is making a stand on what money you will accept.

Ie Your local store will only accept US Dollars and not Japanese Yen. Without being able to run a node, you have no way to independently determine what you are receiving, you could be paid Zimbawe Dollars and wouldn't know any better.

> Full nodes protect from nothing if the chain they attempt to use is nonfunctional.

This is highly subjective.
Just because it is nonfunctional to you, does not mean it is nonfunctional to existing users.

> This power is far more complicated than just nodes.

I never implied otherwise.

> You're implying that node operation == political participation.

Ofcourse it is. Try paying for my goods using BU/Ehtereum/Dash/etc.. or a Bitcoin forked with inflation, you will not get any goods regardless of how much hashrate those coins have.

> Miners being distributed in enough countries and locations to avoid any single outside attacker group from having enough leverage to prevent transaction inclusion, and miners also having enough incentives(philosophical or economic) to refuse to collude towards transaction exclusion.

It's good that you see the importance of this. You should also take into consideration the number of independent mining entities it takes to achieve 51% hashrate. It will be of little use to have thousands on independent miners/pools  if 3 large pools make up 51% of hash rate and collude to attack the network.

>  If users refused to get on board, exchanges would follow users.  If miners refused to get on board, the attempt would be equally dead in the water.  It would require a majority of users, businesses and miners to change the limit;

> Nodes have absolutely no say in the matter if they can't segment the network, and even if they could their impact could be repaired.  Users != Nodes.

Nodes define which network they want to follow. Without a Node, you don't even get to decide which segement you are on. Either miners decide( for SPV wallets) or your wallet's server decides(Node). You have no control without a

>> What makes transactions irreversible
>Nodes have absolutely no say in the matter, they always follow the longest chain unless a hardfork was applied.

My bad here, hashpower decides order. This is the sole reason we have mining, to order transactions.

> Mutual destruction comes from the market forces on the exchanges, and they could give a rats ass whether you run a node or not.

Ability to run a node and validate rules => Confidence in currency => Higher demand => Higher exchange rate

I would not be holding any Bitcoins if it was unfeasible for me to run a Node and instead had to trust some 3rd party that the currency was not being inflated/censored. Bitcoin has value because of it's trustless properties. Otherwise, there is no difference between cryptocurrencies and fiat.

> Literally the only reason we have 10s of billions of dollars of value is because speculation, which includes nearly all Bitcoin users/holders and almost all businesses and miners.  While  Bitcoin borrows useful features from gold, it has more possible uses, including uses that were never possible before Bitcoin existed, and we believe that gives it huge potential.
> The ability of other systems to do transactions, like visa or cash, come with the limitations of those systems.  Bitcoin was designed to break those limitations and STILL provide the ability to do transactions.  We might all agree Bitcoin isn't going to ever solve the microtransaction problem, at least not on-chain, but saying Bitcoin doesn't need utility is just foolish.  Gold doesn't need utility, gold has 4,000 years of history.  We don't.
> There's no reason those blocksize increases can't be tied to or related to usage increases

Blocksize has nothing to do with utility, only cost of on-chain transactions.
OTOH increasing the blocksize has alot to do with introducing the very limitations that Visa/Cash have.
Why would you risk destroying Bitcoin's primary proposition (removing limitations of Cash/Visa) for insignificant capacity increase?

> That's like saying it would be better to do nothing so someone else solves our problem for us than it would be for us to do what we can to solve it ourselves.  Someone else solving our problem may very well be Ethereum, and "solving it for us" is pulling Bitcoin investments, users and nodes away into Ethereum.

Who says nothing is being done? Segwit, Lightning, pre-loaded wallets like Coinbase are all solutions.

On Thu, Mar 30, 2017 at 12:11 AM, Luv Khemani <[email-masked]<mailto:[email-masked]>> wrote:

>> If home users are not running their own full nodes, then home users have to trust and rely on other, more powerful nodes to represent them. Of course, the more powerful nodes, simply by nature of having more power, are going to have different opinions and objectives from the users.

>I think you're conflating mining with node operation here.  Node users only power is to block the propagation of certain things.  Since miners also have a node endpoint, they can cut the node users out of the equation by linking with eachother directly - something they already do out of practicality for propagation.  Node users do not have the power to arbitrate consensus, that is why we have blocks and PoW.

You are only looking at technical aspects and missing the political aspect.

Node users decide what a Bitcoin is. It matters not how much hash power is behind a inflationary supply chain fork, full nodes protect the user from the change of any properties of Bitcoin which they do not agree with. The ability to retain this power for users is of prime importance and is arguably what gives Bitcoin most of it's value. Any increase in the cost to run a full node is an increase in cost to maintain monetary sovereignty. The ability for a user to run a node is what keeps the miners honest and prevents them from rewriting any of Bitcoin's rules.

If it's still difficult to grasp the above paragraph, ask yourself the following questions,
- What makes Bitcoin uncensorable
- What gives confidence that the 21 million limit will be upheld
- What makes transactions irreversible
- If hashpower was king as you make it to be, why havn't miners making up majority hashrate who want bigger blocks been able to change the blocksize?

The market is not storing 10s of billions of dollars in Bitcoin despite all it's risks because it is useful for everyday transactions, that is a solved problem in every part of the world (Cash/Visa/etc..).

Having said that, i fully empathise with your view that increasing transaction fees might allow competitors to gain marketshare for low value use cases. By all means, we should look into ways of solving the problem. But all these debates around blocksize is a total waste of time. Even if we fork to 2MB, 5MB, 10MB. It is irrelevant in the larger picture, transaction capacity will still be too low for global usage in the medium-long term. The additional capacity from blocksize increases are linear improvements with very large systemic costs compared with the userbase and usage which is growing exponentially. Lightning potentially offers a couple or orders of magnitude of scaling and will make blocksize a non-issue for years to come. Even if it fails to live up to the hype, you should not discount the market innovating solutions when there is money to be made.