Eric Voorhees is spot on. submitted by
Without 'users' handing fiat money to miners their would absolutely no mining network.
Early adopters were basically 'miners' who started first. Early adopters could not get fiat rich unless later users gave them the fiat in exchange for bitcoin.
The job of 'users' in this space is to give fiat money to bitcoin sellers and then to refrain from reselling the bitcoin. This is why the 'hodl' meme is perpetually promoted nonestop. Miners can sell but users must hold.
Eric Voorhees understood a motivation was required to get users to agree to this. He decided to promote gambling as a form of liberty by launching Satoshi Dice. On top of this he offered a share offering on a scam stock market known as MPEX. Voorhees decided just collecting winnings from gamblers wasn't enough.
If you really think miners are 'serving' users, you need to face reality. Who are you handing your money too?
Sellers of liberty like Eric Voorhees are in reality digital slavers.
I do apologise. This turned into a far longer post than I envisaged.
TLDR: Where the developers are unable to reach an agreement, the miners are unwilling to be the jury and the economic majority has consensus for a certain action, the economic majority's only choice of acting upon it's decision, and thus enforcing it's will, may be the option of forking with a changed algo. Such option may only need to be used once for it forever to suffice as a credible threat to anyone who wishes to centrally control bitcoin:
So, what happens now?
From what we are reading it seems clear that no developer "consensus" can be reached for a blocksize increase which defacto means a settlement system and, as we all expected, nothing has come out of the conference except for a small increase to 2mb or so in about six months or so.
In a public conversation in the workshop IRC channel I had with wangchung, the F2Pool admin, he publicly stated that he would support BIP101 but starting at 2mb, then doubling every two years for the next two decades. Not ideal, of course, that would mean 2mb immediately, then 4mb in 2018, 8 in 2020 and so on, but with SW improvements and if it closes the debate then perhaps it may be a necessary compromise.
The miners however have publicly suggested that they are followers, not leaders. Therefore seem unwilling to take the initiative themselves even where their majority agrees, as in the case of BIP100. So we have a situation here where the developers are unable or unwilling to reach an agreement, and the miners are unwilling to make a decision, so it is left to the economic majority to conclude the debate.
Now, I'm just throwing ideas here for discussion in the spirit of exploratory enquiry without suggesting any course of action and I highly welcome comments to try and answer this very important governance/decision-making question:
Where the developers are unwilling or unable to reach a conclusion either due to genuine or corrupted opinions and the miners consider themselves to not be the "jury", how does the economic majority make a decision and act upon it, thus conclude the debate?
That is a general question, not specific to the debate at hand, but since the hardfork is the main issue I suppose it might be helpful to propose some specific assumptions regardless of whether they are actually true or not.
Let us suppose that the developers can never reach an agreement, thus taking them out of the decision making process. Let us further suppose that the miners will not act unless the developers reach an agreement, thus taking them out of the decision making process too. Let us suppose that if the economic majority does not act we de facto get a settlement system (as well as perhaps crown some emperor) and, quite importantly, let us suppose that the economic majority strongly supports bip101.
With the economic majority being the only party that has made a positive decision in the above scenario and the only stakeholder with consensus amongst their rank, how do they act upon this decision and conclude the debate?
To satisfactorily answer that question seems to me a difficult endeavour. To illustrate, Brian Armstrong recently stated that it is for the miners to "vote", while the miners are saying it is not for them to be the jury/voters. It is not clear to me who the miners think is the jury. With the economic majority having expressed their opinion quite clearly, and the miners still not following their decision, how does the economic majority act to enforce the only positive (in the sense of making an active/passive choice rather than good/bad) decision made so far?
The economic majority can of course implement BIP101, but with the miners not moving over there is no activation. I suppose the economic majority can wait for the miners to move over, but with the miners following the developers who are disagreeing whether due to genuine beliefs or corruption/sabotage with no likelihood of an agreement in sight, the economic majority is no longer making a positive decision. This would set a terrible precedence in my view as it would allow 1 or 2 developers to veto any changes as well as place the developers in a position of power and control, thus eventually create a hierarchy within the developers with one of them being the defacto emperor.
Unless someone smarter than me can suggest any other option/s, the only way for the economic majority to act upon its decision seems to me to be the option of forking with the mining algo changed.
I don't think anyone would want to exercise that option lightly nor am I knowledgeable enough to know how it would play out. Practically speaking security would be lower, but I would think for only a short time as the race heats up for more and more hashshare. The older chain would continue and the older miners would have no option but to continue mining it. We can expect at least 1 exchange to hold out, perhaps btcc considering its mining investment. Then there is the individual vote.
Coins can only be sold once, in each chain. Therefore the rational investor, if he takes any action at all, will sell the chain they objectively think will lose because if they sell the wrong chain then they have effectively sold their bitcoin at the market price which may at the time be far lower than once the voting war is over.
In our case, the mpex crowed has threatened to sell the bip101 chain regardless of who they think will win. If they carry out their action, they will effectively sell their coins at a, probably, far below market price. That would be an irrational decision as they would effectively be burning their own money, thus many of them would hesitate if they objectively think that bip101 would win, therefore the threat is probably a bluff. If it is not, as the economic majority would be in favour of bip101, I would think there would be plenty of buyers for their very cheap coins. Thus, at best, they would only cause some volatility to the rest, while committing suicide for themselves.
On the other hand, Roger Ver et all will prob sell the 1mb chain. As it has less than 20% public support, I doubt there would be many buyers for the 1mb coins, thus economically crippling the 1mb chain and it's miners with it.
The speculators, of course, will do their, probably decisive, part in concluding with one winning chain while the vast majority would probably just wait until the dust settles with one coin being obviously the loser and the price of the wining coin stabilising or perhaps moon landing. Thereafter, the decision having been made, we can finally move on having set an incredibly powerful precedent.
Since nukes were invented we have had to only use them once, to show their power, and in now more than 70 years have never used them again and one would hope they never are. To fork with a changed algo burns hundreds of millions, if not billions, in mining investment and would likely create some high short term price volatility.
One would think, however, that a credible threat of a serious consideration of this option would be sufficient for miners to listen to the jury/voters of the economic majority and adopt bip101 or a likewise proposal perhaps starting at 4mb or so without the need to actually go through with it.
Such credible threat perhaps can be started by some small player creating the changed algo client which necessarily would attract a lot of cpu/gpu miners, and then it may be sufficient for coinbase/bitstamp to just propose the idea of shifting to this client to place the miners on a conclusive decision mode.
Otherwise, through inaction, we are effectively concluding the debate by following a path that is being laid towards a settlement system without a white paper on how such system would work in its entirety, how miners are incentivised, how nodes are incentivised, it's usability for mum and pop, the advantages of bitcoin against other payment systems to mom and pop if we take out free or very cheap, instant, permissionless, and if we take out smart contracts as well as proof of work itself which is the whole point of bitcoin.
It may well be that some individuals who hold influential positions hold genuine beliefs in holding against scaling proof of work, but by showing the economic majority powerless to take positive action, miners as easily made to follow by some dissent, and thus developers (who can be counted by hand) as effectively the decision makers, a dangerous precedent is set for the developers themselves who become targets and for bitcoin who would be shown to easily be centrally controllable.
Thus, it is decision time for bitcoin. After almost a full year of debating all the imaginable points, two conferences, and the positions having been fully laid out by all sides at this point, the ball is on the economic majority, who is the only stakeholder that can conclude the debate, to decide whether they wish to take positive action in favour of their within rank consensus decision, or take a passive decision and thus forever give up it's power. Both have ramifications, yet only one is the choice.
TLDR: Where the developers are unable to reach an agreement, the miners are unwilling to be the jury and the economic majority has consensus for a certain action, the economic majority's only choice of acting upon it's decision, and thus enforcing it's will, may be the option of forking with a changed algo. Such option may only need to be used once for it forever to suffice as a credible threat to anyone who wishes to centrally control bitcoin.
See also: https://bitco.in/forum/threads/gold-collapsing-bitcoin-up.16/page-162#post-5545
I bought round 30 bitcoins 4 months ago, and with my new found wealth I decided to imitate rich people and start compounding my money. 30 Bitcoins isn't much, but it has become enough to make me seriously consider investment options. Instead of just holding bitcoins and waiting for them to appreciate you can buy equity in bitcoin stocks and bonds and get paid interest in bitcoins! submitted by
To me, this is a no brainer. You get paid interest on the bitcoins you hold, your stocks have potential for growth, and the bitcoin exchange rate has potential for growth. And you are contributing to a growing bitcoin economy by doing something slightly more productive with your coins (instead of hoarding).
Here are some I considered, if you know of any more please post!
HavelockInvestments: Have some nice funds. HIM is mining fund, KCIM is a bond. Site is relatively easy to use, transfers are easy and I have not heard of anyone having any trouble with it yet. SDICE is a fund that pays out dividends from S.DICE (satoshi dice stock) on MPEX, currently paying out 30 percent.
MPEx: Claims to be the only bitcoin service that has not been hacked. One problem with this exchange is that they require 30BTC to set up an account, and I dont really have that kind of cash to squander. It would be a better idea to buy S.DICE through this exchange since there are no management fees. They have quite a few listings, some with fairly low volume, a lot of them mysterious to me.
BTC-TC: Bitcoin Trading Corporation. This one actually looks really interesting. They are marketing their site as a "Virtual Currency" trading platform, most likely to get around some laws regarding registering exchanges and such. They feature options, a ton of stocks, Bonds, and Funds. Similar to Havelock, they also have an SDICE fund.
If a recent post by often-controversial bitcoin personality Mircea Popescu is to be believed, the U.S. Securities and Exchange Commission has focused their gaze on well-known bitcoin gambling site SatoshiDice. Popescu posted a series of emails he exchanged with SEC senior attorney Daphna Waxman, who was requesting information about the listing of shares of SatoshiDice … If there are fewer miners, it is expected the mining hardware manufacturers will take an even larger stake in the bitcoin mining process. With more energy-efficient hardware still being developed, it is likely a certain degree of centralisation will occur in the mining world. A community dedicated to Bitcoin, the currency of the Internet. Bitcoin is a distributed, worldwide, decentralized digital money. Bitcoins are... The companies and funds listed on these exchanges tend to be Bitcoin-related businesses, such as mining equipment manufacturers, but also include Bitcoin-denominated gambling sites like Satoshi Dice 231 and BitBet. 232 Bitcoin-denominated stock exchanges have been plagued by frequent scams in which the underlying company or concern is a hoax ... Some bitcoin exchanges act as intermediaries for currency transactions, converting wealth from bitcoin to national currencies, and then back to national currencies or bitcoin. This is how you can make money, through arbitrage: moving money to exploit the shifting relative values of various currencies, though it is just as easy to lose.
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