Back when the Bitcoin scaling debate was raging the Bitcoin Core/small block crowd frequently used a strawman argument against those wanting a blocksize limit increase that went something like this ― “You big blockers are so stupid. You literally think you can just increase the blocksize limit and do nothing else and don’t realize how disastrous that would be for Bitcoin”.
The reason this is a straw man is that no technical person on the big block side actually believes that you can just increase the blocksize and do nothing else and Bitcoin will just magically scale. The Bitcoin Core software employs engineering practices that were a decade or more out of date when the software was first released in 2009. It’s horrifically unoptimized. And if you intend to scale it you’re going to need to put in the hard work necessary to optimize the shit out of the software so that you can scale while remaining decentralized.
Further, it’s likely that the protocol will need to be modified as well to improve efficiency and improve the scaling properties. This is the unsung work being undertaken by Bitcoin Cash’s two main development teams. Bitcoin Unlimited has identified mempool acceptance as a bottleneck and has prototyped a design for parallel mempool acceptance. Bitcoin ABC is working on parallel transaction validation. Tomas van der Wansem is working on a protocol change to add UTXO commitments to enable fast sync while pruning most of the unneeded blockchain data. Graphene block compression is also being worked on to get minimum block transmission latency. This work is only the beginning of what will be needed to make Bitcoin Cash scale while remaining decentralized.
So while this strawman argument doesn’t apply to those in Bitcoin Cash’s technical community, it does apply to one person in particular ― Craig Wright (and by extension his company nChain). Apparently Craig does indeed hold this strawman view of Bitcoin as he has been fighting with all Bitcoin Cash development teams while insisting that Bitcoin was more or less perfect when it was released in version 0.1 and that the changes being introduced by ABC, Unlimited, XT etc. are heretical. So much so that he is threatening to fork Bitcoin Cash by introducing his own version of the software minus these changes.
So with this post I just want to point out some of the terrible arguments that Wright has been making and urge people to reject his fork and vision for Bitcoin Cash.
“Bitcoin Cash can already handle 2.6M transactions per second”
This is, frankly, absurd. The recent Bitcoin Cash blocksize limit increase to 32 MB is already pushing the limits of what the software can handle. nChain is trying to increase the blocksize up to 128 MB (with designs on removing it entirely) which the software almost certainly cannot yet handle. It will be able to handle it eventually, once ABC, Unlimited, and XT have removed some of the major bottlenecks. But not now.
But just ask yourself what would be required to get 2.6M TPS in Bitcoin Cash? You would need to throw an enormous amount of hardware at the problem. This would require hardware costs in the tens, possibly hundreds of thousands (millions?) of dollars. At these costs only a few large miners would be able to afford to mine.
The fallacy of assuming a small number of participating firms will be fine is the same fallacy that I accuse the small blockers of holding. If you followed my Twitter recently you’ve likely seen my dust up with Saifedean Ammous, author of The Bitcoin Standard. Saifedean writes in his book that the way Bitcoin will scale is by having all users deposit their coins in custodial “Bitcoin banks” who will then clear transactions between themselves off chain.
My argument is that while this would likely work fine in a pure free market, we don’t have a pure free market! Government will almost certainly regulate and control such institutions as they have always done in the past.
The same problem applies to Bitcoin miners. We can’t just assume that five or six giant miners would be enough to keep Bitcoin decentralized and resistant to control because “competition”.
“Free market competition” between a handful of giant firms is not sufficient to remain uncontrollable and uncensorable in the face of an aggressive and hostile government. We need much more decentralization than that.
“We don’t need a blocksize at all. Miners can just coordinate among themselves.”
Again, this goes back to the same fallacy above. A world in which there are so few miners that they can just pick up a phone and call each other to coordinate the blocksize is a world in which the government can trivally shut down or control the whole thing. To remain decentralized we need tens of thousands, maybe millions, of miners all over the world, with free entry and exit. That doesn’t lend itself to just having miners arbitrarily picking different blocksizes or calling each other on the phone to get agreement.
To that end the blocksize needs to be defined as part of the protocol. Something like BIP101 with automatic annual increases is probably the best way to safely increase it. But just having miners set their own blocksizes and adjust their settings in response to the inevitable forks would be a complete mess. And it’s even worse if there are so few that they can easily coordinate.
“Non mining nodes do nothing”
This is maybe one of the worst fallacies spread by Wright. Imagine a world where it takes $50k a year to run a Bitcoin Cash node. You would literally only have like five or six people who do so and everyone else would run SPV. In such a world it would indeed be trivial for those miners to pick up the phone and call each other and say: “Hey how about we increase the block reward to 100 BCH per block?”.
If everyone else is running SPV who’s going to detect that this is happening? And furthermore, what incentives are there for the miners to not do this?
By fully validating all the protocol rules, anyone running a non-mining node can detect if miners do this and can reject any payments from them. Miners are in a subordinate position in the network in that they must sell their coins into the market to profit from their mining operation. If the people whom the miners try to sell their coins to reject their payments because the miners changed the protocol rules, then they have no one to sell their coins to. Full validation by market participants forces the miners to follow the agreed upon rules else they lose their mining investment.
We don’t need everyone to run fully validating nodes. Satoshi himself even suggested most businesses would likely want to run their own nodes while end users would just use SPV. This is a reasonable position and would likely still provide a strong enough of a disincentive to prevent miners from cartelizing and trying to change the rules in their favor. But if we make it so expensive that nobody but miners will be running nodes, then you are opening Bitcoin Cash up to this type of manipulation.
Summary
Those of us in the technical community that supported increasing the Bitcoin blocksize did so because we genuinely believed it was technically possible to scale directly on-chain while remaining decentralized. This was always our vision for Bitcoin Cash and we’re working on making this a reality.
The vision offered by Craig Wright and his new full node project Bitcoin SV is just as bad as the vision offered by Bitcoin Core. It’s a world in which all transactions run through a handful of hyper centralized firms and one which would almost certainly be captured by government regulators.
We can have our cake and eat it too. We can scale and remain decentralized, but it isn’t just a matter of changing a single constant in the code and calling it a day. Real software engineers recognize this reality and understand the importance of optimizing the software and protocol to achieve this goal.
 

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On the importance of having at least *some* people watch the ledger via full nodes: https://twitter.com/im_uname/status/1030947987793428481
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I guess I'm not entirely surprised that you turned out to be a fake Bitcoiner, Chris. After all, OpenBazaar openly shit on big blockers and refused to add Bitcoin Cash at first - I remember.
Your recent "debates" with small blockers seemed like bullshit at the time. You skipped over good points you could have made and basically acted like you were stoned. In retrospect, its clear now that its because you have bad acting skills.
SV is going to happen. Sorry.
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I agree with Dr. Craig about his sense of urgency on uncapping the block size. His proposal is 128mb on nov2018, 512mb on may2019, 2gb on nov2019 and no cap on may2020. So BCH still competitive only if the other coins don't scale in the next 2 years. If Ethereum, Nano, etc... creates a scale solution before that, we are dead. We are in a competition, and the winner takes it all.
He also made clear that decentralization is not the GOAL, but only a TOOL to achieve the goal. We shouldn't worship decentralization, just understand how to use it to have a strong network. We don't have to be completelly decentralized, just enough decentralized. Maybe 100 or a 1000 nodes are enough. Dash has 4000 masternodes. Is there a risk there for them to change protocol's masternodes rewards? I don't think so, even if 1 masternode is inaccessible for a normal user nowadays (a Dash masternode cost today US$156.000).
A $50.000 node won't make it exclusive for 5-6 mining nodes, but perhaps to hundreds or thousands of nodes, as many businesses would have interest in having one, even so expensive.
Your conclusion that Bitcoin SV is the same as Bitcoin Core is not reasonable. The first want to return Bitcoin to it's original path, the other is a business interest path (Blockstream - and its 2nd layer solutions).
Remember that Bitcoin hashpower was centralized in only one person in the early days.
Better to have something now, than nothing in a distant future.
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I'm glad to see an article exposing facts against nchain's sv, and not only exposing craig as a person. I have been a Bitcoin BCH supporter since 2013 & recently been accused by my followers on twitter & youtube of being against bitcoin cash & big blocks, as soon as I mentioned the word 'block size limit'. You just gained a new follower. Thanks for the post!
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Good article Chris. I'm also not a fan of Bitcoin SV, and I think there's no need to rush an immediate blocksize increase. But I've few comments and questions: First, you say: "But just ask yourself what would be required to get 2.6M TPS in Bitcoin Cash? You would need to throw an enormous amount of hardware at the problem. This would require hardware costs in the tens, possibly hundreds of thousands (millions?) of dollars. At these costs only a few large miners would be able to afford to mine." 1) If we reach 2.6M TPS with BCH, even with optimizations, how expensive do you think hardware will cost? Do you think that hardware will cost under $10k and remain profitable for small players?
Mining is already extremely expensive for normal people to undertake, with significant centralization. So do you think:
2) The current mining situation is already too centralized? Next, you say: "To remain decentralized we need tens of thousands, maybe millions, of miners all over the world, with free entry and exit. " 3) Where do you get these numbers? Do you think each of these miners will be within their own unique company? Or, do you think Bitcoin needs to rely on individual, home-mining rigs in order to stay decentralized? Next, you say: "Imagine a world where it takes $50k a year to run a Bitcoin Cash node. You would literally only have like five or six people who do so and everyone else would run SPV. In such a world it would indeed be trivial for those miners to pick up the phone and call each other and say: “Hey how about we increase the block reward to 100 BCH per block?” I think this is wrong on two counts. First of all, way more than "five or six people" would run nodes. The blockchain is a record of global transactions; there's lots of data to be mined from it for a profit. Tons of businesses would run nodes, even just for the data, and maybe a handful of researchers, too. The hobbyists would be the ones kicked off the network, but it's not clear that that's a bad thing. Second, the miners have a huge incentive not to break trust in their currency. They have the most to lose by arbitrarily increasing the block-reward.
The competitive threat to miners is not simply other miners on that chain. It's the threat of people leaving the chain entirely. When you've got millions, or eventually billions, invested in mining rigs, all mining a particular algorithm, you've got every incentive to make sure your currency is the sound currency. You don't simply call up your miner buddies to increase the block-reward, because then people will stop using your currency. Next, you say, "If everyone else is running SPV who’s going to detect that this is happening? The detection would be trivial. All it would take is one business or researcher to figure out - say, Bitpay, for example. Anybody offering the service of block-exploration could figure it out instantly. Next, "By fully validating all the protocol rules, anyone running a non-mining node can detect if miners do this and can reject any payments from them. Miners are in a subordinate position in the network in that they must sell their coins into the market to profit from their mining operation. If the people whom the miners try to sell their coins to reject their payments because the miners changed the protocol rules, then they have no one to sell their coins to. Full validation by market participants forces the miners to follow the agreed upon rules else they lose their mining investment. " I think this is a good answer to the question, "Why don't miners have an incentive to change the block reward." Your disaster scenario is only possible if there's literally only zero nodes on the network other than miners in contact with each other. If there's one, then the truth gets out, and they lose their investment.
Which brings up my last question:
5) Do you envision the Bitcoin system as requiring some degree of altruistic "oversight" over the miners? Whether it's non-mining nodes, developers who value centralization, or something else - do you think that miners and businesses, left to their own devices, will end up ruining the system from their own greed? Thanks for taking the time to respond.
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Oh, and one more question: do you think it's necessary that the top 5 or 6 miners don't control 51% of the hashrate? As in, even if we have tens of thousands of miners, but the top 5 or 6 own more than half, do you think that's a failed system?
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Hey Steve, 1) It's not possible to reach that level without sharding or some kind of zk-snark magic. Maaayybe if it takes several decades to reach that point the hardware may be in a place where a single machine could handle it, but certainly not any time soon. 2) I'd say so. This is the reason I worked on the new mining RPC, which Matt Corallo also produced something similar. The goal there is make mining less dependent on pools and distribute validation across many more nodes. Will that be enough to get the level of decentralization we'd like to see for robust censorship resistance? It remains to be seen, but I think that would be a good start. 3) I'm guessing. Certainly five or six big miners is not robust enough. Would a thousand mining farms be ok? Maybe? Obviously the more distributed the better, but I think there's probably a limit on how distributed you can get with proof of work. 4) You skipped 4! lol 5) I'd rather not rely on the altruism of miners. I'd prefer miners be incentivized to behave correctly and be disincentivized from behaving badly. To that end I think a network where most businesses, exchanges, payment processors, whales, etc fully validate transactions is an ideal we should be shooting for. Then we don't need to worry about whether or not miners will attempt to change the rules.
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Chris forgets that not all miners need to run a $50k node. Mining pools exist and small miners can use them if it's uneconomical for them to run a full node. So long as there are enough pools to represent all the different positions within the space, small miners can still exercise their voting power by switch to a mining pool in line with position they want to support.
The idea that we will end up with zero non-mining full nodes and no one will be able to detect if miners increase the block reward is ludicrous. Block explorers will always exist.
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It surprises me that the same folks that argued vehemently for bigger blocks are now claiming that further increasing block size will lead to 'centralization'. If you really think smaller blocks are better and developers (not miners) should decide block size limit, why support BCH at all?
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Thanks Chris: just a couple follow-ups: 1) Fair enough. I guess a more accurate and abstract way to put it is this: do you envision mining hardware always costing less than $10k, regardless of what level of scaling we're at? And do you think it should stay that way - meaning, when the trade-off is between "more scaling and higher barrier to entry for miners" and "less scaling/higher tx fees and a lower barrier to entry for miners", you're comfortable siding with the lower barrier to entry? Even if the network could use the additional horsepower? 2) You'd rather not rely on altruism of miners; so that means do you think that altruism is an essential part of the system? Whether it's miners, node operators, devs, etc? That the incentives for miners to not break the rules are not sufficiently strong enough to keep their behavior in check?
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1) I'd like to get to a point where individual miners run their own nodes and the only thing the pool does is handle splitting the reward. It was a huge mistake in my opinion to build the entire mining industry around stratum. Today this is possible because the cost of running a node is trivial and any mining firm can afford to do so. But that may not be the case in the we're talking huge amounts of money to run a node. That would basically dictate a stratum-like mining network where miners outsource validation to a handful of pools. We kind of tolerate this today because we think it's easy to spin up a new mining pool. But that wouldn't be the case if the costs go way up. 2) I don't think miners are altrustically abstaining from altering the protocol rules if that's what the question is. I think we have enough people running nodes that it's not possible for them to do so. I'd like to see it stay that way.
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Chris today once again we had issues paying in a shop because of the cashaddress which you pushed so hard. When will you admit that cashaddress was a hoax and you are a double agent? You ruined usability with that cashaddress nonsense. But you probably neprobably never tested real world adoptionadopti
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"Non mining nodes do nothing”
You wrote:

This is maybe one of the worst fallacies spread by Wright. Imagine a world where it takes $50k a year to run a Bitcoin Cash node. You would literally only have like five or six people who do so and everyone else would run SPV. In such a world it would indeed be trivial for those miners to pick up the phone and call each other and say: “Hey how about we increase the block reward to 100 BCH per block?”.
You're better than this Chris. Who stopped miners mining 50 BTC at the first halvening? Other miners with the sense to know the original honest plan would have the most support, so went on mining the 25 BTC blocks facing less competition doing so, until the others gave up. No non miners needed.
Competition means cartels trying to subvert something don't work. There's a huge win for the one (s) that break away to do the honest thingthing the ecosystem wants and expects. That's all that's needed. I know it seems like a leap of faith, but underestimate such economic incentives at your peril.

Only miners matter. They're the only ones building the chain. They may be susceptible to trolling or disinformation, but still it's only them and their decisions that effect the outcome.


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This is such a bullshit article, in fact, it is exact same repeat of what Bitcoin Core and Blockstream have been saying.... saying that Bitcoin original code can't work.
You are by the looks of it anti-Bitcoin also. I have read enough here, I call this article propaganda as I see propaganda in it.
You assume Bitcoin won't be able to scale without some "optimisations" and this is garbage argument as its based on assumptions and not facts.
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Predictable (and sad) that you are being attacked for stating reasonable facts. We all want big blocks and huge scale, but that doesn't mean work doesn't have to be done. I swear... some of these people commenting here seem to literally believe we can just delete one line of code (remove the block limit) and bitcoin software is forever taken care of.
The idea that we need to optimize WHILE we scale isn't just opinion; the gigablock testnet initiative demonstrated that bottlenecks start appearing around 100MB if I recall correctly, and that was a "high end" machine. If you still don't "get" this, think of a dragster or race car. Yes, a huge engine is necessary but it doesn't mean you don't also work on the fuel injectors, the tires, the brakes, the suspension, the aerodynamics, and everything else.
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Wait, I think I've seen this before.. Ah! bcore's incendiary
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Hey look, yours is taking over reddit.
:-)
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I say CSW should just release the exe file for a BitcoinSV client early on Testnet and everyone spams the network with micro-transactions. Then we will know if SV lives up to specifications or is a hyperbole.
I'm sure CoinGeek wouldn't mind a 1 day stress-test to prove CSW claims. Actually I think Calvin Ayers would gladly volunteer to put some miners on SV Testnet to help CSW beta test SV's ability to perform.
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If a miner isn't keeping up with blocksize demand/requirements then they need to get out of the business and make room for miners that will.
This is a serious business, we can't slow things down just because some miners don't want to put in the investment to keep up with demand. No free handouts. There is no free lunch for miners anymore (BTW, small miners can join together, pool resources, and upgrade their servers).
The artificial limit on blocksize needs to be removed. Otherwise, it becomes a crutch for miners that aren't keeping up with network demand.
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No block size limit exists! This is merely a configuration in the miners' software. They can raise the limit whenever they want to. Raising the block size in the software via code only sets the default, so it does not matter.
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I am not against 128MB blocks, it needs to happen, the sooner, the better. Even if it is not needed, it is good PR if we can advertise the coin with how much TPS it can handle.
Increasing the blocksize to 128MB without software improvements however, like you said, based on tests, the software shits itself above 100MB blocks without parallel validation / mempool acceptance.
I still did not see data released regarding nChain's alleged in house testing of 380GB blocks.
I don't think anybody actually minds SV happening, I don't think people have a problem with their proposed OP codes, and I think people would not have a problem if they would put out optimized software that works, but as long as there is no code released people will keep shitting on them, and Craig's tweets just make this worse for them.
However I don't agree that we could see a situation where miners pick up a phone and adjust the block reward to get more coins out of the system, even if there are only 6 pools.
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I think there will be a testnet and we'll see how it works, so what is there to worry?
And what they said is, they are making the block size caps more easily adjustable for the miners, who in the end decide. They aren't forcing 128 MB blocks on anyone just because they would run this software. Miners have responsibilities. 128 MB is just the _default_ hard cap. The default soft cap still is 32 MB, so even if a miner were so lazy that he didn't bother to adjust the default values to his liking, still only max 32 MB blocks would be created by him/her.
"2.6M TPS... hardware costs"
Aren't you ignoring Moore's law?
"five or six giant miners"
The bigger BCH becomes, the more incentive there is for more competition. And some hardware manufacturer will always get lazy and someone else will take over, just like has happened in the past. Constant competition, no static situation.
And if the miners would get caught (you think they wouldn't?) colluding and cheating the way you explain, they would be punished heavily by the coin losing value and credibility. The people involved would lose all credibility. They would only lose, no gain.
"more decentralization"
Block size isn't the bottleneck when the node is <1% of the mining costs.
"automatic annual increases"
is arbitrary planning, not according to reality at the moment. So I'm not sure if it's "the best way".
"Imagine a world where it takes $50k a year to run a Bitcoin Cash node."
Costs for non-mining nodes would be less than for mining nodes. And the bigger BCH becomes, the less unreasonable this kind of sum will seem. If actually used as money by normal people, I'm sure there would be many, many of these nodes.
It doesn't need to be home user's RaspPis to guarantee there's no cheating by miners.
These arguments are very much the same like that people would a hundred years ago have said that we can't go to the moon, because you can't fly a hot air balloon there.
Some refused to believe that it's not possible and they made it possible.
"Satoshi himself even suggested most businesses would likely want to run their own nodes while end users would just use SPV."
I don't think he said "most".
Quote from Satoshi: "If the network becomes very large, like over 100,000 nodes, this is what we'll use to allow common users to do transactions without being full blown nodes. At that stage, most users should start running client-only software and only the specialist server farms keep running full network nodes, kind of like how the usenet network has consolidated."
I see no reason why a restaurant or a store or something similar accepting payments should need to run a node. I guess they could if they want to, but I don't see this as any kind of necessity.
Maybe the most important non-mining nodes, I think, would be block explorers and similar. The more adoption BCH gets, the more there will be incentive to run nodes for various purposes.
There are many people/groups who could easily afford this $50k. You really think all those hundreds/thousands/more would collude in cheating?
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