Big Trouble for Bitcoin (medium.com)

TheCoop1984 writes: A blog post by ex-Bitcoin developer Mike Hearn has highlighted dysfunctional management right at the top of Bitcoin development. He says it is clear Bitcoin is on the verge of collapse, and lays out several compelling reasons why. Quoting: "What was meant to be a new, decentralized form of money that lacked 'systemically important institutions' and 'too big to fail' has become something even worse: a system completely controlled by just a handful of people. Worse still, the network is on the brink of technical collapse. The mechanisms that should have prevented this outcome have broken down, and as a result there’s no longer much reason to think Bitcoin can actually be better than the existing financial system." Is the end of Bitcoin on the horizon?

Comments

I'm I the only one

[rsilvergun]

Who thinks this reads like a "Netcraft Confirms" post? Besides, Bitcoin's not going anywhere as long as folks are using it to buy drugs

Re:I'm I the only one

[wardrich86]

It's probably all a huge ploy to get the value to drop. Some millionaire's gonna scoop up a shit ton of it, then the people pushing the negative press are going to play "April Fools!" and the prices will shoot way the fuck back up again.

Re:I'm I the only one

[coughfeeman]

Oh, the tide is already shifting to a new underground currency, and this one is much more liquid and widely available.

Flouncing for market manipulation and COINTELPRO

[weevlos]

They're at it again. Bitcoin XT/Unlimited/Classic developers are shilling emotionally charged rhetoric declaring the failure of Bitcoin. These blog posts are promoted by their connections in the (((international media))) to try to spread fear, uncertainty, and doubt around the status of Bitcoin and bully people into accepting their suicidal "solutions" to problems that don't really exist involving block size limits.

Histrionic whining on Medium and Reddit is not the proper way to present engineering solutions. Their campaign looks more like some sort of intelligence operation than a patch submission. There's a reason for this: it is.

I have a lot of skin in the game on this issue. I am a target of the United States government, and as such I have a very hard time receiving money. It doesn't matter that I have left the United States because of continuing persecution there. Their control over wire transfers between all countries with Rothschild banks is complete. The United States seizes money on lawful transactions between EU states over things as insignificant as Cuban cigars, despite none of the countries involved participating in the US embargo against Cuba. I've had my bank accounts, payment processing services, and brokerage accounts shut off. Bitcoin is the only way I can engage with any financial services. If it is centralized and subject to controls similar to SWIFT wires and credit card processing, my continued existence would no longer be feasible. Bitcoin is the the most important development in human rights in centuries.

Here's the facts: Gavin Andresen and Mike Hearn want you to switch to something called Bitcoin XT or Bitcoin Unlimited or some other fork of Bitcoin that is under unilateral control so that they can centralize Bitcoin to a dangerous degree-- enough to put it under the control of a government hostile to liberty like the United States. While they do this, they hilariously complain about "oppression" and "censorship" on forums that clean away their bullshit altcoin spam postings.

There are two likely incentives for doing this:
1) They have placed short positions against Bitcoin.
2) They are funded by people that wish to see Bitcoin less free.

Now reflect for a moment that the only major industry supporter of the Bitcoin XT proposal is Coinbase whose gigantic series C round was lead by the New York Stock Exchange. I doubt their financial interests are aligned with a free and unregulated global marketplace.

The good news is that they seem to have lost most of this battle. Consensus on the network is determined by the nodes people run on it. Bitcoin XT only has about 500 nodes. Bitcoin Core, the real Bitcoin software, has about ten times that. The majority of the mining capacity is in China, and Chinese people have little incentive to centralize Bitcoin for the convenience of US intelligence and enforcement organizations. So I must celebrate China's shrewd rejection of XT today.

If you love liberty you should call XT's shilling and spamming out for what it is. If you are invested in Bitcoin you also must do so. If XT gets their way and centralizes Bitcoin, Bitcoin will lose its primary feature of freedom from centralized authorities and thus lose its source of value. You can also support Bitcoin's continued freedom by running a full Bitcoin Core node, and buying and saving Bitcoin.

Bitcoin transaction fees going up is not the end of the world. It's good for miners, and necessary to protect a limited resource like space on the blockchain. I'm willing to pay higher fees to see Bitcoin stay free from government control (and we're literally talking transaction fees of a few extra cents here), and everyone else who loves Bitcoin should be so willing as well.

Hardly surprising

[sjbe]

has become something even worse: a system completely controlled by just a handful of people.

It was that from day 1. People who got in early have lots of bitcoins. Anyone with lots of the market in anything will be able to strongly influence that market.

The mechanisms that should have prevented this outcome have broken down, and as a result there’s no longer much reason to think Bitcoin can actually be better than the existing financial system."

There never was any reason to think Bitcoin would be better than the existing financial system. People believed in bitcoin for ideological reasons rather than pragmatic ones for the most part. It appeals to certain ideologies and people who are trying to hide their activities, often for illicit reasons.

Re:Hardly surprising

[Anonymous Coward]

If you look at BitCoin, you will see exactly this. It was rigged from the start, and there are a lot of unknown people holding a lot of coins. In any other type of industry, this would be a Ponzi scheme, but in the BTC world, it is a fact of life that the people arriving late to the table are the ones bringing actual value, such as the Chinese and Venezuelans.

To boot, the 51% control, which is the only way BTC can be compromised, is now in the hands of one mining group.

So, is BitCoin dead? Too many people have tossed too much actual value into the currency for it to hit the ashbin of history like e-Cash. However, there is definitely room for a BitCoin 2.0. Would it be DASH, altcoin, or dogecoin? Probably not.

What would replace BitCoin is a currency with blockchain functionality, but a few additions:

Better anonymization. Even if one does nothing wrong, it isn't good for every single transaction to be out there forever, and identifiable.

A better way of allowing people to generate currency, but preserve the value of what's in the ecosystem. This way, the currency isn't ruled by people who could mine it from their phone, versus later entrants who have to use massive ASICs and steal power in order to mine their coins.

Methods of escrowing coins, so a third party could be brought in and either allow or roll back a transaction... but the third party couldn't take the coins for themselves. This would allow exchanges to work, but not allow them to run off with everyone's stash. This way, Alice could ensure that the vend-a-goat machine shipped from Bob actually arrives and is in working order before Charlie approves the payment transaction moving the coins from Alice's wallet to Bob's.

A way of being able to separate the blockchain out. As of now, you have to have 50 gigs of data to validate that a coin isn't double-spent. That, or depend on a third party who can easily fake transactions. Having a way to have entire large series blocks signed and vetted would be useful to minimize the fact that every satoshi spent has to be in everyone's register.

A way of allowing multiple coins to be handed over between various senders and receivers in one transaction, but ensure all are paid properly. This helps with privacy.

A blinding factor, similar to Chaumian currencies would be useful as well.

A way to store a coin in multiple wallets at once, and use timestamps to ensure it isn't double-spent. This way, one can have all their coins in one wallet... but if they lose access to that, there is a backup wallet (preferably stashed offline) where the coins are still spendable from.

Oh noes!

[smooth wombat]

no longer much reason to think Bitcoin can actually be better than the existing financial system.

You mean some pie-in-the-sky technology can't do better than an analog system which has been around for centuries? Oh noes, what we will do without technology to "simplify" our lives? How will we live? The horror.

Re:Flouncing for market manipulation and COINTELPR

[PRMan]

Mike Hearn has proven repeatedly that he is very selfish and is not looking out for the greater good of Bitcoin. At this point, anything he is for, I am against.

It's a bit sad to see Gavin joining him, as he always seemed more altruistic.

Re:Flouncing for market manipulation and COINTELPR

[Anonymous Coward]

Clueless, stupid, paranoia and tinfoil hat conspiracy theories with religious overtones. This represents the average bittcoiner, and is why bittcoin has failed.

Blockchain tech is the real contribution and will live on because it's not an implementation of flawed proof-of-concept code coupled with genuinely bad economic principals.

If you can't answer the following question you can shut the fuck up, delete your wallet, and think about what you've done with your life:

How can Bittcoin become a successful currency if it can't break a pretty meager Transaction Per Second barrier? We're talking several orders of magnitude less than what traditional banking and payment systems currently achieve.

And no, brokering transactions through a 3rd party does not count. That's just called a bank, and all the bitcoin banks have failed or are currently failing because bitcoin is simply an unsecured alternate currency. And unsecured alternate currencies are a scam as old as the idea of currency itself.

Re:Human beings are the problem

[Nutria]

As much of an atheist anti-religious person that I am ...

That's called anti-theism, not atheism.

I can't shake the feeling that the secularisation of society has left a large hole somewhere.

I totally agree about the hole.

Those who in earlier times were the highly educated "moderate" religionists (Anglicans, Methodists, Presbyterians, Unitarians, etc) have mostly stopped going to church, and those who stayed (evangelicals, pentecostals, "brown people" churches) have become more radicalized because of the Culture War.

Nothing good is going to come of this, IMO.