Bet the house, but what is the 'House' betting on?

Red Pill or Blue Pill

  • Red Pill - House wins

    Votes: 15 100.0%
  • Blue Pill - Settlement squad wins

    Votes: 0 0.0%

  • Total voters


Well-Known Member
Aug 28, 2015
I've been having a private conversation with @AdrianX for the last few weeks, and thought it time, it got an airing. It started on the 27th july something like this. We felt it was time for some others to add to the speculative theory. Join in.


Can I interest you in a game of 'what would the house do?' I've got a few theories but for obvious reasons they need to remain, very quiet until after the 1st.

Nevertheless I need someone to bounce ideas off, if I'm right we could be about to enter the biggest trading event of bitcoins history and it would be nice to be on the right side of it.

I agree with this and see an opportunity too but it is not without risk.
Having hung out on slack with him and seen many of the old timers come out, i'm fairly sure csw is the 'an early miner' , either way we know from court records he controls an enormous amount of btc, it would also be likely that as an 'early miner' he would know most of the other huge holders of coin. we also know Jihan and Ver want bigger blocks, so between all of them, I think we can safely identify 'the house'

Good base to work off, however I don't see Jihan as someone who is fundamentally committed to bigger blocks. Meeting with Jihan at the conference he seemed to believe it would always be more profitable to mine segwit transactions. in contrast I believe in the practical reality it is only profitable while there is an active transaction limit and users biding for limited space so i think he may make mistakes moving forwards.
In light of recent findings, I find it impossible to believe the house would be happy with Segwit or two persistent chains. The problem they have is that other miners are asleep, or don't fully understand the complexity of the attack. Combined with all the blockstream attempted take over propaganda.

that is almost exactly how I see it.
So as the house, how do you do it? I think you see what i'm getting at here. The viaBTC futures is a genius move to give BCC a price before it's even a thing. This has the effect of forcing all exchanges wallets (who have been suspiciously quiet throughout the debate) and everyone else to be thinking about what to do in the event of a split. There is only one option, and that is to run two nodes. Big block and Segwit.

Now they've got everyone's attention, all they have to do is DUMP the Segwit side. Seriously, Ver could probably do it alone, but imagine what a coordinated effort could do? So my speculation is this is going to be over fast, possibly 24 hours fast and that's if the big block miners don't already have enough hash power 51%+, it might be over before it begins?

I am expecting big holders are not going to take any risks here. In a way adopting BCC from BTC is like TPTB dumping fiat and going all in on BTC, it's going to happen first very slowly then very fast and its going to take time, CSW may hold lots of BTC but I don't thing he is in control of it, it sounds reasonable to think it is held in trust.

There are going to be some big BCC holders who will sell the BCC side to suppress the price. They are aligned with the old world hegemony - Coinbase not giving coins to users fits this MO. This guy points it out:
Thanks for playing devils advocate, just what I needed. Nice to see some similar thoughts, and some divergent.

I disagree here. CB were originally big blockers. There is no way coinbase/gemini will steal users coins, although I do think they will be the last to show their hand. Simply, the legal problems they would have be stealing users funds (it would be theft or misappropriation whichever way you look at it) It would be an infringement on basic property rights to act without users consent. I see it as a risk management strategy. Same goes for bitstamp announcement

I hope so, this could get messy. I think it totally depends on the ToS, and here Coinbase have notified users.

I think there is a possibility the price will be suppressed to make mining unprofitable, my investment in BCC is mining unprofitable coins and waiting. If I smell BCC victory I'll be selling... BTC
For sure there will be some large holders (old world as you say xxx and xxxxxxxxxx perhaps?) dumping BCC, but if you were playing the role of the house it would be like taking ice cream from a child. (I see an element of compassion creeping in here not wanting to fleece innocent holders) It's a trade off between how much you want to clean out the other side, and how much disruption, you a re willing to force upon the network. Hints again towards a quick resolution.

The piece of the puzzle i'm not fully grasping is what exactly happens if/when the big block chain gets majority hashpower? Previously it would have been a simple case of orphaning all <1MB blocks and flooding the 1MB chain until ground to a standstill. (They'd have to PoW change or reset difficulty) for any hope. Now though we have the replay protection, I think this might be a tactical error, as it's the one thing that makes me think this could drag out longer like you suggest.

It won't unless the price supports it. For majority hash power to support the big block chain (BCC) the market price and demand has to be higher that the minority chain.
its a death wish, one of the reasons I don't think it will happen in 24 hrs, it's literally leaving the entire infrastructure of the bitcoin network for the segwit chain, anyeone who doesn't know exactly how to act does nothing and is secure. I think Core are going to try and use this behavior to keep people on the 2MB fork later on, they could succeed if segwit2x implements replay protection.
As for my own position, I've purchased some BCC futures, managed to get ~1/10 so i'm relatively content. I'll be leaving some pre fork BTC and Yuan on viaBTC trusting that of all the exchange they will handle the split fairly, then I might get a few super cheap buy orders in hope of picking up a bargain.

Sure things will change in the next few days i'm expecting one or two more surprises, but so far cautiously optimistic.

I'm cautiously optimistic too, I'm not expecting waves with the BCC split, but I would love to be wrong on that. I'm hedging my bets with mining contracts and some hash power I have at my office. I will be monitoring and ready to act fast, If the shift happens most BTC sells will be stuck because of the slow confirmation times due to full blocks so I will have to act fast.


Well-Known Member
Aug 28, 2015
july 31st

So slight update on how I think this might play out.

I find it impossible to believe the house would be happy with Segwit or two persistent chains.

Going from this, and the assumption that the house is angry at having to put up with this toxic stalling debate for the last 3 years. I think they might want to punish the small blockers who have the strongest opinions. Theres been a number of troll posts outlining the tactic. Demonstrates fear in their camp and rightly so.

You wouldn't want long term holders or people who haven't been paying too much attention to the scaling debate, to get hurt, but give a big enough window for all the fanatics to jump the wrong way.

If you look at the progress of bip 141 is due to activate in ~10 days. NYA was strange like HK all over again, What if this was the secret plan all along, beat them at their own game? Keep the BCC fork alive say at 20% hashpower and let the rest activate Segwit, then jump ship and flood the small block chain until its unusable, bringing more hashpower over and death to SegwitCoin? (Quite likely they'll have to do and emergency PoW change)

In other words I revise my 'might be over quite quickly to might be over shortly after BIP141 activation.

Troll post said:
Once the coin has bottomed out, and everyone who wanted to sell has sold, they [chinese miners/jihad/chinese exchanges] will begin accumulating lots and lots of bitcoin cash.
This is not in the best interests of the big holders, Bitcoin and Bitcoin Cash becomes more valuable with decentralization, centralizing ownership degrades value. Satoshi on the other hand has a set of cards he could play. I am not sure this is the time to short BTC but if he held a large amount i think it would be for an event like this.

I think that post is full of ignorance. If concerned hold you have nothing to lose.

anyway i was thinking of a scenario I wanted to post here that resulted in an initial 30% hashing power and a more optimistic outlook of my original view. I can't remember what it is. if i start dreaming again I'll take some metal notes and add them here.

to me BCC is looking more viable, still risky though.
Might be interesting to reverse the process and play what would big bank, settlement layer squad do?

I defiantly think the big bank, settlement layer squad is in this game, most of the banking investors are lemmings, they follow the master plan centrally managed, when this goes sideways for them most are going to be lames to the slaughter. (they will stay the course) I honestly can't tell the timing on this it could be months, or years. but it will be epic.

the Big Banks are going to start coming in with Segwit, I believe some insiders know this and have dark trading pools set up for this.
Aug 7

I started writing another response here, a several days ago, but it got lost so I'll try again.

So I posted the link to that troll post, only as an example of the strategy. As usual with their propaganda it's laced with irrational hatred and poorly reasoned logic. Nevertheless the strategy is sound, as I mentioned before. I've been calling it the Robin Hood game. Taking from the zealot rich and distributing to the intelligent poor. The house in this instant, is not trying to make short term gain, it's a long game. If you were smart and holding, lets say 50,000+ coins, you'd realise the real value in the system, is long term appreciation of price rather than claiming a larger portion of the pie.
This is not in the best interests of the big holders, Bitcoin and Bitcoin Cash becomes more valuable with decentralization, centralizing ownership degrades value.

As you point out, it's the decentralisation of coins, that's of more value, especially if that involves moving them from those that don't understand the economics or want to harm Bitcoin to those that do and want to help.

Expanding on the theory, that the House is playing Robin Hood, they almost certainly have control of this big HK pool (even the name might be a clue, Hostel ~ Hostile ??) Their first goal was to keep the BCC chain alive and play with the difficulty until it dropped down sufficiently. Phase 2 is to churn out blocks on the BCC chain fast enough so it gets the scheduled difficulty adjustment just before BIP141 activation. During this time weak handed fanatics are throwing away their 'worthless' BCC coins to the smart big block peasants. The House probably has an accord to support the price below a certain level, but not accumulate, and maybe they'll try teasing the small blockers into dumping with the odd price pump towards profitability levels 0.18?

BIP141 locks in after 330 more blocks (479,808) then a further 2016 blocks till activation (481,823) or 16.3 days (23rd Aug). I predict by this time the BCC chain will have just had a difficulty adjustment and the price of BCC will have been walked up, so it's just below profitability. Thats when the fun begins, be sure to have a nice bottle of something ready.

Phase 3 August 23rd/24th -This is the when the House plays its Royal flush. Segwit is activated and shortly after price of BCC rockets as the house dumps BTC and/or moves over all of it's controlled hashpower. CSW claimed to have 20%, we're not seeing all of that on the BCC chain yet, some might still be hidden? This would likely produce a cascade failure on the BTC chain, miners switching over in droves to mine on the relatively low difficulty BCC chain. BTC grinds to a halt, with full blocks and everyone selling BTC for BCC.

Phase 4 the Tsu Zu, or crush your enemy completely. Any number of Peters Segwit attacks are done, plus likely 51% attacks. The legacy chain dies or is so crushed it can never recover. It's here your lambs to the slaughter comes in. One of the few defences other than PoW change, is to pump the BTC price but this will just be throwing good money after bad, and will be an epic failure. Controlled Media will be in full hate mode.

Phase 5, back into the shadows, working towards radical on-chain scaling, and bringing Bitcoin to the other 5 billion, with rye smiles on the faces of all the big block crowd, after years of being abused.

I rest my case.

That sounds pretty good. After meeting with nChain I wasn't sure they had the hashish power they talked about being aligned with someone who did.

Monitoring difficulty the 20% they talk about shrinks fast when 5-10% new hashpower is coming online every 2 weeks.

I was thinking your scenario may only play out when and if the 2X part is reneged on, other than that all is good I'd like a low BCC price to get new fiat investor in I've met 2.on reddis already so they're not as rare as unicorns.

What's the cause of the BTC spike?

I was thinking a lot of BTC used for trading moved to BCC and the BTC acquired by small blockers is not as liquid so there's a liquidity shortage. Thoughts?

I'm going to pull out some old trading accounts and cold storage coins. I've moved my trading coins into BCC on kraken but it's not enough for an expensive bottle of bubbly.

Also I'm a little concerned that kraken is like gox you put money in but you can't get thw BCC out.
Pretty much just speculation here. I'm guessing the reasons are two fold, BCC sellers, rebuying on the BTC chain, and also it's one of the few defences left for the settlement layer squad, keep the price of BTC higher so it remains profitable to mine. Both scenarios are pretty foolish if you understand the economics of betting against the house.

I must say, I was pretty dubious about this fork before it happened. Bitcoin is the longest PoW chain, and forking with anything less than 51% was suicide. Freetrader and Deadalnix have played a master stroke, with the special difficulty adjustment. It puts the two sides of the fork on equal footing, the difficulty reset, leaves the fulcrum able to tip the scales in favour of the economic majority. It's a little like cheating nakamoto consensus and wouldn't work in normal circumstances. These are not normal circumstances. It was clear that there was value ready to be unlocked in mining bigger blocks, the reset just exposes this in all it's glory.

"They vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this consensus mechanism"

Turns out, in a forking scenario, they can also vote with their Bitcoins, and any needed rules can be enforced by the 'honest' bitcoin owning majority, so long as a significant miner is willing to back them up.

it's not over yet, but i'm very encouraged by these developments, and have diversified to the BCC chain accordingly ;-) 10-1 seems like an incredible opportunity.


Well-Known Member
Aug 28, 2015
14th August

So one last post here. It's this article that got me thinking

How a group of miners less than 51% could form a cartel and do interesting things. This is what I think is happening in the Robin Hood scenario.

We've seen the BCC chain has at times had >1.2 Exahash maybe 1.5. (This could very well be the 20% that csw has been mentioning) So if you wanted to play Robin but not loose money how would you do it? Cahoots with ViaBTC BTC.Top and probably Antminer too?

I'm going to assume this has been months in planning. Nobody invests that much mining a 'unprofitable chain' without a detailed plan. Lets say for example, the anti-segwit, big block cartel has 30% strong support to play with. They would have run all the scenarios already, know exactly which price points, and hash rates they need, to keep the BCC chain alive, without affecting the BTC chain too obviously. This blog has done some rough calcs. Apart from the days when they are attempting to game the difficulty down it's been fairly constant ~500PH on the BCC chain. They would know the main scheduled block 479808 difficulty adjustment is a pivotal point.

The problem with the BTC chain is it dies, or at least stops working, if too much hashpower leaves, in turn crashing the price, adding more problems to profitability. Death Spiral. The Hardfork has created the setup for a massive re-org, with all the strong hands from each camp (Small block/Bigblock) swaping coins.

But if you follow this argument, then you see that only one set of coins will actually hold much value in the months to come, and while it appears the HK miner is mining at a loss. They might actually be mining 'real bitcoin' and the main chain is mining 'fake bitcoin'. So if the members of the cartel are aware of the strategy they must be knowingly mining on the wrong chain and therefore selling everything they mine directly for fiat.

In other words the Robin Hood strategy goes like this.

HK miner gets lots of blocks on the BCC chain (will become main chain coins).
Cartel members mines BTC at high price and sells immediately for fiat. (coins soon to be worthless).
Big blockers and small blockers are given time to battle it out, without interference from the big players. This redistributes coins from those that intend to harm the protocol to those that are fighting for it.

Like you say this could go on till November, when it's clear 2X is not going to happen, but why would they prolong the agony, when the Achilles heal of the BTC chain had been exposed? Enough time between Aug 1st and block 479808 has been given for Daniel K's bloodlust players to have taken a position. I'm expecting price fun and games all this week, with fireworks just after 21st/22nd august (@18 min blocks) May be wise to have a few coins on an exchange before then in case BTC is otherwise out of order.

ps: Obviously this is all no more than theoretical strategy, and speculation. You've been around long enough to know, to take care of your own risk profile.


Staff member
Aug 22, 2015
Great conversation. One unexpected outcome is that the first normal difficulty reset will make BCC twice as profitable as BTC.

Some deer are frozen in front of the headlights:



Well-Known Member
Aug 19, 2015
Indeed, great conversation, folks.

@sgbett: Absolutely excellent point.

But as I said in the GCBU thread, I do think there's a pretty grave PR danger to two chains coexisting of similar value.

And even if BCC overtakes BTC, that still means there will be a time window (though that might be small) where the mass media (and the folks behind them) could launch this attack - and likely be successful to an extend.

What I could imagine is happening now is Antpool and ViaBTC showing the other side that they absolutely mean it, and that they mean it with the same level of 'zealousness' that @Zangelbert Bingledack thinks Greg is using as his bargaining tactic: That of going up to seemingly irrational "I am gonna burn the house down if you do this" threats.

Maybe I am wrong and the flippening will be a moment of joy, but I suspect that the real ugliness (especially also in price, both BTC and BCC) would only begin then.

It appears to me that from the current point, only a minor push is needed now for BCC to trigger the flippening and to eat up former BTC.


Well-Known Member
Aug 28, 2015
So, i'm not hearing too many objections?

If then, this is more or less what we see playing out. The next question would be, how to make the transition as smooth as possible?

We are going to need commitment from the industry players, especially the wallets, and price tickers, that they will follow the longest chain.

I'm finding it hard to believe this will be smooth, but it's maybe why many of the big exchanges, coinbase xapo bitstamp etc have been slow to act. Might they be silently, playing nanny, to many of the smaller holders ?


Well-Known Member
Aug 28, 2015
@Norway I though you were crazy going in with that first purchase at 16% I was expecting between 1-5%. you nailed it - balls of steal.

What happens now I'm still unsure, there is sanctuary in hodling both,but then there is truth in: nothing ventured nothing gained.

This is very exciting, like bitcoin in the old days.

"the house" is as I understand it a metaphor for a casino, who never loses and always wins over time.

whatever happens I'm mining SHA256 - be it BCC or BTC it all ends up on the BCC chain until the information landscape changes.

So far the BCC I've mined is worth a lot more than any BTC I could have mined, I think it's the way to go, the profit is in the added utility provided by growing the network of users who transact on chain, it grows in time, i think the flippering is a thing just cant put my finger on timing.


Well-Known Member
Aug 28, 2015
@Bloomie I'm a hobby miner I just have a fiew TH/s I'm mining with ViaBTC after a rather rough experience with

Regardless of all the mining FUD it's always been profitable here where I pay CAD $0.085 per kWh. BCC has generated greater than 100% mining profit over BTC mining. Mining is my way of investing on a daily basis without the trading risk. I'm just doing it for the experience.


Staff member
Aug 29, 2015
Thanks @lunar @AdrianX, interesting conversation.

I think that's a good way of looking at things, thinking about what "The House" wants. Thinking about other people's incentives and motivation generally is a good exercise to try to make sense of things.

The one detail I differ on slightly, is that I don't think The House would want to kill the minority chain, at least not quickly. I think it's in their interest to keep BTC and BCC chains both viable for as long as possible, and let them compete against each other in the market. This is less risky for them, as is keeps two bets alive. Then they have time trade into one or the other as the situation develops and more information becomes available. They can basically hedge their bets this way.


New Member
Mar 3, 2017
@AdrianX What equipment do you use? I've been considering ordering one of the latest antminers, but I'm not sure about dealing with customs and all that. Any recommendation?
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Well-Known Member
Aug 28, 2015
@marcus I have a couple of S9's they are very noisy and reliable (in the heat too). the process was painless, Most Canadian shipments go through the US, my order went back and forth (one unit was opened) I ship a lot of stuff and this shipment took unusual routing. I paid the duty and tax I can't remember what it was, it was a business expense so it may be different for individuals.

if I was to ask them to do it again I think I would have them put "SHA256 Computer processing units" on the international invoice and waybill, I'm convinced the delays were caused by labeling them "Bitcoin Miners". I'm probably on a watch list now.

today my daily reward went up 70% with the difficulty adjustment, this makes mining BCC very profitable at this time (profit being a relative and abstract concept as I don't spend my mining rewards, I treat them like savings)
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Well-Known Member
Aug 28, 2015
The House would want to kill the minority chain, at least not quickly.
Much of this depends on the presumption that one entity, 'the house' is in control. If we take that as true, we can start to speculate how much and what.

Say they control the price, because of much greater BTC BCC holdings and 30% hashpower, they might be able to slow the death spiral of the BTC chain down, by playing ping pong with the difficulty and price of each chain. A kind of oscillating controlled demolition.

The problem with the above is that it requires a good degree of control, the house might not be all powerful, leaving the quick and dirty option as the only option?

I think we'll be able to see what their plan is soon, if there is one? This next difficulty adjustment could make it more profitable again to mine on the BTC chain, Where the exchange rate is, just before and just after the next adjustment will be quite telling. I see an increase towards 0.2 again very soon. Estimate of 0.28 would keep the BCC chain profitable.

Team settlement might also try and keep the BTC chain profitable buy buying more, It would be an epic fiat syphon.


Well-Known Member
Aug 28, 2015
I think of it like a wrecking ball that needs a certain momentum to break down a wall. It swings back and forth mining on each chain then swings and cracks the wall when difficulty price and potential energy is aligned. I don't think it happens fast at first but when it comes down it falls very quick.

This all being invisible I'm thinking I'll join in and mine the most profitable chair and buy BCC on the dips if I'm mining BTC.

That being said I'm still holding most of my coins on both chains, I'm hedging in favor of BCC with my "play" coins.


Well-Known Member
Aug 28, 2015
The one detail I differ on slightly, is that I don't think The House would want to kill the minority chain, at least not quickly. I think it's in their interest to keep BTC and BCC chains both viable for as long as possible, and let them compete against each other in the market.
It appears you're right on this. I'd kind of hoped it wouldn't be a a sudden failure event. That would have been a PR nightmare. Still there's something to be said for the quick fracture, rather than the protracted decay. With the sudden death spiral event, It's clear very fast which chain has the most cumulative PoW with the added bonus that it drags the rest of the business community kicking and screaming over to the BCC side of the fork.

Realistically thats the biggest problem with having to do the minority fork method, we lose the bitcoin name and also all of the years of business adoption. We need Bitpay and Coinbase onboard along with all the DNM they are the real adoption drivers to date and we've had to discard them.

I'm more optimistic than ever now though, that the Segwit and Segwit2X are going to battle each other to the death. Perhaps this was the plan all along? Let those two fight it out, all of BSCores toxicity is focused on defeating BTC1 while Cash can carry on innovating and focused on adoption, unmolested?

What Cash needs now is more transactions, the cost benift of cheap transactions should be obvious to most businesses, but I fear the big players will not switch until we've reached majority hashrate, something that could be 6 months away at least.

I'm currently hopeful that the November hardork will be an utter farce, with Core having to do a PoW change. Their plan to block BTC1 nodes is UASF on steroids, stupidity levels that defy reason. It really is almost like they want to cause as much damage as possible. I find it hard to believe that the group could collectively be so ignorant of Bitcoins value proposition, that they would so easily throw away so much mining power and user base. I see no explanation that makes sense, economic illiteracy only goes so far?

Lastly, if it plays out the way it's looking, Core will have to PoW change leaving Segwit2X and Cash to fight over the existing hashrate. This will get messy, but again, if it was the plan all along, it makes sense to get rid of the most toxic actors first, and then use the simple economic advantages of on-chain scaling to defeat the 2X fork.

BCC is in a very good position right now, with tipping, gambling and a flurry of other use cases suddenly coming out of mothball status. Feels like 2012 again and it's increasingly evident how much damage Core has done to bitcoin in the last few years. They are a disgrace. Maybe the next ATH will be on the BCC fork?

Here's hoping.
@AdrianX your link is to a post that has been deleted, something i've noticed is very common, and hints to professional levels of forum sliding. I'm convinced we've been fighting very organised government or banking industry saboteurs.