Gold collapsing. Bitcoin UP.

Zangelbert Bingledack

Well-Known Member
Aug 29, 2015

It's true that fork arbitrage doesn't add much if there are only two options and we're sure one side has the hashrate majority (and that the hashrate is basically in line with the market - if not, a change in hashing algo is possible as a nuclear option by the underpowered side of the fork). In practice, though, it'll be hard to know for sure unless we have a supermajority committed, due to the messiness of mining pools being proxies and such (plus this messiness of the dynamics around 75%, reputational damage from changing if it couldn't be achieved, unluckiness in mining the blocks during the period, etc.). Also, as a larger point, a futures market could actually be used to set the blocksize cap exactly, rather than pick it from a small set of options. Paul Sztorc I think describes how prediction markets can do this.

Now if we're only trying avoid a permanent split at 50/50, I agree that won't happen because of the tipping dynamics you and @Peter R mentioned, and that something like an 80/20 split would only happen if the market valued the separation (say, because having SettlementCoin and PaymentCoin really turns out to be ideal) more highly than the loss of network effect from the split (and the loss from having to change the mining algo on the minority branch to keep the ship from getting sunk).

I'd say then that overall the forkbitrage process is a lot more comfortable to me as it covers all the contingencies, but in this particular case it looks like Classic may have enough of a lock that it won't be necessary. Part of my excitement about seeing it gain traction is for its use in general, rather than specifically for Classic vs. Core.
On the other hand, it does seem like there should be some way to use markets to figure out whether a proposed feature adds value. So maybe you've got a prediction market that says that there's a 50% chance (to make the math simple) that a particular feature will have been successfully forked into the main chain by the end of 2016. Now imagine that there's a conditional call option to buy Bitcoin at $400 on December 31, 2016 that's only executable if the fork has been implemented, and another conditional call option to buy Bitcoin at $400 on that date if the fork has not been implemented. If the first option trades for more than the second, doesn't that provide evidence that the market thinks the fork would be value-adding?
Yeah something like this sounds good to me. Such markets will spring up as soon as there is demand for them, and maybe that is almost now.
[doublepost=1453179715,1453178991][/doublepost]Also, just in case it wasn't clear, the tipping dynamics of the sinking ship or ball rolling down a hill also apply to the forkbitrage situation. I imagine it would be over within a few minutes since exchanges are set up to display reliable real-time information about what everyone else is doing with their "votes." That's why I think forkbitrage wouldn't be any worse, and could be a lot better in any extenuating circumstances. For the future, in a world where mining is a highly specialized industry, it also gives a much more accessible means of giving a voice to the broader ecosystem of all stakeholders.

One more edit: This is one of those "all roads lead to Rome" things. The market is always in control, and its control is expressed all over the place, so it can generally be expressed through miners alone, and it will probably be remarkable how true that proves to be, but I contend that the purest expression is through forkbitrage - whether that purity will be necessary is another question. It may surprise us how beautifully permeated the market control is into all the things in Bitcoin, such that the forkbitrage idea can remain theoretical for a lot longer than I would have thought.
Last edited:


Well-Known Member
Aug 28, 2015
An issue that seems to be lurking behind every proposal to fork thus far (as far as i know) is that it requires working with something bitcoiners inherently don't like: Trust. Trust requires taking on a multifaceted set of risks.

How can these risks be planned for? Like this.

One idea that might work is an automated fork-escrow that includes automated opening and closing times. In short, a smart contract. A smart contract can synthesize technical and market-based planning and commitments into a very workable ecosystem-wide solution.

Pools would be the parties. The Pools would guarantee X% of their mining power to a pool-of-pools (POP) that would be used to cause the fork. The commitment would have to be enforceable and/or securable, possibly through some kind of automated programming and possibly a market/exchange for making collateral deposits and purchasing insurance or bonds. The POP would stay open until the earlier of a) commitments made to POP exceed some amount (and conditions negotiated by miners met) OR b) the time period lapses. If a) happens first, fork-on - escrow releases after X blocks down the fork. But if b) happens first, fork-off - escrow closes and parties go home and carry on.

This idea is similar to the XT et al 75% mechanism, except that it also includes a binding commitment by pool operators. The advantage of this approach means that some, but not all, uncertainty w/ regards to a hardfork (and commitments therefor) can be reduced.
why is the problem not somewhat managed by using the prediction market. Miners collectively can force the outcome and bet on the winning fork for maximum profit. They can also use the prediction market to mitigate risk, mine one fork but bet the other, either way they win (or nether way they lose)


Active Member
Dec 15, 2015
@AdrianX - I don't think the two approaches have to be mutually exclusive. My proposal could compliment BenD's approach by facilitating the market BenD was hoping would just exist (i.e., my approach creates the demand (the market) for insurance products and securities, but they'd be for miners - speculators might interpret such TXs as signals for their bets).

The escrow window could be open for any amount of time - 1 day, 1 week, 1 month, etc.


Active Member
Sep 24, 2015
It would be interesting to see which exchanges would operate.

Coinbase Bitstamp and such would operate on Classic while Core would have to use a MPEX solution. Would MP really be insane enough to dump on Coinbase while keeping Core coins?
If mining behaves as we expect it should, then there shouldn't be two coins to arbitrage for very long.

Since Classic activation would be known for weeks ahead of time with the majority of hash rate behind it, then we should expect that all (or at least most) miners would upgrade to follow the fork. The losing chain would be stuck with difficulty much higher than any available hash rate left, and the result would be no blocks being produced and no confirmations.

Even if you wanted to use an exchange on the old chain, it would not be possible to move coins onto or off of the exchange.
  • Like
Reactions: majamalu


Active Member
Dec 17, 2015
love the sinking ship analogy!
Thanks! One thing the analogy doesn't necessarily make clear is that not only do miners have a very strong incentive to correctly identify (and get on board) the surviving ship, they have a strong incentive to do so as quickly as possible. In the ship context, the longer you delay, the greater the risk that the ship sinks suddenly, dragging you down with it. In the mining context, the longer you delay switching to the winning chain, the greater the risk you'll miss out on mining one or more block rewards that will actually be worth something.

If the fork into coins A and B were to persist, the combined market cap would be less than if all the value was stored in A or B (e.g., via the Metcalfe value argument).
Maybe obvious, but I just gave a hypothetical on this point in Reddit. Let's say you currently control 10% of Bitcoin's total hashing power. A fork happens and because you really believe in small blocks, you decide to stay on the smaller 1-MB chain along with other miners representing a total additional 10% of Bitcoin's original total hash power (obviously just to make math simpler). So now you're getting half of all newly-mined "mini-bitcoins" on the smaller fork. Pretty great, right? Well except you could be getting 1/9 of the newly-mined bitcoins on the main fork. Are those main-chain bitcoins worth more than 4.5 times as much as the ones on the smaller fork? Almost certainly. (Think Metcalfe's law. The relationship between the size of a monetary network and its total value is not going to be linear.) Therefore it's going to make sense to switch your hash power to the main chain.

I think 75% is OK because sometimes a leap of faith is required and will create its own momentum to success. XT failed because 8MB+ was just too scary for the miners. 2MB is fine with them, so if there is 60% hash-power on Classic then F2Pool will likely reconsider as they would have given Core every possible chance to come to the table. F2Pool is not a solo-miner (I believe) so they will have pressure from their hashers, some will leave to support Classic.

Anything less than 75% might have the effect of also scaring miners that there could be two competing forks with coins from each worth less than half the current value. So they would stay away from a client that did a hard-fork too easily.
Yeah, picking the perfect number is tricky. Set it too low (e.g., 51%) and it scares away too many risk-averse miners. Set it too high (e.g., 99%) and you get a few more supportive but conservative miners on board but at the cost of making the threshold so impossibly high that a few holdouts will prevent you from ever reaching it. Let's say that 80% of hash power is at least theoretically supportive of a hard fork: 20% who are super aggressive (they're comfortable with a 51% trigger), 50% who are moderate (they'd be ok with a 66% trigger), and 10% who are super conservative (they want at least 90% on board). If you release a proposal with a trigger that's anywhere between 66% and 70%, it should be successful. Any lower or any higher and you're out of luck. One solution to the problem of picking the right number would be to take a Bitcoin Unlimited-type approach. Let users specify exactly the minimum percentage they'd be comfortable helping to trigger a hard fork with. Obviously, also include a delay and a notification system. ("Hey, Mr. conservative miner, I know you said you'd only be comfortable helping to trigger a fork as part of a 90% super-majority, but 70% of the network has now indicated that they are going to trigger a fork as of block no. X. I assume you'll want to get on board? Click yes to confirm.") And of course, almost everyone would get on board (including the people who completely opposed the fork). Because again, nobody wants to go down with the ship. So, not surprisingly I like this proposal, but I'm guessing the market would probably consider it overly-complicated. Kind of like how the market seems to have gravitated to the simplicity of Classic despite the (in my mind) clear superiority of BU.
  • Like
Reactions: majamalu


Active Member
Dec 17, 2015
Some more musings on forks.

One of the phrases this debate has given us is "contentious hard fork." And, I gotta say, I think it's pretty stupid (although less stupid than the really obnoxious "hostile hard fork"). As best I can tell, the definition used by most of the people who favor this term seems to be "any fork that I personally disagree with." Here's my question: why doesn't anyone worry about "contentious stasis" or "hostile paralysis" which seems to be what we have now?

I wonder if all of the people who claim that "contentious hard forks" are super dangerous, and that we couldn't possibly execute a hard fork safely without "overwhelming consensus" would be singing the same tune if the shoe were on the other foot. If the always-intended-to-be-temporary 1-MB limit had been lifted a long time ago, and the small-blockers were trying to push a hard fork to reinstate it, would they say: "hey, it's super important for 'decentralization' that we cap Bitcoin's block size at 1 MB, but obviously we're only prepared to make that change if we can get 95% of the network on board"? I'm guessing not.

Revisiting my extended dam analogy, the fear-mongering over "contentious" hard forks seems like an obvious ploy to reinforce the "psychological barrier" to change. We can help to erode that barrier by explaining why hard forks are not something to fear (i.e., why the network will quickly converge).

All of the hysteria surrounding the danger of "contentious" hard forks splitting the network seems somewhat self-defeating to me. In other words, the fact that people are so damn freaked out about a hard fork not resolving quickly helps to illustrate precisely why it will.

It occurs to me that every time a block is orphaned, it's "contentious". In other words, I doubt very much that miners are happy when their blocks get orphaned. "Oh hey, you know what? You were probably a few seconds ahead of me on that one. You go ahead and take the ten grand. Get yourself something nice." No, of course not. But they accept it, and it's all resolved very quickly because the incentives toward convergence on a single version of the ledger are so incredibly strong.

Great point from /u/tsontar over on reddit:

Once a clear tipping point of consensus has been reached, the network will converge quickly on the new consensus rules.

For proof, simply examine the current network, where a majority already favor large blocks and frustration and political conflict is at an all-time high -- and yet consensus holds, nobody is building large blocks and forcing hard forks. There is a very strong incentive to not breaking from Nakamoto consensus.

Let's be clear, too: these are all political conveniences. In reality if a 51% majority of hashpower and economic value can hold together, they can change the majority consensus rules, because that's ultimately how the "Bitcoin machine" works. We apply these thresholds in order to wait to "call the vote" until we're sure simply that the vote can be fairly won. We don't have to wait until we're sure that everybody agrees with us. As long as the vote can be clearly won, I think Nakamoto consensus will drive unanimity on the network in short order.
Last edited:


Well-Known Member
Aug 19, 2015
Regarding code size of SW, here's Greg asserting SW is 'currently' 3/4 of BIP101's code changes:

From discussion at

I didn't do the count yet but I doubt that Greg excluded BIP101s extensive test code, for example.

Oh, and on another note: I think even if 'Classic wins the fork' we should keep Bitcoin Unlimited up and continue our efforts. I think just having an independent set of people with (so far) a similar goal is very worthwhile. In the mid term, this might become very important.

Zangelbert Bingledack

Well-Known Member
Aug 29, 2015
Even though Classic is in the spotlight and may be the best hope for breaking away from Core now as a pragmatic first step, BU is nonetheless the ultimate vision and even in the context of Classic vs. Core the BU message remains highly relevant.

For example, people already make the mistake of thinking that Classic will just take over Core, and they still have the habit of thinking blocksize settings must be tied to dev teams. They still see the devs as planners of consensus parameters, rather than engineers offering good secure code that helps miners and nodes do their jobs more easily. BU looming in the background reminds everyone that each implementation isn't going to be deciding consensus parameters anymore. BU is the purest expression of that. As people decide between Classic and Core, they can't help but notice that BU follows either one. It changes the conversation. It may be a bit before its time, but its time will come.


Active Member
Jan 15, 2016
I hope BU gets some traction: it is worthwhile in itself to have an independent team with an alternative implementation of the bitcoin client. BU's first novel features are the early fruit. Even if they are a bit before their time, let's hope they are not lost.

Everyone who currently has to be persuaded of the safety and desireabilty of an increase in the limit to 2MB via Classic is having to consider their decision for the first time. Rightly or wrongly, some seem to find that a scary prospect.

BU allows change to evolve as miners and others feel comfortable. It should make the whole process smoother. The more cautious can observe larger blocks working before adopting them, and the more adventurous can roll blocksize increases back if they find them disadvantageous.

We really don't want to be going through these blocksize and governance wars every few months.


Active Member
Oct 10, 2015
I am honestly confused by a fee market right now.

We are mining 25 Bitcoins every 10 minutes, 12.5 every 10 minutes in 6 months, then 6.25 in 4 years and 6 months.

We are averaging 0.5-3.25% earned from transaction fees in last 6 months so an additional 0.125-0.8125 Bitcoins. - If I am a miner this is supplemental coins that are not part of the basis proforma of the mining operation as I could not accurately estimate this.

With top estimate of 25.8 Bitcoins that gives us $10,320 per Block (@$400 BTC), most are expecting that we will double in 2016 after halving therefore if we continue with this cost per transaction 13.3 Bitcoins would be $10,640. If we could get that 3 transactions per seconds back to 7 transactions per second with a 2MB initial increase and SegWit followed later we could get another 0.8 ($640) per block for the miners as growth happens.

2021 "next halving" is the go/no time for me to decide where Bitcoin is heading by that time imo growth will be able to give 6-8times the number of transactions we see now which would give 8x0.8= 6.4 Bitcoins along with the 6.25 Bitcoins at a price that would possibly again double to $1600 would give a 12.65 Bitcoins ($20,240). Honestly imo a price of $3,200 in 2021 would more accurately represent the cost really giving a possible $40,480 per block.

Why would one at this point force a fee market now when transaction volume can grow and promote growth in ownership of bitcoin without any real changes other than giving more room to grow.

A fee market in the future does make sense to me IF we are unable to scale on a large basis.
Hey Peter, are your grafics under creative commons? Or, just asked: can I use them for our blog when calling you as the author?

(don't have concrete plans, just wanted to ask)


Bitcoin Is Not an Electronic Payments System Like PayPal, i.e. Bitcoin is a settlement layer.
Bitcoin Is Not and Should Not Be Free to Use, i.e we like fake fee market.

quite sad if I may.
Strange. It sounds like the typical Core-Supporter-Blibberish, but in fact BitFury supports Classic. Or don't they?
Regarding code size of SW, here's Greg asserting SW is 'currently' 3/4 of BIP101's code changes:

From discussion at

I didn't do the count yet but I doubt that Greg excluded BIP101s extensive test code, for example.

Oh, and on another note: I think even if 'Classic wins the fork' we should keep Bitcoin Unlimited up and continue our efforts. I think just having an independent set of people with (so far) a similar goal is very worthwhile. In the mid term, this might become very important.
Does anybody know if greg is right with 3/4?

I also think Bitcoin Unlimited should be kept up. I'd miss it and I think the idea is to good to forget it just because Gavon and Toomin decided to do the hardfork now.

I'm exciting about classic, but at the moment I fear it already peaked. Now Core can began it's constantly media pressure with their fanboys and sockpuppets in theymos'-world about how great SW is, how much coding competence core is ("Bitcoin's biggest asset"), how loosy coders classic has etc.

Expect character assasination against the toomins, gavin, jeff, peter.
Expect reciting of ideas like a mantra till they seem like obvious facts ("Core devs are bitcoins biggest asset. We can't loose them")


Active Member
Aug 19, 2015
Is it this guy: ?

Account Manager
December 2013 - Present (2 years 2 months)
As an account manager at Soluvox, I held various positions:

• Business Development Manager for the social media sector
*• Social Media Strategy Advisor for companies *
• communities Manager
• Editor on our blog"


Well-Known Member
Sep 29, 2015
If it's him, I wonder who his client is. Probably a Canadien entity, lol.

EDIT: Probably him. He even has Bitcoin as one of his interests on Linkedin.

EDIT2: The question is: How much does (Blockstream?) pay Soluvox to have this telemarketer troll the bitcoin forums?
Last edited:


Active Member
Aug 30, 2015
I do not think paralell forks can exist. To be usable separately, the network of nodes, miners, wallets and exchanges has to split, using separate bootstrapping nodes and ip ports. That is not in place. It means trade will basically stop until the split is resolved. (If and when it is established, the two coins will have very different value, due to the difference in liquidity, which is not linear). So that is not going to happen. What can happen, is that someone makes a largeblock, it either succeeds or it does not. If not, a new largeblock will be tried later, if perceived consensus has increased.

The rational thing to do for a miner that wants large blocks is:
  • Make sure you can absorb a large block (when you are ready to risk wasting some cycles building on a large block).
  • Continue mining small blocks.
  • When you are quite certain to succed, make a large block. The risk is loss of one block's mining reward, plus some minutes of hashpower for the next block. Only one miner has to be first, because if one block succeeds, the risk is already greatly reduced. Most miners can just relax and wait until risk is eliminated.
  • Like
Reactions: AdrianX