Gold collapsing. Bitcoin UP.

[Justus Ranvier]

@go1111111
As I already said:

I would say that anybody who doesn't think the majority chain will always retain >50% of the hashing power shouldn't use it.

If you think Bitcoin is going to fail, then you're better off switching to a different currency then trying to rearrange deck chairs on the Titanic.

 

[jonny1000]

Look at ETHF/ETC. There are many people (including me) who think that ETC actually has a decent shot (maybe 20%) at eventually overtaking ETHF in hashpower. It might take many months or even years for this to happen. Just because ETHF has more hashpower now doesn't mean we can be sure that it will continue to. A similar dynamic could play out in a Classic-like fork.

Justus's argument that if the forking chain was reorged the transactions could just be reincorporated later into the original chain gets weaker the more time that has passed between the fork and the reorg. The reason is that the system won't have enough throughput to process all the reorged transactions immediately, so an opportunity for double spending arises. Let's say I buy Justus's boat for 100 BTC on the big block forked chain with a tx fee of 0.001 BTC. Then a month later this tx gets reorged. I see this and immediately send out another tx on the original chain spending this same 100 BTC but with a 1 BTC fee. A miner mines the new tx because the fee is higher. Now I have Justus's boat and he has none of my coins on any chain. Actually I don't even have to wait for the re-org. I can just spend the small block version of those outputs any time, to block my tx to Justus from ever being included in the small block chain.

It does not have to be a lack of throughput in Core causing the transactions not to match on both chains, after the hardfork people may be frantically splitting the coins to trade them or sell the coin they do not like in exchange for coins on the other chain.

Lets consider the following scenario:

• Bitcoin Classic has:
  • 80% of miner support
  • 80% of token holder support
  • 80% of user support
• Bitcoin Classic activates
• Poloniex the exchange complies with its ethical and legal obligations to protect client assets and splits the coins on deposit and allows withdraw on both sides. It also sets up a Bitcoin Core/Bitcoin Classic pair trade
• Since Bitcoin Classic has 80% support, lets say Core coins only trade at 5% of the price. Bitcoin Classic has a large mining lead
• At one point during a period of low trading liquidity, Core supporters (who own 20% of the Classic coins), dump a large amount of the coins on the exchange and buy Core coins. The price of Core coins then reaches 30% of Classic (Like ETC has already traded at)
• Miners see the huge profit opportunity on Core and start to switch over.
• The 80% of Classic supporters begin to worry, they know that if Core ever takes the mining lead, all the coins they bought on the exchange vanish from their Classic wallets. Core users of course have no such fear, their coins are reasonably safe when Classic has the lead
• This creates a snowball effect and Classic holders start panic selling.
  
• Despite only having 20% support, the small Core minority has managed to resoundingly defeat the Classic Chain, and all the early Classic coin investors have lost their funds.

This is one of the many reasons, why in order to successfully implement an asymmetric hardfork, where the status quo has a massive advantage, you need to ensure there is no significant opposition. (e.g. 95% miner activation threshold should be considered as easily obtainable)
[doublepost=1469933782][/doublepost]

and then they'd reappear again immediately as soon as the majority Classic fork pulled ahead again as it's mathematically guaranteed to do, OR when the transaction that paid you was also mined in the Core fork.

Sorry I do not follow. Once Core has the lead over Classic, all the miners will switch to the Core chain and the entire Classic chain will be orphaned.

Remeber I am talking in the context of Bitcoin Classic/XT. There has been a huge campaign to activate these on the network and many people here still support these ideas. My opposition is to Classic/XT. Under these proposals the coins would vanish forever. If you are talking about some other implementation, then we are talking on cross purposes. Remember I support a 2MB HF, I told Gavin I would support 8MB in May 2015, if he implemented it right. IF you have a different idea, like Core's Soft-Hardfork idea for example. Please write up your idea and I may support it.

 

[Justus Ranvier]

the exchange complies with its ethical and legal obligations to protect client assets

tl;dr: the small block supporters will not be content for a peaceful resolution. They will instead use legal means to force exchanges to implement a hard fork in a way calculated to make it likely to fail instead of implementing it in a way that allows both sides to go their separate ways cleanly.

I wonder who's going to fund those legal efforts? Lawyering isn't cheap.

 

[jonny1000]

I do suspect that Jonny has some antagonism toward Classic supporters that doesn't just stem from this concern about asymmetric forks, but if we put that aside, I agree with him that symmetric forks are less risky.

I apologizes for any perceived antagonism. I assure you I am trying to defeat Classic/XT because I believe that to be in the best interests of the system. There are a lot of biases in this area effecting everyones judgment. Please try to analyze the situation objectively based on technical merit.
[doublepost=1469934789,1469933974][/doublepost]

Does anyone actually have a solid reason why symmetric hard forks are more harmful than asymmetric ones, instead of just being unnecessary?

From the point of view of the large block chain, there are still many challenges and questions:

• Do you change the PoW algorithm?
• Do you reduce the difficulty to ensure the launch succeeds?
• Do you leave all the SPV wallets on Core?
• Do you change the name from Bitcoin or try to fight over the name?

My favored methods of hardforking would be the following:

• Soft-Hardfork, first with a softfork requiring a flag supporting the hardfork later on (Core's plan). The gap should be large, at least 6 months in my view. (That way miners would need to switch over after the hardfrok to cause problems)
  
• Asymmetric hardfork without any significant opposition to the idea in the community
• Hardfork that only activates with a strong lead in hashing power, that then also creates valid empty blocks in the old chain, destroying it.

If you want to go ahead with this symmetric hardfork, then go ahead. There is nothing we can do to stop is. Unlike the asymmetric hardfrok, we cant stop you.

 

[MoonShot]

| "Sorry I do not follow. Once Core has the lead over Classic, all the miners will switch to the Core chain and the entire Classic chain will be orphaned."

How does it follow that Classic gaining 51% ( a.k.a. "the lead" ) at fork time does not orphan Blockstream/Core chain when later Core temporarily gains the lead and orphans Classic - according to your opinion.

What is confusing about the way you discuss things is that layers and layers of assumptions and edge case scenarios are piled up, then one ore more conclusions are stated as Fact. Tendentiousness taken to the maximum level, in order to pollute the debate and occupy time.

 

[go1111111]

If you think Bitcoin is going to fail, then you're better off switching to a different currency then trying to rearrange deck chairs on the Titanic.

If I were about to buy fire insurance for my new house, would you tell me "If you think that house is going to burn down, you might as well just buy a different house"? There's nothing wrong with trying to make the worst case scenario less bad just in case, if the cost of doing so is low enough.

If Classic forked and kept the hashpower lead for a month, then lost the lead and the chain was reorged back into the original chain, that wouldn't mean Bitcoin failed. Just because I think a particular fork attempt will fail with probability p, doesn't mean I think Bitcoin will fail with probability p.

Second, rational people think in terms of expected value. I might think the big block fork has a 95% chance of success, but why would I want that remaining 5% to be more disastrous than it needs to be, if I can cheaply prevent it?

I don't get why you seem to prefer an asymmetrical HF. Let's say you can wave a magic wand and generate rock solid code for either a symmetric or asymmetric fork. It sounds like you'd pick asymmetric even if the effort were identical. If so, why?

My favored methods of hardforking would be the following:
...

• Asymmetric hardfork without any significant opposition to the idea in the community

I don't get why you prefer asymmetric over symmetric in this case given the preceding discussion. Yes, if there is no opposition in the community the advantages of symmetric shouldn't matter. But you can't really know that an opposing fork won't form. Symmetric HFs should be about as easy to code up. So why not make it symmetric just in case? What downside are you seeing?

Slightly topic change: Do you think ETC had been the way it is, if the POW difficulty re-target would have been similar to the one we have in Bitcoin (2016@10mins block)?

...so, a block every 3.3 hours if hashpower is 5%? I think the ETC people probably would have HF'd to reset the difficulty in that case.
[doublepost=1469941903][/doublepost]

How does it follow that Classic gaining 51% ( a.k.a. "the lead" ) at fork time does not orphan Blockstream/Core chain when later Core temporarily gains the lead and orphans Classic - according to your opinion.

That is the nature of asymmetrical forks. The Classic coin pulling into the lead can't orphan the Core chain, because the Core nodes don't recognize the Classic blocks as valid. They still see the Core chain as the longest valid chain. The reverse isn't true. If Core ever pulls ahead, the Classic nodes will follow it and orphan the entire Classic chain starting from the fork, because Core blocks are valid according to Classic nodes.

 

[jonny1000]

How does it follow that Classic gaining 51% ( a.k.a. "the lead" ) at fork time does not orphan Blockstream/Core chain when later Core temporarily gains the lead and orphans Classic - according to your opinion.

This is not my opinion. There is some misconception from some here that the nodes "follow the opinion" of the node operator or what the node operator says they want it to do in forum comments. Nodes do not do that by default, they follow the rules they have. This is simply the rules, as I have explained may times over months on this forum.

• Bitcoin Core blocks are valid Bitcoin Classic blocks, therefore if Core has the longest chain, that is the only chain
• Bitcoin Classic blocks are invalid Bitcoin Core blocks

It has taken many comments, some people on this forum are gradually understanding this and the consequences of this. Unfortunately some still do not seem to get it.

Symmetric HFs should be about as easy to code up. So why not make it symmetric just in case? What downside are you seeing?

It depends on the exact specification. One possible disadvantage is that if only a minority want to hardfork both chains could survive. A symmetric fork with a robust activation methodology could be ok. However it may be used as a tool to do a permanent chain split. Which may unfortunately happen someday in the future, but it is probably not necessary now, since the community is united on the need for large capacity increases. Once the campaign to activate Classic becomes insignificant, I think you will be surprised about how untied everyone is on the desire for large capacity increases.

Do you like the Soft-Hardfork idea that Core are planning on? The Softfork will require miners to say they are running a client that will activate a HF 12 months in advance. Any blocks that do not say they have implemented the HF would be invalid and not be built upon. This would ensure 100% of the hashrate supported the HF beforehand.

[doublepost=1469942441][/doublepost]

That is the nature of asymmetrical forks. The Classic coin pulling into the lead can't orphan the Core chain, because the Core nodes don't recognize the Classic blocks as valid. They still see the Core chain as the longest valid chain. The reverse isn't true. If Core ever pulls ahead, the Classic nodes will follow it and orphan the entire Classic chain starting from the fork, because Core blocks are valid according to Classic nodes.

Thank you so much for this helpful comment. I have felt alone on this forum, at last people are helping to explain the situation.

 

[freetrader]

@go1111111 : You have me mixed up in your last post, that ETC quote was from @sickpig ...
[doublepost=1469946583,1469945628][/doublepost]

From the point of view of the large block chain, there are still many challenges and questions:

• Do you change the PoW algorithm?
• Do you reduce the difficulty to ensure the launch succeeds?
• Do you leave all the SPV wallets on Core?
• Do you change the name from Bitcoin or try to fight over the name?

My favored methods of hardforking would be the following:

• Soft-Hardfork, first with a softfork requiring a flag supporting the hardfork later on (Core's plan). The gap should be large, at least 6 months in my view. (That way miners would need to switch over after the hardfrok to cause problems)
  
• Asymmetric hardfork without any significant opposition to the idea in the community
• Hardfork that only activates with a strong lead in hashing power, that then also creates valid empty blocks in the old chain, destroying it.

All of the "many challenges" you list for a large block chain are solved problems. This should make you feel better.

No, we don't use or require your favored methods of hardforking. That makes me feel better.

If you want to go ahead with this symmetric hardfork, then go ahead. There is nothing we can do to stop is. Unlike the asymmetric hardfrok, we cant stop you.

Thank you for that admission. We do realize you will try nevertheless.

 

[Peter R]

Of course it's possible for the minority fork to regain the lead in jonny's 80/20 split--anything is possible. But how probable is it for the minority fork to even survive until difficulty is reset and blocks are found every 10 minutes again?

According to jonny's numbers, the minority fork initially trades at 5% of the majority fork. To make the math easy, assume that the fork occurred on a difficultly adjustment block. The following 2100 blocks on the minority fork will be found roughly every 100/20 * 10 min = 50 minutes. Since finding minority blocks is (initially) no less difficult than finding majority blocks, miners mining the minority chain accumulate a loss of

95% * 2100 blocks * 12.5 BTC/block * $650/BTC = $16 million
​

Is it reasonable that miners will even bother to mine the minority fork given these guaranteed losses?

Furthermore, this is the cost just to get the minority chain back to a difficulty where blocks are found at a reasonable pace. To get the minority chain to a point where its total work exceeds the majority chain is vastly more difficult.

 

[jonny1000]

95% * 2100 blocks * 12.5 BTC/block * $650/BTC = $16 million
Is it reasonable that miners will even bother to mine the minority fork given these guaranteed losses?

Well that is interesting, perhaps one strategy of the Core supporters would be to hold off selling the Classic Coins until the first difficulty adjustment. Then sell the Classic coins and drive the relative price of the Core coins up, such that mining is more profitable on the Core chain.

(I have a few other strategies, I have reason to believe many on the Core side have been preparing for these kind of things for a while. In contrast, judging from discussions here, the Classic side may have limited knowledge about the strategies to engage in, I could be wrong through?)

I hope you appreciate the astronomical size of the relative advantage the Core side has in this battle. If 20% of the miners stick to the existing rules, they have a c14% chance of overtaking a 1 block lead from Classic, just by chance, ignoring all the impacts of momentum, financial markets, sentiment and fear. Just imagine the fear in the Classic investors if Core reaches a 30% price like ETC did. Imagine the excitement and determination from the Core investors and miners, about the large relative massive profits they could make. This is a dream for the many short term speculators in this space and for all those upset about not investing in Bitcoin earlier. It will be coin with massive short term upside versus coin with massive short term downside, going head to head, in the market. Which side do you think the punters will choose?

Furthermore, this is the cost just to get the minority chain back to a difficulty where blocks are found at a reasonable pace. To get the minority chain to a point where its total work exceeds the majority chain is vastly more difficult.

You do realize if the price of the Core coin reaches near parity on some exchanges, the Classic side could look dead in the water?

 

[Bagatell]

tl;dr: the small block supporters will not be content for a peaceful resolution. They will instead use legal means to force exchanges to implement a hard fork in a way calculated to make it likely to fail instead of implementing it in a way that allows both sides to go their separate ways cleanly.

I wonder who's going to fund those legal efforts? Lawyering isn't cheap.

Take your pick.

 

[solex]

What do people make of this?

https://bitflikz.myshopify.com/blogs/news/critical-security-update-from-bitflikz-gdax-coinbase-may-be-insolvent

 

[freetrader]

@solex: can't speak to the accuracy of the article content, but this "bitflikz" thing has been popping up on my radar as a soapbox where anonymous content "hit pieces" are being promulgated. I get the impression someone is manufacturing a controversy around the ETH fork.

 

[steffen]

I see posts about asymmetric versus symmetric fork. Is there a definition somewhere?

 

[cliff]

@solex

Based on no info whatsoever, I think Coinbase is probably fine and the unfortunate target of a wipe-out campaign due to flexing their influence RE: block sizes. Its really sad that's how they get treated for having an opinion. We should be thankful for @jonny1000 who is willing to come and debate rather than stoop to such tactics. This reminds me, any word from cypherdoc? Is he at least alive and safe? If he got tired or whatever, that's fine - I just hope its not more than that.

EDIT -

1. I love how nobody signed their name to that article.

2. I'd have to check some banking regs and accounting standards, but I don't think "insolvency" has anything to do w/ being able to cover customer accounts necessarily in this context (but it could depending on how they treat accounts, In many contexts customers can be/are creditors of a bank - just not sure here, I don't think Coinbase has a banking license). Coinbase has said very clearly that they have enough ETH to cover whatever problems might be associated w/ the ETH fork. Some deposits are also insured.

3. Slightly different topic - I also think people read too much into their fee increase a few days back - they're not forex trading fees that have been traditional - they're purchase-a-valuable-asset transaction fees (like if you buy stock on e-trade, a piece of land, or something similar). Likewise, I wonder how their fee increase compares w/ the rise of BTC tx fees?

 

[cliff]

New article from Nick Szabo:

http://unenumerated.blogspot.com/2016/07/artifacts-of-wealth-patterns-in_15.html

 

[Justus Ranvier]

If Classic forked and kept the hashpower lead for a month, then lost the lead and the chain was reorged back into the original chain, that wouldn't mean Bitcoin failed.

If Bitcoin can be defeated by con artists, pathological liars, and communists rent seekers, then it has failed.

 

[freetrader]

Very classy.
I'm guessing non-smallblock miners from the US weren't invited either (Long, Toomim)?

 

[Peter R]

I see posts about asymmetric versus symmetric fork. Is there a definition somewhere?

Assume a blockchain forks into chains A and B, and that A is initially the majority chain (has more PoW).

The fork is symmetric if BOTH chain A is invalid according to B's rules AND chain B is invalid according to A's rules.

The fork is asymmetric IF chain A is invalid according to B's rules BUT chain B remains valid according to A's rules.

This distinction is relevant because Chain B could orphan Chain A in its entirety if it becomes the most-work chain in the case of an asymmetric fork (but not in the case of a symmetric fork).

That said, IMO this is not a concern for many reasons including the $16 million loss the miners would have to absorb just to keep the minority chain alive.

 

[Bagatell]

Korean BBQ and Bitcoins

http://www.meetup.com/Silicon-Valley-Bitcoin-Users/events/233010800/