Ok, wanted to get this all down somewhere so I can reference / copy+paste later because I've seen a lot of somewhat smart people say really stupid stuff recently. I wrote this quickly, not sure it makes sense and it's 4am so I probably won't revise this unless I missed something and someone brings it up (unlikely).
1) So Mike Hearn comes out and writes the following post - https://medium.com/@octskyward/the-reso ... .luyid49uz
Ok, so first - who is Mike Hearn? First, it's important to know where his interests lay. He now works for "R3" which is a trust based network that will be something like an interbank settlement company. It's basically the same thing as "Blockstream". R3 doesn't actually exist as an actual live, production application.
More importantly, Hearn was working on / invested in trying to "hard fork" Bitcoin Core into something called Bitcoin XT. Bitcoin XT grew from the issue of the blockchain block size and future scaling issues. The problems with Bitcoin XT are multiple - it's an inelegant fix for the scaling issues and added in the ability to blacklist IPs (specifically Tor exit nodes) under the guise of "DDoS mitigation". Again, the idea of centralization is introduced by a single source maintaining the list of IPs. Problem is DDoS attacks. Bitcoin XT has basically failed (6.6% of nodes running XT - https://bitnodes.21.co/nodes/
- this is half of the share XT had 4 months ago) and Hearn can be seen as "taking his ball home and crying on the way out". Funny enough, one of the reasons why XT failed to be adopted was due to XT nodes being DDoS'd to death. It is no coincidence that Hearn wrote the post when he did as XT has basically all but died after having what seemed like massive support even just recently ( https://www.reddit.com/r/Bitcoin/commen ... ortoppose/
As a good recap, here's the "Who is he really" series of links - https://www.reddit.com/r/Bitcoin/commen ... id/cz0ua95TL;DR - He lost, he lashed out, he's moving on to a somewhat similar (sort of) yet very different in philosophy project. It's possible his entire post was a pre-planned attack.
2) Were the issues in his post valid concerns?
So, Mike raises a bunch of concerns - some of them are legitimate, some are not and some are just totally incorrect and show either ignorance or purposeful deception.
a) That the block size hasn't increased yet / scaling hasn't been fixed - Some very right, some very wrong. Scaling is definitely an issue that needs a solution. No one disputes this issue. However, the solution to this issue is far more complicated and here's where Hearn's post doesn't match the reality.
"Why has the capacity limit not been raised? Because the block chain is controlled by Chinese miners, just two of whom control more than 50% of the hash power" - Just totally incorrect. Yes, miners have the ability to vote on forks, but here's a clear explanation on why Hearn's position doesn't even make sense. http://pondpolitics.com/2016/01/hypocri ... y-bitcoin/
simply explains the situation - "If an increased block size struggled to pass through the firewall, the side of the firewall with the greatest hashing power would benefit most (the Chinese side), as the other size would end up producing more orphan nodes. Nobody wants this, including Chinese miners, because it will damage the integrity of Bitcoin and people are willing to wait and try other solutions first." Woops, it's clear Mike doesn't even understand what would happen and is trying to blame the XT failure on the Chinese and create some type of xenophobia.
"Why are they not allowing it to grow? Several reasons. One is that the developers of the “Bitcoin Core” software that they run have refused to implement the necessary changes" - This sentence is correct, but not for the reason Mike implies. Many actual engineers and coders saw the XT fix as an inelegant solution which was basically to just up the block size. Mike is correct in stating that a fix has not been implemented (whether its SegWit (segregated witness) or LN (Lightning Network)) so the issue does still exist since a code push has not been completed by Core devs. However, there is an effort to improve scaling and market forces could dictate the speed at which it is implemented - funny how that works. However, there's a much simpler explanation - soft forks are safer than hard forks ( https://petertodd.org/2016/soft-forks-a ... hard-forks
). I don't think I need to link to Todd's blog post to make that point, but it's pretty obvious.
"The Random Censorship" section - While correct it happened, here's the issue - Bitcoin XT for all purposes was an altcoin - i.e. not really Bitcoin. Yes, this is sort of a chicken/egg issue - any hard fork would create what some would call an altcoin and voting exists specifically exists so that hard forks can be voted on by bitcoin miners, but all other altcoins are basically hard forks. The issue Mike fails to grasp is that Bitcoin XT was voted on despite the DDoS attacks (which haven't exactly been verified, but I do believe occurred). If XT was such a great solution, it easily could have gained the necessary hashing traction but XT failed specifically for the reasons addressed above, not because some guy deleted something off some website (durrrr).
"Bogus Conferences" - Nothing more than boohoo, they didn't adopt XT or find our solution to be the right one. Sorry, but there's quite the support for scaling solutions - https://bitcoin.org/en/bitcoin-core/capacity-increases
(also click on the FAQ for roadmap)
"Replace by Fee" - Holy hell, not even close. Honestly, this is the piece that swung me on the intentions of Hearn. I'm not going to spend my time re-typing it, but here's your RBF primer - https://www.reddit.com/r/Bitcoin/commen ... _about_it/
. Look, 0 confirmation transactions (i.e. confirmed 0 blocks deep) were never safe so ...? Double spends are already super easy to accomplish which is why confirmed 6 blocks deep is important.
b) Should the block size increase to 2MB?
Honestly, it's a technical issue that I am self-aware enough to know I don't know enough about, but plan on exploring more. Some say that the 2MB block size is dangerous because "complex transactions can take exponentially longer to hash as their size increases linearly, leading to big miners shutting out others." Also, see http://rusty.ozlabs.org/?p=522
. Increasing the size, due to the mining centralization in China, would cause issues as cleared up above so block size should not just be increased without regard (see here - https://www.youtube.com/watch?v=ivgxcEO ... t=2h36m20s
which funny enough has a reference to a Hearn patch that didn't really help). It seems like 2MB would be just about the upper limit though so it does appear to be a possible, temporary solution.
Edit - Wanted to add that along with the 2MB size increase a corresponding limit of 100k on the tx size has been suggested which should mitigate the potential DDoS attacks.
3) What about Bitcoin Classic?
Well, as of now, they have produced 0 new code. Doesn't mean it doesn't exist, just that none has been published. Therefore, Bitcoin Classic is nothing more than a firing of the current Bitcoin Core development team - no more, no less. The fact that so many people support this is sort of strange since Classic has shown no ability to actually do anything, but here we are. My guess is that Classic is trying to call Core's bluff by implementing 2MB block sizes on the most recent Core release, possibly strip out RBF and hope the Core team moves over which I don't think they will. If the Core team doesn't move over, Classic will be a disaster - if they do and bitcoin hard forks quickly, things probably turn out ok.
If Bitcoin Core can get to April without being destroyed by Bitcoin Classic hard forking the entire project and they get SegWit implemented by then, and then halving comes a few months later, BTC to the moon. However, that's 3 months and a soft fork away with Classic beating down on the doors and many, many people wanting a 2MB block size without really knowing why so it's 50/50 we get to April. I think there's a good chance Classic gets hard forked and voting approval from enough miners and that's going to destroy the bitcoin price, but we'll see.
Edit - Classic seems to have a proposed date of March 1st with a 4 week grace period. That's when the real fun will begin.