There is a problem with many of the arguments being put forward in the Block Size debate, which is essentially over now. If you want to argue about anything, make a case for something, you need to do it cleanly, logically, and without fallacies. Because Bitcoin is inextricably linked with money, its difficult to get people to argue cleanly about it, but it can be done, and in the case of the Block Size argument, it has been done, and the correct side won, because their arguments are better.
In this matter and all other matters to do with software, only the arguments matter not the people making them. Because the outcome of software changes can be known in advance; its easy to say that putting spyware in the Linux Kernel is a bad thing, because violating people’s privacy is a bad thing. We can make this argument without mentioning the NSA who proposed it or Linus Torvalds who stopped it.
If you really believe that the State is planning to come up with its own cryptocoin to destroy Bitcoin, and you believe you are in a race against them, and you believe that since Bitcoin has “only” ten million users and that big blocks are the answer to this problem, and Bitcoin will not change to support these assumptions, and you have access to millions of dollars then the answer is absolutely clear.
Fork Bitcoin.
Fork Bitcoin to a Big Block Alt-Coin and then capture What’s App, SnapChat, Facebook with your centralized big block alt-coin. Since Bitcoin “is trivially small”, abandoning it is inconsequential compared to the big prize of capturing global social media integration and a strong network effect. If Bitcoin doesn't matter, if it is trivially small, this is the logical step to take, and talking to Bitcoiners is a waste of time.
Bitcoin having the biggest network effect cannot be a reason to stay with it, if its size is also “trivially small”. This is a clear contradiction. Either Bitcoin is too small to matter, or it is too big to abandon; which is it? It cannot be both at the same time. You can claim that Bitcoin has the most attention; this will change overnight with What’s App, SnapChat, Facebook and other social media all promoting your new alt-coin as a feature to their users. In one day, the mind share will move to you and away from Bitcoin. The “Bitcoin has mind share, so we can’t abandon it” argument is not strong at all.
There are other developers out there that can fork Bitcoin for you, like Gavin Andresson, Chief Scientist at the Bitcoin Foundation. He could bring Mike Hearn away from R3CEV to form the core of a crack team for you. Why not do it? Bitcoin cannot have the best chance of becoming a currency used all over the world unless someone becomes ruthless about integrating it with the big social media apps. Perhaps you should partner with Whisper Systems, who just added end to end encryption to 100,000,000 WhatsApp users. Your dream team is sitting there waiting for you: Andressen, Hearn and Marlinspike, the latter already has connections to WhatsApp and can sell this alt-coin as an upgrade to Whisper Systems.
Bitcoin’s current features make it very attractive, but the most important of them is that it is decentralized. It cannot be controlled, and centralizing it “to beat the banks” would kill this.
If Bitcoin is centralized into a few high capacity nodes, it would be easy for the State to mandate any rules that it wants, and there is not a single Bitcoin company that would not obey. The Big ones already do KYC/AML without even being asked, and the EU Cookie directive is a very good example of how weak minded people cave in under the slightest pressure.
The EU Cookie directive has caused sites all over the world to interrupt the design of their sites. This was done without a threat, without a prosecution or any other act than the simple passing of an extralegal “EU Directive”. In Bitcoin it will not be a directive; it will be a law, bolstered by a prosecution to put the fear of the State into anyone running a full node, and as I have said, the people running large public facing Bitcoin services are already inclined to reflexively obey anything that the State wants, or that they imagine the state wants.
This is why Bitcoin must be easy to run on a cheap, quick to install platform, and not the exclusive reserve of millionaires. You are more likely to get a robust global network of nodes with a system that takes little hardware investment to run. These are the simple facts of the matter. Big nodes in the hands of a few is an idea that no sane man thinks can produce a trust free system, and anyone saying, “Give us Big Blocks. Trust us, we will not let you down.” is hopelessly naïve. All you have to do is look at the cookie directive and the Bitcoin exchanges for the true picture of how people will behave in a future big block scenario.
On the other hand, look at BitTorrent. That is the picture of a resilient network, where no matter what any jurisdiction wants, it can never be shut down. No government even utters the words, “Shut down the BitTorrent Network” because they know this is a stupid thing to ask for. This is the ideal position for Bitcoin to be in. Anyone can run it and send and recieve money from anywhere. It is permanently beyond the reach of the State, and it is global by default. No one is in charge of the protocol, and it gets stronger by the adoption of new features that are unarguably beneficial. Magnet Links, trackerless torrents and all the other innovations in BitTorrent are all perfect examples of what it should look like.
It is commonly believed that more people need to be using Bitcoin. It would be great if this were to become the case, but the fact of the matter is that no one cares about Bitcoin; they care about convenience. If the Federal Reserve comes up with a digital currency that gets integrated into Facebook WhatsApp, Twitter and the other social media apps, the billion users of those services will not care that they are not using real Bitcoin. All they care about is the balance on their screens that means they can go out and spend with their phone.
Very few people who use WhatsApp care that it is now a private system. This indifferent behaviour was completely predictable to anyone who has tried to promote GPG to the ordinary user; they simply do not care about privacy; the tools have to be forced on them. Privacy fanatics are working to get the world on to our side so the majority can act as a shield for us, not because those people “deserve privacy”, and the same goes for Bitcoin. No once cares about fiat money and its built in theft. They care about convenience and nothing more.
Bearing this in mind, it is clear that a Lightning powered Bitcoin side-chain on WhatsApp, Facebook, Twitter and the other services is indistinguishable from Bitcoin to the ordinary user. They simply don’t have the capacity to understand any of this; as long as they can go to Starbucks and pay with their phone, they are satisfied.
If Lightning can provide this backbone on the Bitcoin blockchain, then both requirements of ethical Bitcoin are satisfied. Anyone can run a Bitcoin full node, and anyone can do instant transactions on it either with Lightning or a Lightning clone. Remember; anyone can write a side-chain platform that piggybacks on Bitcoin. It is not the unique and sole reserve of a single company, quite unlike Big Block Bitcoin, where only a handful of companies will have gatekeeper access to all apps and integrations no matter what.
Side-chain powered Bitcoin can explode onto the market with the correct PR and partnerships. It is already well understood how to do promotion, and Whisper Systems have paved some of the perception road in advance. Its now up to software developers to create generalized tools that make adding this feature trivial. This is infinitely more preferable than centralizing Bitcoin in the hands of a few “trusted” companies who are under no obligation whatsoever to maintain any sort of business model or ethical practice. This is the true face of “on chain scaling”; putting the keys (literally) of access to Bitcoin into the hands of a tiny, fragile, justifiably self interested minority.
There is no reason to believe that the number of full nodes will increase if the block size is large, and it is not hard to understand why. Big Blocks means bigger capital outlays and a steady growth in infrastructure requirements. If something becomes more expensive to do over time, the number of people able to do it will decrease. Then there is the technical aspect that cannot be overlooked. You can run a full node on commodity software out of the box. Mega nodes will require bespoke configurations that ordinary people simply cannot manage. At a best minimum, it will cause the creation of an out of the box extendible Bitcoin node industry. If it isn't regulated of course, and why shouldn't it be? They regulate the export and selling of RSA and Random Number Generators, so why not Bitcoin rigs?
More people using Bitcoin will not happen because the Block Size is increased. Getting people to use Bitcoin is a problem of marketing and PR, not technical specification. Advocating against KYC/AML and for easy access is far more important, especially now that the argument over Block Size is decided. Once again, the number of full nodes is crucial, because the specification is harder to change by force in a vast number of nodes in different jurisdictions. A small number of nodes in a single jurisdiction is the most dangerous scenario of all.
In the nightmare scenario where Big Block Bitcoin is the norm, you will not be able to switch nimbly from one service to another, either as a user or a thin client developer reliant on a “Blockchain Provider”. Thin client developers will be required to register with “Blockchain Providers” and they will also be required to meet strict specifications including KYC/AML and all other nonsense to control user access. If users don’t like it, they can’t have Bitcoin. They won’t be able to export their private keys and jump to another client; that will be construed as illegal “Money Laundering”. Underestimating the creativity of the Statist in its capacity to invent new crimes is a very big mistake, and in the light of BitLicense there is no excuse whatsoever for it. Once all the parameters involved in Bitcoin clients of all kinds is written down, it will be easy for the next Bin Lasky to write regulations governing every action that a user can make in a client. If you don’t believe this is possible, then you are not dealing with reality. Centralized Big Block Bitcoin is about removing choice for developers and users. Period.
Compromise is very dangerous. If you are willing to compromise your principles because you’re frightened that the State is preparing it’s own centralized cryptocoin, then you're free to do what you want in the market to deal with that perception. You might believe that “we” are no worse off with a centralized and controlled Bitcoin, but who is the “we”? It breaks down like this:
1/ The people who run infrastructure now and who would be in charge of Big Block Bitcoin would end up in the same government controlled world with them as the multi billionaire gatekeepers. Everyone is gate-kept.
2/ In a Fed Coin world, Everyone is gate-kept, but it is the Federal Reserve that controls the Bitcoin infrastructure, not the Big Blockers running infrastructure now. Other men become the multi billionaire gatekeepers. Everyone is gate-kept.
This is essentially the whole argument. Either “we” accept one set of companies becoming the gatekeepers or another set of yet to be anointed gatekeepers is anointed and they pen us in. This is a false choice, obviously.
If you really believe that your ideas are sound, you would have already gone for a big block fork and would have stopped dealing with Bitcoin. There is nothing to discuss; the choice is obvious. Brand recognition is irrelevant in any of this. Whisper Systems, that no one has heard of, managed to get their software into WhatsApp and a hundred million users without “brand recognition”, so there is no reason why an alt coin cannot integrate with them in a similar way. Brand recognition is a distraction and red-herring; It appears to the casual observer that you simply don’t want to do the work of starting from zero, which doesn't make any sense, given the claimed market capturing world beating benefits of big block bitcoin.
Its obvious that the Lightning approach is the most logical. Combined with better clients, (for example, that don’t commit anti-consumer UX errors like requiring you to provide an email address before you can spend your own money, or any other extraneous information) this could form the bedrock of a large and fast system that cannot be stopped, like BitTorrent cannot be stopped. Properly designed clients and user experiences with easy to use on-ramps like Azteco are what is required before talking about destroying Bitcoin because the Federal Reserve MIGHT be working on a “Fed Coin”. And of course, the idea that there is only one government and central bank in the world that matters in the 21st century and constantly invoking it is painfully parochial and insular. Moving the perception of Bitcoin is as important as building the software. The generic “Fed Coin”, nightmare is less likely to emerge if they don’t think that Bitcoin is money, which of course, it is not. The governments are not scrambling to create their own WhatsApp, Twitter or Facebook, despite these services being a clear threat.
The history of software development is crucial to knowing exactly what should be done. Firstly, compromise should be off the table for good. Secondly all fallacious arguments should be identified and rejected. Finally, even if a “Fed Coin” were to emerge, this would not stop a Bitcoin future from emerging, and in fact, it could cause it to come to pass. Even a bad UX “Fed Coin” app would inure everyone to the idea of “money on apps”. In a world where everyone is educated in this way, it will be easier for a mass switch to a new system, no different to Candy Crush with its 93M daily players, 500M installs or any of the other apps that are well designed and irresistible, that people are used to switching to from other games.
In any case, the road ahead for Bitcoin is set. It is now a matter of who writes what software, and who has the ability to get their client in the most hands, and who can feed them with money easily. The latter task is what Azteco solves. There is everything to win, and there is no need to compromise to do it. This is the true essence of Bitcoin, not compromise or capitulation, but the hard work of innovation guided by principle. That is what gave us Bitcoin in the first place.
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