Ah, no we are not. The last part, about "the masses", was tacked on later by the people who fear democracy. That was never a part of the original vision. Quoting the white paper:
"The proof-of-work also solves the problem of determining representation in majority decision making."
Indeed, it'd have been a nonsensical goal to try and stop "the masses" changing Bitcoin, because "the masses" are the only thing that give a currency its value and attempting to produce a currency that literally nobody can change, even if the vast majority of people decide to change it, is simply not possible to do with software. That's why we call it soft-ware.
Unfortunately, the Bitcoin community has been completely wrecked by people who truly, deeply believe that "decentralised" money means "money controlled by a tiny cabal of developers" rather than the more obvious interpretation of "money controlled by its users".
Right. The miners rule Bitcoin. That's the way it was set up. The big miners are[1]:
F2pool 28%
AntPool 22%
BitFury 16%
BTCCpool 12%
all others 22%
What bugs Gavin and the "core Bitcoin developers" is that they're not in charge. The "Bitcoin Foundation" is broke and irrelevant.[3]
The original idea of Bitcoin was that mining would be something done as an idle activity on user's PCs. Today, Bitcoin mining is done in big sheds holding thousands of racks of special-purpose machines, located in cold climates and near power stations.
[1] https://blockchain.info/pools [2] http://imgur.com/JUnQcue [3] http://www.bloomberg.com/news/articles/2015-12-30/the-final-...
Anyone is free to set up a larger mining operation if they are so inclined. Until then, the bitcoin community can't be anything but extremely pleased with how much processing power the Chinese miners are contributing to the system.
> The original idea of Bitcoin was that mining would be something done as an idle activity on user's PCs.
I don't have a quote handy, but as far as I know that is not true. Satoshi expected mining to eventually be run out of large data centers.
Sure, all they need are the tens of millions necessary not only to buy the equipment but also to develop their own competitive custom ASICs.
The biggest problem with btc mining is that it's no longer feasible to make an impact with commodity hardware. I think to the extent that Satoshi may or may not have foreseen that, he assumed that the specialized hardware would become commoditized and that users would still have the power to make a meaningful vote. This didn't happen because the Bitcoin network punishes a faster network with increased difficulty, so as soon as you release your ASIC to the masses, the network raises the difficulty to neuter the effects. However, if you keep your hardware private, you can profit from the hardware without making such a large impact that the network edges you out. This allows the biggest miners to find several blocks per day (which is 25 "new" bitcoins + any attached as fees).
Given those incentives, it's only logical that the best hardware would be used privately and that the vote of the everyday bitcoin user (who was also supposed to be a miner) is irrelevant.
Additionally, none of the zero knowledge proof systems on the market are fast/flexible enough to do it well. Perhaps if SGX were to be one day liberalised, it could work better. So it's not easily implementable today.
However, given that PoW definitely hasn't worked, people should have open minds to alternatives.
Even with the best protocol in the world though, you would still encounter this:
http://www.forbes.com/sites/laurashin/2016/02/12/chinas-role...
(the last sentence is especially telling)
Votes can change a lot of the parameters in the system, and you can vote on where the "profit" goes. So you can vote on how many positions get a share in that profit and who should hold these positions.
"It is a global distributed database, with additions to the database by consent of the majority, based on a set of rules they follow"
Link: http://p2pfoundation.ning.com/forum/topics/bitcoin-open-sour...
Blockstream has no position on the block size debate, other than supporting the consensus building process (whatever the outcome might be). Blockstream's business model does not depend in any way shape or form on small blocks. That is pure FUD. In fact, small blocks are a hindrance to things like sidechains, which generally use much larger transactions for the two-way peg smart contracts. Some of the risks called out in the sidechains whitepaper are that Bitcoin blocks might be too small to contain a return peg, or that full blocks will make it difficult to get a fraud proof on chain before the expiry.
Everyone stands to benefit from larger blocks, but only so long as the network remains decentralized. The debate is over where to draw that line.
(Disclaimer: I'm a co-founder of Blockstream.)
Please don't conflate Bitcoin Core and Blockstream.
> Should users be able to make decisions? Should core developers be able to over-ride those decisions? Bitcoin is a system with majority decision making.
Bitcoin is not a majority-rule system. The only point in which a majority rule applies is a tie-breaking strategy for resolving valid ledger branching. And that vote doesn't enfranchise users!
Bitcoin is a system that explicitly rejects majority rule. It replaces user determination with fixed, inflexible machine arbitration. It is from this fact that Bitcoin is not a democracy that it derives all of its user-protecting properties like irrevocable payments and inflationary protections.
> Making Side-chains the major cornerstone of the Bitcoin ecosystem will turn out to be a mistake. Side-chains don't make much sense if you understand incentives and risk. The same applies to Lightning which will equally be a failure.
You are welcome to your own opinions. Thankfully your permission is not required to new, innovative use of scripting features that were built into bitcoin from day 1.
First, only one core developer with commit access, Pieter Wuille, is affiliated with Blockstream. Yes - the fact that founders of Blockstream are PhDs in distributed systems and cryptography, and the fact that many of them have authored essential elements of the Bitcoin system like libsecp256k1 gives them a purely meritocratic sway over developer mindshare, and for good reason.
Second, according to your words here you've done the impossible - you've finally figured out how to handle all money issues in open source projects. Gosh, that's really something. Don't just leave us hanging like that, do divulge what you think is the optimum way to ensure highly skilled developers and researchers work on open source projects for free.
There is 6B$ in Bitcoin wealth floating around, surely there are means for funding a few salaries. And that's what is going to happen in the future. Funding will take place through on-blockchain methods, some Cryptocurrency projects do this already. Money and opensource is now tightly connected, but Bitcoiners generally haven't figured this out yet. For more innovative ways checkout Ethereum, Bitshares, Nxt, etc.
But no, I'm afraid you'll have to do a bit more than merely allude to (non-)solutions, or point out how paper gains are enough motivation to keep experts who could otherwise be earning 6 figure incomes, to instead work full time on difficult solutions for free.
That you've taken absolutely no effort to spell out any of this magic success formula and instead chosen to allude to altcoins is sadly typical.
Bottom line: nobody has figured out how to sustainably support open source projects with money, period. In the best case, it's the blind leading the blind. You do what works. And whose to say what works? It's ridiculously subjective.
Said the GP:
> There is 6B$ in Bitcoin wealth floating around, surely there are means for funding a few salaries.
Isn't that exactly what Blockstream is doing?
People who've primarily invested in the mining infrastructure obviously want the fees to go up now. People who've invested in more customer-facing elements of the bitcoin ecosystem want the fees to stay low as long as possible so that adoption isn't deterred by the necessity of including a substantial fee whenever you send a bitcoin transaction.
The technicalities of the bitcoin platform have played out such that those who don't want the size of blocks to grow have a disproportionate number of votes. Most users and most bitcoin companies want BIP 101, but they've been outvoted by the interest group that wants to start collecting rents on their mining power ASAP. In human terms, it's like land owners finding a loophole that allows them to vote 10x more than non-owners. I don't believe that was ever part of the intention of Satoshi, but the way Bitcoin's difficulty mechanism works has entrenched it as a very real problem that probably can't be circumvented.
Incidentally, it's a shame that you've gotten some negative reactions to this -- I, for one, thank you for offering some more insight into the Bitcoin developers. I'm sure you have your own biases, but I doubt you set out to misrepresent things, as a few commenters grumpily allege.
http://szabo.best.vwh.net/securetitle.html
If one follows Core's line the question becomes: who if not nodes make decision in Bitcoin? Their answer - the core developers. A future system will have to address this corruption of power.
Is it? That's really what this is all about.
Unlike a constitutional political system, Bitcoin has no explicit meta-rules that govern how to change its basic rules. On one side of the present "civil war" over the size of transaction blocks is a group that wants to make a minor technical change to the protocol to allow it to support a higher volume of transactions; and on the other side is a group that doesn't want that to happen.
But these groups really represent two sides of a more substantial debate. One side is advocating for the first deliberate change to the protocol's basic rules, and the other side is saying, no, you can't do that. Michael Marquardt (aka theymos), who controls bitcoin.org, bitcointalk.org, and /r/Bitcoin, and who is a vehement proponent of the status quo, has made plain his position in this meta-debate: "Bitcoin is not a democracy."
And that's the position taken by several Core developers, who insist that the block-size is a "technical issue" over which users and stakeholders should have no say. Gregory Maxwell, a vocal Core developer on the status-quo side of the debate, and many others, object to changing the protocol in ways that could cause a fork in the blockchain, with clients following one set of rules going one way and clients following other rules going another. It's an objection in principle as much as a practical concern: nobody should be coerced into submitting to a new set of rules by the risk of being separated from the mainstream of the Bitcoin community, and that means we have to stick with the present rules. (Its exponents call this philosophy "consensus".)
So it's the newest setting for the oldest and most basic conundrum of politics: bad rules are bad, but so is changing the rules of the game halfway through. Artificially constrained blocks are driving up the cost of transacting in bitcoin and hampering the currency's adoption; but rules are rules, say people like Maxwell and his colleagues at Blockstream, who have carefully arranged their lives and built their businesses on the assumption that the present rules will be the future rules. (Blockstream is a company that employs several Core developers and is building a mechanism for transacting in bitcoin off the blockchain, i.e., a mechanism for providing more transaction capacity to an artificially limited protocol.)
And Maxwell and his colleagues have a point. We are, after all, talking about the rules of a currency that was created in part to take away from central bankers, politicians, and the masses the ability to change the rules of the game halfway through. If the block-size limit can be changed, what's to prevent people from changing more important rules, like the one that keeps bitcoin's money supply from growing without bound?
Still, as the saying goes, rules are made to be broken—and the peasants do tend to revolt.
Edit: I edited my comment to properly attribute to Marquardt words that I mistakenly recalled coming from Maxwell. I also tried to clarify a couple of points.