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Sunday, June 18, 2017 - 23:10 SGT
Posted By: Gilbert

Maxican Standoff

Mr. Ham: *on the phone* ...that's right, Rico, a half-share on that Salerno villa... look, I don't fooking care about that dangnabit KYC and "currency control" shit, you know they're just there to scare and inconvenience the little people, and make work for surplus bank employees - since when has anybody with any contacts at all been limited by "regulations"?

..ok, fine, Mossack Fonseca got blown, I read the book too, yes, a couple of prime ministers got ousted, but that's what you get for dealing with amateur outfits, man. No, no, you listen to me, Rico boy, the big fish never get caught. They're not piddly superstar footballers, ham, they write the freaking rules; good luck squeezing a single red penny out of them, if there's gonna be universal income in the future, it's not coming from them, even if you're the biggest tax gangster on Earth: the United States. Get the villa deal done by tomorrow, I don't care how, and now, about that Manhattan penthouse...

Mr. Robo: *whispers* Mr. Ham! The human is here!

Mr. Ham: ...f**k. Three point two em for ten percent, not a cent more, you hear me, okay, gotta go, bye.

*turns around*

Human! Haven't seen you around for a long time!

Me: Well, I got wind that the firm of H.L. Ham might have turned away from its core competencies...

Mr. Ham: What? I assure you, my good sir, there's nothing of the sort happening! *glares viciously at Mr. Robo*

Mr. Robo: It wasn't me! It wasn't me!

Me: *pulls a chair up* If so, that's great, because a load of stuff is happening in the crypto space now.

The Luke, The BIP, and the UASF

(Sources: subscene.com, recruitingdaily.com, twitter.com)

But let's begin a bit off-topic. It's one of those things that is hard to "get" - how are "unspoken rules of engagement" understood? It struck me again when watching Live By Night, specifically the part about the uneasy truce between the anti-hero protagonist mobster Joe Coughlin, the Sheriff, and the Sheriff's Klan-leader brother-in-law Pruitt - who provokes Coughlin repeatedly by shooting up his establishments. Finally, Coughlin gets the Sheriff to "give him" Pruitt, using the whereabouts of the Sheriff's lost daughter as bargaining chip.

One can note, through it all, how subjective all these "understandings" were. Wouldn't Pruitt tossing a bomb into a bar warrant some buckshot as a lesson? How many attacks was Pruitt entitled to, before Coughlin could justifiably denounce him as acting in bad faith? Why, when the Sheriff finally withdrew his protection of Pruitt, did he insist that Coughlin do the deed himself... and what if Coughlin didn't?

When one cannot even quantify the calculus of action and retribution, can it be said to be computable?

As it turns out, Bitcoin - depending as it does on untold quintillions of unambiguous computations every single second - remains very much mired in such... soft politics.


It has been a long time in the making. Back in January of 2016, we had covered in-depth the philosophical division between the small-block and the big-block factions of Bitcoin, although the issue had been brewing for years before that. Just to reiterate, our opinion from then remains unchanged: the major part of Bitcoin scalability should rest on second-layer solutions, and not the base protocol itself, due to practical considerations.

However, it is not to say that proponents of a block size increase are completely without merit. Alongside another boom in Bitcoin popularity and price - now hovering about US$2600, after briefly flirting with the big three thousand - average transaction fees have increased into the region of a few fistful of dollars. While this is of course hardly worthy of consideration if you're a big-time player like Mr. Ham, slinging tens or hundreds of thousands' worth of Bitcoin in a shot, it does mean that Bitcoin is no longer usable for everyday transactions, and increasingly expensive for movement of more modest sums, as with repatriations to Venezuela.

Or WannaCry ransoms, which is why some institutions have resorted to more... Orthodox measures
(Source: forums.hardwarezone.com.sg)

Thanks to this, and probably also a general sense of having been misled in the 2016 Hong Kong Agreement (itself hotly disputed as to actual obligations), certain prominent Bitcoin miners have become increasingly insistent on a hard-fork to big blocks. Their previous attempts with alternative software in Bitcoin Classic, XT and Unlimited (tokens consistently trading at less than 10% of their Core counterpart on Bitfinex) have however all ended in total ignominious failure, as we noted in March. Rhetoric on both sides has only grown more intense since then, fanned by Ethereum's even-more-insane price rise, which has led to fears that it might overtake Bitcoin in market capitalization (a.k.a "The Flippening"; that said, market cap was probably never a particularly appropriate metric...), and concurrent escalation of threats.

Setting the scene as an old spaghetti Western now: on one side, we have the brash self-declared big boss in a new mining boomtown - Jihan to his friends, Jihad to his enemies, and the meanest motherf**ker this side of the Mississippi, his Bitmain General Store has extended its sticky fingers to about every corner of the mining business. Shovels, jeans, working boots... if you're prospecting in them thar Bitcoin hills, odds are you're using Bitmain gear. As can be imagined, this position has seemingly gone to Jihad's head, and his cosy mining cartel has declared itself as the "guardians and protectors" of this vast and rich territory.

This status, then, would afford them the right to develop the land as quickly as possible - to hell with traffic codes, who cares about anti-collusion laws? Jihad's constant push to raise or remove the longstanding blocksize regulations have however been thwarted at every turn by the land's ancient custodians - the Core Development Team - who have largely maintained a dignified silence, when faced with Jihad's entreaties and intimidation. They have overseen Bitcoin for over four hundred thousand blocks, they have a well-considered roadmap for the network, and they are not about to rush it for the latest hotshot whelpling in town.

Jihad's attempts at seizing authority over Bitcoin via hardfork - in essence demanding of the town's inhabitants that you were either with him, or against him - were only becoming more and more disruptive, however, and in March, sensing public sentiment rise against him, he hinted at an ultimatum - the hardfork would be accelerated. To this, the people despaired. The Core Team was wise, but they were sworn heavily towards non-intervention, and it seemed as if influence alone would no longer be sufficient to keep Jihad in check. Who, then, could stem the tide?

This being a Western, a hero would of course ride in.

"Call me luke-jr."
(Source: dollarstrilogy.wikia.com)

Some whisper that he came from the Core Team, and he has never denied it; but then, as the Core Team has always insisted, they are not rulers - any man with wit enough, and strength of conviction, could join their circle, founded by Satoshi himself. And, as no one knew the Samurai's true name, their own names were not important - Bitcoin was all.

For this mission, however, the newcomer allowed himself to be known as Luke - "Cool Hand" Luke. With a crucifix around his neck, and his trusty six-shooters by his sides, he would start out with a bang. Up against seemingly-insurmountable odds, at high noon, on Main Street, on the day of the vernal equinox, he strode up against a plethora of guns, held by Jihad's numerous mooks, and lifted up his vest.

Dynamite. The nuclear option. Proof-of-work change.

The implication was clear. Try to force anything, and the whole place goes ba-dah-boom. All that equipment stacked in Bitmain's warehouses, all those specialized SHA-256 ASIC miners, representing a capital investment of tens, even hundreds, of millions, would be as scrap metal. Now, The Man With Some Name said, you might salvage something from the ashes, or you might not. What's it to be?

The audacious gambit worked. Jihad and his cronies withdrew to lick their wounds, but Luke knew that they would be back, soon enough. As he mulled his next step, an old acquaintance, Detective Maxwell, would hand him a tip: Jihad was possibly dealing in ASICBOOST, grinding his hashes to increase profits by forcing carts to depart with worthless ore, the low-down dirty dog. However, Luke also knew that the evidence was mostly circumstantial - Jihad would surely loudly deny that he had not been blocking the small-blockers' segwit protocol, which would have forestalled this forbidden technique, while continuing to sow uncertainty and disrupt segwit adoption under the table, as he had long been doing.

He needed to take the fight to them.

"Well, this is it, pardners. We fire on the stroke of noon, First of August."
"Isn't it only June? Wait, you did reset your timezone, didn't you?"

(Source: minds.com)

It went against the Core Team's tenets, but these were desperate times. There were simply too many reasons to activate segwit now. Bitcoin Improvement Proposal (BIP) 9 and 141 had repeatedly been vetoed by Jihad's circle, and there were no signs that anything was ever going to change on that front. Armed insurrection by the townfolk was the last resort, as it would open him to the same criticism as levelled at the miners: tyranny by unverifiable majority. But, The Man With Some Name figured. The time for talk is over. User-Activated Soft Fork (UASF) it is!

And with this move, the pressure was back on Jihad. He had been away in New York rustling political support, offering concessions on segwit, in return for a hardfork. Oh, the words were honeyed, but who knew if they would keep to them? And, in any case, a hardfork was not theirs to give. No, there was now a date: August 1, UASF - segwit would be activated come what may, and those miners chafing under Jihad's heel would be more than welcome to join the revolution. If it came down to it, there would be a fight, and there would be casualties. But, who had more to lose - the rag-tag insurgents, or the big miners with bills to pay, and loans to cover? Jihad and company could call the bluff, but they could then find themselves holding a Dead Man's Hand...

Indeed, the miners appeared to understand the situation they were in. Jihad would bluster with a User-Activated Hard Fork, but his erstwhile allies would display little stomach for it, and it in any case did little to dent Luke's resolve. Faced with the prospect of the town going up in flames, men from both camps hustled to hammer out an acceptable compromise. A BIP 91 Miner-Activated Soft Fork was offered, and eventually, the New York Agreement's segwit2x proposal was brought into compatibility with BIP 148 UASF... with some comic relief supplied by the segwit2x developers making a hash of the update (but then, they were doing their best)

However, this also means that the hardfork component of the proposed bundle cannot be enforced, however many big names might supposedly be behind it - any hardfork must, in the end, stand by itself. The shootout was over, the game was done, and as the dust settles, a nameless man rides off into the sunset, until next time...

An Equitable Division?

Stripping away the dramatization, I would first have to admit that I never quite thought that UASF would work out, as it stood. As many have pointed out, number of nodes is hardly an acceptable measure of actual support, going by how easily they can be set up (an argument used to [correctly] dismiss support for Bitcoin Unlimited, etc). Had there been no reaction from the miners, I would have expected the UASF chain to attract next to no hashing power, but more crucially, for major Bitcoin exchanges and retailers to simply stick with their existing Core node software. Trading hypothetical token futures (BCC/BCU) is one thing, but one imagines that the exchanges under what's at stake, if the actual Bitcoin brand comes under contention. In this case, the sheer inertia of Bitcoin's status quo bias should win out - 无为胜有为.

Fortunately, it appears that segwit should be activated one way or the other by August, and while its impact on Litecoin's value has been moderate, I expect its effect to take place over a longer period. We have been hearing so much about second-layer technologies such as the Lightning Network and Rootstock, and they might be just what Bitcoin needs, to get to the next, five-figure, level.

Also, I do have some sympathies for the big-blocker side, and luke-jr has just publicized a possible method for both parties to get what they want. Essentially, once drivechains (a form of sidechains) are ready, a Bigcoin blockchain can be set-up, at one-to-one parity with the original Bitcoin (think the Singapore-Brunei dollar peg), with users free to transfer their coins between Bitcoin and Bigcoin at will (with some caveats, as always). Thus, small-blockers ("decentralisation-first") and big-blockers ("adoption-first") can each go their own merry way, with the Bigcoin dev team free to raise the blocksize limit to their hearts' content... and suffer any negative consequences by themselves, of course.

The major issue under this system, I expect, would be whether exchanges continue treating coins on the Bitcoin and Bigcoin chains as intrinsically equivalent under the hood, or handle them separately. The latter seems fairest, especially as the two chains are likely to develop separate transaction fee markets, but this could also obfuscate and dilute the main "Bitcoin" brand. One issue at a time...

Postscript: The Oxlee Saga

"I've given your comment some thought,
and I still think the fault ultimately lies with AHTC.

- best comment on the whole issue

Even if one has been living under a rock in Singapore, I don't think it's possible to have missed this super high-profile PM vs. siblings spat, which has attracted its fair share of soap opera references. While I'm running out of snacks, watching the arrows darken the sky, I have to state that while I have little enough enthusiasm for the incumbent party in its current state, I also take no joy in witnessing a public family quarrel.

Although there are surely a bunch of juicy details in store, my personal opinion is that whether the house in question is ultimately demolished (as apparently according to LKY's last-known will) or not, it is hardly that big of a deal. I mean, luminaries get posthumous honours lavished on them against their professed wishes all the time - it is really hardly a matter of national concern, is it?

On the brighter side, the most prominent third-generation dynasts have declared that they have no interest in politics, which I think is frankly best for everyone concerned; they both seem like smart and capable men, and if they do keep to their word here, I'd say they deserve to be saluted.

See dishonor caught up between bein' a father and a prima-donna...
To formulate a plot fore I end up in jail or shot

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