Longread: Death of Bitcoin and the Consensus Problem

24.01.2016

A few years ago, I went to see a shrink. She taught me a pretty simple technique to get down to the bedrock of my problems. The technique is indeed a piece of cake, and anyone may use it. You just have to keep asking yourself â€śwhy so?â€ť

One time is not enough. Those experienced may go through the chain of causes and effects pretty fast, but initially you have to ask yourself the question several times. Every time you ask it, you go back to the intermediary cause of the problem. Eventually you go down the regression ladder to the foundation. Solving the fundamental problem may automatically solve all higher-level problems associated therewith.

If we apply the technique to the current bitcoin crisis, a terribly sad thing may arise.

No one is going to argue that there is a scalability problem with the whole system. It started a storm of debates raging for more than six months. The situation is nasty all right, but it managed to divide the whole community into several groups with each of them proposing their own solution. However, there is yet another group proposing nothing, and watching the show and eating popcorn instead. These are banks and traditional financial institutions.

The scalability problem in its core is quite technical, and normally it would have never launch a conceptual analog of a civil war. However, if we ask why the community goes insane when it comes to block size, the most likely answer will be that they really worry about bitcoin’s fate.

Moreover, scalability as it is has very little to do with the fate in question. The block size debate became a mere trigger to bring the deeply running controversies to the surface. Bitcoin’s fate depends on what it is; and block size debate might be none but a substitute for the debate about what bitcoin actually is.

The community’s trouble is that it lacks a uniform or at least a prevailing opinion in this regard.

And just when the debate around a philosophic controversy reaches its climax, the death apostle Mike Hearn comes into play proclaiming everything is over. His statements became those prominent not just because he used to be a Core developer; many considered his arguments pretty persuasive.

Since then, block size debate started paling, as its true self and prototype, the debate of whether bitcoin is dead, replaced it. After conceptual masks were taken off, a part of bitcoin really started dying. Philosophically speaking, bitcoin is not a code, nor a money, and most certainly nor upgrade of gold. In the first place, it is a group of idealistically inspired people.

Throughout the history, groups of idealists were responsible for major breakthroughs. Their contemporaries ignored them at best, or tried to destroy them at worst. Scientists repressed during the Stalinist era, while working hard at concentration camps, spent their free time to do the research. They didn’t expect any reward for that; most of them knew pretty well that they most probably will die in a while because of terrible life conditions. However, they still worked and even managed to discover new things. If they were fortunate, they could tell about them to their friends and family in letters. Discoveries and progress meant to them much more than personal ambitions.
Bitcoin’s part underpinned by idealist or even naĂŻve aspirations of its creators, is officially dying in the aftermath of Hearn’s statements. The community started turning into a network of separate people, each of whom spends all their creative efforts on attempts to prove they’re right.

If you ever watched Monty Python and the Holy Grail, you might recall a smashing scene with some lovely acting, where a dude tries to give a living old man to the collector of the dead. The dude claims the old man is dead, the old man cries he’s alive and wants to go for a walk, while the dude promises he’ll be stone dead in a moment. The collector of the dead, meanwhile, languidly argues until he stuns the old chap and puts him to other corpses.

In order to illustrate what actually happens within bitcoin ecosystem, I made a screenshot and signed who is who offhand:

Generally speaking, the very fact that the situation perfectly complies with a scene from a movie by a company dubbed kings of absurd, should make one uneasy. A pythonesque drama in the heart of a giant industry with enormous money and probably human fates and fortunes at stake, can hardly end up well.

Consensus is among bitcoin’s very basic principles. Even though bitcoin itself is quite alive and feels happy, the community’s consensus is effectively dead. The community hasn’t dealt a fatal blow to bitcoin so far, but it seems quite likely that someone started raising their hand already.

However, the hope for resurrection of the consensus is still out there. Some managed to do so, you know. It took them just three days, however; in bitcoin’s case, the process may take a bit longer.

by Jenny Aysgarth

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Tags: Bitcoin