Keynote: Bitcoin’s Network Governance | Pierre Rochard

Thank You Ellie for the introduction I I do want to clarify I'm the co-founder that Satoshi nakamoto's to it and I want to give credit to my fellow co-founders Michael Goldstein and Daniel Cray with Daniel who's the one who introduced me to Bitcoin in 2013 when I was getting my masters in accounting at UT Austin so I think that Ali has really set it up very well which is that Bitcoin has challenges and the way that those challenges are going to ultimately either be addressed or not is through bitcoins governance process so today I wanted to start with what is bitcoins governance process what are some of its limitations and advantages over other forms of governance so the first question is why why do we care about what bitcoins governance process is and my view is the Bitcoin is important because of this concept of sound money and I don't want to give the entire speech about sound money or the economics of Bitcoin or why I think that it's one of the most important historical developments in modern history but in terms of why there's so many people who are passionate about it it's important to understand that it is widely viewed that sound money is a cornerstone of civilization and it's it's interesting and amusing to me that today I'm presenting in a auditorium in a museum for paper money and really if you go through the halls of this museum and see all of the passed paper money's that have existed you can see that there there might be an issue of turnover that is that there's quite a few monies that existed in the past that no exist today whether it's because their political system that they were lying on collapsed they were defeated in war or they hyper-inflated their money away so I don't I don't want to get too deep into it but anyway that aside bitcoin is the first successful most liquid and widely known crypto currency and if bitcoins governance model is flawed it could prevent Bitcoin from reaching its full potential and there are other projects which make a point of denigrating and criticizing bitcoins governance in order to emphasize the superiority of their own projects governance so I think that it's important to have a baseline understanding of well what is it that we're criticizing or that we're hearing be criticized and if bitcoins governance is flawed then I think that Bitcoin stakeholders whether it's in industry or in academia or even just individuals on Reddit and Twitter they should work to fix it if it's flawed I don't think that it's enough to just abandon it or try to create something entirely new from scratch because that comes with its own set of problems so conversations regarding bitcoins governance tend to focus on who the decision-makers ultimately are usually the candidates are miners nodes developers investors these the debate is about who makes decisions and there's actually I think very little emphasis placed on the why what is the purpose of bitcoins governance and then also the mechanics of the governance how is it actually put into a reality and how does it how how is it that changes to bitcoins rules eventually make it into the wild and are used by network participants views on the efficacy of past governance decisions are often driven by who won or lost a specific decision rather than the adequacy of the decision-making process itself let's see if I can go to the next slide so what is Bitcoin governance I my definition of Bitcoin governance and this is debatable and after this let's definitely have a Q&A and discuss it further but to me the Bitcoin governance is the process by which a set of transaction and block verification rules are decided upon implemented and enforced such that individuals adopt these rules for verifying that payments they received in transactions and blocks fit their subjective definition of Bitcoin if two or more individuals adopt the same set of validation rules they form an interest objective social consensus of what bitcoin is between themselves so I think that it often gets overlooked that BIC horn and it's its existence is a social construct right it's arbitrary that tests net coins are worth zero and bitcoins are worth thousands of dollars they are the exact same technology it's just the social context in which they exist is that everyone has agreed the test net coins could be wiped out and that bitcoins will not be wiped out and so it's it's a it's not so much the technology that gives Bitcoin value its our agreement regarding bitcoins value that gives Bitcoin value I know that that can be a bit circular but that is the nature of social phenomenon so what is the purpose of bitcoins governance there's debate over what the purpose even is Matt Corallo emphasizes the trust lessness is the most important property of Bitcoin and that we should be optimizing for trust lessness so let's define trust lessness it's the ability to use Bitcoin without trusting anything but the open source software that you run now I I will say that one of the issues with this definition is that you you have to trust the open source software you run and this is a challenge especially for for non-technical for non developers who want to use Bitcoin but ultimately they have to go to a website download their node software as a binary and run it and there's there's trust involved in that but if we're trying to maximize trellis notice let's let's take it as an assumption that you're trusting the open source software you run and let's see how you interact with the network and what you have to rely on in order to have the guarantees that you're looking for in Bitcoin and without the property of trust lessness arguably all other positive outcomes are jeopardized because the moment that you have to trust another participant especially in the case of the creation of bitcoins then they are free to go and inflate the supply of bitcoins for their own benefit now Daniel crevice argues that maximizing the value of Bitcoin is what governance de-facto optimizes for he says the the general rule about Bitcoin upgrades is that upgrades which increase bitcoins value will be adopted and those which do not will not so in in other words if there's an improvement to Bitcoin which means that Bitcoin is going to be more useful and more widely adopted then that will cause the value or the price of Bitcoin to go up and thus the governance process is going to be focused on maximizing the value of Bitcoin and so I I kind of I see this dichotomy as kind of a means versus ends discussion which is that trust lessness arguably is the means to value of it maximization and it's the it's the classic divided between deontological ethics and consequentialist ethics now i actually favor maths a deontological approach focusing on trust lessness throughout monetary history from ancient coin producers to modern central banks trusting others to produce money has resulted in abuse of that trust compromising on trust lessness could help the Bitcoin price find a local maximum at the expense of finding a much higher global maximum so I think that the the clearest example of this is looking at other projects there are there are projects that exist today that have entirely compromised on trust lessness and you'd have to trust 120 150 nodes that are specified by a centralized entity and they have a tremendous amount of value in the marketplace and so they've clearly found a niche perhaps or you know a speculative bubble or whatever it may be that there are potential if you sacrificed restlessness and you embrace centralization then you can have for example a much more scalable blockchain but I think that finding that local maximum ultimately hinders you from finding the global maximum which is having a currency a money that is trusted around the world to not be inflated or censored and there's also just no evidence that bitcoins price has been correlated with upgrades to the Bitcoin protocol we see things where you know we might loosely see that ok segwayed got activated and then the price went to $20,000 but then the price crashed down to $6,000 is it because Segway was a failure that the price went from 20,000 to 6,000 so I think that's kind of an absurd notion and I think that the the price has been evolving at its own pace regardless as to what the actual technological improvements are of Bitcoin and Bitcoin is so illiquid and volatile the the price does not reliably reflect what we could call the fundamental value or the underlying value that I I would argues is increasing every day not not just from the technological improvements being made to Bitcoin but also just from the fact that Bitcoin has existed for one more day and therefore we can expect it to continue to exist in the future so if we can't observe the consequences of an upgrade on bitcoins value then I think the consequentialist approach of value maximization seems inadequate so before we can evaluate the current Bitcoin governance process against these goals whether it's maintaining trust lessness or increasing the value of Bitcoin we should attempt to define how the current Bitcoin governance process actually works so I've broken it out into five different steps which I think that again perhaps there's more we could add more nuance but I think that broadly speaking this is how changes to bitcoins ruleset occur so the the Bitcoin governance process is maintaining a set of verification rules at a high level this it's a long set of rules it covers syntax data structures resource resource usage limits and so that includes the limit on signature operations or the limit on block sizes sanity checks time locking reconciliation with the memory pool and the main branch a coin based reward and fee calculation and perhaps most importantly block header verification so amending these rules without trade-offs is no easy feat and most of these rules were inherited from Satoshi Nakamoto now some have been added or modified to address bugs and denial service vulnerabilities and other rules have have come into or other rule changes have occurred to enable innovative new projects so for example check sequence verify was added to enable lightning so every rule begins or every rule change begins with research and I think that that's where if we want to talk about the dichotomy between our research and in disturbs sorry the scientific community and industry I think that one of the big differences is how they approach and conduct research I would argue that there's there's a bit of a tension between the emphasis on simulations in the scientific community versus the emphasis on just implementing it and experimenting that we see in industry but so for example segue it began with research into fixing a transaction malleability transaction value bility had become a serious issue because it prevented lightning Network from deploying on Bitcoin and we saw that industry and independent researchers collaborated on what eventually became said good that we know today one of them one of the industry participants is a sponsor today block stream and they actually implemented Segway first in their elements project as a hard fork and now granted it it had to be modified to be put onto Bitcoin but we can see that they in fact did an experiment on their own platform as kind of a way of proving out the concept now critics have pointed out occasional disconnect between and I don't mean this relating to seg what specifically but to the research process that there's a disconnect between what research researchers want to research and it's important to keep in mind that I think all of the researchers in in Bitcoin are self-motivated I I don't know that any of them are taking specific direction from others but so being self-directed means that arguably they're not researching the right thing to be researched and that disconnect with with user expectations perhaps researchers should go and talk with Bitcoin users and ask them what those users think should be getting researched yeah results may vary but it's something to think of that and there's also a disconnect between what research want what research is being done and what's good for the network's properties if if a researcher does not value bitcoins network properties or trust model or security guarantees or whatever you want to call it then there their research is going to be limited by that in the sense that if they are if they're the results of their research are violating those properties it seems highly unlikely if not impossible that that research would ever actually get implemented and then deployed on to Bitcoin so there does need to be some congruence between what what would get into Bitcoin and what are you researching now granted it's it's fine to to research things that will never happen alright it's kind of a speculative form of research it might help clarify areas or it might motivate you to create your own project that's separate from Bitcoin but in the specific context of Bitcoin governance your research likely should fit within the constraints of what people value in Bitcoin so for example if your research is into okay we need to have rapid inflation and much more creation of bitcoins than 21 million bitcoins it's not going to go anywhere so the next step after the research has discovered a solution to a problem is that they the researcher has to share the proposed changes to bitcoins rule set with other protocol developers this sharing can be in the form of an email to the Bitcoin dev mailing list a formal white paper or a Bitcoin improvement proposal also known as a BIP so most if not all soft Forks I believe have been in the form of Bitcoin improvement proposals bibs and this provides kind of a standardized format for people to be able to evaluate proposals that want to change the rule set so this is kind of a process of peer review right which is that in and it's it's unlike the review process in academia in the sense that there's there's no enmity there there might be pseudonymous review and the review will not always necessarily be kind and constructive sometimes it can be very acrimonious and confrontational there's just a lot of different personalities in Bitcoin and I think also Bitcoin selects for a certain personality type but that aside I the of having other people look at your proposal and evaluate it and poke holes in it I think generally either strengthens proposals or eliminates them as viable candidates for improving or changing bitcoins rule set so I think the if you have a change to Bitcoin that you want to offer I think the place to start is the Bitcoin dev mailing list before you go about implementing or formalizing it that will give you an early source of feedback there's also if it's if it's there's there's IRC channels but I I think that having an asynchronous method of communicating is probably better and then the next step so if your proposal has gained traction and clearly there's interest within the Bitcoin protocol developer community that this should go forward and there should be a change the rule set the proposal is implemented in the actual node software either by the receipt researchers who proposed it or by other protocol developers who are interested in it if a researcher cannot implement a proposal or the proposal does not attract favorable peer review then it will linger at this stage until it is either abandon or revised so if if you're not a C++ expert but you want to see a change made to the Bitcoin rule set often it's sufficient to just have a change which is so compelling that a C++ expert is motivated to go and implement it themselves so one example and this was not a change to the Bitcoin protocol rule set but it was a change to the Bitcoin wallet which is that the coin selection strategy was researched by a gentleman named Murch and ultimately it was implemented by someone else called Andrew Chow and they it didn't necessarily have to be the same person who did the research as the person who implemented it so this this could give the impression that contributors to Bitcoin and those who are giving this peer review can veto a proposal and I think that this is a false impression because ultimately researchers can make their case directly to the public and route around existing developers now obviously if a proposal has been rejected by the technical community or has been found to be controversial within the technical community I would argue that that is a good sample and reflective of the wider community and that you'll find the that the interest in your proposal is no greater in the wider community than it was in the technical community but it's important in terms of emphasizing the decentralized nature of bitcoins governance that we have to clarify that ultimately there are no gatekeepers and that if you want to go around other Bitcoin developers and Lobby the Bitcoin public at wide there's plenty of forums for doing that and it's but it's challenging if you don't have a reputation if you don't have the the credibility it's challenging to have other people listen to what you have to say there's a lot of noise in Bitcoin and a lot of proposals been put forth that ultimately didn't go anywhere so another problem or criticism at the implementation phase of bitcoins governance is that the maintainer zuv what's called the reference implementation which is also called Bitcoin core it's the github comm slash Bitcoin / Bitcoin and it's kind of the direct descendant of Satoshi's code base and thus has a lot of momentum and path dependency to it I think 98% of Bitcoin nodes run what's called the reference implementation and the maintainer zuv the reference implementation just won't merge in a change to the rule set if that change is widely seen as being contentious whether it's by the Bitcoin developers himself or the the wider Bitcoin community the the implementation the reference implementation Bitcoin cores maintainer x' have a deliberate policy of following consensus changes rather than trying to impose them on users and the C++ reference implementation so it's it's hosted majid hub and it continues to be the most popular node implementation due to both its history and the maturity and reliability that it has built up over time so I think that if if the maintainer is were to just go and merge in things that we're seen as controversial I think that Bitcoin core would lose its place as the reference implementation and we would see a fragmentation of different implementations of the Bitcoin protocol which might not be a bad thing right but I think that in terms of their their philosophy of development it's that let's not merge things in that are extremely controversial or contentious and let's let the community and the developers sort out what they want to do to go forward rather than kind of unilaterally imposing their will now to circumvent the reference implementation the Bitcoin core maintainer z– is is easy and you can make consensus changes to the Bitcoin code base regardless of what other developers view as being good for the network it's as simple as just copying the Bitcoin code base it's open source making your changes to it and releasing those proposed changes you know ideally you'd release the source code and a binary and we saw this happen actually with a Bitcoin improvement proposal bit 148 which was widely known as the user activated soft fork of seg wit and so a gentleman called Shaolin Frye I think that's obsidian I'm I don't know that that's his actual name he released his own version of the Bitcoin code that had this controversial user activated soft work in it and that that that change was rejected bit 148 was rejected by the Bitcoin core maintainer x' as being too contentious and possibly disrupting the operation of the Bitcoin network so it's definitely possible to go around what is perceived as being the gatekeepers of the github repository so a proposal to change validation rules can have a soft fork or a hard fork implementation some proposals can only be implemented as a hard fork because they essentially widen the the Bitcoin rule set and whereas Softworks strictly narrow it so a soft fork implementation is forward compatible with a soft fork the pre fork nodes who have not upgraded don't need to upgrade their software in order to continue value validating the pre fork consensus rules and they remain on the same network however these pre fork nodes are not validating rule changes made by the software so a hard fork is forward incompatible and pre fork will end up on a different network as post fork nodes if they don't upgrade so these have different trade-offs and it may be the case that one is better in certain situations and others so far Bitcoin has only had planned soft Forks and there could potentially be a planned hard fork in the future there have been attempts at making at hard forking Bitcoin in the past that have failed but there's there's no reason why that will continue to be the case now no there are there are reasons what I'm sorry there are reasons why a hard fork may never happen in Bitcoin and is there are people with a view that there should never be a hard fork in Bitcoin unless it's a security emergency essentially and hard Forks have been a topic of controversy but software's are controversial as well they they're seen as being safer than hard Forks because they don't require an explicit opt-in of the old nodes but this can also be seen as coercive where you're changing the rules without actually getting people's buy-in and someone who disagrees with a soft fork change to bitcoins rules has to do a hard fork to reverse those changes alright so that covers the implementation the next step is deployment so once the code changes are implemented in the Bitcoin node software users have to be persuaded to use that node software so not not all node operators are equal in their importance for example block explorers like blockchain info have more power than you as an individual user because so many others rely on their data to determine what is Bitcoin so essentially there there are people who delegate their node operations to third parties whether it's blockchain dot info or an exchange a custodian or arguably an SPD server and so an exchange also has a unique power in the sense that an exchange can determine which validation rule set belongs to which ticker symbol so we saw this controversy last year with the Segway 2x proposed hard fork where there was a lot of back-and-forth about which side of the hard fork would get that that coveted BTC ticker symbol because that that ticker symbol has a tremendous amount of brand brand value to it and it also it just represents what the inter subjective consensus of what bitcoin is so exchanges do have that power now granted that power is is checked by other exchanges and traders as well as large holders so how does one go about persuading people to run your node software so I think that it actually mirrors how you would go about persuading the developer community that your proposal is worth implementing and worth supporting which is to highlight first of all the the advantage is brought forth by the rule change but also emphasize that it does not degrade bitcoins trust model and providing kind of a vision for why that's the case well not just a vision proof all right we want proof and then there's also the question of okay if we've agreed that this rule change is a good idea how do we signal that we are actually running the node software that implements the rule change so individual users may signal on social media that they are using a certain version of node software but obviously this can be Sybil attacked you can have plenty of fake accounts created that upvote or favorite or whatever different strategies and so I think that signaling on social media or other even even like in in meatspace in real life signaling of discussions you don't always know whether that person's actually being honest or not the ultimate test of consensus is whether your node software can receive payments that you consider to be bitcoins and that you can send bitcoins to your counterparties node software that they consider to be bitcoins and so I don't think that any amount of signaling is a replacement for actually going out there deploying your node seeing who it communicates with and then seeing if there's actually a network there that has the critical mass needed to be called Bitcoin and I I liken this to in game theory there's this issue of having a focal point where people without having any communication with each other agree for example the the classic example is meeting someone in New York City now this person is a complete stranger you don't have any way of communicating with them but you've agreed to meet in New York City on a specific day now you have to think about where did they where would they think that I want to meet them and then do that reflexively all the way through which is that okay so now where do they think that I think that they're I'm going to meet them and they've actually gathered data to see how and so this is called a shelling point which is that without communicating with each other are we going to be able to show up at the same place and in New York City for example they found that the the preponderance of people decide to meet at noon at Grand Central Station and so clearly there's a set of properties about Grand Central Station and about noon to make it that people are going to meet there even though they have no ability to communicate with each other and so I would argue that we see the same phenomenon with bitcoins consensus which is that there's a set of properties to bitcoins rule set that happen to be that such that people end up running that rule set and it's not entirely that they're communicating with each other and negotiating or making compromises it's that they're each individually deciding to show up at the shelling point and that becomes Bitcoin now granted you can have a selling point that is 80 percent or 20 percent right so we saw this with Bitcoin and Bitcoin cash so 20 percent of Bitcoin users ended up becoming Bitcoin cash users because they saw that as being the shelling point of what bitcoin is and so that's why you'll hear them say confusing things like Bitcoin cash is Bitcoin or a Bitcoin is Bitcoin cash it's because they're establishing a shelling point now granted I think that when you're in the situation of having to establish a shelling point that means that you don't have one and that maybe you should go to Grand Central at noon rather than going to the Statue of Liberty at midnight and you know and trying to convince other people to follow you so that's I would argue that that's kind of the the on the node level of consensus there's also a way of signaling with hash rate and this is called bit 9 now and it's a way of miners signaling that they support a soft fork or a set of soft Forks I think you can have like 20 different soft Forks that they are quote unquote voting on so minor support for proposals is used as a proxy measure for the wider community support and unfortunately this proxy measure can be inaccurate due to mining centralization and conflicts of interest between miners and users so unchain voting by miners also perpetuates the myth that bitcoin is a minor democracy and that the miners load alone decide on transaction and block validity so in my view benign and kind of this Unchained governance feature is only useful to the extent that we recognize and accept the limitations of it as a proxy measurement and we also take into account the what I think is the more determinative consensus of what nodes are actually and people using nodes what they're accepting as Bitcoin payments which brings me to the next step after deployment now BIP 9 has complexities to it we could get into it but I think that if we want to focus on governance at a high level we can put those aside so enforcement is I think crucial changes to the validation rules are enforced by the decentralized peer-to-peer network of fully validating no nodes use the verification rules to and independently verify that payments they have received are valid Bitcoin transactions and are included in valid Bitcoin blocks nodes will not propagate transactions and blocks which break the rules in fact nodes will disconnect and band peers which are sending invalid transactions and blocks one quote that I really liked on this subject is that Bitcoin is an impenetrable fortress of validation and if everyone determines that a mind block is invalid then the minor block reward and fees end up being worthless because now they've essentially hard fork themselves off of the network so I think that this is actually the the way that changes to bitcoins governance are enforced which is that nodes will disconnect other nodes if they are not in sync on what the consensus rules are and thus you have a natural partitioning of net different networks with different rule sets and then that means that in you know the level above the network with network users that means that now you have different monies right so you have bch which is on the Bitcoin cash network and you have BTC which is on the Bitcoin network and so these two different monies are now trading at their own values and also being considered as distinct and non fungible units the role of miners is to provide a time stamping function secured with proof of work the amount of hash rate provided is based on the cost of hardware and electricity on one hand and revenue from the coin base reward plus fees on the other hand miners are mercenaries and in the past they have provided their time stamping function without full validation the Bitcoin rules and this has actually caused unanticipated chain forks because they ended up mining a series of blocks that were invalid a few years ago due to a soft fork so the fact that miners are not always fully validating the rules and also if you look at mining pools pool operators are the ones who run anode and the people contributing hash rate to the pool they themselves are not running anode so I think that there's a very strong disconnect between the actual hash rate and on one hand and the validation of rules on the other hand and this is most clear with with the Bitcoin cash Mart fork which is that Bitcoin cash uses the same proof-of-work algorithm shot 256 squared as Bitcoin does and we see the hash rate shift between the different chains based on the relative value of the underlying tokens BTC and BCS and so clearly the miners are just pursuing profit and don't actually particularly care about bitcoins governance to the same extent as its users or investors do on top of that the mining has become unfortunately rather centralized so to the extent that there's only you know let's call it a dozen mining pools to be generous that means that there if if we did not have if only miners ran nodes that means we would have 12 nodes and that would be trivial to for a government to intervene and to censor or for those 12 nodes to decide that hey we are actually going to change what bitcoins consensus rules are now there will be 25 million bitcoins and 4 million of those are so clearly we can't trust the the miners to be validating for us so in terms of outcomes I think you know I just went through describing what bitcoins governance process currently looks like and the question now is is is that process resulting in an increase in Trust lessness if we kind of held that as being what we're trying to maximize for and I actually I think that Trust lessness main might not have increased but it has certainly not degraded and I think that bitcoins governance process is what has prevented a degradation of trust lessness the dramatic increase in Bitcoin transactions over the past five years has no end in sight there's an ever-increasing demand for black space and I think that if bitcoins governance model had not been resistant to last year's minor signalling for a doubling of the maximum block weight which was called segue to X I think a precedent would have been set of evaluating valuing bitcoins transaction throughput to the expense of trust lessness so in in the sense that we've had an outcome where bitcoins trust lessness has not degraded I think that we can call bitcoins governance process as it currently exists to be functioning rather well now has it resulted in an increase in bitcoins value so we can look at the exchange rate and say well yes clearly the price of bitcoins has gone up that means that the governance process is effective I think that it's impossible to establish a causal relationship the price seems to be driven by an endogenous process of trader psychology rather than technological fundamentals now regarding the fundamentals though I think it it's undeniable that bitcoins governance has delivered consensus changes which increased bitcoins value in the sense that for example by enabling the Lightning Network which we'll be hearing discussed today and tomorrow it's clearly delivered you know with check sequence verify but also with the segment malleability fix it has clearly delivered on a very important project for addressing the challenge of Bitcoin scaling and I think that it's only through the process of experimentation of seeing was this set of consensus changes sufficient to address the issue of scalability that we'll be able to determine whether bitcoins governance is actually effective or not and because if if let's say lightning Network fails and or fails to increase Bitcoin scalability properties and that there seems to be no other way of modifying bitcoins rule set to increase the let's say the the block size limit and Bitcoin fails to scale whereas other projects with different governance models are able to implement scaling changes that allow them to continue to increase their their utility then arguably bitcoins governance model as I laid out today is not fit for purpose so that concludes my talk and I'd be interested in hearing any questions and also Thank You Ali for organizing this [Applause] you can have comments as well it doesn't have to be a question so any questions please hi thank you for your talk so as you said researchers and developers are self-motivated this is good also in Bitcoin we have a painful history with the Bitcoin foundation so we refuse any centralization and organization that will manage that will govern a bit going I think I'm ok with the governance model but in the same time I think that we need a bit more organization because yeah people are working in anything they want and if if we were more more organized we should we could maybe do more and in my opinion the lack of governance doesn't mean doesn't mean that we need to be disorganized yeah yeah I completely agree so to give context there so the Bitcoin foundation was created many years ago it still exists kind of as a shell of its former self but at one point it did employ at least one of the Bitcoin core developers Gavin Andresen and there was I mean actually the Bitcoin foundation came with its own set of governance problems which I will go into but there's always been a lot of controversy about having organizations that have an outsized influence on the direction of poins development so most recently there's been a lot of criticism about one of today's sponsors block stream the there and uh honestly I kind of see it as like borderline conspiracy theories but that they they employ so many Bitcoin core developers that they can kind of direct where development goes which I think that if you actually look at the underlying data of who is contributing to Bitcoin core that's just a simply a wrong assertion but there actually is an organization that is contributing a significant amount to become core and it's called chain code labs out of New York City and they are just an independent collection of contributors and I I do want to address the your your argument that more organization and more more I think that the the key part of it of an organization is communication right and so if there are problems about communicating proposals to changing the Bitcoin rule set I think that the the current processes are adequate in the sense that you know you can go do a pull request on Bitcoin or a bull request on Bitcoin improvement proposals or an email to the mailing list and the the issue isn't that you're not able to speak and and put forth your point of view it's the you have to get others to listen to what you're communicating and it's possible to do that in a company where there's kind of a hierarchy and people are telling you hey listen to what this person has to say but when it comes to volunteers or independent contributors it's it's very difficult to tell to to push people to say hey look I understand that you didn't like the title of this proposal but please hear it out and read through it and provide your criticism and part of the problem is that all of these contributors have their own pet projects that they're working on and don't necessarily want to take up time trying to address what they might consider to just be noise and to not actually be a constructive proposal so that can be challenging in terms of organizational communication which is getting people to listen and I don't see a good solution to that but if people have ideas I'd be interested in hearing them and then seeing if they're actionable thank you any other questions sure so last year we had the secretary vision that software and I think we can all agree that it was pretty much a failure at the beginning it was pretty bad I'm wondering for example there are several software explain for the near future and I wonder what could be done or what is being done to to make the process better and at least not be stuck so much time in in this indecisiveness yeah so I think characterizing it as as a failure kind of depends on on what level right so in terms of the minor signaling for sigh quit that was definitely a failure I think the it reached like 30 percent and it needed like 95 percent and I'm speaking before 2017 or before you know New York agreement and segue to X and all that but but so that's a failure but on from a process point of view you could argue that that was success in the sense that there was a a set of stakeholders that did not want segue to activate and thus they were able to block it and thus that means that that governance model is working right now and then that was able to be overridden and so again arguably the the governance process continued to function by people's ability to override the veto arguably with you ASF arguably with New York agreement it kind of gets political but for future soft Forks so I think is I think that Segway was a uniquely big change to bitcoins architecture and to bitcoins rule set and that the the the magnitude and complexity and kind of the yeah the the uniqueness of that change made it uniquely controversial as well especially in the context of the wider scaling debate and as to whether on chain scaling is the future or level to scaling is the future and then also the kind of the block weight or block size limit all of those factors made it so that Segway was not evaluated in a vacuum on its own merits it was evaluated relative to other proposals which it were at least orthogonal if not entirely unrelated and I think that future proposals or at least what what we have in on the horizon are just simply not as controversial and so I think that snore signatures for example we haven't seen a tremendous amount of pushback from any of the different constituencies within Bitcoin so I think that we can continue to use minor activation as a proxy for wider support for soft forks but we should also continue to be vigilant about if minors for whatever reason are dragging their feet that we as as node operators as independent bitcoiners reserve the right to do a user activated soft fork or even a user activated hard fork which much more controversial thanks for you talk I have a quick question about what you said about segue to X so you basically said that the reason it didn't go through is because for you to decrease in the trustless nest level of a Bitcoin I believe most of like why it was so rejected by the communities more the fact that it's a hard fork and it doesn't fix any long-term problem because it's just a doubling of the of the block size so I'd like to have your input on what you think is more detrimental to Bitcoin is it the hard fork side of things or is it the lack of well or at least the decrease in interest lessness or increasing centralization okay great question so I think that well first to clarify it's not that I think that segue to X failed because it reduced or degraded Bitcoin stress lessness and thus people rejected it I think that it failed because it didn't go through this governance process that I just outlined and it went through an entirely different process which had very little credibility or buy-in from the wider community and it may be the case that in fact that just simply doubling the the block weight limit wouldn't materially affect trust lessness and the you know the the cost of operating a node it wouldn't a double overnight it would just increase over time as that malach space gets occupied so yeah I think that segue to X failed because it was decided in you know a hotel room in New York by a select few number of people and then it was kind of pushed on to the community as being an inevitable upgrade and they have they you know they they have the miners on their side and then the largest Bitcoin businesses on their side but I think that the yeah the reason I failed is that miners and large businesses are not bitcoins governance model and so there was ultimately no chance that they would be able to push through to X so I'm sorry what was the second half yeah so there there is a camp within Bitcoin that Hart Forks should never happen and will never happen unless it's a security measure I I think that that's actually a bit of an extreme position in the sense that we've seen other block chains too hard Forks and they were able to do it safely but the the problem is that you have to have you have to have everyone come along with you who on a hard fork now for example with the etherium and aetherium classic hard fork a certain percentage of the etherium community did not follow the hard fork and stayed with the original chain called etherion classic and that's that's fine like I think that you can lose a residual part of the community but the the problem is what is your hard fork selecting for and what part of the community is it selecting for which is that essentially it with pick or with the theorems hard fork a theorem classics selected for the people who value immutability and who have in mind things like you know code is law etc and then the hard fork proponents they had a different set of values and so I think that bitcoin is is going to and okay so now arguably bitcoin cash for example was a hard fork and a successful one in the sense that these two different groups split off and they had different values right so the Bitcoin cash group values on chain scaling more than the Bitcoin side of the fork and they have different views on SPV and zero confirmation and all these different political issues but it was successful in the sense that now people had a choice right and so they were able to if they owned bitcoins before the fork date now they had a choice between bitcoin cash and Bitcoin and so you could argue that bitcoin has already hard forked it's just that the the Bitcoin side of the fork continued being the Bitcoin side of the fork and did not so for example it's it's kind of the opposite of what happened with aetherium with aetherium the heart Fork side which changed validation rules in an incompatible way continued to be aetherium with Bitcoin the hard fork side which changed the validation rules in an incompatible way changed and became Bitcoin cash and I don't see I I think that it can go either way so I'm not opposed to a hard fork now I'm not opposed to it in principle I have been opposed to every single hard fork that I've seen in practice so I look forward to the day where there's a hard fourth that is very compelling and that I'm enthusiastically supportive of but I haven't seen that yet I think for your talk so it's that different kinds of hard work that you're describing only a matter of sociological concern because I mean who's who has the right to say we are Bitcoin or we are etherium so it's just in terms of numbers of nodes or mmm so that's you're entirely right that it is sociological in the sense that it is it touches on how do humans communicate which is that we have to have a shared meaning when we use words and so within the Bitcoin cash community when they say Bitcoin they're actually referring to Bitcoin cash within the Bitcoin community when we say Bitcoin we're actually referring to Bitcoin so it is entirely about what are the definitions of words that we agree to and the so that's kind of on the social level now it is operationalized and automated at the technological level using nodes but by no means is it the case that one node is one vote i I don't want to give that impression at all because if if one person creates a thousand nodes that doesn't actually and and it had they have their own consensus rules that are different than Bitcoin he's gonna have a hard time getting other people to view that network as Bitcoin and to accept tokens from that network as BIC ones so it is entirely social and Bitcoin is a social construct that then is automated using software and then the time stamping and ordering of transactions is secured using proof of work yeah yeah first I want to thank you for your podcast which I really enjoy we've been driving over here listening to it then I want to ask how do you think the time prep time preference of the various actors involved influences the balance between sort of maintaining long-term trust lessness versus perhaps short term optimization of you know free block space to make corporate money yeah that's a that's an excellent question so I think that for example with with miners you'll hear an argument made that miners have invested in this mining hardware and therefore they have a long-term view of what is good for Bitcoin and thus should have an important say in bitcoins governance process and so that's kind of the that's kind of an empirical question of well what is their mining hardware depreciation you know if they're mining hardware depreciation is one year and their hardware is obsolete in one year then is their horizon that long right it's just to me one year is very short-term even though in in Bitcoin terms one year is like several decades because bitcoins only nine years old and so you know we can analyze every constituency like this and see what are their motives ultimately though like on the individual investor level it's it's impossible to discern between someone who owns bitcoins or is receiving Bitcoin payments and verifying them with their node and intends to sell them in a month and never touch Bitcoin again to differentiate that from someone who is moving their bitcoins to a cold storage solution that is time locked for 30 years and now granted if it's time locked then we can definitely see on Shane that that's the case but if it is if it's just that there they're going to sit on those bitcoins for a very long time and they have a very low time preference it's it's very hard to to say that to figure that out based on what's going on on chain and then even if we have the ability for example we've seen there was the ability to vote on Bitcoin proposals using your private keys so you are able to sign a message that says hey look I own 5,000 bitcoins and I think this is a good idea so that that can easily well not easily but it can be it can be abused right so if you could go out and borrow 5,000 bitcoins sign a message and then repay that loan repay those 5,000 bitcoins and now you just got to vote by just paying interest on owning a bunch of bitcoins which kind of gets into more of like a proof of stake model so ultimately I think that we can't we can't use that kind of method for determining consensus and it really does come down to socially what are people calling Bitcoin Bitcoin and now that can be affected by time preference in the sense that people with lower time preference might be seen as more socially important and thus more socially influential and that's their view of what bitcoin is carries more weight than what you know a silk road user his view of what bitcoin is it might not be as influential in the community but yeah that's an interesting question okay I would like to thank you for the talk and for the questions it's an interesting discussion but we have to take a coffee break and we can continue the discussion offline okay thank you [Applause]

Maurice Vega

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