G. Andrew Stone & Andrew Clifford: Bitcoin Unlimited (Episode 166)

Transcript

[Music] this episode of epicenter is brought to you by The Ledger Nanos the hardware wallet which sets the new standard in security and usability get it today at Ledger wallet.com and use the offer code epicenter to get 10% off your order and by Jax Jax is the userfriendly wallet that works across all your devices and handles both Bitcoin and ether go to jx. and embrace the future of cryptocurrency wallets hello and welcome to epicenter

the show which talks about the Technologies projects and startups are decentralization and the global cryptocurrency Revolution my name is Brian faan Crane and I'm M Roy our episode today is focused on the Bitcoin block size debate we have as guests um Andrew Clifford who is the president of Bitcoin unlimited and G Andrew Stone who is the lead developer of Bitcoin unlimited so today we are going to talk about uh how Bitcoin unlimited as a project came to be uh what its fundamental tenants are and what do they see as the path forward so before we start we would like um both of you to give us an introduction and tell us

about your background first starting from uh G Andrew store Zone who we will refer to as Zerg during the interview in 2012 I was working on a uh open-source Hardware project and I discovered um that I was spending a lot of the money that the the project that the board ultimately sold for actually dealing with like um moving the money around the world because you know parts are sourced in China and then fabrication happens in China then everything gets shipped to the US and then I ship out to Europe um and so I kind of was looking for a simpler solution and uh more efficient solution

and I ran into Bitcoin um and obviously you know it was not really applicable at that time since it was so small but uh you know having read the white paper it really kind of caught my attention and what about you Andrew Andrew Clifford yeah my my background is in um in main frame systems in uh Investment Banking writing Financial uh accounting systems and trading applications and I actually left that in 2010 to become a writer and it was about two years later uh late 2012 that I heard about Bitcoin and uh I realized pretty quickly uh what a breakthrough it

was and the benefit to the world economy that could occur from sound money and and the fact that it was limited to 21 million um and the mechanism to how to achieve that uh was was uh quite exceptional so um I immediately became immersed in that subject and we're now over four years on and I'm still immersed in Bitcoin hoping that it will succeed and I think it will do a lot of good for the world economy so so Andrew what did that immersion look like did you um in what ways were you involved well first off uh when when I heard about it um I joined Bitcoin talk

and started to contribute there and it was quite a healthy community and in fact it's quite ironic because one of my first post uh was about the block size and I said this is this isn't enough to succeed long term we it needs to be increased so that was over four years ago now um um and I've been banging on about that like like every few weeks ever since um and there was real momentum to solve it in 2013 um I also okay well the the idea for making millions of Bitcoins as in bits uh someone came up with that idea

but that rather largely got publicized through my efforts um I I initiated the discussion on bitcoin talk and and got it uh imp well became implemented in a number of wallet applications and it's in common usage um and also the xbt iso code uh I realize that that's important for integrating into uh mainstream Financial systems so I push that and and that has become quite popular as well as a result so it's really the these uh facets of Bitcoin to help help it succeed um in the world economy the things that I've tried to push uh and

then when uh Andrew Stone came up with the idea of Bitcoin Unlimited in late 2015 again I could see that it's the best approach uh to solve these scaling issues so um I've been spending quite a few hours a week involved in helping make that succeed s cool so Zur you so you you also discovered Bitcoin in 2012 what did your journey look like in in the Bitcoin space and how did you then end up uh starting Bitcoin unlimited you know the I guess the beginning of my journey was trying to convince uh some Chinese manufacturers

to accept it actually um I mean the fact was that I was able to get a prototype physically get a prototype fabricated and mailed to me faster than I could move the money to China right it took more time to do the Western Union transfer than it took for them to fabricate the part and uh send it over so I was saying to myself if only the money could be moved instantly I would cut you know the turnaround time which is very important uh in half right so from there I made some Investments but I didn't want to um and I also did a quick code review and so forth but I didn't want to jump in um to do development uh for essentially

redundancy reasons uh you know because if you put all your you know I had done investment in Bitcoin so it's better to then be pulling a salary from you know a separate uh Endeavor um in case Bitcoin fails um but coming around in you know 2015 I realized that the promise of Bitcoin as a peer-to-peer payment system worldwide which is really um well I I both feel like that uh is the fundamental basis of its uh of its use as store value is the fact that it can be used as a peer-to-peer um payment system and also because I feel like that's where it will really affect the world and when when

that uh promise started to uh be uh fail I uh felt like I needed to you know become more active in the space and so uh coming out like coming out of this um I'd been um you know participating a lot in this gold collapsing Bitcoin up forum and a lot of the guys there had similar ideas and so the idea of Bitcoin unlimited really came from you know a lot of the conversations happening in that group we talked briefly before that you know Bitcoin unlimited has been around

for a while since 20 5 but I think it was uh it was after Bitcoin XC so would you mind just just running us a little bit through the history of you know where in that sequence of of different clients Bitcoin unlimited came and and what's what sort of happened with with the other ones in that course as well and why you guys felt like the right thing was to do was Bitcoin unlimited as opposed to supporting uh you know XT or or some other approach that existed yeah so that's a good question um and it it it did come after Bitcoin XT um and I actually uh began uh by contributing to bitcoin XT I did the uh traffic

shaping uh in XT but you know uh XT was still um XT was proposing if I remember some kind of compromise uh solution and also um it was I think uh Mike Kar was leaving at approximately the top like I think he sort of left so there was a question about whether Bitcoin XT was going to continue right and that was when on the Bitcoin um you know gold collapsing Bitcoin up a forum we really started reconsidering exactly uh what these limits should be and someone

proposed that um you know that these non- money protecting functions really should not be consensus um parameters and that is really like a fundamental uh you know uh philosophical difference from uh I think Bitcoin XD and that's why uh Bitcoin unlimited kind of emerged and and then uh Bitcoin classic uh came a few months later if I remember correctly and it um came out of some work by the tuman brothers uh suggesting that the uh great firewall at China could really accept I think it was like 4 megabyte blocks um and so you know Bitcoin classic I think

originally emerged as a to propose a compromise at like two or 4 megabytes I think they eventually settled on too so so this is going to be like one of the main things that that we'll focus on is the fundamental difference in approach that Bitcoin unlimited has where where Visa V something like uh XT and classic which are as I understand um like both creating the clients for and campaigning for Block size increases from 1 MB to some higher value they might be different for different clients but Bitcoin unlimited has a completely different approach where the the block size limit would be removed as a core

consensus parameter itself so we'll get into this topic um but before before we jump there I would like to quickly ask one question is um so we have all of these different clients right all of these different approaches um to block size increases why is it that you think that all of the Bitcoin users companies and people that are pro block size increased why have all of them not kind of converged to support just one client why are there why is the pro block size increase Community like fractured into all of these clients today if I could take that real quickly I would say it's one of the reasons is

because if you get seven developers in a room you end up with 10 opinions right there are a huge number of proposals right and honestly you know one of them is barely better than another you know in many regards and a lot of people seem to think that their approach is best and Bitcoin unlimited to some degree came came out of that observation in the sense that it um says you know the we should let the future us decide the block size and not come up with some uh top down um proposal that we're all going to follow no matter what or have another block siiz debate right so it was in one

sense a reaction to all the proposals and it's sort of ultimately then kind of the ultimate proposal right being based on uh you know uh Nakamoto consensus and not yet another algorithm that developers have decided on and are pushing everyone to use so Bitcoin unlimited when people hear the the term Bitcoin unlimited you know one imagines and and we we did the same thing like okay now anybody can create you know a block a block of any size uh so you know sort of all all limits off but can you run us through first of all what what where's that name

from like what what does the unlimited mean in that context and what does it mean in terms of block size does it really mean a miner could now you know bit Fury could create a 30 megabyte block and propagate that right so unlimited does not mean infinite right simply means that there aren't limits or in particular the the market will pick a limit right the code code does not create the limit right um so that's what is meant by Bitcoin unlimited and there's also a strong sort of Philo uh it's also like refers to a strong philosophy of more like unlimited Choice okay and um in terms of uh the age-old question

will a minor create a gigantic block right uh there are forces um you know in the network that naturally uh reduce the um likelihood that that will happen and in fact honestly um that question is actually Irrelevant in the face of the X thin work that Peter shipper did because the the the time to transmit a block is uh you know negligible now um the question is really um the transaction throughput time like how many transactions per second can can you ultimately have and what I'm trying to say by that is um if someone produced a huge block then the chances are very good that

subsequently you would have a Spate of uh zero length blocks and the average block size would ultimately then come down to the average that the network can um can handle and we kind of uh in my work uh on um empty blocks I kind of showed that uh effect happening uh both uh empirically by looking at the uh rate of um zero length blocks and how they uh uh depend on the size of the prior block and then I also kind of showed it theoretically let's take a break to talk about The Ledger Nano s the new flagship Hardware wallet by Ledger I'll pass it over to Ledger CTO nikab Baka who can

tell you all about Ledger security features and SDK so Ledger Nano s is a personal security device based on a secure element screen and button so that you can verify everything that is done on device and make sure that you are really doing what you want it to do compared to our previous solution this device is based on the latest generation secure element the sd31 from STD micro the sd31 is an is using a secure arm core which means that you can have the same ease of development that you would have on a generic microcontroller but benefit from the security features of a secure element security features include an application firewall at the lowest level that let you protect application from each other which means that you can

load multiple application on the hardware wallet even post issuance and you as a developer will be able to leverage these features to load your own application without our authorization and without any kind of authorization from the vendor we will be providing this device with an open SDK um that let you do anything you want with this device we provide sample applications for cryptocurrencies different cryptocurrencies so Bitcoin ethereum uh uh we will also provide a pH authenticator and you will be free to add everything you like for example you could add some secure messaging some encrypted chat and you'll see that the solution is quite powerful and very easy to develop with the Nano s sets the new

standard in Hardware wallet security and usability you can get yours today at Ledger wallet.com and when you do be sure to use the offer code epicenter to get 10% off your first order we'd like to thank Ledger for their support of epicenter you mentioned um X thin and with that the the block Size Doesn't Really Matter can you expand on that a 2 tbte hard dis costs like $50 right and um so you will be able to store the entire Block Chain uh in your life and also um really um very few people really do need to store the entire block size as well I

understand that there might be a small you know security issue and someone could artificially create like if you stored let's say the past year of blocks someone could you know painstakingly generate a gigantic fake tree that would give them a lot of money but this is this is incred this is like you know can you imagine the processing power that would be required to do that right this is a very very theoretical um you know uh e uh like effect so in reality even if um Mo's law on discs don't exceed the the uh size of you know blocks being submitted to discs uh you can just enable pruning right which is a feature that core itself you know

actually uh implemented so I think that they you know sort of recognize this reality as well so the issue is not dis space right the issue is really uh network uh Communications um and in that case um before X th it used to be that when a block was transmitted the entire 1 Megabyte block had to be transmitted and that created a certain latency through the network right but post X thin what's happening is all of the transactions are probably already um dispersed throughout the network so the block simply says oh yes and that transaction that you already have and this one and this one and this one it just kind of identifies them right so the size of the block is actually really

small referring to exist transactions and what's actually really interesting about this is that um what would happen if you don't have those transactions the answer is you have to go and get them right and that does take time so uh another way of saying that is if the Network's capabil like if the capacity of the network is such that it can't push the transactions fast enough to get to you before the block does then the latency that it takes you to process the block increases which means from the minor perspective that they're more likely to create uh empty blocks and so the average block size will uh fall okay

that's that's very interesting so basically before right it's kind of uh kind of thick right it's kind of detailed yeah no but that's I think that's a super interesting uh thing I was actually not not aware of I think I maybe saw Xin mentioned before but I wasn't wasn't fully up to date so basically what you're saying right is that in the past I as a minor would aggregate all these transactions stuff from in a block mine a block and then I would send out that you know one megabyte or something around and you know it takes somebody however long it takes them to get that block and when they have it they can start mining on that thing right but with X then because the transactions are already being

propagated in the network and there are in the M Pool of all these different notes I can just say I I've mind a block you know here it is and and Mayer says okay I already have you know maybe 95% of those transactions or 98% uh so I just need to get those remaining uh remaining ones and then I I already have to block and and if I just sort of tell May her what to include there that's much smaller and propagates much faster right there's a bit that he that he hasn't said yet is xin's even better than that it will predict the ones that you're missing and send those with the abbreviated

block and in fact uh a recent uh uh log report showed that there were no missing transactions in an entire day for a node and it predicts which ones are missing by sharing a so hundreds if not thousands of blocks go through without a single misted uh you know transaction in today's level of use because the network capacity far exceeds worldwide the you know our current use of it okay that's is this is amazing kind proof right the fact that that no transactions have been missing from Xin blocks for a long time yep and then Xin is the standard um are

all blocks X thin at the moment uh only B bu and uh XT and classic are all using it can can you explain what Xin is briefly is it a protocol is it what is it who uses it and so it's a protocol um and um so just you guys might all have an aha moment when I say that uh after Xin came out uh core implemented compact blocks which is sort of almost exactly the same I think that they don't uh do this transaction prediction so they have slightly higher um retry rates but I think theirs are more in the 95 98% I haven't tested it myself this is just

what I hear so do you guys know what compact blocks is no okay so the idea is um instead of including it's it's this is not rocket science instead of including the full transaction in a block you simply uh include uh it's the transactions you know uh hash right at sha 256 right uh but then you can observe that with relatively few transactions say Millions right running around the system you don't really need a 256bit identifier uh so you could just chop that a little bit and only send like the first 64 bits or whatever first 128 bits and so you can gain uh you know additional um compression by sending a

partial shot 256 instead of the transaction itself and then on the other side um you know the block is reconstructed uh on the receiving side and of course um if there was a Shaw 256 you know or a sha 64 collision and you put the wrong transaction in the block then ultimately the Block's you know signature uh the Block's um hash wouldn't match and so there's no chance that you're gonna uh I mean the chance of you uh constructing an incorrect block is the same as the chance of two people creating a Bitcoin wallet with the same

address in it right almost impossible so why did why did core um not also adopt Xin why did they go with some other thing called compact blocks I think that uh this um goes into political and personal reasons which only core themselves can know I think there's a huge amount of not invented here uh attitude in core and I think they see Bitcoin unlimited as a threat to their business model um and so it would be you know bad to uh suggest that a single Advantage

I'll give you an example um when I first um I didn't write Xin but I put uh the announcement out on Reddit in the r Bitcoin um users group and it got like 150 200 up votes it was right at the very top and then I edited the original post and I said you know this work was done under Bitcoin unlimited and the posting was removed within five minutes so I do think this is like a political thing but what it effectively means is like for correct me if I'm wrong but there have been like a lots lots of research papers that have um investigated uh the economic behavior of miners always

assuming that uh it takes time for a block to go from one minor to another minor and based based on based around this a lot of strategies like you know selfish mining uh network analysis have been done and I'm I'm pretty sure there like 25 to 30 academic papers that that do this but what you're saying is something like Xin basically changes the dynamic completely that uh it takes very little time for the blocks to be transmitted between the miners and it effectively removes the need for a 1 MB cap yes absolutely I mean if um particularly the the time to transmit a block is no longer proportional to the

block size really right um or it's proportional to a factor divided by thousands right so it's essentially a constant size um given today's you know networking capabilities it but that all that all does presume that the transactions are fully propagated right so where we get to an interesting case is in a theoretical case where we're far above probably far above 10 megabyte block sizes right where the transactions aren't fully propagated and what's really interesting about that is then um what happens is that um because a minor hasn't fully propagated the block block uh or because

the receiving minor hasn't fully validated the block he has to produce um um Zer length blocks right which a lot of people think are evil uh but I think they they came to that conclusion without really thinking about it because what a zero length Block in this case says is the full transaction set wasn't propagated to me so I want need to slow down the processing of the Bitcoin Network right and this is how like a small minor is no longer penalized uh by uh these sort of issues because he can simply produce um zero length blocks and you know his essentially hash he's essentially doing a hash power weighted vote saying I think that the network

should uh handle fewer transactions right and that will uh you know in the end uh create a fee market right um just like uh uh you know Peter paper was suggesting that block propagation time will create fee Market but that fee Market will be naturally um will naturally come about due to the limitations of the Bitcoin Network itself it won't be arbitrarily chosen at one megabyte right and because of that you can't really imagine that an altcoin will outperform it because it's performing at the limits of the global Network so anyway that's like the

fundament Al philosophy behind Bitcoin unlimited right and why we believe you can have uh block sizes that the developers do not limit okay that's that's super interesting now just to just to have a clear picture of this now with X thin uh blocks how how much space does a you know one megabyte Xin block take up and and what about you know 8 or 10 meab block Andrew do you remember what the compression rate was I I think in the ballpark of 50 to1 so 20 KB including the filter yeah wow this is quite

mindblowing because genuinely mind why yeah why on Earth there's no reason there's no real reason why by the way we've done tests on the propagation rate uh from like China through the uh great firewall China right out to America and uh like London and these rates were you know uh in like the tens to hundreds of milliseconds they were just a bit above the uh speed of light uh because it's a great Advantage uh when you're propagating small blocks the you know the China firewall can often let them through right they for some reason the you know we we just kind of empirically

you know run tests and then try and figure out what's going on with the great firewall tryo but it seems to drop packets and connections uh you know proportionally to the bandwidth right so if you just pop 20K through uh once every 10 minutes it's more likely to let that go through so okay just to just to test my understanding so so assume like I'm I'm like this um small minor let's say in Iceland right mhm and uh before X10 uh when a block was generated uh 1 MB of data need needed to come to me uh with the block and then I would start building on I would validate that

block and start building on it yeah in the worst case too uh sorry to interrupt is that you have to remember that every hop in the Bitcoin Network would fully validate that block uh you know receive it validate it fully test all the signatures and send it on right yeah so that's important too but go on yeah so now with now with X10 um the the normal operating case is that I will already have heard of all of the transactions that are going to be put into the block and I just need to know the let's say the transaction numbers so that is very very little data right so that is around 20 KB and out here like if if I heard all of the transactions

before the block was made and uh then I can just do with receiving 20 or 30 KB of data and that's it here the risk is that um some some adversary might spin up a lot of nodes in the network and manipulate the network in a way that me the small Miner in Iceland uh does not receive all of the transactions my transaction meole is not updated because some adversary is gaming the network that I I don't receive my transactions right that is the RIS a civil attack yes that's the Civil attack is the risk right so because of this risk now the question becomes what would I do if that sort of thing were to happen so what you're saying is if that

sort of thing were to happen as long as the network would ensure that that 20 or 30 KB of data board the new block reaches me there might be a chance that I I know the header of the new block but I cannot validate all of the transactions in it but just knowing the header I could start building the next block assuming that this 20 or 30 kilobyte header is is correct yes that's not quite the way it happens in the network today but that could definitely occur okay so the way it happens in the network today is that all of the miners uh have registered as miners in all the

other minor networks MH and so uh but they're not actually mining with any any hash power in the other mining pools networks but what happens is that a miner sends a block update out to all of its you know miners right and uh the competitive minor receives that block update and so then uh it gets the you know the header and it can start um can start mining zero um you know an empty block until it receives the full Block it's it's just a small detail but the end result is exactly the same and you are right that uh your if

you didn't do that um if you didn't have this uh validation L mining it's called going on then um you would fall back to exactly what you're talking about okay I think Gavin uh first created a patch actually to do that it's called headers first mining or something like that today's magic word is UN limited that's u n l i m i t d head over to let's talk bitcoin.com to sign in enter the magic word and claim your part of the listener reward what is your estimate H what kind of um block sizes do you think the

network could support today I I I don't think that uh that supposition about that is really all that that helpful right I think that they're much higher than they are today I think a better way is to turn that round and say what block size is the demand out there for legitimate demand and that might be one and a half megabytes at the moment and then we can look at the Historical growth rate and transactions because before blocks got full they weren't full and there was an uptrend and and the size of them and we can predict that forward and we can get an idea of what the block size should be

based on historical Trends and and it's it's a number to know obviously you can't predict the future but but it's better to have some information than nothing and I think that should be the ballpark of where we say blocks should be is based on the historical Trend prior to them being full and the network can definitely handle that with the um exin and the compact block um propagation methods one thing to add is that we still don't have very fast um block propagation for U for resyncing a node so when a node is offline and needs a thousand blocks they still have to be sent full size um but

in the normal course of events nodes should have quite a bit of long periods of up time and that's not a major consideration cool well let's let's talk a little bit about Bitcoin unlimited as an organization is it um is it a nonprofit currently or do you guys have a formal organization that's that's kind of behind uh the project I can um give you some background on that the the organization was in unincorporated has articles and they're on our website Bitcoin unlimited doino and it had in there the provision to become a registered non profit and that's what we did back in August uh

last year so it is a registered nonprofit um but uh as we're still in the nent stage we're not really doing a lot with the nonprofit but we're building the organization uh and uh it has about 50 members at the moment um and that would lead into the question of how people become a member and and uh uh the the way that is done is that we have a forum which is the bitco doin Forum um where we can have censorship free discussion and that's been the home for be and people are welcome to join that and if they support be they're

welcome to apply for membership and uh membership is free uh and people have to evidence an online history such as on Reddit or Twitter um or Bitcoin talk uh showing or medium showing a history of positive writings about Bitcoin doesn't have to agree exactly with what Bitcoin unlimited says but then just want to make sure you're not you know a sock puppet right some history some history is a real person um and then the membership will uh decide uh the existing membership decides on the admission of new members

which is the best way to maintain the Integrity of an organization so you would have a vote regular vote when new people want to become members we do every couple of months we have a vote and we induct um a number of new members not a huge number but it's growing um and that's good good how many members did we induct Andrew the last time we had a vot like a week ago yeah yeah January the 1 was our last um vote that finished and we had eight new members join then all with good good track records of writing about Bitcoin and interest in the space investors developers um so we get we've got some

very good people in the membership now and are you guys trying to be um exclusive with that or have a certain high standard or or what's the because 50 seems like a very very low number given also the the recognition that bitco unlimited has so are you guys intentionally trying to keep that fairly limited which would be slightly ironic I mean but no we don't want to limit the mean which would be great if you know everyone who wanted Bitcoin to succeed um could become a member but um OB obviously there's a lot of different opinions in the Bitcoin space um and some people have iions which are so

strong and so Divergent from the ethos of Bitcoin unlimited that they probably wouldn't make a good member but that is up to our members to decide um so we welcome all applications um and the members normally accept you know the vast majority of applications uh but but some will get rejected um and that's how the organization maintains its integrity I'd say uh for potential members it's important to understand that um you don't want to become a member just CU it's cool or whatever uh the the job of the members is to vote on you know the

proposals and these proposals will ultimately uh you know result in changes to the Bitcoin client right so you have to be willing to put in a few hours you know I'm preferably a lot of time understanding you know the Bitcoin um uh environment in general right but then a few hours really studying the proposals and talking about them um and you know if you're four large blocks but you don't have the time to help steer Bitcoin unlimited then membership is probably not for you right but if you want to actively uh shape uh what the Bitcoin unlimited client is going to be then you know we want

you and and those proposals will be uh on on what kind of basis are you talking about so a few hours on a on a weekly basis or I think we tend to have votes like once a quarter or once a month it would really depend on how many proposals are presented uh and any member is allowed to present a proposal or uh they can sort of sponsor a proposal presented by a non-member okay so so somebody who's you know who's knowledgeable about Bitcoin and has a you know I would probably a decent technical understanding and is willing to spare a few hours uh per quarter uh evaluating uh you know

different proposals for Bitcoin unlimited would be suitable for a membership absolutely okay very interesting well uh I mean we'll definitely post a link so if people are interested in in joining us members they'll know uh know where to go I think that sounds quite uh quite interesting also perhaps as a way to just be a bit more engaged with it uh you know with everyone's opinion actually I find I think that would be very interesting to see what what the developments are moving on to the next thing one of one thing that stands out about Bitcoin unlimited is that you guys have articles of federation why did you choose to do that and and what are some of the main um

main ideas in those articles I wrote the articles or pulled articles together from um you know a lot of writings of other people um so I'll I'll begin with why I did that before um writing a single line of code and then maybe Andrew can talk a little bit more about it from a you know from the president's perspective but I I started by writing the Articles because um I felt like the there was no process in the um in the the um method that was um occurring in Bitcoin core it seemed like there was a lot of talk about

consensus but it seemed like consensus was actually defined by when one of the leaders said there was consensus there was no quantitative way of measuring consensus um and uh it seemed even that um like proposals uh would not even be allowed to um exist even uh you know they wouldn't get a bip number for example unless they um adhere to certain people's opinion as to you know the way these things should work and so it seemed like there was a um a veneer of process but the truth was it was like a veiled dictatorship and I

didn't feel like um I felt like many voices were being uh you know ignored and crushed through that process so I didn't want Bitcoin unlimited to be like like that it was never my intention uh and in fact one of my own bip proposals was recently uh not passed to kind of prove that Bitcoin unlimited is not a dictatorship by me right so just to continue a little bit further the the the articles that we have are trying to create a new model of of of democratic development where we really do try and get a feel for what what the what the ecosystem needs from Bitcoin and produce software which

delivers that and The Bu members are a proxy for The Wider Bitcoin community and and therefore when they vote on a software change and one of the software changes that was rejected early on was that rvf the replace by fee um and one reason is the is the damage that it does to the zero confirmation business which was working really well for Bitcoin PRI blocks being full and in fact the zeroc comp is is an entry point for new users to bitcoin that often the first experience that people will have is buying a beer with Bitcoin it used to be but it probably

isn't any longer um and and who knows someone who buys a beer with Bitcoin May suddenly understand this is wonderful and becomes a major player and runs up a 100 nodes or whatever you know these people are not joining Bitcoin now because the the entry barrier for for joining is is higher because zero conf transactions are not happening so so RBF was rejected by our membership um and this this is the Democratic aspect of development and action and we think that we are mirroring what the ecosystem wants and needs more than any other uh implementation let's take a short break

to talk about Jack Jax is a multicoin wallet created by the people at the central now in the past if he had a whole bunch of cryptocurrencies it was a pain to handle them you either had to leave them on an exchange which was insecure or you had to have all these different wallets which was a hassle fortunately now with Jax those medieval days of darkness misery and suffering are over Jack supports multiple cryptocurrencies and new ones are being added but it's not just storing cryptocurrencies you can do with Jacks but you can also exchange them directly from with inside the wallet thanks to their shape shift integration and since there's only one seed Jax makes it super easy to back up

and sync to the other devices Jax works with Windows Mac OS Linux Android iOS and has browser extensions for Firefox and chrome so go to ja.io that's ja x.o to download the wallet and get started today we'd like to thank Jack for their support of epicenter Bitcoin unlimited has been around since uh 2015 what's what's the status right now what percentage of the miners are supporting Bitcoin unlimited or of the nodes and then what kind of uh threshold do you think is necessary to reach until Bon unlimited actually kind of you know gets activated and bigger blocks get created yes at the moment um the mining

percentage is about 15% um which is quite a healthy percentage of the mining and of the full nodes about 7% 8% is the peak that it's reached uh these percentages do need to be higher before U we will see larger blocks um but I want to actually just go back go to another aspect of Bitcoin unlimited which is that we don't want to replace core with Bitcoin Unlimited we we want a new environment where there'll be multiple implementations decentralized development so the the model we would like to see is that all develop uh

implementations have less than 50% of the nodes and 50% of the mining power and that provides lots of checks and balances in the development as well uh it makes Bitcoin stronger with with the decentralized development so Al though we may see Bitcoin unlimited we don't we don't know whether it will happen or not go above 50% and we get bigger blocks activated the long-term goal would be to go back below 50% again and see a landscape of competing implementations and we get D inion natural selection the benefits of it that's the vision the longer term

Vision so so let's say in the future um the block size does does end up going in the in the path you think you you want it to go which is the unlimited block size set by the natural dynamics of the of the network right what would a transition from the current regime of 1 MB blocks to a regime of U blocks um set by the network look like how would that transition happen What Bitcoin unlimited is doing is is giving quite a bit of control to the miners about block sizes they'll create which which is really the only way that that it can work uh the miners have all the skin in

the game with with with with the the financial investment and the sha256 hasing power so they will look at what happens if if we don't know whether it will happen but if at The Bu mining percentage gets up in the region of 70 to 75% they'll be looking at triggering a hard Fork so we'll lie with them um and probably announce a flag date a month out and say and agree with the miners that that greater than one MB blocks will be produce after that date and hopefully a lot of the other full nodes on the network will upgrade and even the core ones can remain core

all they need to do is change that um number to be instead of one up up it to six or eight or something depending on what people want um or it could have use our patch for emerging consensus which would be a relatively small patch that we can give to core around that time they can use it if they want and at that point the miners can then create a larger block um we would expect that the other 25% of the miners would see the writing on the wall and most of them would switch at that point so there should be 95% mining Power by the time the flag date is seen now if nothing happens ahead of the flag date then of course that could

be cancelled um and but uh it it should function in a manner like that it be quite a smooth process right now you said Bitcoin unlimited was at 16% I think the segregated witness uh share is around 25% and and segregated witness has a 95% activation threshold I think and of course segregated witness is the proposal and the favorite way uh to achieve scalability or indirectly achieve scalabilities by the Bitcoin core team so you know it seems like both are very far from breaking through I was

wondering why doesn't Bitcoin unlimited not do the unlimited way of managing the block size and also add sec a witness in there CU I I could imagine you know if one could sort of combine those forces of support might be much more likely that the hard Fork would go through how do you guys look on that uh I think that that's actually a fairly interesting proposal um I haven't looked at the code line by line but from a structural standpoint it's not my favorite uh solution um for a variety of reasons that basically are some summed up with the word technical debt and what that basically means is you create a lot

of problems for people working on the code in the future right for example um you know you're creating a transaction right and it's actually completely valid but it's let's say it's not a segregated witness transaction uh because you screwed up the the witness section of it but it's going to be it's going to look completely valid for for the old rules right and so now God knows what's going to happen to that transaction right if it's improperly formatted um an a similar example actually we have today of this same sort of design problem is the fact that every once in a while somebody accidentally um creates a transaction with a gigantic uh uh minor fee right because um in you know today's

transactions um you don't explicitly say what how many Bitcoins you're you're giving to the minors it's just uh if you add up all the inputs uh you know and then you add up the outputs then the miners get the difference right so every once in a while someone will make a big mistake and they'll accidentally send the miners a couple hundred Bitcoins right um so this is the sort of thing that uh creates technical debt right and it's much better to create a simple transaction format where it's very hard to um mess it up basically uh so I haven't heard a word from core about a compromise um and you you have to it it actually begs the question um if we're

going to do a hard Fork anyway then why should we do a segregated wit a soft Fork right let's take that technology and make it into a hard Fork right and I haven't heard any proposals uh from them about that right um and actually that same observation does make a lot of the large blockers Wonder at the promise of core to increase the block size down the road right um why have a soft Fork now if you're planning to ever increase the block size in the future uh which I think you know was promised um because you get the worse of Both Worlds right you incur the technical debt of a soft fork and yet you're still having a hard

Fork um but I would you know I would bring something like that um to the membership and see what they say and that would start me actually analyzing the segregated witness code for its you know quality and completeness oh I will just add that we do actually have a um a boip for us a hard hard Fork seget Amendment and that's uh that's in our list of bips that have not yet been readed for voting upon yeah I mean I I I could imagine that this would at least maybe get some people over into the camp right I mean there's certainly also a whole set of startups you know from lightning Network

and uh or side chains or rsk or a a whole set of startups right that want something like s g a witness and uh and you know whatever their position would be on on the Block size so they might uh they might be sort of you know come into into the Bitcoin unlimited Camp if if support was for that yeah it's interesting and that's you know why we would consider it the a lot of those Tech like Bitcoin unlimited is not against lightning at all right we're essentially for lightning and would like to uh let it I mean I think lightning has uh you know some really interesting use cases right I'm not sure if

scalability is one of them because as people have pointed out it scales the number of transactions that a particular user can make but it doesn't really scale the number of users right um but there's lots of great use cases for it I don't think that segregated witness is the only path to getting to lightning at all right and we have um several proposals down you know um as Andrew was saying that I think uh lightning can be built upon right because basically in order to implement lightning you got to clean up a couple of mistakes that you know exist with the current uh transaction

format let's still assume though that no no compromise happens we we are stuck at this place where uh there's a significant minority that wants to go in different directions one one of them unlimited one of them segre maybe some other ones and uh you know a year from now we're at the same point or a year and a half from now we're at the same point it's just there's no progress there it seems at some point right there the best solution might be or one solution might be I don't know if you guys think it would be the best solution in the in situation like that is to have something like we had in ethereum right where you have ethereum classic ethereum

at the regular ethereum and you know and there's a split even if there's not an overwhelming majority do you guys think at some point that's that could be uh the best solution I I think this would be something that would have to go to The Bu well it would be b a bip about anything that would create a permanent Fork what you're talking about is say a minority Fork um that's off the table at the moment as far as we're concerned we still think that a hard for can happen um we're relatively early days in the process and Andrew Stone can tell you about our new release which is due out

imminently and that should generate quite a bit of interest and excitement so we we really are hoping not to be where we are here in a year's time um so that is quite hypothetical um a lot of things will happen before then it's important to remember that uh Bitcoin unlimited always follows the hash power majority uh to the extent that we can code that um that's what we mean by emerging consensus uh unless the um the uh monetary property unless like a transaction were to or a block were to undermine the Monet properties of Bitcoin um so you know we will stick with um the hash power majority uh

regardless of what you know that is so so to create this uh this Fork that you're talking about would um you know be uh changes to both the philosophy it'd be almost a different project maybe built on top of BU um because it would change both you know code changes and philosophical changes um person like um as early as I think 2013 I was um commenting that I thought that there was maybe room for three coins in in this world one was um an app like uh ethereum style uh actually Four coins uh an anonymous coin a store value like Bitcoin and then a microtransaction coin

right um and that would presume now the question is the value of a store value coin can be undermined if this micro coin can do the job just as well right and with you know reasonable block size increases um at at this point uh you know Bitcoin can be both this you know small transaction coin and uh a store value coin so I don't see right now you know this uh this Fork to be imminent yeah certainly not imminent it's just um there's always there just a question whether it will be possible to

come to some kind of agreement and I think what's also interesting right we we've done many episodes with sort of new blockchain proposals right new new blockchain networks and and one of them one of the topics that we see coming up again and again again and that everybody is thinking about is how do you have some governance on chain that you can resolve questions like this and so that one doesn't have a situation where you know there's differing opinions about where the protocol should go and there's just no real way of resolving it so if it doesn't happen right this this may come up yeah combining the governance with the blockchain is like a fascinating

concept but it's certainly beyond the scope of Bitcoin unlimited yes and and really there's only one thing wrong with Bitcoin and that is the block size the rest of it just requires optimizations and and improvements there's nothing fundamentally wrong that would probably require blockchain government governance to fix yeah that's an excellent point yeah I know I think for for Bitcoin it's uh it's not feasible right I think one probably has to uh program that in from the very start and uh and there certainly pros and cons to both right having a an in indirect governance mechanism in Bitcoin where essentially are choosing by choosing the client or

by the hash rate is also a way of doing it this is it because the the network is a balance between the miners and the non-mining full nodes and this is a major difference with our emergent consensus proposal in the uh the bip 100 initiated by Jeff garik which was purely a minor voting Proposal with with our emerging consensus the miners will experience push back from the full nodes Beyond a certain level where the miners are creating blocks which are damaging to the network um financially so so that that is a governance mechanism within uh the

emerging con consensus so that the ecosystem as a whole has influence on the uh on the Block sizes just beyond the rate of transactions coming in cool well we we're at the at the end of our episode but Andrew and Zer thanks so much for coming on it was extremely interesting learning about your work in Bitcoin unlimited thank you thank you very much and of course we'll have links to to the resources the bitco unlimited websites there is some uh some papers as well U Zurg mentioned the one he wrote there's another one about the transaction fee transaction fee Market uh and a whole bunch of other

information there and we'll also be linking to the place for those who want to get involved in the project to become member that they can uh you know let them know of their interest and prove that they are indeed human being and not not a an account commanded by the forces of enemy and evil and yeah with that we are at the end of our show so thanks so much for listener for listening we will be back uh next week and uh you can of course find this show and many other shows on that let's so bitcoin.com and if you want to support the show then please leave us an iTunes review that helps new people find the show we appreciate that very much so thanks so much and look forward to being back next week

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