Published on: 2017-10-13T11:35:09+00:00
The discussion revolves around the need for a new difficulty algorithm for Bitcoin. One participant argues that slow response times indicate less intelligence and advocates for implementing a better algorithm to enhance future security. Another participant believes that a constant value should be neither inflationary nor deflationary, and determining this without a third-party index is crucial. The conversation then shifts to the impact of the BitFinex price ratio on transaction rates. It is suggested that a faster measurement of hashrate for difficulty can lead to more efficient and accurate economic determination. The roles of developers, users, hodlers, and miners in Bitcoin governance are also explored. Miners are compared to banks lobbying for higher total fees, while hodlers, who hold 90% of the coin, lobby for both security and price increases. Users prioritize stability over price fluctuations. The discussion concludes with the notion that hardforks are risky and require massive coordination efforts, making them unfeasible within a month. Off-chain methods can enable fast market determination, and developers should aim to expand the coin quantity to maintain constant value, which aligns with the five characteristics of an ideal currency.The argument is made that miners prioritize profitability and will choose the chain that yields higher rewards in fees and valued tokens. However, it is noted that all chains must follow the same difficulty adjustment, and hardforks are generally seen as dangerous. The conversation then delves into the power dynamics between developers, users, hodlers, and miners in Bitcoin governance. Hodlers, described as the new 1%, lobby for security and price increases, while miners act like banks seeking higher total fees. Users are the group developers need to protect against both hodlers and miners, focusing on stability rather than price. The idea of expanding the coin quantity to maintain value is introduced but viewed as a departure from the fixed limit nature of Bitcoin, potentially making it deflationary.ZmnSCPxj argues that miners would choose a chain providing 1 token as a fee per block, even if an unwanted chain offers 2 tokens as a fee per block. This is because the unwanted chain's tokens are valued at only 1/4 of the desired chain's tokens. However, this argument fails to consider the price for a coin capable of handling double the transactions. Some hodlers, including Roger Ver, advocate for a coin with more transactions, lower price, and lower fees per coin transferred to attract more merchants, customers, and miners. Bitcoin's consensus truth operates on the principle of "might is right," allowing buyers and sellers to shift some might to miners through fees, which can conflict with hodlers' interests in security and price increases. The importance of meeting user needs for long-term value is debated alongside the significance of mining infrastructure.The thread acknowledges that developers serve as a governing authority influenced by users, hodlers, and miners. Hodlers hold a significant portion of the coin and lobby for security while also being interested in price increases. Users, referred to as "the people," should be protected by developers from the demands of both hodlers and miners, as they do not want to pay unnecessary fees merely for their coin to dominate. The suggestion is made that developers strive for an expansion of the coin quantity to maintain constant value, aligning with the five characteristics of an ideal currency. Peaceful and sustainable forks are encouraged, enabling constant value, security, and low transaction fees per coin transfer. Forks with faster difficulty adjustments are deemed more capable of retaining value.Addressing a statement about Core developers holding vast amounts of Bitcoin and their influence over hardforks, it is clarified that there is no incentive for developers to hold more Bitcoin than others in the industry. Becoming a Bitcoin developer does not require holding Bitcoin. Numerous individuals and organizations who are not developers possess massive amounts of Bitcoin. While Core developers may have influence over Bitcoin's direction, they do not possess complete control and cannot prevent hardforks.The power dynamics between hodlers and miners in hardfork situations are discussed, with the understanding that hodlers hold more power. However, when hodlers are evenly split between coins, miners will favor the coin with higher transaction fees, potentially eroding hodler confidence and causing longer delays. Hardforks further fracture the community and should be avoided. It is emphasized that hodlers will retain held coins regardless of available transaction rate, and any hardfork going against Core's wishes may collapse due to Core developers' action as hodlers, without requiring special actions as developers.The feasibility of a hard fork in Bitcoin is debated, with the author arguing that it would not address issues like long transaction delays unless the difficulty algorithm allows price to guide hash power instead of vice versa. The author suggests that Core might need to fork to a faster responding difficulty algorithm if faced with a lower hashrate. Another participant notes that changing the difficulty adjustment algorithm does not resolve the misalignment of hashpower with users' interests.
Updated on: 2023-08-01T22:02:36.035649+00:00