The resolution of the Bitcoin experiment
Pretty good article, and a great overview of the blocksize controversy.<p>Also a great exhibit of some stereotypical programmer social problems; we don&#x27;t get a lot of middle ground, most programmers are either openly hostile and combative <i>or</i> so deathly afraid of confrontation and responsibility that they give away their authority so that they don&#x27;t have to handle the pressure. Gavin should&#x27;ve kept control. Bitcoin is learning exactly why a strong central authority is so desirable in money exchange: it keeps the value of the currency stable by preventing panic and confusion over issues like this.<p>Many discussions of Bitcoin claim that this power is transferred to &quot;the network&quot; to make the final decision, which sounds very egalitarian and democratic, but Bitcoin failed to provide the controls that would prevent power hoarding and ensure that the people who depend on bitcoin were fairly represented. This is one reason why modern democracies are structured within the framework of a republic. This is probably one of bitcon&#x27;s hardest to solve problems, since the hardware to get respectable hashrates is unobtainable for quite literally everyone who doesn&#x27;t have access to their own microfabrication facilities. Even if one of the specialty bitcoin hardware makers had a really good, cheap chip, why would they share it? They&#x27;d hoard all the hashpower for themselves. Litecoin attempts to address this by hasing with scrypt, under the belief that it&#x27;s harder to hoard power with custom hardware if the algorithm uses a lot of processing power <i>and</i> memory instead of just a lot of processing power.<p>Mike failed to mention one incentive that exists to prevent increasing the block size: miners get the transaction fees attached to each block they mine. If the block size is large, there is little contention for space in the blocks, and ergo there is not much reason to incentivize miners to include <i>your</i> transaction in the next block. By keeping the artificial constraint on the block size, people who own a lot of hash power will be gaining a lot more bitcoin for themselves.<p>I don&#x27;t think this crisis is insurmountable. So much money has been sunk into bitcoin that I can&#x27;t believe people are just going to let this cabal take it out. BitcoinXT will gain notoriety through the mainstream press and the resultant sell off among casual investors will freak the big players out and force them into running XT nodes.