Another insightful podcast on the scaling debate. Highly recommended. Link below. 

Interesting to hear Vijay’s explanation on how frequent changes to bitcoin’s protocol undermines trust in its “unchangeable” monetary properties. I hadn’t considered this before, but it makes sense. He argued for conservatism very well. 

I thought Brandon represented the “Big Scripters” 😜 well too. He focused the debate on how these proposed technologies promote bitcoin’s decentralization — which, of course, is the North Star for many of us (me included). 

He argued that without these new scripting capabilities, fewer people will hold their own UTXO and therefore bitcoin will be more centralized. In the future, large custodians will be the key economic nodes and may control bitcoin and their interests may not align with ours. 

Brandon recognized that his concerns are in the distant dystopian future, perhaps even after a wonderful “gilded age” for bitcoin. 

Brandon argued that we need to do something now. He doesn’t know whether the proposed scripting capabilities will actually fix the potential problem but he hopes they will be helpful. 

Brandon recognized that the proposal could have unknown risks but he was largely dismissive, believing that it’s probably safe. 

Why now? Why the rush? Brandon left it unsaid, but I had the impression there may be a sense of urgency amongst the Big Scripters. Perhaps because they believe bitcoin will be harder to change in the future - ie, it’s now or never. Perhaps some believe that they will lose control to folks like Saylor, who represent the whales and large financial custodians of the future. If these large financial nodes control bitcoin, then the devs may believe that they will lose the power to make changes later.

I remain unconvinced. Here’s why:

Firstly, I believe we have to reject any proposals that solve potential problems that don’t yet exist, even if plausible. We don’t know what will happen in the future, nor whether the issue will be solved later without making protocol changes. 

Even the best of us are just humans and not magical infallible wizards. We can never completely predict that a change will not create even bigger problems. We can’t take risks for potential problems that may never happen or which might be fixed in some other way. 

Changes to the protocol should be a last resort. Bitcoin is our hope for the future. We’ve been given an incredible gift. We can’t mess it up. Future generations are counting on us. 

Secondly, I believe our ability to accurately predict risk is related to our inability to accurately predict the future.

For example, I don’t recall ANY community discussions pre-Segwit / Taproot anticipating that we would be soon syncing our nodes slowly over Tor with 4 MB blocks filled with spam. It was all a big surprise to the community, wasn’t it?

Why was the block size increased? Why was there a discount given disproportionately to spammers? Why was the risk overlooked? Why hasn’t there been a post-mortem? So many questions. 

I’ve realized we can’t blame the devs. We, the plebs, need to take responsibility. We allowed the devs to make complex changes to the protocol relatively quickly and we blessed it by upgrading our nodes. We trusted but didn’t verify. Lesson relearned. We can’t do this again.

Lastly, the power to change bitcoin should be held by the nodes and not the devs. Maybe it will be harder to change bitcoin in the future. That’s a feature of bitcoin, not a bug.

Devs, if you’re in a hurry, please check your time preference. I keep thinking that bitcoin could be like one of those cathedrals which took hundreds of years to build and which stand for millennia. 

We should take our time to get this right. Even if it takes 10 more years of research and debate, that’s nothing in the grand timeline. In the meantime we should fix bugs, make it easier to run nodes, improve network privacy, and improve community communication. 

@stephanlivera Thank you for the great recent content. Love the debate format! 🙏

https://stephanlivera.com/episode/583/ 

 Well said! 

 Agreed.

My programming intuition sounds the alarm when I see solutions with a number of unknown downstream consequences. I don't like code with unknown risks.

At a minimum, features can be tested for several years on for example Liquid Network and be evaluated there.

Among the claims of lower L1 fees, I don't trust such claims for several reasons. Tx fees can already range from $1.5 to the tx's upwards of $200 that were seen for a week right after the halving. This tells me that the tx fee pricing is largely dependent on the willingness of participants to pay a certain amount. If there is a willingness to pay high fees, then we can improve the bandwidth all we want on L1 without achieving low fees.

As far as the solutions involving increased efficiency for exchange transfers, I doubt that they would make much of an impact, if exchanges want to use them.

For the other proposals I am also unconvinced that there will be actual increases in L1 efficiency. They may or may not be significantly helpful.

My main concern is the ability to whitelist future addresses, i.e. blacklisting all addresses outside of the whitelist. It is not inconceivable that governments at some future point, in an attempt to hinder the competition against CBDC's, may decide to require exchanges via regulations to apply whitelisting schemes, to lock bitcoin within an approved framework of future addresses. Even if such regulations are introduced and then abolished at a later date, the whitelisting protocol would already be in place. If central planners can abuse a mechanic on L1, I would rather see such a mechanic on L2-L3. 

 Expanding further, the idea that 8 billion people can use L1 always struck me as strange.

I don't have data on the average number of transactions per block but it would seem to be around 3500-4500 tx.

If we could achieve 7000 tx per block on average then that would translate to a million tx per day (144 × 7000). Dividing 8 bn people with 365 million tx per year gives a bandwidth of ~22 years for an ideal scenario.

A more likely figure for the current bandwidth is 4000 tx per block, yielding 576k transactions per day, giving 210 million tx per year. This results is ~38 years for the world population bandwidth.

Even if the demand pressure on L1 is far lower than 8 billion people, some percentage are children without the need to move savings, some may not be using Bitcoin at all, some may be using mainly L2-L3's, we are still at a situation of some participants outbidding others in order to have their tx included on the main chain.

The idea that "everyone must be able to use L1" is naive in a scenario where almost 8 bn people are using Bitcoin. Not all participants will have the funds to compete for blockspace, even if we had 7k tx per block or more.