How Segwit Murdered Bitcoin: Bitcoin Can NEVER Scale (Op-Ed)

An Economic Proof for Why Segregated Witness Won’t Work and Bitcoin’s Failure to Scale Will Precipitate Its Death

Introduction

To start with, there’s no easy way to define Segregated Witness. However, I will attempt to give a brief explanation and overview of how it works (technically) in the Bitcoin. I won’t delve too much into the politics of Segregated Witness or how it was implemented other than mentioning that it occurred via a soft fork on the network.

The purpose of this write-up will be to give a thorough synopsis of the practicality of Segregated Witness and its numerous risks, long-term implications, technical debt, and security weaknesses. In addition, a massive part of this piece will be dedicated to dissecting why it is an economically infeasible ‘upgrade’ to the Bitcoin protocol and one that may precipitate its eventual decline as the ‘leader’ of cryptocurrencies.

Segregated Witness Defined

The primary purpose of Segregated Witness, as purported by the Bitcoin Core team and others, was to provide itself as an on-chain scaling solution for Bitcoin as well as a fix for the issue of transaction malleability.

Transaction Malleability refers to a ‘bug’ in the software of Bitcoin itself that allows users to change the ID of their transaction by altering the hash number of the transaction itself. While this has no bearing on the actual funds that individuals receive, it could seriously disrupt off-chain transactions, such as the oft-hyped Lightning Network.

Another purported major feature of Segregated Witness is its separation of the ‘signature’ from transactions.

This new implementation was proposed through BIP 141, BIP 142, BIP 143, BIP 144 and BIP 145.

Without digging too much into the technical aspects of Segregated Witness (here is a great article and video that do that already), here’s a brief synopsis of what Segregated Witness is supposed to work to increase on-chain scaling in a nutshell:

It segregates the signature from the transaction. For those that don’t understand what this means, every transaction made with Bitcoin contains ‘signature information’. Check out the picture below:

Everything you see within this picture is part of a single transaction — from the version number to input counter, list of inputs, previous transaction hash, etc.

By far, the majority of the data within the transaction is the ‘Signature’. So, that data would go directly within the block itself.

However, Segregated Witness makes it so that this portion of the transaction is no longer being placed directly into the ‘main block’. It is instead comported into a section of the block designated for ‘witness data’.

How Did They Do That?

This was done by employing a change in the software that changed the block limit from a size-based limit, to a weight-based limit. This is somewhat hard to grasp conceptually, but it allowed them to artificially increase the capacity of the blocks.

Here’s How

Essentially all of the transaction data is given a weight that we’ll call ‘X’ and all Witness Data is given a weight of .25x (1/4x). This is hard to grasp conceptually because they didn’t necessary create more space within the TX itself, it just reduced the base size of the transaction to allow more transactions to fit within a given block. It’s important to note that the original block limit was determined by base size. By segregating the witness data and creating an additional merkle root calculation to make it backwards compatible, the team was able to roll out Segregated Witness.

Hopefully the above synopsis gave some idea of how the Bitcoin Core team was able to create Segregated Witness. Now, from this point in the article moving onward, I will dissect some of the many inherent issues with the implementation of Segregated Witness.

Increase on Miner Load

One of the inherent flaws of Segregated Witness is that the Witness data itself being .25x (x=weight of TX), is just a semantic change when it comes to validating the actual transaction. In order to validate the Witness data within the TX, 4x the amount of work must be completed in order to confirm the data. What this means is that, in theory, if the block size is 1 MB, then the total amount of work that must be completed (if all transactions are SegWit) would be 4 MB.

Since this is highly unlikely to happen, this is something that’s not too rampant of a concern. Current estimates suggest that, when taking the average TX “weight’ into account, it is unlikely for the block size to experience more than a 1.7x increase in size assuming a full implementation of Segregated Witness.

It is important to note that because Witness data is only ‘weighed’ as .25x of non-witness data, a hypothetical 1 GB TX= 4 GB Witness Data.

Thus, nodes on the network must hold 4x the block size limit at any given point in time in order to prevent an attack vector. This presents an inherent risk because miners now must download and validate signature data in excess of the signatures that they’re actually mining. Thus, their overhead and workload has now increased. Whether it has done so four-fold is an economic consideration that cannot be determined, but to say that there is a palpable increase would not be an overstatement by any means.

Below is an except from bitcrust.org that outlines the dilemma and inherent flaw in this setup succinctly:

Source: https://bitcrust.org/blog-incentive-shift-segwit

Thus, the security problems with Segregated Witness are already inherent through its design. This article will cover many of the other flaws in the rollout of Segregated Witness as well as long-term implications after rendering a thoughtful and informative economic discussion about the harmful impact of Segregated Witness on Bitcoin’s scalability form a unique, financial perspective. I felt that this was needed because, thus far, most, if not all of the critiques of Segregated Witness have been primarily technological and philosophical in nature. However, in the world of crypto, there is a void of individuals that are willing to dissect the issues of Segregated Witness from a financial perspective.

Economic Analysis of Segregated Witness

Introduction

As mentioned earlier within this dissection of Segregated Witness, the extra burden that it has placed on miners whilst failing to increase their profitability in any other way has created a situation in which their exit from the market is inevitable, resulting in the creation of an eventual monopoly. In addition, the refusal to actually increase the block size limit whilst simultaneously attempting to create a ‘scaling solution’ that is intended to reduce the fees for Bitcoin entirely will set in motion a series of events that will guarantee an increase in fees in the future as well as even more market congestion and centralization among miners than previously conceived.

Thus, the original purported intent of the Bitcoin Core team to create Segregates Witness as a means of lowering the coin’s fees, improve on-chain transaction speed, and ensure decentralization has been thoroughly undermined by the actual soft-fork change itself.

Unnecessary Rent Control

Before reviewing any charts or financial models, it is important to note that the refusal of the Bitcoin Core team to actually increase the block size in a method that is proportional to the PoW provided by the miners to create the blocks has created an artificial suppression on the price akin to that of rent control by governments when trying to create ‘fair housing prices’. As is demonstrable from these incidences, the consequences of rent control are detrimental and well-documented.

However, when viewing this from an economic perspective, the artificial limit on the output (confirmed TX) that the miners are able to produce will eventually result in a market (simplified) that looks like this:

In this model, the mining nodes for Bitcoin would represent the producers, while those that purchase Bitcoin for commercial or consumer purposes, w­ould be considered the consumers.

The dead weight loss represents the excess in fees that customers must meet since the quantity of supplied products is actually lower than what it would be normally if the quantity was allowed to reach equilibrium (Qe).

The fees, while obtained by miners, is simply re-routed/re-purposed to maintaining their monopolistic competitive edge in the market, which is only necessitated by the fact that the quantity of their output has been artificially suppressed due to the pending imposition of Segregated Witness and the Core team’s refusal to include bigger blocks into their design.

Synopsis:

· That deadweight loss is fees.

· A=restricted quantity.

· Consumers=Customers

· Producers=Miners

· The quantity here is block size.

· The suppression of block size has created a ‘fee market’ where deadweight loss prevents equilibrium (higher block size). This is basic economics.

Source: Pearson Education
The situation that I posted above is the economic chart for individuals who are in a perfectly competitive economic situation.
Source: http://www.economicsonline.co.uk/Business_economics/Perfect_competition.html

Since there are no barriers to competition to enter into the market and become a miner (technically) apart from being able to curate the necessary mining equipment, we can say that the market is (was) in a state of perfect competition.

This is particularly evident by the fact that the very first adopters of the Bitcoin software were both mining and observing nodes. This is evidenced by statements made by Satoshi and other forum members circa 2010:

For those that are unable to read the text, it says: “The current system where every user is a network node is not the intended configuration for large scale. That would be like every Usenet user runs their own NNTP server. The design supports letting users just be users. The more burden it is to run a node, the fewer nodes there will be. Those few nodes will be big server farms. The rest will be client nodes that only do transactions and don’t generate.”

From these statements, one can ascertain that there was a point in time where only a laptop was needed and most of the nodes on the network were mining nodes. However, as the principles of economics dictate, as mining has become more profitable for individuals, the competition has increased. This is one of the genius aspects of Bitcoin because it encourages greater competition, which increases the hashing power and subsequently increases the resilience, stability and security of the network and this competition is reinforced with the block rewards, thus creating a self-sustaining model that doesn’t require any independent party to ‘pay’ miners directly from their own pockets.

With that stated, let’s revisit the chart for perfect competition that I posted above:

In order for miners to successfully continue their operations in this environment at a profit, they must verify transactions/produce blocks at a rate dictated by q* on the chart (I put a blue square around it):

Q2= This point would occur when the amount of resources being spent (electrical output+maintenance of mining equipment) would exceed the actual reward that the miners are receiving, thus leading them to a deficit. Given the nature of mining, this is plausible because each additional piece of mining equipment added to a ‘server farm’ or similar setup would incur an additional cost and would raise the aggregate cost of the entire mining operation because of the re-allocation of resources to ensure that the additional equipment works cohesively with the rest of the network.

This cost can be measured through a loss of time required to setup the additional equipment, price of the equipment (if it has appreciated), or increase in storage mechanisms to ensure that the equipment can be housed in an environment that facilitates its production.

Q1= This point would occur when a mining operation has ‘lifted off of the ground’ or has just started and the mining agency/farm does not have the adequate resources to produce adequate enough hashing power to generate a return that would exceed the costs of their total operation.

How SegWit Hurts Perfect Competition

Segregated Witness negatively impacts the perfectly competitive market environment among Bitcoin miners because it imposes an additional (future) cost that must be incurred by the miners if we are to expect them to preserve the security and integrity of the network as a whole. Because of the different ‘weights’ of the Segregated Witness information versus the regular transaction inputs, a few things must be true:

· Mining nodes must always possess at least 4x the current block limit for Bitcoin in order to prevent an attack vector being launched on the network that’s predicated on the purposeful issuance of 4MB blocks (which must be assessed for verification). If a majority of this network fails to possess this capability to audit the block, then the security of the entire Bitcoin network would be placed at stake. Thus, if Bitcoin decides to scale — this relationship between the block “size” limit (remember it works based on ‘weight’ now), would remain the same. Thus, a minimum size limit of 5MB, for example, means that miners must possess the capability to audit 20 MB blocks, despite the fact that the vast majority (most likely all) of the blocks will possess no more than 10–11 MB of data.

Because of this, the miners must incur an inherent additional cost in this respect to increasing/updating their nodes.

· The fact that the mining nodes must now spend 2x-3x the amount of time (potentially) verifying additional transactional data without any increase to the actual reward or fees (fees are supposed to reduce according to SegWit proponents!), means that the cost of mining itself has/will invariably increase in the future.

These two factors when examined in unison mean that when the market is perfectly competitive (it technically is even though there are a handful of mining companies that possess a lion’s share of mining profits), then, the movement of the mining behavior must mimic what is seen below:

The output of the miners must be increased to Q2 in order to cover for the additional marginal cost that have been imposed on the market. Assuming that the market remains perfectly competitive, the MC line would move to the right by an equal amount as well, and the movement of the MC to the right would precipitate the movement to Q2

In either case, the movement to Q2 must be made in this scenario.

Proof-of-Work (PoW) Implications

As stated before, the Proof of Work concept in Bitcoin is one of its biggest blessings. However, in the situation created by Segregated Witness, it can also be one of its biggest downfalls as well. As the output increases from Qe to Q2, the Proof-of-Work algorithm will subsequently increase proportionally to the increase in the quantity, which means that the mining difficulty will increase — which cuts down on the marginal revenue that the miners are receiving.

The combination of the increase in the Proof-of-Work algorithm adjusting to the requisite increase in mining output in order to keep up with the higher marginal cost imposed by Segregated Witness and the additional marginal cost imposed my Segregated Witness itself will make sustainability in the market impossible for most players entering.

If that’s confusing, I’ll try to put this in a formula that makes it more palpable to those that are trying to digest this information for the first time. I will form this into a mathematical proof below that displays empirically that this setup will result in the aforementioned results.

MC=Marginal Cost

SW=SegWit

PoW=Proof of Work Increase

MR=Marginal Revenue

Q2= MC>MR

Q => MC=MR/MR>MC

Q1= MR>MC

So:

Q2 — SW = Qe

Qe = (MC=MR)

Q2 — SW = (MC=MR)

(MC=MR) + SW = Q2

SW = Q2 — Qe

Q2 > QE

PoW + QE = Q1

Q1 — Qe = PoW

Qe > Q1

PoW + SW = (Q1 — Qe) + (Q2 — Qe)

PoW + SW = -(2)Qe + Q2 + Q1

Let’s assume the numbers we have in our example graph are accurate in terms of TX output (hypothetically):

Q1 = 7

Qe = 8

Q2 = 9

So:

PoW + SW = -(2)(8) + 7 + 9

PoW + SW = Zero.

What Does Zero Mean?

The point of this mathematical proof was to show that miners will remain or end up at the same output, because PoW essentially “cancels” out their efforts to increase their output due to the perfectly competitive atmosphere within Bitcoin.

However…

Since the marginal cost under this model will increase, staying at Qe means that the companies will no longer run be at equilibrium, and instead will be running at a loss.

Why? Because QE = (MC=MR)

Thus, due to a shift in the MC curve to the right, miners can expect that this change will place the majority of miners at Q1.

Q1 does not mean that miners will run in deficit, but they will not be able to produce the maximum or optimum output per their resources because of SegWit. As a result, the capacity of the market will actually shrink artificially because miners will be producing comparatively less of an output compared to before SegWit.

This restriction on the output of miners will seriously hurt the Bitcoin network in the future as the amount of users on the network increases. However, there will never be a proportional increase in the output being produced because of the structure of SegWit (assuming it is fully adopted at some point in time). Thus, the market is destined to remain eternally clogged and the problem will only exacerbate itself over time.

This is what the normal adjustment in a perfectly competitive market would look like.

However, due to the conflation of the PoW factor by Segregated Witness, this increase in output will not be able to occur. Thus, the supply curve here, must be moved to the right in order to accurately reflect the increase in marginal cost.

Therefore, the scenario will look more akin to this:

The additional costs that are imposed upon the miners will ‘wipe out’ any of the gains that they would have received from operating at the lower output.

Ignore the ‘price’ on the left side for a moment. In this scenario, the firm does not get to set the price (fees), they must adhere to the market standards that the market places upon them.

Here is another version of the chart above with the equilibrium posted:

Equilibrium = Red Box

Here’s another graphic to show what’s going on.

This is the short term look before the chart I posted before takes effect.

At that point the Price (fees + block reward [assuming block reward is fixed, we don’t look at that here in these models]) = Average Variable Cost but is lower than Average Total Cost, meaning miners will be running in a deficit. However, not enough of a deficit where they won’t be able to make $$.

So, What Will This Result In?

Economics dictates the likely results:

SegWit has now produced a potential future dilemma for miners where their Average Variable Cost (AVC) will exceed the Price (P) because of increased validation requirements. Thus, many will eventually be forced to leave the market. Especially if LN is successful in ANY way or the block size in the future is eventually increased.

To give a brief synopsis:

· As Bitcoin was increasing in price (and when it does again) miners increase their rate of power to keep up w increased demand for TX to be mined.

· P2=Fees(P2)

· P1=Fees(p2)-x

· PC & below=Fees(p2-x) S

· SegWit increases Marginal Cost to the extent mining won’t be profitable.

Please Note: Fees will increase for those buying Bitcoin. However, on these charts the fees are relative to the mining operation. Please do not think of P as something with a fixed number in these examples — they are merely showing how the fees + block reward will equal a certain level of profitability/loss.

This is just yet another chart that shows the economic principle that I’m trying to emphasize in this writing.

A fall in quantity will occur for two reasons:

· Miners will be forced to exit the market because they will not be able to remain profitable.

· The barriers to entry will continue to increase, which will disrupt the normal perfectly competitive economic model (company profits — attracts competition — market becomes less profitable due to competition — players exit due to insolvency — profits raise for those remaining — company profits — attracts competition etc.)

The resulting monopolistic competition that will take place in the market (we’re already seeing this to a much greater extent today) will be an economic model that provides a strong deterrent for rational economic actors that are mining to scale their operations because of the imminent diminishing returns that have been compounded by the implementation of Segregated Witness.

Here’s what the market will begin to look like:

Miners will understand that restricting their output to Q* will optimize their profits because the fees will eventually increase (D to A).

Check this out below:

· As the fees increase (D to A), miners will be able to retain profitability.

· Because Average Variable Cost (AVC) will increase quadratically (Witness Data = .25x where X = TX data), assuming additional output in a world where SegWit transactions are the primary form of TX would be illogical for any rational actor.

The consequence of this setup is that Price (P), which represents fees (+ average block reward) will continue to soar if Bitcoin truly does reach greater adoption.

Here’s the basic takeaway principle here: In a market where P=fees and Q=blocks produced/TX confirmed, there will ALWAYS be high fees & long TX times.

One key thing to note here is that in a monopolistic structure, P=ATC. Thus, as the average total cost of the miners increases (which it will upon further market adoption), so will the price/fees. This relationship makes sense in this model, which essentially makes it a self-checking system, because we all know that a limitation in the amount of TX being mined and confirmed + increase in market adoption = higher fees for those that are looking to use the Bitcoin network.

All This Doesn’t Matter Anyway Because the Lightning Network Will Cure Everything?

Here’s the issue with Lightning Network:

If anyone has read the whitepaper on Lightning Network, they’ve more than likely come across the headlines stating that it is the ‘ultimate scaling solution’ for Bitcoin!

The fact is that the initiation/creation of a Lightning Network channel requires an on-chain transaction. The same applies for the closing of this channel or merely updating it to settle fees with the party that one is dealing with. These channels can also only be facilitated through the usage of SegWit-coins (I’m assuming this will be the case because of the inherent security risk when introducing transaction malleability into any off-chain payment structure for any cryptocurrency).

Assuming the best-case scenario for the Lightning Network (it’s a huge success and everyone uses it), there are several fundamental mathematical reasons for why what I outlined above with Segregated Witness would make even using the Lightning Network a tedious and laborious task whilst rendering the ‘settlement layer’ virtually unusable entirely for regular transactions. This would essentially make the creation of a Lightning Network channel infeasible for all but the very wealthiest users, thus destroying the promise/premise of a virtual

· The bulk/majority of Bitcoin users must consider this to be their preferred method of transacting. This would be considered ‘success’ for the project.

o Current estimates from the University of Cambridge suggests that the coin has obtained approximately 2.9 to 5.8 million users. Assuming that each one of these users were to perform a transaction at some point without performing any simultaneous on-chain TX for alternate purposes for any reason at all, a rough estimate for the # of TX that Bitcoin should be able to handle if we account for potential growth as well as implementation in order to facilitate Lightning channel creation would rest at approximately 5 million — and that’s probably low-balling it.

Bitcoin has the inherent capacity to handle 7 TX/S. However, at the time of writing, blockchain.info estimates that the network is handling approximately 9.92 TX/s:

· There are 3.154e+7 seconds in a year (31557600 exactly).

· Thus, 3.154e+7*9.92 would give us the average amount of TX we could expect BTC to handle in a given year — and this is assuming that the market remains as is (keep in mind the implications of expansion).

· The total number is 312,876,800 TX/year at its current pace.

However, these numbers don’t account for the fact that a significant sum of them remained unconfirmed TX for the most part.

Source: blockchain.info

For those that can’t see the graphic above too clearly, Bitcoin reached approximately 490,644 TX around December (right around the height of the frenzy at $18k+/coin).

However, the mempool (# of unconfirmed TX) stood at a monumental 120.8 million bytes or 120 MB.

Source: https://blockchain.info/charts/n-transactions-per-block

This would represent 120 filled-up (non-SegWit) blocks. Assuming we give the benefit to SegWit of full adoption (x1.7 increase in size), there are still 70.5 MB (70 blocks) of unconfirmed data that needs to be confirmed. Math: 120MB/1.7MB(average block size w SegWit)

Source: blockchain.info

The average # of TX per block at this time period, however, was 2,723.

However, the average fee during this time period was exorbitantly high. We can assume that this was due, in part, to the fact that there were 2,723(avg. TX per block)*70.5 (# of blocks worth of TX unconfirmed assuming full SW integration) to get a lowball estimate of 191,973 unconfirmed TX (in reality it was much higher).

So, here’s some math to get the aggregate total # of TX that people attempted to initiate with Bitcoin was at its height (nowhere near widespread, mainstream adoption):

· 490,644 TX confirmed/day in late December.

· 2,723 avg. TX per block

· Approximately 70.5 (assuming these were all SegWit-enabled transactions) blocks left unconfirmed.

· 70.5*2,723 = 191,971.5 unconfirmed TX/daily at that time (at least).

· 490,644 (confirmed) + 191,971.5 (unconfirmed) = 682,615 attempted TX per day.

· We can assume 490,644 is the absolute threshold for # of TX/day.

· [191,971.5 (unconfirmed)+490,644 (confirmed)]*365= 249,155,935 million unconfirmed+confirmed TX/year if adoption reaches the height that it was at previously.

The number of unique wallet users has doubled in the last calendar year alone from 11 million to 22.9 million.

Source: blockchain.info

Each unique new wallet (11 million in last 12 months) signifies a safe default average of 1 TX/wallet.

Some of these wallet users send dozens or hundreds of TX per year.

Assuming the numbers don’t grow at all and adoption rate doesn’t increase past what we witnessed in December at the height of Bitcoin activity, a modest, super-conservative estimate is that approximately 5 million people would actively use Bitcoin in the 365 days following the (eventual) adoption of the Lightning Network and SegWit (hypothetical situation).

Assuming they all used Lightning Network and stayed off-chain entirely, they would not be able to create a channel and settle payments with more than 25 people/entities in a given year.

How does this math work? Each movement to bring money off-chain into a channel represents one on-chain transaction. Settling the payments on-chain also represents another transaction. So, establishing a channel with 25 different people and settling it that year would represent 49–50 transactions per person.

So, the math on that is 5 million*49 TX = 245 million TX

Once again, this assumes full SegWit adoption and that everyone uses the Light Network. That’s also assuming that these things would give the coin the capacity to handle the additional unconfirmed transactions.

These parameters are obviously not only unreasonable but impossible. I don’t think there’s anything else to say but that SegWit and Lightning Network aren’t the scaling solutions we thought they were.

So What Happens Now?

This is a good question. Do you want to know my prediction?

All of what I described above will precipitate the eventual destruction/fall of Bitcoin. If I had unlimited margin available, I’d wait until Bitcoin’s next run, then pull a short position and I wouldn’t sell it until the price hit below $100.

Are You Crazy? You’re Predicting That Bitcoin Will Die?

Yes. I’m not going to give you an on-the-fence, iffy or unsure answer about it — I think that Bitcoin will most certainly die. The only question at this point is when.

Why Do You Think It’s Going to Die?

· SegWit has set it on an irreversible crash course with the economic ruin that I detailed in the first part of this essay.

· The war and in-fighting in the community will continue to expose the flaws in Bitcoin. As it becomes more popular and more and more people feel emboldened to take the stance that I am taking, it will become more than “FUD”, it will be recognized as a fact.

· Blockstream and Bitcoin Core are staking everything on Lightning Network. Go on social media right now and you’ll see nothing but Lightning strikes on profiles everywhere. People believe this is the one true solution to Bitcoin’s scaling problem. What happens when they find out that this couldn’t be further from the truth? What’s the alternative? People will have to accept the fact that it can’t scale with its current implementation.

· What if they hop on the blocksize bandwagon? Too late. The problems expressed with SegWit would only become more exacerbated.

When Does the Music Stop?

Who knows. I’m guessing within a couple years max. My targets are within the next 365 days. Long end of the range is a full two years.

If I’m wrong about all of this in three years, then I’ll post a video of me eating my hat.

Does This Mean the End for Cryptocurrency?

Hell no. If anything, this may be the thing that’s needed for cryptocurrency. Look at the last few years in this sphere. Bitcoin determines everything that’s going on with everything. If Bitcoin crashes in price, so does everything else. The media coverage of cryptocurrency is contingent on Bitcoin. If Bitcoin has scalability issues, the mainstream looks at it as cryptocurrency has scalability issues.

With Bitcoin out of the way, people will be free to evaluate the slew of other cryptocurrencies that exist in the world and evaluate them for their true value and scalability.

Do You Hate Bitcoin?

Absolutely not. But I don’t look at brand names, I look at technology. That’s what matters. You don’t care that a dollar bill has George Washington on it (some people do but that’s another story). What’s important is its value and what it can do for you. In other words, its properties. Although Bitcoin is not fungible, we look at it in a fungible way because we look at money in a fungible way.

Bitcoin is an experiment. Those aren’t my words — they’re Satoshi’s. It embodies the innovation of “cryptocurrency” as a concept and the implementation of blockchain. Bitcoin, no matter what, will always go down in the history books.

But the chain isn’t flexible, it was never meant to be. It’s a prototype. At the time of me writing this, we still don’t have an iteration of “Bitcoin 1.0”. Based on my knowledge of how the blockchain technology works, and economics — I don’t see a feasible way for Bitcoin to ever scale in a fast enough manner to ensure its long-term survival.

Are you a Bitcoin Cash Shill?

No. There are some issues I have with the community’s advocation of a variable block size limit. I think that this would be a reckless implementation and I’m hoping that they do not pursue this as the direction of the future. I need more time to look deeper into some of the theoretical software upgrades that they are proposing for 2018 before I can completely co-sign Bitcoin Cash.

Just to be clear, this is not a “Bitcoin will die but ___________ coin will be way better”. Just about every coin that I’ve seen has issues, and I will do my best to outline the issues in each in separate articles. However, the focus for this specific issue was Bitcoin, so that was what I wanted to address first.

Are You a Government Shill?

No. I am just a regular human being.

Why Are You Writing This?

Because I believe what I’m saying is true, and I think that these issues have not received enough attention. Perhaps with enough community support, people can petition the Bitcoin Core team to adopt another direction or pursue a more sustainable measure for supporting Bitcoin. However, I am not sure that this is feasible now given the fact that SegWit was soft-forked into the chain’s software. Thus, I think that the fate of Bitcoin is sealed.

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