We all want to peak behind the curtain and see what people really think, but in a public setting, they are usually guarded and engage in marketing speak. So we went undercover.
The following conversation took place on the 16th of February 2017 when it became clear segwit had stalled. Bitcoin Unlimited, at the time, had gained some momentum, but the mood was uncertain.
Considering the apparent rejection of segwit by miners, we began by wondering what Bitcoin Core developers plan to do now.
Adam Back, executive director and President of Blockstream, told us the plan might be to “maybe talk with some miners, see if we can debug what the issue is.” When we pushed by saying miners seem to have made their decision in regards to segiwt, Back replied by stating “I’m sorry, but I can’t help people who make nonsensical decisions. You realise what the alternative is?”
It is worthy to bear in mind this is a real-time two ways conversation. We interjected to point out that it wasn’t about people, but bitcoin, a, at that time, $16 billion market.
Back replied to state that “bitcoin as a default continues with a 1MB block and no segwit. For holders that appears stable.”
The obvious question we asked is whether Back is “happy with 1mb forever?”
He replied to state in a way that implies he would be happy “if a few miners abuse a monopoly-like position to block something that most of the ecosystem wants.” He further added:
“What are the tech alternatives if they have decided they don’t like segwit for no particularly rational reason that anyone has heard? Just tech feasibility, no judgement. Say developers accept this aesthetic or ego or whatever choice. Then a new approach has to be implemented. It will take 12 months minimum. Design, development, testing, network validation etc.”
“I won’t engage in arguments or pass judgment, I’m sure they have their reasons. We are where we are. Where do we go now?” – we asked.
“I like to understand motives and reasons.” – Back replied, “is it a rational proposal to delay 12months to no gain?” – he continued. “In the mean time fees go up, some usecases leave bitcoin that didn’t need to, lightning is delayed. It seems to me it is within the capabilities and means of the bitcoin ecosystem to fix this problem. They just need to get their act together and talk with Jihan.” – Back said.
We kept pressing by re-iterating our question: “does bitcoin end here at 1MB or is something else coming along?”
Back replied by stating that “there are lots of things coming in stages including lightning and high transaction throughput and bigger block via some kind of fork. It’ll take, in my opinion, 2-3 years across all those things because software is complex. It’s kind of unfortunate if one stubborn or miscommunication or whatever problem delays progress by a further 3 months.
Bitcoin underwent many optimisations of similar nature over the last 8 years. I’m flexible but developers are bounded by the reality of software physics. They can’t do 12 months of work in 1 month. No one wants to break bitcoin by bungled untested fork to fix it.”
After some back and forth repetition, we pointed out that ethereum coded their hardfork in weeks. They did so more than once. In response to the DAO incident and in response to a DDoS bug. We pointed out that Adam Back has 13 developers under his command. It can be done in days.
“Their s*** was on fire. They had to undo it. It was bungled. No one transacts on ethereum. No one cares. Few people who are smart attacked it. Different ball game. Take a look at segwit. The design was figured out in outline August 2015 I think. Alpha code December 2015.” – Back stated.
We asked if “4MB plus segwit in 12 months” can be proposed and merged. Back replied by stating “no one in the tech community will accept that 4MB multiplied by 2-4 by segwit (4-16mb worst case) is safe. They will want to do weak blocks first (as the roadmap says) and in order to do that they would like to see the effect of segwit. It is not just a technical effect but an economic usage effect so it’s not entirely predictable.
I think people often think we’ll just do “xMB and segwit too, or do segwit as a HF and call it a day.” Not realising that each word of their what-if configuration is a months work for a team of dozens. And often negative work, resulting in a worse or riskier solution (a number of people have proposed such variants, it is just more complex than it looks). And this isn’t even getting to the root cause of why centralisation is such a problem.”
Putting forth the other side’s argument, we asked “why should I think you do not want capacity limited to 1mb?”
Back replied by stating “the opposite, but there are tradeoffs to security and permissionlessness. So, here’s one concrete thing: I proposed the use of schnorr aggregated signatures in 2013. It’s now implemented in library form. That makes transactions 27-41% smaller so more transactions per block.”
Pressing on the 1MB point, we stated that “many blockstream employees have said they are fine with segwit never activating and, basically, 1mb forever,” to which Back replied by saying “it’s a reaction to the impression that some people are thinking to blackmail developers. They are explaining that it’s the wrong tactic.”
“Doesn’t that suggest developers are blackmailing miners?” – we asked, to which Back replied by saying “no. What they did is develop a proposal that they had every reason to suppose would be acceptable to all. It’s up to the ecosystem as to whether they like it or not. The ecosystem evidently does like it. And miners role is to do what the ecosystem, which includes users and investors, wants or ultimately the ecosystem can and will fire them. But none of that is for developers to meddle in their view. That’s between users, ecosystem companies and miners.”
“You say ecosystem, but if there was a token vote and 90% showed one preference, don’t we still need developers to merge and then miners activate?” – we asked.
“Not really. It could just be activated by companies. People are content to wait for miners to do the right thing for a while. If that doesn’t happen presumably another activation method will be used.”
This conversation took place exactly ten days before, on the 26th of February 2017, a Litecoin developer proposed a new flag day soft-fork activation method which gained some attention and ultimately led to Bitmain mining with Bitcoin Unlimited. At the time, we were not aware, so asked if by “another activation method” Back meant the so-called nuclear option, a Proof of Work fork.
Back responded by stating “no pow change. Just activate it.” We pointed out miners are needed for transaction validation as well as developers to merge, but Back responded by saying “consensus rules are enforced by economic full nodes. If economic full nodes say with near unanimity this is what we want and we’re turning it on, miners will follow.”
“I think the miners are quite bitcoin invested (directly) as well as indirectly. They do not actually want to hurt their investment.”- Back continued.
We argued that would be network suicide: “Developers propose, miners judge, in the very most extreme circumstances users over-rule. When it comes to users to decide, it’s basically over, their only decision is selling it down to zero, unless two coins, but…”
“How so?” – Adam Back asked. “segwit is opt-in for miners also. They don’t have to create segwit blocks, if they do nothing different, nothing breaks. It’s a misunderstanding of what miners job is here. Miners are only paid to ensure transaction processing and signal for rules users want. Users set the rules.”
“I’m sure you’ve read the whitepaper.” – we said. “No, it’s more technical and subtle. If a miner changed the rules, they would not be mining.” – Back replied.
“There are no fast rules, we don’t know what would happen.” – we argued. “It’s true that things get grey at the edges, but it is assumed that no one wants the nuclear option in MAD.” Back replied.
“You appear to,” – we said, “or, your employees.” “No and no” – Back replied. “We’ve all (those much involved with coding on bitcoin) behaved extremely professionally and courteously under fire doing mission critical and not lost our cool, nor been particularly forceful in calling out bad behavior.”
“I hope you all understand it is not for you to order anyone. You serve. You made a proposal. It is rejected. What now?” – we asked.
“Right. Well it was not rejected. It was accepted by most of the ecosystem.” – Back said. “23% for three months, that’s rejected.” – we replied. “That’s one guy. His view can change over a meal. Those 200-500 CEOs, VCs and investors can’t manage one plane ticket to China and a meal between them?” – Back asked.
“It’s not just one guy, F2Pool, Bitmain, BW.com, HaoBTC, BTC.TOP, ViaBTC, plus others.” – we pointed out.
“It is just one guy. It’s all the same guy!” – Adam Back said in one of the more interesting statement of this undercover interview. “He has 80% of the ASIC production, ViaBTC, he’s an investor in. He’s not overtly blocking, e.g. with his own pools, but as a proxy war, the view and some evidence is that this is indeed what is happening.” – Back continued.
We asked for evidence. “I do not actually know you, to know that the conversation won’t be on pastebin at the end of the day… but there is evidence. Anyway, say it’s 2-3 guys. Still people can go talk to them.”
“Are you seriously going to defame Jihan Wu in a private conversation without providing any evidence?” – we asked.
“I will not provide you with evidence because I have no idea who you are.” – Back replied. “Or because you have none,” – we returned. “Fine ask a dozen other people.” – Back told us.
Bitmain has denied they have backed ViaBTC. BTC.TOP has stated none of their hashrate share is from Bitmain. Sources suggest part of the reason why Bitmain began mining Bitcoin Unlimited is because of what they see as unfounded accusations.
“What happens if Jihan denies it?” – we asked. “I would not approach things in a accusatory way face to face. That is not clever in Chinese (or western) culture. Clearly he would have influence so if some people chose to go talk with him, they could ask for his help in activating segwit.” – Back stated.
“Is it so difficult, after two years of debate, to accept others have different views, including much of the industry, and despite your own interests, they have their own interests, especially miners, who have invested far more than you.” – we asked.
“At this time it appears that most of the ecosystem supports segwit as a next step and would sooner see it activate asap. My interests are simple: what is best for bitcoin, in my view.” – Back said.
“Didn’t the Digital Currency Group recently publish a pretty damming article, do you listen to no one?” – we asked.
“I listen to everyone who is willing to say what it is they think.” – Back replied. “But you don’t and you know it,” – we returned.
“Again, back to the well what technically else can be done. I do think a lot of the developers approach things in a selfless way. Propose, if it isn’t liked, then ask questions and propose something else, but these are not free choices.”
“2-3 weeks for ethereum developers. Are bitcoin developers so incompetent?” – we asked.
“The competence level is the other way around. Again look at evidence. Segwit pre-alpha was implemented between August 2015 and December 2015. Released to testing May? 2016. Signaling started from a few months ago.”
We responded by saying “it [the other way around] seems like not,” but Back told us “reason is confused,” courting a bit of sarcasm on our part “says you? Master Adam” which was met with an interesting response.
“Look there are lots of smart people, but there is also a lot that almost no one knows about security details in bitcoin incident response. So it’s a common theme that a VC or someone will think that they can just rustle up $10m and hire some top developers, how hard can it be. And they are very wrong.”
We pointed out that “miners are making no choice” to return the conversation towards a potential solution. “I would like to look said miners in the eye and see what they are actually willing to say about their decision.” – he told us.
We pointed out he has done so many times. “No, once more. The last conversation ended with them saying they would activate segwit and yet now it is not happening so something unexplained to what was said is going on. My interests are bitcoins, and I know much more about the protocol and security than they do.” – Back said.
The conversation diverged somewhat in a back and forth regarding the above last sentence, we raising skepticism and Adam Back telling us it is not difficult to imagine he knows better than miners. We pointed out we don’t need imagination, which interjected “post-facts.” We pointed out post-facts don’t exist. There are facts, post-facts are called lies. A statement Back agreed with, then proceeded to say:
“I do get a few too many people look at me like I’m Satoshi and supposed to rescue things. I think things would not be nearly so bad if more people acted like men and got involved and spoke their minds. Un-constructive behaviour can survive better if people do not step up and call it to account.”
We pointed out that statement can be applied both ways and returned to the underlying matter to ask for the third and last time whether ethereum developers, who coded, deployed and activated a controversial hardfork in weeks, as well as, later on, a non-controversial hardfork in the same sort of time frame, are more competent than bitcoin developers. This time, we finally received a response. Back said:
“I cannot tell developers what to do. If they are ethically against a given coding proposal as bad for bitcoin they will simply refuse. It depends what the change is but nothing that large in network load will be accepted as a simple one off change, because the networks decentralisation is already near breaking point. So they will want to implement related changes to make it decentralisation safe.
Developers are servants, but not slaves. If they are asked to do something unethical, they say no. Personally, I prefer extension-blocks which are not even a [hard fork], rather a further soft-fork like segwit to get more scale. So would that be rejected because it’s not a hard-fork?
It is hard to do good protocol design and science if people will block and fight based on irrational criteria. It is also hard to do design and development work when it is unpredictable what will be accepted, which is kind of how we got here… 12 months work and then stall for the short term.
Anyway, the next thing to watch is Litecoin, they are a dry run and it may shift thinking… I am more positive than all of this. Let’s see Litecoin activate. A few companies go talk with Jihan and other miners. See if they can work something out.”
Litecoin’s segwit stands at around 20% after more than a month with BTC.TOP’s founder saying major Litecoin pools will not activate segwit.
Returning to the conversation, we stated: “Yes, you can’t tell developers much, and that’s a problem. Obviously you could fire them, but, conceptually, it is a fundamental intellectual problem.”
“Right, but bitcoin developers are servants (to bitcoin users) and not slaves. I can’t tell them what to do, and if I tried they would say no, and I would support their absolute right to do so. The concept is just that they must do what they think is ethical.” – Back responded.
“Indeed, but it’s more complex, because they do have power to merge code and if they don’t things could get messy, so a complex intellectual problem” – we said in turn.
“Which doesn’t mean one can’t try to formulate pragmatic compromises and see if they could be persuaded of the merit of it being in bitcoins best interest long term. See, even bitcoin classic, u/maaku7 on reddit wrote an very principled and clear explainer of why he would reject a change pushed by political force and lobbying.” – Back said.
“Yes, but he’s just one guy, with no real stake in the system. If bitcoin goes down, he just gets another job.” – we pointed out.
“Right, I take bitcoin failing deathly seriously. That must not happen under any circumstances. It is too valuable for humanity. You do know I got complained at on all sides for my last attempt to broker peace.” – Back said in response.
Back suggested a 2-4-8MB compromise around two years ago, a compromise that was expected to be announced at the bitcoin scalability workshop. In a surprise move, segwit was announced instead.
Some, at that point, speculated he was over-written and had no real say. A conclusion that was supported by what happened after the Hong Kong agreement. After around 17 hours of closed door discussions, with no journalists invited, between almost all miners and many Bitcoin Core developers, as well as business representatives such as Adam Back, an agreement was reached to merge a 2MB hardfork code into the Bitcoin Core client three months after segwit is merged.
That agreement seemed dead in the water just months after it was reached following a prominent Bitcoin Core developer’s insult of those who signed the document. Now, more than a year later, there is no doubt the promise to miners made by Adam Back and many Bitcoin Core developers has been breached.