The economics of sinking Garzikcoin aka BIP 100.

Apparently it’s time for yet another round of smacking populist children upside the head, because obviously “the community,” for whatever baseless value that may imply, can never and will never heed the wisdom of its superiors (including Satoshi) until it’s been so thoroughly raped and mercilessly cleansed of everything it ever held to be true and just and right and fair that it can’t tell which way is up, for the simple reason that reading, thinking, and reflecting are hard and really can’t be taught any other way.i Just the way of the world, it seems.

First, a bit of Bitcoin history that you may be too young for. Way back in October 2014, Gavincoin was sunk,ii that much we know and that much we will never forget. Then, just a few weeks ago, Hearncoin aka BIP 101 aka Bitcoin XT was sunk, that much we know and that much we will never forget. Now, as is Soviet custom and USG policy, the “taught controversy” continues unabated with its calls for a pre-emptive strike against herpaderp dreams of global adoptionz and apolitical payola.iii

As you may have heard, the latest thickheaded hard-fork scammer who wants to steal your money is Jeff Garzik, Mr. “Let’s put PGP in your web browser” himself.iv Now, USGarzik’s “BIP 100” paperv is a proposal of such nebulous wankery and such poorly defined specificity as to warrant nothing more than mockery. So let’s do this thing. Spaketh USGarzik :

Changing bitcoin’s rules requires a risky operation known as a hard fork, an abrupt global upgrade.

Well, to my understanding at least, an “abrupt global upgrade” isn’t at all the definition nor the practical reality of a hard fork. While we agree that it’s a risky procedure, a hard fork entails a splitting of the network’s hashing power into two distinct chains, one running the original software and one running the “upgraded” software.

In such a case, as anyone is more than welcome to find out for themselves, the less economically valuable chain will depreciate and the more economically valuable chain will appreciate. So, BIP 100 triggers, but is it more valuable than therealbitcoin ? Well, no – categorically no, in fact.

Garzikcoin will be more expensive to mine because higher bandwidth connections would be required to relay the larger blocks, something that already seems to be an issue with 1 MB blocks based on the SPV idiocy of early July,  its network will be more fragile as fewer users could afford nodes as the costs of running a node increased exponentially exactly like they would for Gavincoin,vi and as a result Garzikcoin will be less valuable, opening up the economic opportunity for holders of pre-fork coins to trade their Garzikcoins for therealbitcoins. After all, lesser options don’t overcome better options just for the saying so of “the people.” Continuing :

If two or more populations of users choose to follow different rules, one of bitcoin’s key axioms is broken: the same bitcoin may be spent twice (one in each user population). Each population has an enormous incentive to seek consensus and end this situation. If such a split occurs, bitcoin payment processors, exchanges and other businesses must either Pick A Side or simply shut down until the confusion is resolved, severely damaging confidence.

This is rank nonsense of the first degree. Each post-fork population has the incentive to out-compete the other. This is a free market we’re talking about here, and the purest, sweetest flavour of capitalism yet devised by man, not the kumbaya corner at Shambala. The grave of consensus has been dug and no amount of voodoo doomsdaying is going to revive its walking corpse and keep it out of the ground where it belongs. At best, it’s just going to create more terrorists.

Additionally, the notion that Bitcoin businesses will be “confused” until everything is “resolved” is absurd. Businesses in general will pick a side, whichever they deem to carry the more valuable clientele (therealbitcoin obviously), while exchanges will add “Garzikcoin” in the same way they added Ether, allowing users of pre-fork coins – that is, owners of coins on both post-fork chains – to trade their copper for gold, which is exactly what they will do because that’s exactly the way their economic incentives guide them.

A block is an economically constrained resource for which bitcoin users bid space according to the laws of supply and demand. Your bitcoin transaction has very little security until it is validated and placed in a block. This system discourages garbage floods (spam) ­ it costs increasing amounts of money to do so. This system incentivizes conservation and efficiency.

USGarzik understands what a bitcoin block is in theory, he understands what economics are in theory, he understands was money is in theory, but in praxis he only understands “the community,” the narrow realm of his own meagre coding abilities, and the paper promises of his handlers. He’s therefore entirely unsuited to lead anything more than a kindergarten class on a field trip to the zoo, which, incidentally, is pretty much exactly what he’s endeavouring to do. From each according to his abilities, to each according to his needs, indeed.

Why change? The primary reason is removing a roadblock to bitcoin growth. The theoretical limit with the current block size is 7 transactions/second. Any responsible business projecting capacity usage into the future sees the system reaching an absolute maximum capacity, with this speed limit in place. Increasing or removing this limit will encourage businesses to view bitcoin as scalable and capable of supporting millions of new users.

The primary roadblock to Bitcoin growth is not in fact “supporting millions of new users” as USGarzik claims, nor is it in the collapse of fiat markets, it’s in establishing and affirming Bitcoin’s cultural superiority. This includes, but is not limited to, killing any and all USG operatives who would stand in our way, regardless of race, colour or creed. No point being all racialist now.

As to what “any responsible business” might do or not do, given that USGarzik has had little to no exposure to such things, he’s hardly in a position to judge any more than Travis Patron is in a position to judge whether anyone makes rules on the Internet.vii The mere suggestion to the contrary is really quite humourous. Hell, USGarzik would probably deny having even heard of MPEx, the central hub for the listing and trading of legitimate Bitcoin businesses.

Needless to say, USGarzik soldiers on the way only government fed and clothed soldiers can. In essence, his BIP 100 protocol proposal is as follows :

  • Changing the 1MB limit is accomplished in a manner similar to BIP 34, a one­way lock­in upgrade with a 12,000 block (3 month) threshold by 90% of the blocks.
  • Limit increase or decrease may not exceed 2x in any one step.
  • Miners vote by encoding ‘BV’+BlockSizeRequestValue into coinbase scriptSig, e.g. “/BV8000000/” to vote for 8M. Votes are evaluated by dropping bottom 20% and top 20%, and then the most common floor (minimum) is chosen.
The proposition that 90% of miners would actively work against their own economic self-interest is completely preposterous on the face of it and ignorant of, once again, some pretty basic economics. But hey, numbers aren’t fair mkay, and why shouldn’t a bunch of heel-dragging dragqueens have to submit themselves most abjectly and humbly before The Bitcoin Lordship when they can just continue with their populist charades as if the Internet were some sort of representative democracy instead of a functioning aristocracy.
Sure, what the hell, it’s worth a shot. What’s the worse that can happen, they hang in the gallows for their crimes ? What, really ? Who could’ve predicated that ?!

Answering some the existential questions opened above, bitcoin as engineered today will not be the Star Trek ideal we all want: instant, secure, borderless, egalitarian, non­volatile currency directly accessible by 7 billion.

No, we don’t ~all~ want your pressed shitboard cockroach sandwich thank you very much. I sure as fuck don’t and I very much intend to continue enough my decadent lifestyle, if you don’t mind. If you want to spread buttered garbage on your bread, there’s always more government dole for you to suckle on. Y’know, until there isn’t. But hey, that’s future you’s problem, innit ?

Ultimately I have confidence that the free market, transparency and user choice will sort it all out. Bitcoin is as much about the humans that use the network, as it is about the technology. If the technology suddenly breaks, users have over $3B reasons to work towards fixing the problem.

Ultimately, I also have confidence that the free market, transparency and user choice will sort this all out, just as it always has, though much to the current dismay of the mass adoptionists who would dilute the holdings of the bold and brave fast followers (what early adopters ?).

So regardless of what tricks are turned by what hoes flung up against the wall of public scrutiny, the USG will be embarrassed six ways to Sunday. Their pathetic and ultimately pointless attempts to subvert Bitcoin will fail. They can try to entice the miners with phree treats,viii they can try to entice redditards with empty promises of universal equality, but they can’t entice Bitcoin’s users – those with the actual coins – we, Bitcoin’s aristocracy. We’re the ones who make the rules. And we’re not for sale.

Now that’s economics.

___ ___ ___

  1. Blame their shitty parents for being too “progressive” to set them straight. Or their parents’ parents. Or don’t blame anyone because what is, is, and there’s only one way out of this : more beatings until morale is improved is less meta.

    Then again, since this is the Internet and physical beatings can pose a bit of a practical challenge, there’s always history lessons like this one. And art. []

  2. To quote :

    Gavin walked into the lion’s den with some seriously weak sauce and got his head ripped clean off. He tried to pretend, as a scammer can only do, that bandwidth, CPU cycles, and hard drive space are as plentiful and renewable as snowflakes in the arctic, that they fall from the heavens whenever we need them and can never be depleted. And he failed because it simply isn’t true.

    []

  3. That an American is proposing a “pre-emptive strike” to prevent the consequences of some boogeyman is no coincidence, it’s de facto USG policy, lest we forget the sorry story of America’s lost decade in Iraq on account of their scapegoating Herr Saddam Hussein. Remember him ? The guy who didn’t actually have WMDs ?

    Yes, once it was George W. Bush, then it was another American, and still another and another and now another, apparently ad inifinitum, because when your dick is so and you’re materially lacking the virility needed to fight against the real world the way it actually works, and you’d rather not recall that the slogan “Making America Great Again” implies that you now suck a bag of fourth-rate soviet cock with more youthful enthusiasm that you’ve ever sucked before, then you really have no choice but to stick it to dark-skinned boogeymen in bedroom closets, whether those be terrorists in your backyard  or the equally deadly African bitkoin komoonity. []

  4. No, we haven’t forgotten. []
  5. It’s available as a PDF somewhere. If you want it, go, find. []
  6. Lest we forget :

    Gavincoin’s 20 MB blocks would grow the size of its blockchain by 2.88 GIGABYTES PER DAY or 1.05 TERABYTES PER YEAR since they will be filled with essentially zero-fee spam transactions by design.

    And Garzikcoin wants to open up the door for 32 MB blocks. Lulz. As if. []

  7. Incidentally, after Travis, he of 5 Simple Rules fame, recently popped by Contravex with the derpy “no one makes rules on the Internet” comment, he unsolicitedly dropped me a plaintext e-mail, which is reproduced below alongside my deciphered response below :

    From : Travis
    To : Pete

    Hi Pete,

    If you could summon up the courage to temporarily set aside your
    trollish tendencies, I’d be interested in hearing your thoughts on this
    article: [redacted]

    From : Pete
    To : Travis

    Travis,

    Here’s how this works and I won’t tell you again. Seriously, like you send me another plaintext piece of shit and I trash it. Because that’s how that works. Anyways, if you want to me read your article, much less provide you pro bono feedback, you must unequivocally and without further delay :

    1. Humbly submit before me, which is to say, drop the fake bullshit where you pretend like we’re equals and you play it all cool like I’m doing ~you~ some sort of favour by reading whatever shannonised shards you’ve cobbled together into sentences.

    2. Acknowledge that the Internet most certainly has rules, and apologise publicly for your previous transgressions.

    3. Get in assbot’s WoT as per http://wiki.bitcoin-assets.com/first_steps_in_bitcoin-assets and http://wiki.bitcoin-assets.com/first_steps_in_bitcoin-assets/cloak and http://wiki.bitcoin-assets.com/irc_bots/assbot

    4. PGP and only PGP if you want to talk in private, which I’d actually prefer if you didn’t. Going forward, either leave a comment on Contravex or find me in #bitcoin-assets. Tertium non datur.

    Regards,
    Pete

    I sent him that response three whole days ago, since which, silence. No “!register travis_patron” in #b-a, no pgp-gram back, nada. I’m sure he’ll reappear in another month or two, as full of pretence as ever. []

  8. Some miners might be tempted to take a few goodies on the down-low from the USG Department of Infinite Promises, but at the end of the day, the USG is a broke joke and any miner intent on being around in a year or five will do the very simple math and realise :

    The whole fucking point of Bitcoin is that the users don’t have to trust the miners.

    That’s what it means when we say that Bitcoin is “censorship-resistant.” The users have the power, those in the WoT even more so. The miners are merely acting in their own self-interest, they could care less whose transactions they’re relaying, they just want to get paid.

    And since the miners just want to get paid, their economic incentive is to mine smaller blocks because that’s the only way higher transaction fee markets will develop.

    For the record, miners also don’t want to remove the 21 mn coin cap (the next faux “battle ground” once the block size faux “debate” has been drilled into everyone’s head with a blunt stick) because that will only serve reduce the value of every coin they mine. Sure, there will be “moar coinz so everyone can haz,” but as with seashells, producing more currency disproportionately devalues the existing stock and ultimately leads to debasement and loss for all. Scarcity is essential, which is why it’s non-negotiable in currency. []

9 thoughts on “The economics of sinking Garzikcoin aka BIP 100.

  1. Adam T. says:

    “pre-emptive strike” — best characterization I’ve seen yet to describe the odd feeling of urgency from certain parties.

    • Odd indeed. Almost like these overgrown children seriously imagine that Bitcoin didn’t reach escape velocity 2.5 years ago and that they can rewrite history if only they obtain enough “consensus” on social media. Must suck to think that’s how the world works.

  2. […] practicable use for than as water-resisting objets tacked to the hull of The Most Serene Republic certainly don’t point to the contrary. […]

  3. […] And these are the same incompetent twerps you want ‘developing’ Bitcoin ? Mkay. Enjoy. […]

  4. […] is sarcasm, folks, unlike USGavin‘s and USGarzik‘s deadpanned and straight-faced belief in the mystical power of an ex-post […]

  5. […] in front of our steamroller, lest we forget that there was also XT (also with 20 MB blocks), Garzikcoin (up to 32 MB blocks), SegWit, (same blocksize but loss of signature validation by nodes), most […]

  6. […] Garzikcoin was sunk by TMSR~ so I guess he’s on to “Bloq” or whatever. No different from Gavin “moving on” to MIT. Same shit. Same unwashable stink. [↩] […]

  7. […] ? THREE BLOCKS. But signs of strain were already showing less than 24 hours into this “experiment” that “no one could’ve predicted,” namely the pretend “Network […]

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