If we say that Bitcoin SV is the only crypto currency fulfilling Satoshi‘s vision, we are mostly talking about scaling. This question, how to scale Bitcoin, is very old. It is even older than Bitcoin itself.
Let‘s go back to the beginning: To the day Satoshi announced the Bitcoin whitepaper in the cryptography mailing list. This was October 31th, 2008, about three month before Satoshi created the Genesis Block. For three days nothing happend. Nobody in the mailing list seemed to be interested. Then, finally, Satoshi received an answer.
James A. Donald wrote: “We very, very much need such a system, but the way I understand your proposal, it does not seem to scale to the required size … If hundreds of millions of people are doing transactions, that is a lot of bandwidth.“
Satoshi seemed to have waited for answers and already thought through this question. Only one hour later he explained him, why scalability was not a problem:
“Long before the network gets anywhere near as large as that, it would be safe for users to use Simplified Payment Verification …Only people trying to create new coins would need to run network nodes. At first, most users would run network nodes, but as the network grows beyond a certain point, it would be left more and more to specialists with server farms of specialized hardware.“
There is zero ground for doubt
Satoshi educated James Donald with a very clear answer on a specific question.
Let‘s look at the problem: Bitcoin is a p2p network. It consists of nodes which are peers. This means they are all the same. Every node receives, verifies, saves and sends every transaction. It‘s obvious to ask how this can scale, since the nodes need more resources when the network grows.
Satoshi had a very clear vision in mind: The nodes should not be run by users, but by specialists. Users shouldn‘t need to run a node to verify payments, but use a simple solution which he called „simplified payment verification“ (spv).
This was not a one-time shot. Satoshi confirmed this plan over and over. One example is a thread on bitcointalk in June 2010, in which Dan Larimer, well-known for creating Steem and EOS, claimed that a bitcoin transaction consumed too much resources to be useful for micropayments. Satoshi told him:
“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..”
Can it be more clear? Bitcoin nodes should be run by specialists with big servers. Period.
Not a technological problem
The community around Bitcoin knows these quotes of Satoshi, and people know very well how Satoshi planned to scale Bitcoin. But today they all claim that the inventor of Bitcoin didn‘t understand his own invention as well as they do.
This became obvious in 2015. In this year the great scaling war began to dominate social media around Bitcoin. The discussion got extremely heated and controversial, and it ended breaking the community.
On the surface it was a technical debate: Engineers discussed how to increase the blocksize limit and how it will affect different parameters. Engineers showed problems and bottlenecks, demonstrated alternative scaling solutions, met on a series of Scaling Bitcoin workshops, gave technical talks, and so on. Only engineers were accepted participate in the debate, just as only engineers should decide about the security parameters of an airplane.
However, in reality, it never was about technology. Technology did never matter, and engineers shouldn‘t decide about it. The question, if and how to scale bitcoin, is solely a political question. Should Bitcoin become like Satoshi planned – a network of specialists – or should it be a network of hobby nodes?
Specialists and laymen
If we do it like Satoshi wanted, there is no scaling problem. Not the slightest. Specialists are already able to up- and download 1 gigabyte of data in a second, and hash, validate, save and perform a backup.
A gigabyte of data equals roughly 4 million transactions. If Bitcoin will ever need so many transactions, it will have changed the world, and it will be trivial to process much more data. If full nodes are specialists, there are no physical bottlenecks. Scaling Bitcoin would be so easy.
However, if you believe Bitcoin needs hobby nodes – nodes which can be run by everyone who has a computer – scaling becomes a terrifying, sleep-depriving problem. A game you can only lose.
Hobby-nodes are maintained by newbies. They are not educated and not competent, they neither have enough time nor resources. They miss updates and make mistakes. The nodes run on old laptop with tiny chips and disks and plug it on their home router, through which also Netflix flows in. For hobby nodes scaling is ALWAYS a problem, no matter how low you go.
Domination of Proof of Social Media (PoSM)
In Bitcoin (BTC) in 2020 hobby nodes have become TINA: There is no alternative. Despite their obvious shortcomings, most Bitcoiner conceive them as the inner core of Bitcoin, as the one and only important value proposition. This is the result of a long war in social media, which blustered on all channels between 2015 and 2017.
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This didn‘t happen without severe resistance. Many users and investors and almost all Bitcoin companies, miners, exchanges, payment providers and wallets, wanted to scale like Satoshi planned. But they all had to bow to a clique of technocrats and their militant social media armee.
Since mid 2015, whoever dared to vote for Satoshi‘s vision had to wade through shitstorms. The troll horde accused him of not understanding bitcoin or being an enemy of Bitcoin. Trolls haunted and forum moderators censored almost everybody still holding the vision of specialist nodes. Popular developers were no longer allowed to speak at conferences, authors banned from popular magazines, influencers afraid that troll armies destroyed their reputation, and even large companies had to submit after being plagued by months long social media slandering.
Since 2018 Bitcoin marches completely under the ideology of hobby nodes. They have become a dogma, a religion, the end of free thinking and civil discussion, a taboo line, separating allowed and prohibited opinions. If Satoshi would draw his vision today, he would be called an idiot or an enemy of Bitcoin.
The religion of hobby nodes
Hobby nodes embody decentralization. That‘s the core of the dogma. And wasn‘t decentralization what Satoshi had in mind? Look at the whitepaper, it says „a peer-to-peer electronic cash system.“ So even if Satoshi wanted specialist nodes, the hobby node community defends his vision better than himself. That‘s about how the hobby node ideology goes.
Decentralization has become a holy term, a slogan, which has never really been defined, but which cuts the world in good and bad. Who is in favor of decentralization, is good. Who is against it, is not a „real bitcoiner“, and the high priests of Core decide what decentralization actually means.
Every important property of Bitcoin, so the story goes, will succeed and fail with a decentralized infrastructure of hobby nodes. The censorship resistance, the privacy, the autonomy, the fixed monetary supply – everything Satoshi had in mind. He just didn‘t know what we know today.
Today, the passion for full nodes birthed a whole market for merchandise. You can buy your hobby node out of the box. Usually it is an overpriced tiny computer, like a raspberry pie, which is either packed in a retro design or in a lot of cypherpunk pathos. There are also hobby nodes like nodl, which are the thermomix of the nodes, and can also be an electrum server or a btcpayserver. Everybody who buys such a device and plugs it into the router, pays his toll for decentralization. Defending freedom has never been more comfortable.
For the hobby node lover, it can‘t be small enough. The tinier the hardware a hobby node needs, the better. Decentralization was never defined, so we never know when we have enough of it. The current state of something like 100,000 hobby nodes is ok. But it‘s not the goal. A node in every household and in every smartphone – that‘s the perfect world of the hobby nodes.
Making all things complicated
It is very obvious that a Bitcoin of hobby nodes can‘t scale. Since every node must do everything, the network can only do what it‘s weakest node can do. This doesn‘t scale anywhere.
But Bitcoin still needs to scale. So it must be done otherwise. The canonical solution is the Lightning Network. This is a very complex construct of payment channels, multisig transactions, hash contracts and timelocks, which bangs Bitcoin finally out of the space of the explainable. Lightning allows users to send payments „offchain“, so they never hit the blockchain.
Many engineers love lightning. If you accept the dogma of hobby nodes, there is no alternative, and it is the perfect solution. However, lightning makes everythings very complicated. Users need to fund channels, connect with other nodes, find routes through the network and manage the liquidity of their channels. The user experience is mostly, even for small amounts, cruel. Like since 2015, it‘s still 18 month away from being ready for the masses, and even Lightning Developers started to doubt that it will ever reach this state.
But what else can we do? Bitcoin must remain decentralized, and this means we can‘t do it like Satoshi planned.
A glaringly inefficient network
The network that the BTC scene is striving for is extremely inefficient. It does not grow in height, but in width. Instead of nodes doing more, there are more nodes doing less. The goal is not to increase the performance of the nodes, but to increase their number. Such a network scales quadratically. It‘s consumption of resources, CPU cycles, bandwidth, disk space and so on grows with the data volume AND the number of nodes. If the BTC network of 100,000 full nodes processes 1 megabyte of transactions, it needs at least 100 gigabyte of bandwidth. A network with just 100 nodes could process 1 gigabyte of transactions with the same resources.
But this is not the worst inefficiency. To understand this, you need to look at the miners. They build asic farms worth billions of Dollar, large warehouses full of chips, which consume terawatt hours of energy just to find a hash with certain properties, which allows them to create a new block. But this is not the real service of miners. What they really do is to process payments. They validate, confirm, propagate and save payments. To merge this function with the creation of new monetary units – and, later, with fees – is one of the strokes of genius in Satoshi‘s invention.
In the BTC hobby node network the whole investment of miners flows into asics, while a tiny server in front of a warehouse full of chips does the real work. They can‘t use a stronger server, as 100,000 hobby nodes have to be able to replicate their work. This is the biggest waste of resources in Bitcoin (BTC).
Only Bitcoin Satoshi Vision scales as intended
Everything would be so simple if we would do it like Satoshi said. No need to worry about hobby nodes. No need to wait that Lightning will be ready for the masses in 18 month. No need to use the most inefficient network you can imagine.
All what was needed was to allow nodes to become specialists. Satoshi‘s vision has an elegant simplicity, and it was communicated very clearly from the beginning.
However, there is only one cryptocurrency taking the advice of the inventor of Bitcoin seriously. Even Bitcoin Cash, which was founded as an escape from the shackles of hobby nodes, started to worry for hobby nodes and limits the transaction capacity. In Ethereum the concern for decentralization by hobby nodes dominates the debate of scalability, which has become more and more complex and confusing since then.
Blockchains like Ripple, which have no miners at all, claim to bet on industrial nodes. But they do exactly the opposite: They cut the incentives for specialists and expect that hobbyists do the same without being paid.
It would be so easy. You just need a proof of work cryptocurrency which is run by specialists. But there is only Bitcoin SV which wants to achieve this. That‘s why it‘s called Satoshi Vision.
Original german article:
Ja. BSV steht für Bitcoin Satoshi Vision. Und zwar zu Recht.
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