Why Bitcoin's problems are people problems

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Steve Sokolowski
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Why Bitcoin's problems are people problems

Post by Steve Sokolowski » Wed Nov 11, 2015 6:16 pm

Reading the news lately, one might be tempted to believe that cryptocurrencies are beset by technical problems. The bitcoin blocksize debate is portrayed as a disagreement among nerds as to the future of bitcoin. While there is certainly legitimate disagreement about this and other topics, this point of view is inaccurate. It's time that people recognize that the paramount issues right now that will determine the future of cryptocurrencies are people problems. The reason these issues are not being resolved is because everyone is focusing on technical solutions when almost all of the problems preventing cryptocurrency from exploding are not technical.

Not only are most of these problems created by people, but there are a very small number of people creating the problems. While I used to believe that negativity was more widespread, I've come to understand that there are a limited number of people involved in exploiting others and creating chaos. It is possible that just 1 in 1000 people in the cryptocurrency industry are involved in the activities that are undermining it. The current community efforts at improving bitcoin are misguided. It's possible to increase adoption and acceptance by writing code and onboarding merchants, but these efforts are quickly undercut by bad people.

Nothing is going to be accomplished, and bitcoin's potential will never be realized, if these people are not ostracized from the bitcoin community. People who use cryptocurrencies need to recognize that the best use of money and resources at this moment is to force out bad actors, even more importantly for now than creating new services and writing code - because those services will continue to be hobbled by the same forces that have been at work for years. I'll discuss several groups who are dealing immense damage right now and why it is necessary to take action against them.

First, the Cryptsy withdrawal issues over the past week have brought the problem of corrupt exchanges back to the limelight. Cryptsy has been delaying withdrawals longer and longer for days, with many customers receiving form-letter replies to their tickets. Cryptsy was in debt to our customers over 50 litecoins and several bitcoins, for a total of more than $1,200. It turns out that it is possible to withdrawal money from Cryptsy, as long as it is done in small increments, and in coins other than bitcoin. We got our money out by using Ethereum and Monero, but why these coins would be fine while bitcoin withdrawals are frozen indefinitely makes little sense. When confronted with these issues, Cryptsy continues to reply with standard form letters and has no answers as to why it would be refusing to pay out customers. Unfortunately, few have noticed or complained.

While Cryptsy is not a scam, Allcoin (http://www.allcoin.com), a well-known outright scam, has been stealing its customers' funds for over a year. The Allcoin scam works by allowing customers to make trades for a while, and then the exchange suddenly stops responding to support tickets, stealing its customers funds. While we only lost $40 there, other customers have reported hundreds or thousands of dollars in unpaid debts from Allcoin. Again, there is little community outrage about Allcoin, despite the clear evidence that they are committing fraud by claiming to be a registered California corporation. In fact, we found that the State of California has no record of their claimed corporate name in any of their books. Everyone knows what happened with Mt. Gox, but Mt. Gox is occurring over and over again at a smaller scale, with nobody taking action.

Some state that the solution to exchange issues are "decentralized exchanges." Decentralized exchanges sound good in practice, but the reality is that they are extremely difficult to implement and there is little potential for profit in implementing a decentralized exchange. More importantly, a decentralized exchange still needs to be promoted and maintained by a development team. If the development team is unethical, then they could implement bad features or stagnate the decentralized exchange's development. In both centralized exchanges and decentralized exchanges, good people need to be in charge. There are exchanges with good people in charge, but they are hindered by the bad ones. Good exchanges have to turn a profit, which means charging higher fees. Bad exchanges charge lower fees because they can just steal people's money. Eventually, the good exchanges go out of business if nobody takes action against those witholding money from their customers.

Second, Michael Marquardt, known as theymos on reddit and elsewhere, is singlehandedly responsible for months of delays and millions of dollars in losses to the bitcoin economy. In charge of bitcointalk.org, /r/bitcoin, and by proxy /v/bitcoin (among others), there is no single person more responsible right now for bitcoin's problems than Marquardt is. Until he is removed from his positions of authority, bitcoin will continue to struggle. It is well documented that he deletes threads in his forums referencing Bitcoin XT and altcoins, but it needs to be examined how his poisoning of the debate goes far beyond deleting posts. These next few paragraphs are an attempt to draw attention to the methods he can use to manipulate the discussion.

Earlier in the year, Marquardt and his moderators entertained discussion of using CSS stylesheets to hide censored comments, which would lead people to believe that a child comment was replying to a different comment than it actually was. For example, consider the following thread:
  • BIP 101 is a poor choice.
  • No, BIP 101 is great because it allows for larger block sizes.
  • You: I'm in full agreement.
Now hide comment #2, and look at how your post appears now:
  • BIP 101 is a poor choice.
  • (More indentation than normal)
  • You: I'm in full agreement.
This is why it is very important that people not post to places, including reddit, where they don't trust the moderators. Discussions can not only be censored; they can be changed so that the context is very different than it originally appeared. Imagine if some media outlet read these posts and decided to quote you on your opinion. This issue isn't theoretical; the post discussing altcoins I made on Saturday was read 6,000 times after someone posted it to /r/bitcoin, even though he eventually deleted it. The danger of misrepresentation by contextual deletion is a reason why I make my posts here rather than there.

In another strategy, Marquardt removes threads so that they are still visible through direct links, but are no longer visible to anyone else. This tactic encourages forum posters to waste hours replying to threads that will be read only by people who have either replied previously, or who have been invited by the moderators to tilt the discussion in their favor. Since he does not adhere to his own moderation rules, it usually doesn't make sense that a post would be "hidden" like this until it happens. I purposely avoided mentioning the name of any altcoins in this entry and had my brother submit it to /r/bitcoin to demonstrate how a post can be removed without cause or warning to its contributors.

There is another method of manipulating discussion that has received much less attention. It is worth nothing that studies have shown that a plurality of bitcoin users support BIP 101, while the number of people who support indefinite small blocks is far smaller. It is possible to provide the appearance of "fair" discussion by selectively disapproving posts that are in favor of BIP 101. A naive user reading about bitcoin for the first time, and perhaps even the experienced user, gains the impression that bitcointalk.org, /r/bitcoin, /v/bitcoin, and all the other forums with which Marquardt is associated are balanced discussion spaces because there are an equal number of support and opposition posts. In reality, the posts supporting larger blocks should outnumber those opposed by at least 2 to 1, with there being an additional group of people who are unconvinced in either direction.

It simply isn't possible to resolve any issues with bitcoin when nobody can have a serious discussion in basic online forums about the topics. Those most in favor of obtaining "consensus" on all changes also try the hardest to eliminate methods by which that consensus can be reached. It is my belief that if the forums were not censored, consensus would coalesce within a few weeks. People need to understand that the reason there isn't consensus is because Marquardt is purposely and deliberately making it so. The opposite, as he claims, is not true (that consensus will never form, so the discussion should be preemptively removed).

There's a final issue that seems to have been overlooked in much of the censorship debate. As responsible and ethical people, developers have a basic responsibility to call out activites that are against the interest of the greater community. Many of the Core developers have failed that responsibility by not issuing a statement strongly condemning the participation of Marquardt in the community. Should they not issue that statement, they have demonstrated that they are not acting in good faith - as anyone who is acting in good faith has no issue with a discussion of opposing viewpoints. Jeff Garzik has set a good example in this instance by at least tweeting that the /r/bitcoin moderation is "over the top." However, he and others need to go further and call unequivocally for a change in leadership of that forum and the others moderated by Marquardt. A signed joint letter from both sides would be a powerful statement that would go a long way in forcing change and improving relationships.

Finishing up, there exists a group of people who are simply trying to create chaos. Attackers are performing denial of service attacks on bitcoin nodes. Well-known community members resort to legal threats against developers. Trolls repeatedly target users for out of the blue personal attacks, when the user had never met or heard of the attacker before.

In conclusion, some people believe that all of bitcoin's problems are technical. In this view, adopting BIP 101 (or some other solution) will resolve the current issues stagnating the currency and resume the race to adoption - but that isn't true. In reality, bitcoin remains held hostage by a combination of criminals who never have action taken against them, people who are more concerned with their own views rather than the good of the community, trolls, and unprofessional attitudes amongst some developers. Adopting a blocksize solution without dealing with these people will just replace these negative headlines with different ones.

As a result, the only true solution to bitcoin's ills is for a large number of community members, combined with a group of people willing to invest money and resources into the effort, to systematically remove the small number of people in positions of authority who are damaging bitcoin's usefulness and reputation. These people need to work with the police to sue, arrest, and charge scam exchange operators, apply social pressure and negative publicity to reddit to force them into a stand on forum manipulation, investigate where the millions of dollars in donations for bitcointalk.org forum improvements were spent, invest in protection for hosting services suffering from denial of service attacks, and force out those who are making legal threats, blatant personal attacks, and bad faith comments.

Bitcoin is not in a "civil war" - it is in a war against ten or twenty people who are destroying an entire industry that employs tens of thousands of hardworking, ethical people. While some just want to profit at the expense of others, it needs to be understood that some of these actors are purposely engaging in their activities for the sole purpose of preventing anyone from coming to agreement on the solution to bitcoin's relatively few actual technical problems. By disrputing discussion and engaging in personal attacks, they create anger and disagreement when there would otherwise have been room for compromise.

Technology isn't going to solve bitcoin's problems, because they are people problems. Most people are good, and there are honest people who can step up to take on greater roles. It's about time that people recognize that the industry is not going to move forward until it is rid of those holding it back.
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Joined: Fri Nov 13, 2015 11:11 am

Re: Why Bitcoin's problems are people problems

Post by TheOneLaw » Sat Nov 14, 2015 12:59 am

This concept is so crucial it prompted me to register out of /lurk mode/.

This problem is not unique to Bitcoin,
but Bitcoin being an elephant in the global room this begs for an answer - our money is at stake here.

I would hope someone can pick this up and explore how we can out people who get bent
in the manner you describe.
Because what they do is outside any legal framework [an excellent situation worth preserving, in my opinion]
any kind of restitution must be driven by the markets they prey upon.

It is not enough just to know who they are,
they need to be publicly demonstrated to be causing damage to the system.
Then, the people they prey upon must be motivated to avoid the predations.

This leads to a three point system:

develop a methodology+criteria for identifying/revealing people who are deceiving the population,
(identify - document instances where such persons have actually falsified or erased valuable information.
This must never be about feelings or insults or anything else
beyond simple misrepresentation such as falsification or censorship.
PEEPLE (the YELP for people) was a horrible idea
and a perfect example of how such things can be cures much worse than the disease,
simply by not sticking to absolutely demonstrable fact.

develop a method+venue for collecting such information in a place that has some lasting existence.
A website is the cheap solution but better methods probably exist. Website databases are vulnerable.

find a method to advertise such information, persuading markets to shun, exile or otherwise disregard such personalities.
[ some form of a context sensitive p2p advertisement might be a start]

No doubt,
given the fact I am a highly experienced self-recognized expert authority at re-inventing the wheel,
Someone probably already does this somewhere, it is just waiting to be discovered.

Barging in on your discussion is not my intention, but the point you make begs for a solution I am sure can be found.
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Joined: Thu Nov 19, 2015 8:31 am

Re: Why Bitcoin's problems are people problems

Post by Spectral » Thu Nov 19, 2015 8:51 am

Just a quick comment. I agree with the overall notion the Bitcoin's problems must be solved by people. Bitcoin's consensus mechanism is already there, the technology is built, and the cogs and wheels in the machinery are people. The block size debate has pushed Bitcoin (the community) from a cozy state of reliance on core developers out into the real world where there are actual decisions to be made and open, fair debate is crucial to the future success of the system. However, this new reality demonstrates the need for additional tools. You have pointed the finger at two separate issues that need to be dealt with.

The first is the problem with new iterations of Mt.Gox. We've seen numerous examples of this since the collapse of Gox, I don't remember all of them, but as an example, I was personally burned at Mintpal. This problem is not only a people's problem. It is the "classical" problem of centralization of control and trust. The obvious answer to this one is new, trustless technology minimizing the amount of trust needed to perform the needed function. Bitcoin itself is a solution to the old money system. Bitcoin 2.0, or financial blockchain technology is the natural extension of the ecosystem, and although we're not completely there yet, there are working decentralized exchanges out there, such as BitShares, where users can actually hold their value in trustless cryptocurrencies (SmartCoins). These systems will need to grow before the liquidity of markets and robustness and decentralization of the system is adequate, but the only way to get there is for people to start using them.

Secondly. for solving the fair and open discussion and debate issue: This is again a problem of centralization. The reddits and forums in use are centralized and this needs to be solved by technology. I'm not completely up-to-date on the newest decentralized communication networks, but there have been attempts at making such systems. I don't see a reason why we couldn't build a decentralized version of the Reddit Bitcoin, it should be perfectly possible, and much easier to accomplish than a decentralized exchange, or even something as complex as Ethereum. There are already platforms like NXTTY out there, but as far as I know, they do not yet offer the desired functionality. Until such technology is out, maybe it would be possible to "hack" the centralized nature of reddit by building some distributed control over an administrator account?

Ok, the comment didn't turn out that quick... for what it's worth, the thoughts of a more or less random cryptonian :)
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