It's time to move on

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Steve Sokolowski
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It's time to move on

Post by Steve Sokolowski » Tue Jan 12, 2016 9:40 am

The increasing probability of a Trump vs. Sanders presidential election, an outcome which I predicted in July, gives me the opportunity to comment on the influence of money in politics. Whether those politics involve running for president or changing the size of bitcoin blocks, those with money control everything in society. While this observation seems obvious in that rich people can buy ads to influence public opinion or trade favors, it's worth examining the subtle ways that money affects community decisions. What is happening in the presidential election right now is how a democratic society, in the words of the New York Times, executes a coup against a corrupt government. The purpose of this article is to demonstrate that a number of people are also trying to overthrow a corrupt bitcoin governance model as well, but since there is no bitcoin constitution, bitcoin's deadlock is unlikely to be resolved.

theymos's censorship of his forums is often mistaken as a sign of personal "immaturity," as if nobody older than he conducts himself in a similar manner. Key to his ability to censor, however, is the millions of dollars in "forum donations" that disappeared and are unaccounted for. Even if theymos eventually agrees to an audit or refunds the donations, he still was a key figure in bitcoin's early history, a time when simply buying a few bitcoins (or monetizing his proprties for bitcoins and holding them) would have earned him a lot of money. Indeed, before his censorship began, theymos's brands and web traffic were likely worth hundreds of thousands of dollars.

He had the opportunity to become the main source of news and discussion in cryptocurrency as the industry expands around the world. His position earlier this year was akin to that held by other major forums, which provide no special features or services but just happened to be the first community that popped up after the Internet came around. There are numerous default phpBB forums that get hundreds of thousands of hits just because people joined there first for some special topic and saw no need to change. But yet, he destroyed hundreds of thousands of dollars in value by using his position to drive out community members, who otherwise would have given him ad impressions or purchased products he could have sold based on the value of the Bitcoin Talk and other brands. The value of his domains alone was enormous and has declined significantly.

If placed in such a position, with such a financial opportunity at their fingertips, most people would take whatever steps they could to make a better life for themselves. Indeed, most people will jump at any opportunity for easy wealth, such as buying lottery tickets to a 1.4B jackpot, for example. Most people reading this earn less than $38,000/yr - and the idea that someone would willingly waste hundreds of thousands of dollars is beyond arrogant. The average person slogs through life trying to make enough to eat at night and to own or rent a decent place to live. Such average people simply couldn't engage in the sort of arrogant behavior that theymos does. It's only the rich, like him, who can afford to throw away money and value, because they know that they'll still have enough left over to live at the end of the day.

And, by the way, what does it matter to millionaires if you spend $1 in fees? It's only a dollar; barely enough to stoop down and pick up if it falls out of your wallet. It's not as if all those spent dollars could be aggregated into a college education fund for their sons and daughters, for example. It's easy for you to say that we should make bitcoin a settlement network if you can afford to use it, but not me. The argument that fees are too low is being made by people being paid $100k/yr, not average users.

The division in the bitcoin community is largely one of rich vs. poor. When you have enough money, you can spend money on DDoS attacks, Twitter wars, and censorship - and you don't have to worry about any consequences to your reputation. If people don't like you, that's fine, because there aren't any restaurant owners who are searching the Internet on your personal conduct before hiring you as a server. If you have to devalue your brand to achieve your personal objectives through unethical tactics, it doesn't matter if you make slightly less next year - you already have $500k in savings. Don't get led into believing that everyone in the debate is on the same level playing field, because they are not.

In addition to the obvious implications of wealth - being able to spend money and not worry about the consequences of one's actions - there is a more subtle effect of income on the debate. People who have more money are simply able to devote more of their time to expressing their beliefs, which leads to those people having a greater influence. Review the list of the 37 signatories to the Core development roadmap and you'll notice that almost all of them own large, successful businesses, or are wealthy through having purchased bitcoins in the early days. Small business owners are not represented in that list, because they are too focused on making money. You won't see me attending huge conferences in Hong Kong - because I already spend 75 hours per week at work. The only time I would be able to actually go to such events would be if the business becomes successful enough that I can reduce my hours. The real people who are doing the day-to-day coding that makes bitcoin great and who are trying to come up with new inventions are not rich enough to spend time flying around the world to these conferences.

Finally, cryptocurrency itself intentionally places control into people with wealth. Rich people can afford to purchase more ASICs and "buy votes." In proof-of-stake coins, rich people get to vote by simply doing nothing, which is even easier. While the real-world political system is at least intended to reduce the influence of money in politics, bitcoin makes no pretense of doing so - if you spend more, you vote more, as the system was designed. Thus, it's not suprising that unethical rich people have co-opted the system for their own purpose.

People need to seriously consider whether decentralization is an effective method of organizing. Given that bitcoin is the first currency that uses this model, it is often forgotten that it has yet to be proven that decentralization is effective. In a centralized society, like the United States, we see what is happening when people get fed up with lobbyists and corruption - they increasingly support two people who the media writes off as "unqualified" and "unelectable." Trump is popular with people who are fed up with lobbyists and paid-off legislators. Sanders rails against big banks controlling the economy and wants to incite a people's revolution, but the proportion of the economy controlled by banks pales in comparison to the proportion of the economy controlled by the richest bitcoin figures. In a decentralized society where votes are inherently determined by how much money you are able to spend, what recourse does the 99% (without money) have?

The answer is that they have none, which is why it is time to move on to a different network. While BitPay's solution to the blocksize problem is a good one technically, remember that this company promised to support BIP101, and then reneged on that and put out another solution. They had an opportunity to add momentum towards a solution, and instead backed out of their promise and went the other way, adding to the confusing array of potential solutions that split the vote and confuse matters further. January 11 has come and gone, with support for BIP101 below the threshold. Other solutions, like BIP100, are vaporware. Censorship is only intensifying and miners now say they are waiting for "consensus." Am I the only person who laughs at the absurdity of people ever coming to "consensus?" Do the Core developers think that the network is going to come to a "consensus" on the Lightning Network, if a patch is put out? The Lightning Network on bitcoin is dead on arrival for the same reason that every other bitcoin patch is dead.

How long is it going to take before people finally realize that bitcoin is a lost cause? There are many people with good intentions who are proposing solutions, but I was wrong in October. There is not going to be a "crisis" that causes people to come to an agreement; that has already happened every time price approaches $500 and crashes due to transaction backlog and fees. People continue to use bitcoin because there is, as of yet, no other competitor.

As average people, we do not have the financial resources to influence how bitcoin is developed. However, there is one action we can take that does give us a reasonable chance of influencing the adoption of cryptocurrency: to leave bitcoin behind and focus our time and money on litecoin - an API-compatible coin that is ready to upgrade on Charlie Lee's word. Last week, Lee said that he was thinking about the BIP101/4 proposal, and I volunteered to implement it once he responds. At this point, I do not see any purpose in continuing to participate in the futile debate about bitcoin's future, which has been deadlocked by moneyed interests. Even the Litecoin Association functions far more effectively than its bitcoin counterpart. Instead of wasting my time with bitcoin, I purchased litecoins and plan to begin assisting the litecoin community in attempting to overtake bitcoin, whether it be through core development, periphery services, or marketing. Unless there is an unforeseen change to the present state of bitcoin, I won't be devoting any more of my time to bitcoin and will no longer be purchasing it or holding my profits in it.

Imagine if instead of continuing to argue with theymos about censorship, everyone instead focuses their efforts on convincing one person to switch to litecoin instead, or by porting open-source bitcoin wallets and websites to litecoin. Our time in bitcoin is not being spent effectively. Stop wasting your time trying to convince people in forums and let's take action. This is a people problem, so the only solution is to go around the bad people. Right now, there is no concrete step an average user can take to force change. Let's put our efforts into creating a solution where the free market can exercise its vote.

Let there be two coins, one of which is managed by reasonable people and one of which is deadlocked by corrupt people using unethical tactics. Give people a real choice, and let's see which one they support. I'm confident in that outcome, which is why I hope that people will join me and agree that moving on is a much more effective way to create change.
coinaday
Posts: 23
Joined: Thu Mar 19, 2015 9:05 pm

Re: It's time to move on

Post by coinaday » Tue Jan 12, 2016 11:18 pm

Good luck! If LTC can make serious inroads on BTC's marketcap as a result, I think this would be a great thing for the Cryptocurrency market in general and help to show the long-term viability of the market routing around any lagging coins, even the original when necessary.
TuringHimself
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Re: It's time to move on

Post by TuringHimself » Wed Jan 13, 2016 1:45 am

How are you going to convince all of China to switch over? :?

And BTW if you're right that BTC can't cross 500 because holders panic at the backlog, why are we not seeing spillover into LTC price already? LTC can currently handle a lot more traffic even without BIP101/4, but right now LTC isn't even its usual 1% of BTC price. Your logic isn't following through. Holders are instead going back to dollars or gold, not LTC.
rnicoll
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Joined: Thu Jan 14, 2016 6:37 am

Re: It's time to move on

Post by rnicoll » Thu Jan 14, 2016 6:57 am

I'm not inherently against the rich, but I do find a lot of the attitudes in the community bizarre with regards to them. There's an amazing number who seem happy to let the rich control things, and often believe the rich must have our best interests at heart. I see people scream about bankers, while embracing our own rich. I don't mind either way, but the inconsistency bothers me.

Certainly, as Steve points out, the major events that you need to be present at to stay properly involved, are expensive and time consuming to attend, making it extremely difficult for those of us with full time jobs. I'm hoping to jump to freelance at some point (my personal circumstances are that I've burnt a lot of my ability to take risks on a whole career path that didn't pan out, so right now I'm doing very safe things while I recover, but that is changing), which will help, but I find it perplexing how few people apparently realize this.
TuringHimself
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Joined: Wed Dec 30, 2015 1:32 am

Re: It's time to move on

Post by TuringHimself » Fri Jan 15, 2016 12:07 am

Here is a great article from MIke Hearn on the present BTC failure, and it quotes Chris/Steve:

https://medium.com/@octskyward/the-reso ... .317cf4lyi

BTC dropping fast. LTC a bit less but not much.
Some1notu
Posts: 62
Joined: Tue Oct 06, 2015 7:48 am

Re: It's time to move on

Post by Some1notu » Fri Jan 15, 2016 1:32 am

https://letstalkbitcoin.com/blog/post/l ... ed-witness

Andreas knows SegWit is a stop-gap measure, but seems to think it is at least some headway towards blocksize increase.
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ltc2084
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Re: It's time to move on

Post by ltc2084 » Wed Jan 20, 2016 1:20 am

I've almost always converted all my mining to BTC. This is making me rethink that.

Looking back, it does seem clear that LTC has seen much worse times.

Maybe this is a good time to rethink which coin has a better future. Thanks for your post Steve.

http://www.cryptocoincharts.info/pair/l ... -e/alltime
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ltc2084
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Re: It's time to move on

Post by ltc2084 » Wed Jan 20, 2016 1:44 am

But compare the historical price of Litecoin vs. Bitcoin.

https://bitcoinwisdom.com/markets/btce/ltcbtc

It does still seem like Litecoin is near the lowest point it's been... and no signs of reversal.

So why would Litecoin seem like a good investment now instead of waiting for Bitcoin Classic. Shouldn't Bitcoin Classic resolve the major issues?

Isn't Bitcoin Classic a solution that most companies are behind? It does seem like this will happen doesn't it?

https://bitcoinclassic.com/
TuringHimself
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Re: It's time to move on

Post by TuringHimself » Wed Jan 20, 2016 8:50 am

And why is price of both going up if we're supposedly going to 200 USD?
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Steve Sokolowski
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Re: It's time to move on

Post by Steve Sokolowski » Wed Jan 20, 2016 10:35 am

ltc2084 wrote:But compare the historical price of Litecoin vs. Bitcoin.

https://bitcoinwisdom.com/markets/btce/ltcbtc

It does still seem like Litecoin is near the lowest point it's been... and no signs of reversal.

So why would Litecoin seem like a good investment now instead of waiting for Bitcoin Classic. Shouldn't Bitcoin Classic resolve the major issues?

Isn't Bitcoin Classic a solution that most companies are behind? It does seem like this will happen doesn't it?

https://bitcoinclassic.com/
I think that people are too bullish on Bitcoin Classic's odds of success, for one. I'll explain more when I have time over the weekend. There will still be people who don't upgrade, DoS attacks, the Core developers releasing an alternate solution, etc.

You're also forgetting that both currencies need to fall if they fork because market chaos will occur before the fork takes effect. No conclusions can be drawn from price until after a fork is successfully concluded.
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