Let's implement a solution on Litecoin now

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Steve Sokolowski
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Joined: Wed Aug 27, 2014 3:27 pm
Location: State College, PA

Let's implement a solution on Litecoin now

Post by Steve Sokolowski » Sun Dec 13, 2015 10:53 am

Yesterday, I pointed out how our bitcoin payouts were delayed by 14 hours despite the best fee estimation algorithm available. Tens of thousands of bitcoin transactions are backing up, and the network is becoming unusable. Financial software requires trust, and it's impossible to trust a network where service is sporadic and where one cannot determine how much it costs to use the service. It's not an accident that price fails to rise above $500 every time the bitcoin network backs up and people can't get their money to exchanges. And bitcoin is running with 9 minute block times; imagine what will happen when the next crash occurs and hashrate begins to decline again.

Imagine that you walked up to a counter at a service that remits money to friends and family. There are two companies offering services at this counter. On the left, a company is advertising the ability to send money across the world. It costs 12 cents and the money is available to your family members in 14 hours. On the right, a different company promises to send money for 0.1 cents with an expected arrival time of less than 2 minutes. Which company would you choose?

In this case, the left counter represents the bitcoin network, and right counter represents the litecoin network. It seems that many bitcoin community members who are weighing in on forums are not using the actual networks to send money and buy things. The experience with the litecoin network is infinitely better than that on the bitcoin network. For us, bitcoin is expensive, unreliable, and slow, while we can count on our payouts being received by litecoin users within a few minutes, every time, at little cost. Consider what would happen if everyone could wipe their minds and be exposed to the two networks for the first time. It's hard to believe that many would see the unreliable and deadlocked network as the future.

This isn't just our view. On the charts page, you can see that bitcoin is projected today to comprise a minority of payouts for the first time in the history of the company. Of the half of value in altcoins that are projected for payouts, LTC is at an all-time high of 24% of total payout value - an astonishing rise in just the past week. This is one of the reasons I've said that LTC is significantly undervalued and why I have begun keeping mined LTC blocks as my portion of the pool's profit distribution.

Unless interest in cryptocurrency stops, it's difficult to imagine a situation where January arrives without bitcoin becoming completely overloaded and some transactions beginning to spill over from BTC to LTC. The one-time solutions being proposed for bitcoin like the complex Segregated Witness or a single 2MB blocksize increase are insufficient given that BTC is already in a state of crisis, months before any of them could be implemented, tested, and deployed. I did use the word "crisis" and will hold to that word: BTC is no longer a viable system for point-of-sale transactions in this state.

Fortunately, the litecoin community a golden opportunity to take action well in advance of network overload becoming an issue. Look at the advantages of LTC over BTC: its mining power is more concentrated, which means that it would be possible to come to a decision more quickly. Scrypt altcoins allow hashpower to be diverted to LTC to assist in securing the transition period. There are not yet a large number of LTC/USD exchanges, so fewer stakeholders need to be in agreement to make a switch. Theymos does not control any litecoin forums and has little sway in the LTC community, allowing for fair debate without censorship and eliminating unnecessary hatred. And deadlocked BTC miners don't have the right equipment to be able to influence the discussion.

Over the past few weeks, I've started to see litecoin as the best opportunity there is to produce widespread adoption of cryptocurrency. Rather than continually battling censorship and participating in endless debate on reddit with intransigent people, the solution to the deadlock may be to simply move on to a system where it will be possible to come to a decision.

But if that decision is to be made, the time for it is now. Litecoin adoption is likely to increase rapidly now that bitcoin saturation has been reached. While this may sound rude, the reason that litecoin has a chance to solve the problem is because the people who have stonewalled bitcoin have not yet begun to invest in litecoins or to adopt litecoins for their businesses.

We are willing to begin mining any reasonable solution to the blocksize issue on the litecoin network immediately, and (if necessary) will divert scrypt hashpower to litecoin to assist in implementing it at our expense. My initial suggestion would simply be to take BIP101 and divide it by four: an immediate increase to 2MB and then everything else at 1/4 BIP101 thereafter. Since litecoin has already been running with 1MB blocks for a long time, increasing the size of blocks from 1MB to 2MB in that first step is unlikely to create danger, and it shows that the network is forward-thinking and will be ready for increasing demand. An alternative is to take BIP101 and divide it by eight, which does not immediately increase blocksizes but is still a vote of confidence in the future of the network.

I realize that Charles Lee may be hestitant, but BIP 101 is already active on the bitcoin testnet, is extremely simple, and provides certainty for the future. However, we'll listen to anyone who puts anything else out there.

I also hope that people who have engaged in legitimate debate on how to fix the bitcion problem will join in this discussion. In the past, altcoins were looked at as a distraction from bitcoin, but I hope that people will keep an open mind. It may turn out that the best way to improve bitcoin is not to try to fork bitcoin into two networks, but instead to move to a different project that shares their ideals and let the best one win.

It is true that the increased litecoin blocksizes wouldn't be used immediately. The purpose of coming to a decision now is to avoid the continual state of crisis that bitcoin has entered in regards to network congestion. More importantly, the goal would be to make a statement that litecoin will have the capacity in the future to handle anticipated demand. Further one-time improvements like Segregated Witness can be added to litecoin later if users decide to do so. Users would see that their businesses will be viable on litecoin for a long time in the future, and some would switch from bitcoin to litecoin because of that certainty. Litecoin uses the same API calls as bitcoin, so it is in a unique position to be able to continue the development of cryptocurrency in the event bitcoin continues to be deadlocked.

Let's start a conversation on the future of litecoin. We have the opportunity to make a statement that litecoin will be available to handle future demand. To continue its adoption, cryptocurrency desperately needs that certainty as soon as possible.

*There was a comment here at the end of this article that talked about drawbacks of BIP101/8. It was incorrect, so I deleted it.
Fleshwound
Posts: 1
Joined: Sun Dec 13, 2015 4:45 pm

Re: Let's implement a solution on Litecoin now

Post by Fleshwound » Sun Dec 13, 2015 4:52 pm

Just wanted to say I've been lurking for a long time, and to be honest finding articles like these, so well written is almost impossible in the bitcoin universe. I just wanted to say I enjoy reading these posts, you seem to be a beacon of light, when all there seems to be is darkness. A breath of fresh air sir! I no where near understand the way you do, but you make it so easy to understand its been a pleasure reading everything here. Keep it up! I got my eye on you!

Id also like to add I agree with the current state of Bitcoin, that maybe swimming up stream isn't the answer after all? Maybe Litecoin is the life preserver we needed? Hard to believe things are in such a state that we're left coming up with solutions people would think absurd a couple months ago.

I also love debates, understanding of the subject matter permitting, so look forward to lots of annoying posts! Im also known as Fleshwound on Polo, Hi ;)
TheOneLaw
Posts: 3
Joined: Fri Nov 13, 2015 11:11 am

Re: Let's implement a solution on Litecoin now

Post by TheOneLaw » Tue Dec 22, 2015 2:25 am

Steve Sokolowski wrote:Yesterday, I pointed out how our bitcoin payouts were delayed by 14 hours despite the best fee estimation algorithm available. Tens of thousands of bitcoin transactions are backing up, and the network is becoming unusable. Financial software requires trust, and it's impossible to trust a network where service is sporadic and where one cannot determine how much it costs to use the service. It's not an accident that price fails to rise above $500 every time the bitcoin network backs up and people can't get their money to exchanges. And bitcoin is running with 9 minute block times; imagine what will happen when the next crash occurs and hashrate begins to decline again.
....

*There was a comment here at the end of this article that talked about drawbacks of BIP101/8. It was incorrect, so I deleted it.
The frightening few hours today where blockchain.info went off the rails illustrated this in excruciating detail.
( https://www.reddit.com/r/litecoin/comme ... ncreasing/ )

having BTC hung up in transit as being an unconfirmed transaction
while paying for investment or other high-price services will create immense blowback.

With no effort or visible movement by the LTC crowd to show by lead, the shift will not be from BTC to LTC.
The markets will abandon BTC in favor of gold [au], and it will occur in a matter of hours,
scuttling any real value from the BTC universe and completely negating any remaining credibility in the people who use any kind of cryptocurrency.

Code: Select all

You won't even be able to buy a cup of coffee with BTC if they stay on the road they are on.
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