Point-by-Point Response To Mike Hearn’s Final Bitcoin Post

I told myself I wouldn’t do this, that I had more important things to do, that I’d spent more than enough time on this already.

But it keeps coming up and nobody else seems to be willing to oblige the demand for a point-by-point refutation.

Charles Arthur, this post’s for you. A compromise: this post will be lazy. The prose will be sloppy, and I will make statements that some readers might find unconvincing unless they take the effort to research the references for themselves. Oh well, I’ll live with that. I’m hoping something is better than nothing, and I don’t want to spend a second more on this than I feel I have to (even though I’m probably setting myself up to get dragged into it further).

At the same time, it’s paradoxically easier to go beyond point-by-point to line-by-line because it’s all those filler lines that Mike uses to manipulate his audience, and so commenting on them to illustrate just how much manipulation is going on is relevant.

Warning: this will get ugly, fast. When you call out so much deception it naturally starts to look like an ad hominem attack to outsiders. Imagine if you knew a person who was pathologically dishonest, and you had to explain their years of dishonesty to someone who did not know the situation. It would look like an ad hominem attack (“Liar! Liar!”). This is one of the reasons why nobody (?) has taken the time to write a full point-by-point refutation of Mike’s post. I ask therefore that you withhold such judgment until you’ve taken the days (or weeks or months depending on your technical level) necessary to read all the links in this post and all the sub-links, and the sub-links within the sub-links.

Mike’s dishonesty can be summarized like so: he doesn’t want you to know that virtually every one of his attempts to modify Bitcoin would lead to its centralization (a real death for Bitcoin).

“The resolution of the Bitcoin experiment”

Many people have incorrectly understood this title to mean that Mike was declaring Bitcoin to be dead. Yes I know that’s what he does later in the post, but based on my understanding of his history, I do not believe this interpretation is at all correct.

More accurately, as a redditor observed, “Bitcoin didn’t fail. Mike Hearn’s plan did.”

I’ve spent more than 5 years being a Bitcoin developer.

True-ish. To be clear, Mike has spent 5 years being a developer in Bitcoin. He has not spent 5 years working on Bitcoin itself, but he did write a very popular Java SPV library for Bitcoin (his primary claim to fame in the Bitcoin world).

But this doesn’t stop him from promoting himself a “Bitcoin Core Developer”. On his website we find:

Screen Shot 2016-01-18 at 12.30.46 PM

And he never seems to correct anyone who refers to him as “one of the pre-eminent core developers”:

Ad hominem? No. Your honor, this goes to the credibility of the witness and how that faux credibility has been used to manipulate others.

The term “Bitcoin Core Developer” has a real technical meaning. It refers to those who work on Bitcoin Core and have made meaningful contributions to it. The truth is that Mike has made hardly any contributions to Bitcoin Core. There he is, at the bottom of the GitHub contributors graph, with 3 token commits accepted (amounting to maybe a couple days worth of coding by line count):

Screen Shot 2016-01-18 at 12.39.33 PM

It is on this basis from which he promotes himself as a Core Dev.

The real Core Developers are at the very top. This is what their contribution history looks like, several orders of magnitude difference:

Screen Shot 2016-01-18 at 12.41.20 PM

It should be acknowledged that Mike did (allegedly) write code that never made it in to Bitcoin Core, but at least some of it didn’t make it in for very good reasons: it included a centralized Tor blacklist, which he says is “not a blacklist but a de-prioritization list”. This is utter nonsense. It was and is a blacklist. A de-prioritization list can be equivalent to a blacklist. Just imagine a jam-packed bar with bouncers that “prioritize” only those patrons who are not wearing red polka dotted shirts. That’s Bitcoin’s future in terms of SPV-fullnode connections (especially with Mike’s block size proposals). It’s an anti-anonymity blacklist.

Back to the post:

Bitcoin is an experiment and like all experiments, it can fail.

This is Mike’s parting shot at Bitcoin. He does not have the authority to talk about Bitcoin in this way (only Satoshi can). It’s his personal opinion (imagine an “IMO” in front of that sentence and it becomes more accurate).

But despite knowing that Bitcoin could fail all along, the now inescapable conclusion that it has failed still saddens me greatly.

OK, now the truth is being bent even further. He’s building up this 100% false notion that Bitcoin has failed. Except it didn’t fail when he wrote the post, nor has it failed since. Nothing, except for the price, has changed. It’s still chugging along, doing exactly what it’s supposed to be doing, moving millions of dollars around the world in a single transaction without breaking a sweat and doing it cheaper than its dinosaur predecessors.

Mike Hearn declaring Bitcoin dead is the same as you or I declaring Bitcoin dead. It means absolutely nothing. The only reason anyone is paying attention is because some journalists and news organizations have zero integrity and still have a ways to fall before everyone stops paying attention to them.

From where I stand it has all the markings of a premeditated attempt at price manipulation on the part of Hearn and his new banker employers at R3.

The fundamentals are broken and whatever happens to the price in the short term, the long term trend should probably be downwards. I will no longer be taking part in Bitcoin development and have sold all my coins.

Read: “Mad! I’m very mad at Bitcoin! Grrrgh Bitcoin!”

Why has Bitcoin failed? It has failed because the community has failed.

Ah, some truth, but not how most people will interpret it. Yes, Mike’s experimental coup attempt failed because the Bitcoin community rejected it. Boo hoo.

What was meant to be a new, decentralised form of money that lacked “systemically important institutions” and “too big to fail” has become something even worse: a system completely controlled by just a handful of people.

It’s true, Bitcoin is controlled “by just a handful of people”, but not the way Mike explains it. More accurately, it is controlled by a handful of groups spread across the globe. See this for a more accurate picture.

Worse still, the network is on the brink of technical collapse.

This is 100% false.

The mechanisms that should have prevented this outcome have broken down


and as a result there’s no longer much reason to think Bitcoin can actually be better than the existing financial system.

That’s nice, Mike. Lots of people, including folks who are more honest and less deceptive than you, completely and entirely disagree.

Think about it. If you had never heard about Bitcoin before, would you care about a payments network that:

  • Couldn’t move your existing money

Bitcoin can move your existing money.

  • Had wildly unpredictable fees that were high and rising fast

This is total nonsense. They’re predictable today and aren’t rising fast. As far as tomorrow, well, tomorrow brings in the Lightning Network (LN; code recently released), and fees on the LN should be predictable and are unlikely to “rise fast”. Besides, even if they did, a solution would present itself or people would abandon Bitcoin. Most likely a solution would present itself. Mike presents exactly zero evidence to suggest otherwise.

  • Allowed buyers to take back payments they’d made after walking out of shops, by simply pressing a button (if you aren’t aware of this “feature” that’s because Bitcoin was only just changed to allow it)

Lightning Network is designed to prevent this.

Replace-by-fee (RBF, the “feature” he mentions) has nothing to do with Lightning Network or sidechains (which are the Core Devs plan to scale Bitcoin), and if you’re curious about it read this post and the links therein.

  • Is suffering large backlogs and flaky payments

Mike is wildly speculating here without any substance. This is certainly not true today with how Bitcoin is supposed to be used, and as Bitcoin evolves with LN and sidechains it will continue to be untrue with how Bitcoin is used then.

  • … which is controlled by China

Yes, China could technically 51% attack Bitcoin at this point in history. However, this is detectable, and moreover, Mike doesn’t propose any solution to the fundamental problem of 51% attacks. He does make plenty of blocksize-related suggestions on how to make them worse, though.

In terms of China’s dominance, that may not necessarily be the case going forward. Companies like 21 could change the playing field, and sidechains can potentially play a role as well.

  • … and in which the companies and people building it were in open civil war?

If anyone is in “open civil war”, we have mostly Mike to thank for it. I know some might find that hard to believe, but spend a few weeks browsing through Hearn’s multi-year involvement in the Bitcoin community and then get back to me.

Sure, not all of the blame for this “civil war” rests on his shoulders.1 Some of it also rests with those who unquestioningly read his posts and took him at his word while ignoring or failing to understand the arguments the Core Devs were making.

I’m going to hazard a guess that the answer is no.

I’m going to state you’re full of it, Mike.

Deadlock on the blocks

A misleading subtitle. There is no deadlock among Core Devs. Rough consensus, the principle that guides the governance of the entire Internet, was achieved after Scaling Bitcoin Hong Kong.

The block chain is full.

No it isn’t, and even the graph in Mike’s post shows that.  Even if it were it still isn’t a big deal. Given the great work on scalability from the core devs and LN devs, it’s certainly nothing to have a hard fork or a “civil war” over.

EDIT: To be clear, when Mike published his post the average block size was 693KB, and when this post was published the average block was 641KB. Some blocks are full, and some are almost empty. This is perfectly fine. All it means is that the age of completely free transactions is coming to a close. This isn’t news, it’s entirely expected. To keep fees low, Core is increasing the capacity (safely and intelligently). Bitcoin’s success is their success.

put in place as a temporary kludge a long time ago, has not been removed and as a result the network’s capacity is now almost completely exhausted.

Some backpedaling. Now we’re at “almost completely” (he says this like it’s a scary thing).

FYI, on calculating fees see Cohen’s post and this tweet from a LN dev:

So that level, about 700 kilobytes of transactions (or less than 3 payments per second), is probably about the limit of what Bitcoin can actually achieve in practice

It’s not clear that this is true even without LN, but it’s certainly false with it. That attack was very expensive and the network can auto-adjust its fees to protect itself from DoS attacks. It’s possible the attacker simply ran out of cash before hitting the network’s limit.

Regardless, it’s impossible to use block size to scale Bitcoin (while keeping decentralized) so this entire point is moot.

When networks run out of capacity, they get really unreliable.

Here Mike links to another post of his. It takes at least 10x the amount of effort to refute BS than it does to produce it, so I will skip going point-by-point through two blog posts. I will say that any sort of node stability problems (if they even exist) are addressed not by fiddling with block sizes but by fixing any bugs or issues in how nodes and thin clients handle blocks that are filling up (which they are going to do and it will be perfectly OK!).

Mike then quotes a post from a Bitcoin-related business:

The issue is that it’s now officially impossible to depend upon the bitcoin network anymore to know when or if your payment will be transacted, because the congestion is so bad that even minor spikes in volume create dramatic changes in network conditions. To whom is it acceptable that one could wait either 60 minutes or 14 hours, chosen at random?

Obviously that’s not acceptable, but neither is centralizing Bitcoin (which was Mike’s solution to this problem). The Core Devs’ have better solutions called Segregated Witness, Lightning Network, and Sidechains.

Once upon a time, Bitcoin had the killer advantage of low and even zero fees, but it’s now common to be asked to pay more to miners than a credit card would charge.

False. He links not to a Bitcoin fee but to a fee from a Bitcoin-related company. That’s not a Bitcoin transaction fee. Today Bitcoin fees, as others have observed, are still, as far as I know, lower than credit cards (they are so low I’m not going to spend time looking up what credit cards actually charge).

Why has the capacity limit not been raised? Because the block chain is controlled by Chinese miners, just two of whom control more than 50% of the hash power.

Although miners do have a say, the real reason that the limit has not been changed because the core devs don’t want to damage the network and cause it to centralize beyond how centralized it already is.

Next, Mike concedes this point.

Why are they not allowing it to grow? Several reasons. One is that the developers of the “Bitcoin Core” software that they run have refused to implement the necessary changes.

Ignoring the scare quotes around “Bitcoin Core”, you might notice that Mike doesn’t actually answer his own question here. He doesn’t tell you why the Core Devs are telling him to bugger off. He just wants you to think the Core Devs are crazy unreasonable people (unlike him), so he doesn’t link to any of their responses.

And the final reason is that the Chinese internet is so broken by their government’s firewall that moving data across the border barely works at all, with speeds routinely worse than what mobile phones provide.

Yes, that is true. And we should respect the Chinese ability to participate in securing the network. As well as those behind Tor. Oops. I guess Hearn forgot to mention Tor. And Raspberry Pi devices. You’ll find that Hearn conveniently forgets to mention a lot of things.

Ensuring the ability to run a full validating node behind Tor is a high priority for the Core Devs, and an important one.2

This gives them a perverse financial incentive to actually try and stop Bitcoin becoming popular.

Hearn is confusing popularity with a debate about block size while simultaneously being ridiculous.

The resulting civil war has seen Coinbase — the largest and best known Bitcoin startup in the USA — be erased from the official Bitcoin website for picking the “wrong” side and banned from the community forums.

To be clear, it certainly doesn’t help outsiders get a good impression of the Bitcoin community when people are complaining about rampant censorship on r/Bitcoin.

On the other hand, Coinbase is on the “wrong” side, especially in their decision to promote a pathologically dishonest person’s attempt to literally steal control of Bitcoin and appoint himself dictator. So I can understand why the subreddit mods decided to ban such toxic and dangerous-to-Bitcoin people (EDIT: actually, they haven’t banned Hearn, here he is today, still commenting).

Again, go nuts. Spend weeks on this (like I did) if you want to get to the bottom of it.

When parts of the community are viciously turning on the people that have introduced millions of users to the currency, you know things have got really crazy.

Yes, and we have Mike to thank for it.

Nobody knows what’s going on

Oh my god this is taking forever.

Most people who own Bitcoin learn about it through the mainstream media.

It’s true, if you get your Bitcoin news from the mainstream media you will not have any clue what’s going on.

In August 2015 it became clear that due to severe mismanagement, the “Bitcoin Core” project that maintains the program that runs the peer-to-peer network wasn’t going to release a version that raised the block size limit.

What Hearn calls “severe mismanagement” I call remarkable conscientiousness and excellent stewardship. People who are angry at the Core Devs are utterly clueless as to how grateful they should be to them. Out of all the alternative implementations of Bitcoin, the Core Devs have been saints in terms of what matters: preserving Bitcoin’s decentralization.

You won’t realize how much you needed them until they’re gone.

This might be a good time to remind folks that contrary to the nonsense out there, Core is giving you the capacity increase you want and have thought about way more variables than you have.

They’re doing a fantastic job. Thank your lucky stars you have them and they haven’t left out of spite from the mountain loads of ignorant and lazy mud that’s been thrown their way.

Where was I? Oh, Mike, right.

So some long-term developers (including me) got together and developed the necessary code to raise the limit. That code was called BIP 101 and we released it in a modified version of the software that we branded Bitcoin XT.

One. One long-term developer out of about 10 joined you.

And Bitcoin XT was not BIP 101. Bitcoin XT was BIP 101 plus a Tor blacklist, and total revolution in Bitcoin from being a decentralized system to 100% centralized in the hands of one person, Mike.

Why did you leave that part out? Seems kinda important?

The release of Bitcoin XT somehow pushed powerful emotional buttons in a small number of people.

“Somehow”. Lol.

But when XT launched, he made a surprising decision. XT, he claimed, did not represent the “developer consensus” and was therefore not really Bitcoin.

Well, he (theymos) was right. I mean, what can you have against him for being right?

Why on earth would anyone, including users, want people who have literally zero understanding of how Bitcoin works making critical decisions as to its functioning?

Hope it’s OK with you if I skip over Mike’s angry ranting about how his attempted coup failed.

Why is Bitcoin Core keeping the limit?

People problems.

Yes, Mike’s got a problem with people who want to keep Bitcoin decentralized.

The idea that Bitcoin is inherently doomed because more users means less decentralisation is a pernicious one.

Who said anything about Bitcoin being doomed? Not Maxwell. Pure logic suggests that it doesn’t make sense for Maxwell and the other core devs to be pouring their souls into this project if they believe it’s doomed.

No, they don’t think it’s doomed. Stop twisting their words. They are saying Bitcoin can be scaled, but that the way Mike wants to do it is deadly to Bitcoin. And they’re right.

And it leads to an obvious but crazy conclusion: if decentralisation is what makes Bitcoin good, and growth threatens decentralisation, then Bitcoin should not be allowed to grow.

More nonsense. Bitcoin can grow in the right way. LN is growth. Sidechains are growth. And at some point you reach a point beyond which growth is impossible. All of these are “right growth” that preserve decentralization, you reckless lunatic (OK, that was ad hominem :-P).

But it quickly became apparent that the Bitcoin Core developers were hopelessly at loggerheads.

Ad hominem for ad hominem? Fair trade? 😉

They insisted that nothing be done without “consensus”.

That thing that you’re carelessly putting in scare quotes? That’s the very foundation of what it means for the developer side of Bitcoin to be decentralized.

Meanwhile, the clock was ticking.

For you to get your as—never mind.

Bogus conferences

The Scaling Bitcoin conferences were anything but “bogus”. They were incredible. If the Bitcoin community has anything to thank Mike for, it’s that his attacks on Bitcoin brought the community together and made it stronger.

and moreover, with the start of the winter growth season there remained only a few months to get the network upgraded.

There’s that totally false sense of urgency. This is the tool that Mike effectively exploited to split the community and cause all of the drama in Bitcoin for the past 12 months or so.

Wasting those precious months waiting for conferences would put the stability of the entire network at risk.

Conferences are over and the network is perfectly stable. The conferences were super productive too.

The fact that the first conference actually banned discussion of concrete proposals didn’t help.

I’m curious what Mike is referring to here. If anyone knows please comment. So far as I can tell no talks were banned, and plenty of people talked about raising the block size.

But too late. Whilst the community was waiting, organic growth added another 250,000 transactions per day.

OH NO!!! 😱

Somebody quick! Check Bitcoin! It’s been another day! Is it still there?

Jeff Garzik and Gavin Andresen, the two of five Bitcoin Core committers who support a block size increase

ALL Bitcoin Core developers support block size increase. The only way in which they disagree is on what constitutes a “safe” increase. Block size increases are endorsed by the roadmap that came out of Scaling Bitcoin. Capacity increases via SegWit have been implemented and are now being prepped for launch via the testnet.

So that is quite a disingenuous statement.

I’m more of a tell-it-like-I-see-it kinda guy

And an omit-it-when-it’s-inconvenient-kinda-guy.

Core block size does not change; there has been zero compromise on that issue.

That doesn’t matter. What matters are capacity increases. The block size can be totally irrelevant to that, and it’s capacity increases that are what matters. Core Devs are delivering exactly that, like responsible adults who care about the well-being of a multi-billion dollar network.

In an optimal, transparent, open source environment, a BIP would be produced … this has not happened

Um, perhaps I’m misunderstanding what’s being asked for here, but there is a BIP, here it is. The rest of the stuff post-SegWit will surely, as usual, also result in BIPs. That is how Bitcoin must be modified, after all.

One of the explicit goals of the Scaling Bitcoin workshops was to funnel the chaotic core block size debate into an orderly decision making process. That did not occur.

Yes it did.

In hindsight, Scaling Bitcoin stalled a block size decision

No it didn’t.

while transaction fee price and block space pressure continue to increase.

This, (1) doesn’t seem to be meaningfully true (I certainly haven’t noticed a meaningful increase in the transaction fees I’ve been sending for successfully confirmed transactions), and (2) is an example of that same false-sense of urgency that Mike has been using (to great effect) to split the community around a topic that needs probably about an order of magnitude less drama surrounding it.

EDIT: See also this followup post that explains (in simple terms) how RBF elegantly addresses “stuck” transactions that can occur should blocks become full for a prolonged period.

As an example, the plan Gavin and Jeff refer to was announced at the “Scaling Bitcoin” conferences but doesn’t involve making anything more efficient, and manages an anemic 60% capacity increase only through an accounting trick (not counting some of the bytes in each transaction).

I will copy/paste Bram Cohen’s response:

Hearn criticizes the block increase made possible by segregated witness as being an ‘accounting trick’ as if that means anything, and complains that it’s ‘incredibly complicated’. As it happens segregated witness is primarily about addressing the problem of transaction malleability, which has been a real problem in Bitcoin since the beginning (mt.gox blamed it for their accidentally all the coins). That’s why it’s called ‘segregated witness’ and not ‘increasing the block size’. During development of segregated witness it was noticed that it could both be used to introduce vastly improved hooks for future extensions and to have a significant one-time de facto increase in the block size limit, as ‘bonus’ features which happen to be very compelling in their own right. Whether Hearn honestly doesn’t understand this and thinks that all the complexity is in service of a block size increase or he’s just being disingenuous I honestly don’t know.

Instead of doing a simple thing and raising the limit,

“Raising the limit” is not simple.

it chooses to do an incredibly complicated thing that might buy months at most, assuming a huge coordinated effort.

While I can’t speak to how much effort SegWit will involve (I’m pretty sure Hearn is exaggerating, but for a fair analysis ask the Core Devs), I can say that the concept of buying months is bogus.

Fees are going to rise and it won’t be the end of the world. Most people will not do everyday latté purchases on-chain.

Replace by fee

Response #1.3 Response #2 is LN.

Lattés. Not. Happening. On. Chain.

Not unless Bitcoin-NG is adopted, at least. And Mike isn’t advocating for Bitcoin-NG. He’s advocating for stupidity.


I’m going to skip Mike’s Conclusions section because I’m getting a headache and need to go for a walk and be done with this. If there was anything profound in there that I left out I’m sorry. I doubt it, somehow.

I stand with Peter Todd when he says:

I stand with a slightly less-politically correct version of this Andreas Antonopoulos tweet:

I stand with all those who are laughing at the “Bitcoin is Dead” blog posts that come out periodically:

I stand with Bram Cohen (inventor of BitTorrent) when he says:

I stand with Martijn and Nick Szabo (who RT’d this tweet) in declaring contentious hard forks to be a terrible idea:

And I stand with everyone in laughing at and condemning irresponsibly inaccurate journalism.

Other Rebuttals To Hearn (AKA Time Wasted)

If you aren’t tired of this by now, you should get yourself checked out.

Anyway, for the masochists out there:


Am I calling all the past 12 months of drama in Bitcoin land over block size pretty much total nonsense? Yep.

Do your own research! And don’t trust shady people from QinetiQ!

  1. I put “civil war” in scare quotes because at least among Core Devs, there isn’t a civil war.
  2. If anyone has a good link for this part please let me know. I know there were a few discussions on GitHub about this for example, but am too lazy to hunt them down.
  3. On March 9, 2016 this link was updated to a better post. Previous link went here.

51 thoughts on “Point-by-Point Response To Mike Hearn’s Final Bitcoin Post”

  1. “> The fact that the first conference actually banned discussion of concrete proposals didn’t help.

    I’m curious what Mike is referring to here. If anyone knows please comment. So far as I can tell no talks were banned, and plenty of people talked about raising the block size.”

    Phase 1 of Scaling Bitcoin said:

    This event will not host sessions on the topic of any specific proposals involving changes to the Bitcoin protocol. Such proposals would be the topic of a 2nd, follow-on Phase 2 workshop described below; this event is intended to “set the stage” for work on and evaluation of specific proposals in the time between the workshops.

  2. This is great. Excellent job. It needed to be done.

    If you consider what could have been accomplished by Core and others in the bitcoin community on both sides if not for this hapless “leader”, it boggles the mind what could have been accomplished.

  3. Your response to many of his criticisms is lightning network. Except…lightning network doesn’t exist. It won’t exist in 1 month or 2 months or 3 months. If its own developers are perfectly on schedule, it **might** exist in 9 months (an eternity in the fintech space). Or of course there might be delays or unforeseen difficulties that make it take 12 or 15 or 18 months.

    • The code for Lightning Network does exist, and yes, it will take a few months (9 seems like a good guess) for it to go live, and that is totally OK. The house is not on fire.

      We’ll see how LN works out when it goes online. In the worst case, that it fails somehow, there are still other options (like sidechains, or yes, even hard forks if necessary).

      The difference with block size as the only scaling mechanism is that it is a known failure mode. Devs will increase the block size, just slowly & safely.

      “Keep Calm And Bitcoin On”

      Bitcoin is not going anywhere (unless people decide to commit suicide by switching to Classic or something equally stupid).

      an eternity in the fintech space

      We’re still using checks to this day. We’re still using ACH.

      Fintech might be one of the slowest techs.

      A good use of time would be to send a “thank you” to the Core Devs and the LN devs. They’re the ones keeping this ship afloat.

  4. Here’s a link to the Github discussion re Hearn’s pull request for the Tor blacklist

    This conversation reminds me a lot of what Wikipedia talk pages look like in response to corporate vandals – people who are paid to change the information in a page in accord with a corporate agenda. They make an edit that nobody agrees with, but they seem to have infinite time on their hands to push their point of view until everyone else gives up, and the biased content stays.

    Core dev Wladimir J. van der Laan sums up Hearn’s general approach well:
    “Every pull you touch turns into a cesspool, a big controversy that detracts from getting day-to-day work done. You are behaving in a way that is toxic to this project. Instead of considered step-by-step development and reasoned discussion, like all other people here, you throw something over the wall and start a forceful argument on how you’re right and every alternative suggestion is a mistake that will lead to doom and gloom. This is draining our energy. Stop it.”

  5. To be honest, this is not time wasted, getting this out there is sorely needed! Thank you for writing and it is the responsibility of the community to propagate this kind of information, even to the media who are jumping at the chance to discredit bitcoin (and indirectly, the core developers).
    This whole drama, if not handled correctly, will lead to a vurnerable community. For example, many are now blindsided by Classic, which will look like a reasonable compromise to many stakeholders in the wake of all this drama but is of course a power grab.
    Those will for a big part be the type of stakeholders who are in it for short term profit, meaning they hope to pump the price by adding more users as fast as possible, and don’t care whether in 5 year bitcoin is a wasteland.
    If someone dismisses the phenomonal work the core development team has provided, the restraint, intelligence and commitment to bring a truly groundbreaking technology to the world, if someone somehow doesn’t understand that there is no way that after all those years they are in it to destroy bitcoin, or if someone claims the block size is the real pressing issue here, that someone simply does not understand the technology or is in it for either short term gain or the downfall of bitcoin.
    The irony is, that if they would use this energy to follow and realize the roadmap plus add useful services, their bitcoin holdings would be worth MUCH more in the long run.

    • Hi mijnerrey, can you please elaborate how Bitcoin Classic is a power grab? Who would grab what power, and what would that have a consequences (good for the grabbers, bad for others)? Thanks!

      • If it succeeds, it would change the gatekeepers to the most widely used version of the software, which is a transfer of power/control over the direction of bitcoin at the protocol level.
        At this point those gatekeepers are the core development team (they have last say in what gets added and what does not), who have shown their worth, commitment and vision over the years. They have shown terrific constraint in not selling out or using this status for disproportional personal gain, and in keeping the protocol free from horrible ideas like blacklisting TOR IPs.
        Changing the gatekeepers is an idiotic gamble, especially when hordes of short term thinkers and selfish powermongers are jumping for a chance to suck as much value out of the bitcoin network as fast as possible, without any care for the long term prospects and smaller stakeholders.

        In the pseudonymous internet space, true credentials, earned reputation and proven track records are so important, and a part of the bitcoin community is eager to throw this treasure away for the prospects of personal power or short term gain.

  6. So LN…

    if LN ever works doesn’t it make mining undesirable as the rewards diminish?

    When block rewards aren’t enough and there’s a handful of transactions per block, say good bye to hashpower, say good bye to blockchain.

    Sort of a Bitcoin replacement that requires Bitcoin, like a Virus that will kill the host.

    • if LN ever works doesn’t it make mining undesirable as the rewards diminish?

      LN will definitely work, you can bet your Bitcoins on it. The concept is solid and the code has been released, written in Go (the right language for the job), and they’ve even surprised me by releasing an onion-routing mechanism that uses Sphinx. (Talk about over-delivering!)

      Fees may go up, and I have no idea if we’ll need fewer miners, but whether that’s the case or not really doesn’t matter at all. The blockchain will still be there, and the overall value of Bitcoin will go up (rewarding miners who held onto their coins) as LN begins to enable the widespread usage of Bitcoin.

      Remember, micropayments can’t happen on the Bitcoin blockchain. LN can do millions of txns/sec.

      You’re welcome to suggest an alternative, but block size can’t be it (as explained in the post).

  7. good stuff …. the key must be to ensure the core continues to work … scaling will be what and when it will be ( Rat Logic )
    With mainstream suits now jumping on the ‘block chain good’ band wagon we will see more and more attacks on bitcoin ( as it rather spoils their game )
    keep strong, keep focused, keep building

  8. Maybe being the father of a 5 and a 7 years old gifted me with the capacity to extract a message out of a rant (even one of those made stomping the feet on the floor and screaming, such as Mike’s post). This is why, cleaning up all the anger, resentment, and fingers pointing, the only message I extracted from Mike’s post is “Bitcoin has problems that needs to be fixed. if they don’t get fixed, Bitcoins will become unreliable”. All the rest of the rant, and how hated Mike seems to be in the community, or how many lies he is accused to say, had no much importance. I didn’t read in his post that “bitcoin has died”, but rather than it risks to die if nothing is done quite urgently. In your detailed analysis on what he wrote – done line by line rather than between the lines – you are saying pretty much the same thing, and you do it also with quite an emotional state attached (so I kinda of filtered out also what I perceived, in your post, to be dictated more by emotions than by clear analysis). And I agree with you both on the essence of the message: Bitcoin is NOT going to die, because something will be done about it. People don’t get along in the community (just check bitcointalk .org to see how many bullies roam around), there are high economical interests that may motivate people to choose one rather than another options (and lobbying for them), and it is a big mess 🙂 All the remaining arguments are just good IMO for a bitcoin world soap opera! Anyways, long live Bitcoin, and all the new generations of cryptos too! Best, Rob

    • Thanks Rob! Wish more people were reasonable and level-headed as you. Unfortunately, most aren’t, and so a reply had to be written for those demanding one.

    • You are, by “stripping away the emotions”, totally ignoring the highly political aspect of his rant, namely using these emotions to get people to turn away from bitcoin and spreading the feeling that bitcoin has failed, which is manipulative to say the least (and cost a lot of people real world money as well). By going to big media instead of quietly leaving what he did amounts to a full scale attack on each stakeholder in bitcoin.
      Also, someone being a liar or not is VERY important. If he is proven to lie or spread halftruths, would you still trust the person? Would you entrust this person with your personal money? Would you start a business with this person? Then why entrust him with the future of our investments?
      The thought of a person like this almost being the de facto CEO of bitcoin should send shivers down the spine of any stakeholder in the bitcoin space.
      Bonus question: should a high profile paper give a multipage interview to someone known to be manipulative and a liar and allow him to bring his message worldwide without fact and background checking?

      • It’s past emotions, it is face value facts.

        China is home to many of the top Bitcoin mining companies: F2Pool, AntPool, BTCC, and BW. It’s estimated that these mining pools own somewhere around 60%-70% of Bitcoins hash power, meaning they mine about 65% of all new bitcoins.

        Now see mining by pool charts https://blockchain.info/pools

        There’s your proof. It has to do with the network being crippled by the great firewall of china because OVERALL miners in china control about 70% of the mining.

      • Mijnerrey, thank you for your reply. Sure the effect of the rant, amplified by the mainstream media, had some temporary negative effect on BTC, but also brought many to learn and understand more. Just looking at Mark’s commit history should relieve anyone form the idea he is a de facto CEO of Bitcoin. This said, your reply is also full of emotions, and this shows that the Bitcoin community is an emotional community, and reacts emotionally to what is announced, besides if that has solid bases or not. The good thing is that the technology is not affected by emotions, and a problem – if exists – persists, and a non problem, remains a non problem. Technologically speaking. It is also true that bitcoins needs the community to exist, so spreading negative emotions is damaging. The two things, tho, should be looked separately. It is when the two things mix (emotions and technology/science) that I feel people is confused more than rational. 🙂

  9. You completely ignore the fact about China (overall as a collective) has more than 50% of mining power, slowing down the network to the point that it is unusable behind . You thought the 50% thing was a 51% attack. You are so blind to this topic its’ incredible. It has NOTHING to do with a 51% attack. China’s internet is controlled, it is slow for international connections. Causing transactions to be both more expensive which defeats the purpose, and also too slow to be of great use in real life.

        • Yes, my analogy is that the first engine invented has been a huge thing, yet had a lot of problems. Technology evolves, and today engines are way better than the first even invented. Now, second (and more) generation of blockchain solutions have addressed so many of Bitcoin’s blockchain issues. Now, if looking at Bitcoin as blockchain technology, I agree, it must be replaced. If we look at Bitcoin as a cryptocurrency, then it will well survive, with new and better technologies. If Bitcoin dies (and will not) it is a BAD THING for all the alts. I am with Nxt, for example, and it makes me smile when I see people giving 2h seminars on how to make a transparent voting system using bitcoin blockchain where tons of hacks and tricks must be used, when in Nxt it is just a normal function of the platform. People need to mature into the decentralised idea, and Bitcoin – we like it or not – is the entry door for most. It better be good, healthy, and supported by good technology, or we all lose 🙂

    • China is not a problem at all. If another country will offer cheaper electricity and decent political stability (and internet connection) to run a mining operation, the mining business will move there, simple as that. The miners have incentive to keep the network and protocol honest and stable, to protect their investments and income streams.
      Distribution of wealth in any coin will always move towards uneven, whether you start mining in China, Russia, USA, whether you use Proof of Work or Proof of Stake, and wether initial distribution is totally “fair” (whatever that means), or 100% pre-mined. Any coin that gets popular will have a rich elite. You think if your favourite altcoin gets popular that no giant mining operations will move to the place the provide the lowest costs?
      Bitcoin works fine for transactions at this moment, and they are not expensive at all. A fee smaller than 10 dollarcent for moving thousands of dollars is not expensive. To move 100 dollar through Western union costs you more than 5 dollar, thats what I call expensive.
      The network is also not slow, pay a normal fee and it is as fast as it has ever been. Altcoins exist with much faster transactions speeds, and that has to do with the protocol they choose to use and not the network.

  10. a joke of rebuttal. The main concern is not addressed. This issue alone is enough to make Hearn’s post valid.

    “Why has the capacity limit not been raised? Because the block chain is controlled by Chinese miners, just two of whom control more than 50% of the hash power.

    Although miners do have a say, the real reason that the limit has not been changed because the core devs don’t want to damage the network and cause it to centralize beyond how centralized it already is.”

    Miners do have a say? Yes they do, all two or three of them. Whatever they say is command to the Bitcoin system, to put it mildly. Funny how this Greg himself admits the system is centralized in this “rebuttal”.

    • This issue alone is enough to make Hearn’s post valid.

      Sometimes it’s difficult for me to tell whether someone really doesn’t understand how logic works or is trolling. This is one of those times.

      Just a note, you’ve stepped into the “borderline” zone. I’ve approved every comment so far, but if I sense you’re trolling I will ban you (because trolls are a waste of everyone’s time).

      • yes reading sindre’s trolling clearly wasted my time. its that type of irresponsible and illogical comment thats causing more prob in the btc community. i respect your spending lots of time responding to mike action to get the truth out. i hope the Core Devs and others working on bitcoin realize that they are truly changing the world for better- bringing more freedom, fairness, and peace. the world needs more people like you and andreas antonopoulos. in the words of winston churchill, never, never, never give up.

  11. As always – great post Greg. I really enjoyed your hard work of research and I am very thankful for you that help other people to reveal the truth.

  12. Hi Greg

    Since I know you and Mike both personally (remember, we met in Palo Alto at Swarms meetup), I respect both of your contributions (both in their own way) quite high, I wanted to make my points, as my understanding of the dispute is a bit different. I would be happy if you point me towards misunderstanding, I might have. I also see just what I know.

    1. Bitcoin is about trust, like in any currency – an important asset that is to be protected
    2. From a consumer perspective, most people expect bitcoin to be working like visa (not caring about how it is done) – they want to buy Latté, or whatever is offered on OpenBazaar with bitcoins.
    3. Mike comes from a corporate background, and he thinks about fixing problems before they appear. He also has a straight forward approach about getting things done. And what he plans to do, he delivers mostly in time. I have seen many bitcoin ideas come and go, hot talk and visions that are completely far away from reality. Don’t get me wrong, going to Mars, establishing a basic income economy, self driving car bitcoin networks, and other things are really inspiring – and provide an important value, as they create the motivation to do the groundwork for the systems – yet there needs to be a careful balance on where you allocate your scarce resources of time and money, to get the right mix. Don’t get me wrong, but I see you (and Joel, and others) more in the corner of inspiring great visions.
    4. My understanding of Bitcoin XT, was that is was never meant as the solution, but as tool to buy us time, until good solutions have been discussed, reached consensus, are programmed, tested and deployed. Which under Mike’s understanding (and experience), takes more time than just a few month.

    So my understanding is, that in the grand view of idealism, you and him have the same ideas, where bitcoin should go – but a completely different perspective on which way to go.

    Mike: Think about the users. Fix things fast. GTD. Sustain trust in bitcoin. And gradually improve.
    You: Keep straight on the path of idealism, and cope with the problems while they are impacting users. But keep the vision pure all along.

    I just wan’t to say, there is really no wrong or right here. As I see both your passions align at the end. So for me it is just sad to see Mike go. And not seeing things getting done. While I am happy the spirit of a decentralized bitcoin stays alive.

    PS: What still confuses me, is that it seems that Greg Maxwell has a vested interest in siding for the, lets call it, “BitcoinSpririt” side (vs “BitcoinGTD”) – and shouldn’t be representing the community in this position. Don’t you agree?

    • Yes, I think that is a total misunderstanding of the situation.

      Mike: Think about the users. Fix things fast. GTD. Sustain trust in bitcoin. And gradually improve.

      The Core Devs and I do not believe Mike had Bitcoin’s best interests at heart. To understand why you have to understand all of the various technical proposals he made for Bitcoin and their consequences (and you can get that level of understanding by taking the time to read the information in the links I posted).

      Mike did not want to fix Bitcoin, he wanted to destroy it. This becomes clear once you understand the technicals of all his various proposals. There is a very small possibility that he might not have “wanted” to destroy Bitcoin, but in that case he was stubbornly refusing to acknowledge the reality and consequences of his proposals.

      You can see his hypocrisy in his complaining about Bitcoin’s centralization in China. Nobody who cares about decentralization would on the one hand complain about that, and yet on the other hand choose to establish themselves dictator of Bitcoin (and thereby completely destroy its decentralization).

      That is just one of a multitude of hypocrisies and dangerous decisions he was making.

      You: Keep straight on the path of idealism, and cope with the problems while they are impacting users. But keep the vision pure all along.

      That’s not quite it. My primary concern is Bitcoin’s decentralization. Bitcoin is not Bitcoin without it. So you could say my primary concern is in keeping Bitcoin alive.


      I just wan’t to say, there is really no wrong or right here.

      There is a very clear right or wrong here in terms of keeping Bitcoin decentralized, and that is what matters.

      PS: What still confuses me, is that it seems that Greg Maxwell has a vested interest in siding for the, lets call it, “BitcoinSpririt” side (vs “BitcoinGTD”) – and shouldn’t be representing the community in this position. Don’t you agree?

      I don’t agree at all. Greg Maxwell and the other core devs are most definitely getting things done.

  13. I am sorry to say, but this “rebuttal” comes across as immature and childish in exactly the same way you accuse Hearn. Additionally, it does not get into any of Hearn’s real technical objections to the scaling situation and the control of Bitcoin by this small cadre of devs. There are many smart devs who object to the way Bitcoin is being run and to how the Core team plans to scale it. Many of them I know personally. No amount of denial, name calling, or insults will change that fact.

    But this post is just silly “gotcha posturing” and “we’re right, you’re wrong” mentality that in no way penetrates the real issues at hand.

    Many people feel further on-chain scaling is possible and should be done. This is what Bitcoin was designed to do by Satoshi himself. This scaling creates no real risk of “decentralization” with current scaling plans vs. current hardware capabilities. My crappy Mac from 2009 will still be able to run a full node with these increases. The blocks are getting full. It’s undeniable. Even if they are not all full all the time. Bitcoin as a payment system needs to be able to handle busy times and slow times–ask Amazon why they originally created their cloud service (hint: it had something to do with Christmas). Bitcoin is growing fast and we need to have the technology ready to facilitate a great experience. Hearn certainly knew this.

    It’s easy to make idealistic objections that the Blockchain can’t handle Visa levels. But we don’t need to handle Visa levels right now. We certainly need it to handle 2 MB blocks. Regardless of what people think about Moore’s law–storage, memory, bandwidth are constantly getting cheaper. We certainly could have raised the max block size a year ago and additionally devised a simple way to scale it while maintaining the same amount of relative decentralization. This problem should have never been a problem. The dogma and stubbornness of the Core devs, their lack of human skills, and real lack of leadership boggle the mind. There is obviously this debate–yet they claim everyone agrees with them. Both things can’t simultaneously be true. So then everyone must be a stupid non-dev! This is also the attitude I get from reading your article. It’s insidious.

    Additionally, there are many good near-term alternative technologies to solve these purported “centralization” worries that the Core team simply ignores. I mean now I can go buy an 8 TB hard drive for under $300 bucks and libsecp256k1 offers 8-10x faster sig validation (obviously Core brought us that). Some of the devs on the XT project are running extreme thin blocks on the prod net which actually eliminates the block transmission delay for nodes. Check it out. Many cannot understand why the developers of Bitcoin would not want to actually allow the Bitcoin network to have increases in transaction capability when it can obviously be handled–Even if the solution is to eventually use other technologies such as side chains and LN. We don’t need to handle the scaling problems of 2025, but we do need to handle the scaling problems of the next 18 months. These are the Bitcoin devs after all. Not the LN devs. Not the side chain devs. The Bitcoin devs.

    There are many people on the Core team and their proponents with an attitude of “we’ve already figured it out, go away dummy” and your post just exemplifies this attitude completely. They are already wedded to their right answer and have no interest in being open or hearing any other ideas. It is anti-intellectual and makes people really wonder what agenda they are serving, especially when sitting an a multi-million dollar stack of VC money. VC money for developing fee-based side chains. So add in this dogmatic refusal to do even the most basic scaling and you have what appears to many as a massive conflict of interest. I know how funding works, there is pressure to get results.

    So I strongly suggest you dial back the attitude and increase the humility–especially for a site purporting to know something about Tao. This Bitcoin Core frat boy bully attitude is extremely disheartening. You seem like a smart man. It’s about getting the right answer–not my answer is right.

    And I really challenge you to keep this comment online, as of course another tool being employed in this particular debate is to give the illusion of consensus by deleting anyone who disagrees. I have kept a copy and will check back. And I hope you take my criticisms to heart.

    • Additionally, it does not get into any of Hearn’s real technical objections to the scaling situation and the control of Bitcoin by this small cadre of devs.

      Sure it does.

      My crappy Mac from 2009 will still be able to run a full node with these increases.

      Ignorant strawman.

      The blocks are getting full. It’s undeniable.

      Nobody is denying that. They will get full. That is expected.

      It’s easy to make idealistic objections that the Blockchain can’t handle Visa levels.

      Neither I, nor the core devs, are making idealistic objections. We are saying that’s impossible to do using blocksize while keeping Bitcoin decentralized, and that is a fact.

      Sorry, I’m not going to read or reply to the rest of your comment because I’ve spent enough time on this and so far you are 0 for 4 (and I doubt you will do much better).

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