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Bitcoin's ASICBOOST Problem Explained [pdf]

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Re: Bitcoin's ASICBOOST Problem Explained [pdf]

#101

Post by midmagico »

futuravenir wrote: post #26
timq wrote: post #20

Just to point out that SegWit is everything but "already adopted in the industry". It turns out that SegWit is the solution promoted by the developers of bitcoin core to allow for bigger blocks, and solve some issues like transactions maleability. It's more than 10 000 lines of code highly controversial because they require... A soft fork, and will change bitcoin in a fundamental ways. Not to add that a company calle…

I want to say that I've been on the anti-censorship boat and the 'AXA money is sketchy' and the unlimited train for as long as I've heard of it. Just recently, someone in the ecosystem that I've known since the beginning of my time with Bitcoin came out in support of Blockstream and Segwit with a backing of other Canadian support. https://medium.com/@francispouliot/canadian-bitcoin-economic... I don't know what to ma…

The easiest way to detect who is telling the truth is to ask lots of questions and see who is making the most unusual and/or logically inconsistent (especially over time) claims.

A lot of people are, in fact, keeping track, and can point to significant numbers of problems and inconsistencies in what people are saying and what they've supported and why. Factual assertions are particularly excellent indicators. For example, if someone says Gavin Andresen is a segwit opponent, you can literally just click one link to discover that he isn't:

https://www.reddit.com/r/btc/comments/60i4jl/miners_we_are_a...

Re: Bitcoin's ASICBOOST Problem Explained [pdf]

#102

Post by midmagico »

AgentME wrote: post #36
futuravenir wrote: post #26

Earlier quoted context omitted.

I want to say that I've been on the anti-censorship boat and the 'AXA money is sketchy' and the unlimited train for as long as I've heard of it. Just recently, someone in the ecosystem that I've known since the beginning of my time with Bitcoin came out in support of Blockstream and Segwit with a backing of other Canadian support. https://medium.com/@francispouliot/canadian-bitcoin-economic... I don't know what to ma…

>because they stand to make $100,000,000/yearly from their (now not so secret) advantage. If anyone is confused how the 30% advantage that ASICBOOST gives translates into this huge number, remember that the 30% boost applies to revenue, not profit. The revenue of mining in the long run approaches the costs to mine (basically the cost of electricity), leaving extremely slim profit margins. Let's say the usual revenue…

Your arithmetic is off. Revenue doesn't increase. Costs decrease. Effectively the increase in profit is similar, though, to your result. Just for different reasons.

Ignoring depreciation or hardware costs, the arithmetic is like this:

Pre-ASICBoost: Revenue: $1.02 Costs: $1.00 Profit: $0.02

Post-ASICBoost: Revenue: $1.02 Costs: $0.70 Profit: $0.32

The closer to costs that revenue for non-AB mining is, the closer to infinity the comparative profit margin is.

That is, AB doesn't increase hashrate. (That would be a very, very much more complicated equation since the hashrate reward pie is essentially static.) All it does is decrease the amount of power required to do the same work.

Re: Bitcoin's ASICBOOST Problem Explained [pdf]

#103

Post by midmagico »

zik wrote: post #76
futuravenir wrote: post #26

Earlier quoted context omitted.

I want to say that I've been on the anti-censorship boat and the 'AXA money is sketchy' and the unlimited train for as long as I've heard of it. Just recently, someone in the ecosystem that I've known since the beginning of my time with Bitcoin came out in support of Blockstream and Segwit with a backing of other Canadian support. https://medium.com/@francispouliot/canadian-bitcoin-economic... I don't know what to ma…

That was the exact point of the ASICBOOST FUD we've seen in the last week - to cast uncertainty and doubt. Taking a step back though it all seems like just the latest attempt to distract from real issues. ASICBOOST is just another optimisation from companies who make their living working on these kinds of things. It's been known about for many months now so the last few days just seem like a bizarre attempt to demoni…

Nobody wants to kill ASICBoost. Literally the only thing people think is a good idea, and the purpose of this post:

https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2017...

.. is to close off only the covert ASICBoost mining incentive which is directly incompatible with a host of high-quality Bitcoin improvement mechanisms. (An incomplete list of which is in the above link, near the bottom.)

Overt ASICBoost is completely wide-open, and remains untouched. In fact it's completely compatible with SegWit.

Re: Bitcoin's ASICBOOST Problem Explained [pdf]

#104

Post by shea256 »

jlrubin wrote: post #79
shea256 wrote: post #63

Earlier quoted context omitted.

A few red flags came up for me with this post. I feel I have an obligation to post a response to this to clarify some things, lest people less involved in the community come away with a misinformed view. A few facts on the core developers: -- There are hundreds of developers who contribute to Bitcoin Core. Over 50 of them have 10+ commits to Bitcoin Core. -- Blockstream employs 7 of these developers, including Pieter…

Thanks Ryan, these are good clarifications to the parent's post. For full transparency, I [OP, author of the PDF] am currently contracting with (but am not employed by) Chaincode and am currently #39 by commits (#26 by additions though! ;)). I also think that SegWit is the best way forward; no one pays me to say that. If Blockstream sent money to developers to endorse SegWit, they must have skipped me!

Absolutely, and thank you for the post! And congrats on working with Chaincode, I didn't know that. I can no longer edit my post unfortunately but at least people can see this follow up. Keep up the great work.

Re: Bitcoin's ASICBOOST Problem Explained [pdf]

#105

Post by midmagico »

wyldfire wrote: post #68
timq wrote: post #20

Just to point out that SegWit is everything but "already adopted in the industry". It turns out that SegWit is the solution promoted by the developers of bitcoin core to allow for bigger blocks, and solve some issues like transactions maleability. It's more than 10 000 lines of code highly controversial because they require... A soft fork, and will change bitcoin in a fundamental ways. Not to add that a company calle…

> The community and a growing majority of miners is actually switching to bitcoin unlimited I love bitcoin too. I might be underinformed but everything I've learned so far is that larger blocks and segwit aren't a dichotomy at all. I think segwit sounds good. And I think larger blocks sound good too (but I realize that they do come at a cost). If the overall transaction throughput increases but the fee income goes do…

> I might be underinformed but everything I've learned so far is that larger blocks and segwit aren't a dichotomy at all.

You aren't underinformed. You are completely correct with this comment. SegWit isn't incompatible with a blocksize increase, because it is a blocksize increase. :-)

Re: Bitcoin's ASICBOOST Problem Explained [pdf]

#106

Post by midmagico »

tlrobinson wrote: post #60

This might not be the place for this question, but can someone explain why we can't / shouldn't have both unlimited block sizes and SegWit? Block sizes will supposedly be constrained by bandwidth / propagation times. SegWit will allow more transactions to occur off chain, reducing the need for larger blocks. They seem complementary to me.

> SegWit will allow more transactions to occur off chain

On-chain, actually. :-)

Re: Bitcoin's ASICBOOST Problem Explained [pdf]

#107

Post by midmagico »

fpgaminer wrote: post #40

Besides the technical issues involved here, there's been a lot of political quarrels as well. Here's my run down of them. Note that I was heavily involved in the Bitcoin community a few years ago, but have been on the side lines recently. As with all things political, take my interpretations with a grain of salt: 1) The Bitcoin network began experiencing congestion due to rise in popularity driving large numbers of t…

Just a few minor corrections, and some comments, if you'll permit me:

> It doesn't explicitly allow larger blocks. It does, however, upgrade Bitcoin to allow side chains.

SegWit itself as implemented is explicitly a blocksize increase. More TX can fit on-chain. It upgrades Bitcoin so that a host of other, interesting upgrades become possible, but as part of SegWit there is a blocksize increase to about 2MB.

> I believe the root of this argument is that Bitcoin has served us well for many years, so why try to build another, potentially weaker system on top of it?

The interesting tangent here is that the exchanges themselves dwarf on-chain transactions in terms of economic volume. They absolutely dwarf it, and we don't see anyone demanding we put every exchange TX into the blockchain. :-) Instead we see people talking about how they should be able to put individual cups of coffee on-chain. It's odd, to say the least.

> But, for whatever reason, the dialog shifted.

This is a crucial point. The narrative change in large part is driven by totally opaque reasons that even an informed person like yourself can't remember or fathom. Why did it change? This is where speculation about the economic disincentive for it comes in, and with the evidence that covert ASICBoost is a direct option in all currently-deployed hardware from Bitmain, it becomes more clear why their constantly-shifting technical reasons might be.. constantly shifting.

> ASICBOOST, the way this mining operation has supposedly been using it, is not compatible with SegWit.

Nobody says they have more than circumstantial evidence for it being used. The main issue is that it could be used, literally tomorrow, and nobody would know it. And it would be something that would improve their efficiency even though none of their customers have it enabled.

This means their profit even in relation to their own customers would be a crushing advantage, and nobody would know, so they can just say e.g. what they did in their recent press release. "No, we're not using it."

Re: Bitcoin's ASICBOOST Problem Explained [pdf]

#108

Post by midmagico »

stale2002 wrote: post #72
fpgaminer wrote: post #40

Besides the technical issues involved here, there's been a lot of political quarrels as well. Here's my run down of them. Note that I was heavily involved in the Bitcoin community a few years ago, but have been on the side lines recently. As with all things political, take my interpretations with a grain of salt: 1) The Bitcoin network began experiencing congestion due to rise in popularity driving large numbers of t…

Hey, the big reason to oppose segwit is mostly as a negotiation tactic. Many of the bitcoin developers , small blockers, and the blockstream people really, REALLY want segwit to activate. They are so desperate to have it, that although they may not explicitly agree to a "compromise" 2MB HF + segwit proposal, they might at the very least not go freaking nuclear or something in their attempts to oppose it. Segwit is ni…

> They are so desperate to have it

This is completely false. In fact, they're quite honest about the fact they don't mind if it doesn't. Here's an example:

https://www.reddit.com/r/Bitcoin/comments/617b7h/peter_rizun...

gmax says: "none of us are particular eager to see segwit activate-- we did our part, Bitcoin is just fine without it. -- bitcoin core doesn't even signal it by default, though I suppose the next version probably will."

> They explicitly say that it could be decades before any more block size increases come around.

Since nobody can predict the future by more than a few months, and most people know this, you should probably cite this. I'm pretty sure nobody has said that it will be decades before a hardfork. In fact, most people have been quite forthright in that a good hardfork is something they are looking forward to.

lol

Re: Bitcoin's ASICBOOST Problem Explained [pdf]

#109

Post by midmagico »

mjevans wrote: post #2

Wasn't the entire point of picking SHA-256 to both check the integrity of the existing ledger (why it's a hash) AND as a proof of work lottery? The "problem" being that instead of being a proof of actual work, shortcuts in the work were found. It seems then that a good solution would be to force many different types of proof of work. Different basis of hashes are obvious, but maybe some type of actual work every so o…

> The "problem" being that instead of being a proof of actual work, shortcuts in the work were found.

Nope, the problem is that covert ASICBoost mining has created a strong, valuable incentive for miners to oppose protocol upgrades while supporting much more destructive ones like the recent extblocks, which is susceptible to instantaneous, irreversible full transaction invalidation on a reorg.

ASICBoost in its other forms is completely compatible with SegWit.

Re: Bitcoin's ASICBOOST Problem Explained [pdf]

#110

Post by stale2002 »

fpgaminer wrote: post #89
stale2002 wrote: post #72

Earlier quoted context omitted.

Hey, the big reason to oppose segwit is mostly as a negotiation tactic. Many of the bitcoin developers , small blockers, and the blockstream people really, REALLY want segwit to activate. They are so desperate to have it, that although they may not explicitly agree to a "compromise" 2MB HF + segwit proposal, they might at the very least not go freaking nuclear or something in their attempts to oppose it. Segwit is ni…

I'm happy to have some big blocker perspective, as I know my comment perhaps paints "Big Blockers" in less than favorable light. Not intentionally. It's a bit hard to be completely fair in a short summary, given the events that have occurred, even though those events are likely not the fault of real big blockers. That said, good technology should _never_ be used as a bartering chip. I think it's hypocritical of any B…

2MB HF + segwit (2MB average) adds up to 4 MB total. 4MB forever is better than 2Mb forever.

If this whole debate really is because of soft fork is hardfork, that is easy to solve.

You can scale by soft forking using extension blocks, OR just by changing the segwit discount parameter that segwit does.

If segwit can do it, then so can 4MB segwit.

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