During the past week there has been controversy in the Bitcoin community concerning the software changes coming to increase the number of transactions that the Bitcoin protocol can process. TechCrunch this past Saturday posted Bitcoin is a technological success but is in governance crisis.
Today, I spoke with Gavin Andresen, Digital Currency Developer MIT Media Lab and Chief Scientist of the Bitcoin Foundation, via email about the changes both Gavin and Mike Hern, have introduced to increase the size in the block in which transactions are processed every ten minutes. Currently Bitcoin Core is one megabyte and Bitcoin XT will provide eight megabytes. Here are Gavin’s responses to our discussion about the Bitcoin XT.
Q: The proposed alternate software system for blockchain has brought controversy across the bitcoin community. Would you like to explain the technical need for this enhancement to bitcoin protocol?
A: Several years ago, an arbitrary limit was placed on the number of transactions per second that the Bitcoin protocol can handle. We’re getting close to that limit, and it is time to raise it to handle the larger transaction volume and usage that we see today.
Q: Do you see the challenge about the Bitcoin XT change in blockchain from one megabyte to eight megabytes in January 2016 as education and acceptance or another issue? Some miners are using it so more transactions per hour can be achieved.
A: There are a few different issues people bring up when discussing the change, ranging from extremely technical (and, in my opinion, extremely unlikely) arguments for why it might lead to a more centralized network, to economic concerns about the incentives for people to run computers that validate transactions in ten or twenty years, to concerns about what precedent might be set for other changes if this fairly minor fix to the protocol goes through without unanimous consent from everybody holding or using Bitcoin.
I don’t think education will lead to 100% acceptance, but I’m sure two or three years from now everybody will look back and marvel at all of the noise and drama. We went through a similar technical debate a couple of years ago for a feature that some people predicted would “be the end of Bitcoin” if implemented… and it got implemented and is used every day to make Bitcoin wallets more secure.
Q: How do you address the concerns for the issues of Tor and privacy? Is the original anonymity compromised in the new system?
A: Two Tor-related issues have come up. With respect to bigger blocks, I wrote about that concern here last May on how to handle it by connecting to a mining pool via Tor.
In short, I’ll first repeat what I always say about privacy: true anonymity is hard to maintain, as Ross Ulbricht (convicted founder of the Silk Road hidden web site) found out. Increasing the maximum block size doesn’t change that.
The XT software also contains code that detects if you are being attacked by somebody connecting to you from a lot of Tor nodes (to hide the source of the attack), and only if that happens, to block that attack. That also does not compromise anonymity.
Q: Will this alternate Bitcoin XT require protocol change in 2017 or will it be replaced by another system.
A: XT implements “BIP101”, which is a twenty-year plan to scale up transaction handling. It is impossible to predict the future, and there will certainly be protocol changes to improve scaling, privacy, security and functionality between now and 2035. Bitcoin XT and other implementations of the Bitcoin protocol will certainly evolve over time, exactly like how other Internet protocols evolve over time.
Q: How can bitcoin become more marketable to the masses who question the longevity of bitcoin?
A: Great question for a marketer! I’m a programmer… In general, I think Bitcoin will be useful to the masses only if they start to receive it as a normal part of their daily life. That may never happen– it is possible Bitcoin just becomes invisible “payment rails” used behind the scenes.
Q: Tell us about your work at MIT Digital Labs Currency Intuitive and your role?
A: The MIT Media Lab’s Digital Currency Initiative supports my work on Bitcoin by paying me (and two other developers) and encouraging us to collaborate with the Very Smart People at MIT (students and professors). My role so far has been to give people at MIT and idea of what the pressing concerns are in the Bitcoin engineering world; that role is likely to evolve as the Digital Currency Initiative builds momentum.
Q: Please, clarify your status regarding maintenance of the Satoshi Nakamoto alert keys to release bitcoin information.
A: There is an “alert key” that gives the holder of the key permission to broadcast a message across the peer-to-peer network that is shown to anybody running the Bitcoin Core software. It has been used several times in the past to inform people of critical software bugs or problems on the network. I’m one of a few people who have access to that key.
It will only be used if there is a critical threat of some kind to the network that requires people to do something (like upgrade their software).
Q: Blockchain and bitcoin have changed the paradigm of transactions globally. What is your outlook for the future of this twenty first century technology?
A: I think the long-term outlook is very bright; we’re at the very beginning of figuring out what can be done with this technology.