1st March, 2016

Bitcoin is in its first real crisis.

As predicted in May by Gavin Andresen[1], it's the 1st of March and blocks are full. Normal users can't transact in the system[2,3,4]. Bitcoin as ecash is dead, at least for right now.

Core no longer believe in the foundational principles of the bitcoin movement. Namely, peer to peer cash[5] free from centralized control of economic incentives.

What we have now is a team of developers misattributing skill in cryptographics to skill in economic policy. 'Fee markets are good' they say, 'we should make blocks smaller'[6] they say. 'Full doesn't mean full'[7]. It would appear they, and their supporters, do not understand the essential economic forces involved. If you must pay ever increasing fees to compete with other transactions, the fees will only reach equilibrium when there is nobody to compete with. Bitcoin was designed to be controlled by the free market and pure individual incentives, not to be artificially restricted in the name of creating subsidized preemptive markets.

If we can't carry out a simple 2MB fork to Classic because of back room deals[8, 9], then Mike Hearn was right - bitcoin is a failed experiment.

The guardians of the network, our miners, have failed to protect themselves and everyone else. A cultural appeal to authority, which is completely antithetical to bitcoin, controls the vast majority of hashpower and as such, nakamoto consensus appears to have failed. They can't see beyond what they are told to see.

Bitcoin isn't dead yet, but it is in critical condition.

Keep up to date at /r/btc on reddit

[6] (mirror)
[7] (mirror)
[9] (mirror)