I've been trying to learn about BSV and BTC in general. We …

To control it. Once the protocol is locked no one can control it . It takes the power out of money. https://youtu.be/26LDWnM7qe4

@39

Hey @6503, welcome to Twetch.

I'd be happy to discuss this with you!

Short version, BTC created limitations that make scaling really, really hard for them...

I'm not the best one to explain what those are on a technical level, but I can speak to a lot of things that have been done on an economic level.

Segwit, for example, uses a "block weight" metric to calculate fees differently than for normal txs.

This creates what's called price discrimination in the fee market, and fundamentally distorts the entire pricing system for BTC transactions.

Segwit itself separates the input signatures from the rest of the transaction...

(Hmm, looks like a transaction got paid for but didn't go through to the Twetch being posted. Will wait for a bit to see if it comes through.)

What was their purpose for creating limitations in the first place?

Read and listen to Craig's shit. You'll learn ALOT

Well, I don't claim to know their intentions with certainty. There are plenty of conspiracy theories out there about it. I'll stick with the popular narratives as I understand them instead.

Essentially, "my full node matters."

The thought was that if enough individuals run a node, fully verifying everything that goes into the chain, then it acts as a check on the miners.

But, there's a cost to this, and if the chain gets bigger, those costs go up.

Currently in the process, just kind of thinking out loud as I continue to learn.

This was used to suggest that higher costs will price out an "essential" aspect of "decentralization," which is these "full nodes."

This is more or less at the root of it, in my understanding.

But... It's also utterly wrong.

To explain this, it helps to have visual references. See this thread:
https://twetch.app/t/717092e27acc1a81b755dc01064b1dda534fe4b2c19152580b2a43357c05b622

In those visuals you'll find an overview of the production structure of Bitcoin, essentially, what inputs go to what processes, to create which outputs, etc.

Following this structure, you'll find that "my full node" doesn't actually matter.

The fact is, there are no inputs to production from "full nodes" to anything, unless it is a miner pulling data from it to mine the next block.

But here's the kicker - they use their own node for that process, not yours.

If you're not mining, you're not actually producing anything unique in Bitcoin, though you may be consuming... That, is, with one exception.

Users create transactions, and those are their only means of actually producing an input to the system.

This is where the "economic weight" idea comes in.

The problem is, a single user has almost no "economic weight." So they still don't matter.

And, without having significant business interests, they still don't have "economic weight."

This interacts with the errors of the "hodl" mindset.

No, if you don't sell, you aren't keeping the price up. That's not how markets work. Prices are set on the margin.

So, the result of all of this is an exchange based consensus model, not a user based consensus model, even if you accept all of the technical approaches taken by the BTC side, and you take it to its end logical consequences.

Basically, it's the current financial system, redux.

But even then, miners are still the only producers of the blockchain.

But I'll have to continue that train of thought in a bit... Got to get going.

We're in the Information age, like with Stones, Iron, and Enlightenment, these things can be controlled and hoarded...

oh look another clue!
https://www.youtube.com/watch?v=6oowBF70HxM

Is that not the point? Isn't that why we are all here?

excellent question. I found a clue:
https://www.youtube.com/watch?v=0BZoKH-hX_o

Personally not sure why second and third layer built on top of BTC won't suffice for helping it scale. We don't need final settlement for the coffee or ride. Apparently the fear with bigger blocks is that it will centralize the mining capabilities

If only governments can mine at some point, and there are 100's of governments, isn't that MicroCentralized but MacroDecentralized?

There is this whole thing in crypto with "minimally via let decentralization" kind of an interesting argument. Check it out. The point is to keep it available for EVERYONE to mine, not just the big players.

This seems silly as not everyone will want to mine, or have the storage space necessary to download the blockchain, if they can even download faster than it's being updated that is...

But the beauty of Bitcoin is the ability to verify by yourself. I'm not the most technical guy but I believe there are trimmed versions of the chain you can run, or maybe it's called a pruned version. Also meant minimally viable decentralization.

On BSV, Can't businesses handling frequent payments still run full nodes for independent security and quicker verification? Even if they aren't miners?

I'm back!

So, miners as producers.

The interesting thing about markets when you're considering their structure (essentially, how many firms, and how much power does each have?) is that most people don't have a clue how it works...

Most people think that the most important thing in determining how many firms exist in a space is the cost (barriers to entry,) but that's a very poor way of looking at it. More cost =/= less firms per se.

Instead, it's about market niches.

More than that, how many niches, and how many different, mutually exclusive investments must be made to service them?

So, if there is only one product to serve in the market, it'll eventually monopolize...

If there are many, it will be distributed.

When you look at BTC, how many ways can miners compete?

A: Hash power.

That's it. They compete over hash power only.

As such... It will be monopolized. Production of BTC will consolidate into one or two firms (mono/duopoly.)

As a contrast, let's start with BCH.

In BCH, at least miners can compete over block size, until 32MB, but that's really not much to compete over. Worse, they're building up protocol level mechanisms that prevent competition and require "pre-consensus."

So for BCH it isn't nearly as bad as BTC, but it's still got some pretty major issues.

Now let's look at BSV, the chain that's all about eliminating restrictions, making them miner configurable aspects of competition.

And that is, at its core, the most important thing about BSV, and what makes it align with the original design of Bitcoin.

Bitcoin is all about competition in an incentive aligned system that creates coordination around the main chain.

Bitcoin as it's meant to be, as BSV is becoming, will be decentralized because Satoshi understood that market structures are a result of competition over varied services that cannot all be serviced equally with the same capital structure.

Bitcoin will maintain miner decentralization, and therefore, decentralization of power, because of the economic design of the system, not because of altruistic "I'm running my node to defend my Bitcoin" style actions.

The result is a mandala network, as shown in the above linked thread of visualizations, where the center of the network is formed from the miner network, then blockchain consuming services, merchants, then users on the way out, all producing value.

Transactions originate from the outside and feed in to the middle.

Blocks originate from the inside and feed out to the edges, being pruned and compacted as it spreads out, until all that's left is the headers for the very outer edges.

https://twetch.app/t/2f5f9daa1e1fbd77546c4777d8604bae0c48d72011cf18ed24819159bc333c6b

And that, I think, is where I'll end this thread for the moment.

Please feel free to ask me any questions you may have.

uh technically they can but it's like, vertical integration where they're trying to be their own payment processor, that's not going to make sense for most companies, they can just hire a specialist to do that for them

take a look at spv in the bitcoin whitepaper

Yes, this is my main question. BTC people don't like that they can't run their own node on BSV. The white paper says businesses handling frequent transactions should be able to do, and may even want to.

They could have, but those github devs didn't want to compete for bitcoin with hashpower. They attempted to confine bitcoin to a module in their own over engineered payments solution, with insecure sidechain and other changes from bitcoin protocol

Removing the blocksize limit increases the demands on nodes. The fear is that the network centralizes as the social costs (hardware, bandwidth etc) begin to increase.
The most impacting point of disagreement between the two camps is the value of node count