Rumors has it that segwit2x accidentally created a hard fork during test phase, thus dragging Bitcoin down more than 8% (and along with it the entire market, as you can see below: all red, blood on the streets, yada, yada, yada...)
Wether this is true or not, well, that's another story.
But what's true is that inside the Bitcoin world there's a fight going on. There is a fundamental, ideological debate between greed (miners) and growth (developers). Please don't take these words as derogatory, there's healthy greed, sometimes, as there is unhealthy growth, sometimes. Just look at them at some irreconcilable positions.
Even if August 1st will pass on without major problems for Bitcoin, which is something I doubt, looking at the markets, the contradiction will remain.
Power and Control
Bitcoin was created as a way to take control from a centralized system made by a toxic combination of state and banks, and give it back to the average user, in an untampered way. 7 years later, there is a new form of control. It's not state or banks, it's the people who are making the network tick. The miners. And, to some extent, the developers as well.
As long as there will be the tiniest niche in the underlying protocol of a crypto currency, there will be people willing to take advantage of it. Maybe not in the beginning, maybe not all at once, but there will be a need for control. Just 2-3 years ago, if you were telling somebody that China will become a super power in crypto universe, all you would get would have a been a giant laughter.
Proof of Work, as the niche which gives leverage to the miners, is already a toxic management approach. It's time to think at something else. Ethereum is signaling for a while that it will move to Proof of Stake, with Casper. Steemit (and BitShares and PeerPlays) is using DPoS for more than a year, with fantastic results.
And, in case you don't know, there are even other ways to validate the transactions in a blockchain, apart from PoW and PoS. I'm talking about something called Proof of Burn, in which you get "hashing power", or the chance to mine a block, by spending your own coins, or "burning" them, sending them to an address which will destroy them. This makes computing power completely useless for the network health, because you can actually mine with your Raspbeery Pi (which is something I'm doing for a while) or even with your phone, if you write some basic wallet for it.
This currency is called Slimcoin, it's listed on Coinmarketcap, and, believe it or not, it's one of the few cryptos actually soaring in the middle of this war (screenshot taken a few minutes ago).
Of course, Slimcoin's capitalization is ridiculous, but the signal is important.
Capital is moving away from toxic governance structures.
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
https://steemit.com/~witnesses
If you're new to Steemit, you may find these articles relevant (that's also part of my witness activity to support new members of the platform):
Proof Of Burn seems to be the optimal solution for now, lets see if any coins in future adopt it... Thanks @dragosroua for sharing these important Bitcoin updates.
I am not surprised by the tug-o-war out there. I have been saying in first post since I joined Steemit that there will people in the wings looking to replace the current bankers as we know them. Instead of a few bankers, just expect more bankers.
Are miners mining too much and too quickly? If there is a problem, I would not blame the miners but rather the mines. I have some Bitcoin. I hope for the best in the split or whatever that happens.
Interesting thoughts on the red everywhere
Thanks for sharing
Excellent piece. Watching STEEM go below a dollar was a shocking sight to behold but I'm not too worried long term. This will kick back, but there's definitely some external manipulation going on and we need to get to the bottom of it.
The mass selloff is insane.
Yeah, the price has only two ways to go: up or down.
Could you please comment on the relative "toxicity" of Steemit, and how you see it in comparison or contrast to Bitcoin?
😄😇😄
The "toxicity" of Steemit can manifest (and it manifested in the past) when the stake is used abusively. I'm sure you remember the flag wars. But now the voting power evened out and the effects of such a potential problem are smaller. DPoS tends to heal itself faster than PoW.
Thank you, Dragos. I appreciate the added insight. ;)
For someone such as myself who has been using the platform for less than a month, what are you referring to here with regards to "toxicity"?
A few months ago a few whales engaged in a so-called "flag war" in which they ended up flagging (most of the time abusively) other people caught in the middle. By "flag" I understand a downvote. If you downvote a post, and your voting power is bigger than the current reward of the post, it will be added back to the reward pool ("taken away" from the post). I used quotation marks because no reward is sure to be distributed until the moment of distribution, until then everybody can upvote & downvote as he / she sees fit. During that flag war many people saw their rewards vanishing, there was a lot of frustration.
Cool, thanks for the explanation.
Don't you feel there's a little bit of a problem with people not wanting to upvote comments and posts out of some kind of selfishness or fear of 'using up' their voting power too much? I still have to wrap my head around it all, but I thought there'd be in general just a lot more voting happening in comments sections. People are thus hesitant to upvote comments and overall discussions suffer as a result. On Reddit for example there's no cost to simply upvote to say "this is a good comment", but here people don't seem to want to do so - I'm not entirely sure why.
Maybe people incorrectly think there's actually a direct cost to them whenever they upvote on Steemit - what do you think? Because, from what I understand, people should be upvoting whatever they think is worth getting more attention/getting their virtual thumbs up, but people don't because there is a strange sense of scarcity attached to something as simple as an upvote.
See, there's two elements to the upvote: the number of votes, and the earnings of votes, and we're getting a little hung up on the latter for some reason.
I think this will even out in the end. It's a process.
Considering all the money draining into Fiat right now, It's sort of an ebb and flow
I think market will keep going down till all things are sorted out between bitcoin miners
Wow thanks! I will take a look at slimcoin
Nice write up with good insight on things happening around Bitcoin. I my self have wrote a technical analysis on bitcoin today, but i must say your article just completed my analysis, so thanks for that.
Its a HUGE war going on between TPTB and their FIAT currency (product) which they print out of thin air .. And their competitors.
Up till now Gold and Silver has been the main enemy .. But since crypto currency has become somewhat mainstream ...... They do all they can to kill that too .... All to protect their (useless) currency .. Called money.
This will go on until that 100 year old (The Fed) Ponzie scheme crashes ... Which is not THAT far away in the future.
Thank you for this article! I am a member of the Slimcoin community and I think you're totally right with the analysis that we need alternatives to Proof of Work.
The Slimcoin model uses three different block generation/consensus methods, being Proof of Burn the most unique one, but we also use Proof of Stake and Proof of Work.
This is not only better for security - pure Proof of Burn consensus could be relatively easily attacked in periods where few people participate in "burning" - but it has also the advantage that there is a better power balance. "Miners", "Stakers" and "Burners" are representing three different investor/business types and they complement each other, being burners the most long-term oriented group (and so they have a strong incentive to do everything they can to make the coin a success).
Some explanations are here: http://slimco.in/advantages/ , above all in the "Balanced power structure" section, and our Proof of Burn ELI5: http://slimco.in/proof-of-burn-eli5/ . Enjoy!