Proof of Hat vs Proof of Work presented by Pierre Rochard at Bit Block Boom.
Blog post by Cousin Edgar Stumblefield.
Today I am going to be speaking on Bitcoin governance
Why do we care?
Sound money is a foundational pillar of civilization, and Bitcoin restores this powerful tool for social coordination.
What is Bitcoin Governance?
Process for maintaining transaction and block verification rules
Verify that payments receive fit subjective definition of “Bitcoin”
Form an inter-subjective social consensus of what “Bitcoin” is
Bitcoin has to be decentralized in order for Bitcoin to survive. This system has been working well so far.
What is the purpose?
Trustlessness vs Value maximization
General rule – those that increase Bitcoin's value will be adopted, those that do not, will not.
Throughout monetary history, trusting others to produce money has resulted in an abuse of that trust. On top of that you can see scenarios – if you compromise trustlessness, you increase value in the short run, but will produce a worse outcome in the long run. Consequentialist approach seems inadequate
How Does Bitcoin Governance Process Work?
Blockheader rules are the most important especially those put out there by Satoshi Nakamoto
Transaction Malleablity had prevented the lightning network from deploying. Due to non-centralization, there is a disconnect as to what researchers are interested in and users are interested in exploring. Simulations are sometimes preferred over actual real trials.
Proposal – one group shares information and ideas with another group ; can be shared at conferences, formal white paper. There is a lot of debate that goes on about protocol levels. Egos can clash, while some are incredibly humble. Bitcoin verification rules have been a big topic of discussion.
You can take all of the feedback you get and work on improving your proposal.
Implementation – if a researcher cannot implement a proposal, it will be either abandoned or revised. Keep in mind, this is decentralized. You do not need approval to implement something in open source software and run it. If the other developers run it, then it becomes Bitcoin.
Only when the developers have strong disagreement would there be a problem. There will be a few changes that disagree with the Bitcoin developers.
Bitcoin core is 98% of the nodes are using this software. Following consensus changes is a policy that helps to keep things running smoothly. The reliability of this code base is why so many are using it. Changes to the code are carefully peer reviewed. This is not some cowboy hat game open source project. There is a lot of thought that goes into all of this.
You do not have to use the reference representation. There were a group of miners that wanted to make some changes, but the developers did not want to merge in the code.'
It is easy to copy in your own code, and implement your own rules.
BCH and not BTC
Etherium hard forked some time ago. There is debate as to whether or not Bitcoin could hard fork. Some have argued that it would need to in order to accommodate for time change (ex: Y2K).
Once the proposal has been implemented as a hard or soft fork, then there is the deployment faze.
There are many retailers that are only marginally interested in Bitcoin. When you use a block explorer, you are depending upon their node. If you are using a node to validate your Bitcoin, you are going to be seen as more reliable than someone that does not. Does give exchanges some power when there is debate as to which side of a hard fork is with the social consent.
By no means are exchanges centralized (this has been one of its criticisms).
Problem with this aspect of Sybil attack; can create several fake accounts to make a certain change happen.
One way to know you have your node software running properly is to receive payments that are verified as Bitcoin and send out payments as well.
Decentralized p2p network of fully validating nodes
Nodes will disconnect and ban peers that send invalid transactions
Miners are mercenaries – they will mine whatever is profitable. Miners do not always validate the rules. They cannot be trusted to validate the rules on their own.
Trustlessness vs Value maximization
There has been a degradation of trustlessness. People run nodes to verify the money the are receiving is what they are expecting , but they end up verifying others transactions as well.
Bitcoin's price has gone up and so has its governance. Bitcoins governance has delivered on consensus changes. Lightning network increases Bitcoins value dramatically.
Unchained governance like the DOW, there was a bug in their code, they had to fall back to ungoverned code.
Pierre Rochard is a Software Engineer, the co-founder of the Satoshi Nakamoto Institute, and an outspoken Bitcoin Maximalist. He holds degrees in business administration and accounting from the University of Texas at Austin. He co-produces the “Noded Bitcoin Podcast” with his colleague Michael Goldstein, aka “@Bitstein”.