You may have heard of BIP-110; This is why this fork is not only bad for Bitcoin, but it is built on a misunderstanding of what a Bitcoin node is and what it is good for. And also why, because of this misunderstanding, BIP-110 will fail.
This article is a takes. The opinions expressed are entirely those of the author and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
PEP-110 It is a proposal to improve Bitcoin entitled “Temporary Reduced Data Fork”. The BIP proposes a consensus change for Bitcoin, which attempts to limit the types and amounts of arbitrary data that can be added to consensus-valid transactions by limiting the wide range of Bitcoin’s scripting capabilities. BIP-110 is led by a pseudonymous developer known as datun om It is widely supported by the Knots community, an alternative application to Bitcoin led by one of the early Bitcoin Core contributors, Luke Dashjr, and his supporters.
The BIP-110 consensus change is heading towards a mandatory signaling period in the coming weeks, hence a potential fork with the main consensus rules as implemented in Bitcoin Core. The proposal needs to gain a significant amount of support from miners over the coming weeks to change the Bitcoin consensus. As of the time of writing, mining signals for BIP-110 have reached a level of Less than one percent.
The Knots community is broadly made up of Bitcoin users who run nodes on devices such as Start9 and umbrellarallied around Knots in protest against a series of development decisions made by Bitcoin Core, the open source core development community and reference implementation of Bitcoin. While the majority of senior Bitcoin developers are either opposed or indifferent to the changes proposed by BIP-110, the movement has gained enough steam to become an ongoing topic of discussion on social media.
BIP-110 proponents believe that by running full Bitcoin nodes signaling a consensus change, they alone can change Bitcoin. Here are the key concepts discussed, the biggest misconceptions about Bitcoin consensus, what a Bitcoin node is, and why BIP-110 is almost certain to fail.
Power and limits of the Bitcoin node
Many of the controversies and misconceptions in this latest cultural clash within Bitcoin revolve around the idea of a Bitcoin full node. Influencers like Nute Svanholm, author and podcaster, have elevated the role of the full node to heights perhaps very close to the sun.
Knut recently tweeted: “Every person on Earth is a node in the Bitcoin network. Of course, to a small extent, but every node is primarily a person, not a machine. And which tools we use to interact with the network (and, by extension, to what extent they influence the network) depend entirely on the choices we make.”
Statements of this kind are poetically beautiful, philosophically great, even romantic, and yet they are artistically incoherent and fundamentally meaningless. Knut’s tweet attempts to redefine the meaning of “Bitcoin node” and fails, instead devaluing the entire term. He might also have said that every atom in the universe is a Bitcoin node, as that term seems to be universal to him.
Knut, though well-intentioned, is wrong. A Bitcoin node is a very specific thing. It is a complete copy of the entire Bitcoin transaction history, block headers, and transaction-related data. Its purpose is very specific: to allow users to verify the integrity of Bitcoin’s supply and transaction history in relation to Bitcoin’s consensus rules.
Bitcoin nodes give users a variety of benefits, such as privacy. Third-party wallet providers Querying their copy of the Bitcoin blockchain to get the user’s balance and providing it back to the user via the wallet app. Most mobile wallets work this way, where users request a third-party server for their balances; Some, very few, can connect to a local Bitcoin node run by the user, in which case the user’s public addresses and balances are not shared with any third-party wallet company.
Another benefit that Bitcoin nodes give users is the ability to check if they are in agreement with the rest of the network, and stay in sync. If a user mines Bitcoin or contributes any significant amount of hashing power to Bitcoin’s proof-of-work network, the node also provides the opportunity to assemble a block, and choose which transactions to enter into. This is only possible if the user can mine a Bitcoin block, which is a major achievement today, given the difficulty and intense competition.
Even new types of mining pools like Ocean, which are trying to decentralize the production of block blocks, allowing retail miners to have greater influence over the transactions entering the chain, still need enough hashing power to win the proof-of-work race, leading to sparse block mining and therefore limited influence on the blockchain.
Bitcoin nodes also relay transactions across the network, with tens of thousands of them communicating via the flood network; This results in a censorship-resistant system where a small number of nodes can obtain transactions that are controversial to miners, bypassing any type of filters, as demonstrated by Peter Todd free relay. Therefore, Bitcoin nodes cannot easily filter transactions entering the blockchain.
However, even the vast majority of Bitcoin nodes alone cannot change the Bitcoin consensus. Not without a significant amount of economic activity entering the Bitcoin network through it, as exchanges do on behalf of millions of users. Not without a community of protocol and application developers behind them. Not without the investor community behind them. Bitcoin is not a contract democracy, contrary to popular memes today.
A Bitcoin contract does not give you “citizenship” in a “Bitcoin country”. Satoshi Nakamoto was quite clear about this in Bitcoin white paper. Bitcoin’s ultimate security and governance structure is: one CPU cycle, one vote, not one Bitcoin node, one vote. Miners, who manage CPU cycles across Bitcoin’s proof of work, are very sensitive to the sentiments of investors and the broader developer community, resulting in a global, distributed protocol for funds that is difficult to change.
Bitcoin nodes eventually let you know if you are connected to the network that has the most proofs of work and that its consensus rules are being followed, but a node alone does not allow you to change the consensus rules. Users who change the consensus rules of their Bitcoin node, by definition, are no longer using Bitcoin. As a result, changing Bitcoin’s consensus as a node operator is very difficult, and this is a feature, not a bug. Bitcoin is money for enemies.
History games and Bitcoin consensus
Deep work has been done trying to understand the Bitcoin consensus and its various pillars and interest groups. Ren Crypto Fish, Steve Lee, and Lynn Alden identified six of them BCAPan open source effort to analyze Bitcoin consensus and risks in protocol upgrades. Identify BCAP stakeholders such as Economic contract, Investors, Media influencers, Miners and Protocol developersand Users and application developers
Historically, in the event of a consensus crisis, it is true that Bitcoin contracts have been used to indicate support for one version of Bitcoin over another. Fork events such as the 2017 Bitcoin Cash fork are often cited as examples of economic nodes that won opposition from miners. 2017 legendary User Activated Soft Fork (UASF) It faced significant opposition in theory; It supported the vast majority of mining pools and their corresponding collective hash rate Followed up 2x A version of Bitcoin, with many exchanges and companies signing on to the infamous version New York Convention.
However, a soft fork backed by a Bitcoin node won, completely spoofing the Segwit2x version of the disputed blockchain. But here’s the thing: While the Bitcoin nodes technically won, they did so by garnering massive support from protocol developers, investors, and media influencers: These nodes had economic weight and Rough consensus. On the other hand, BIP-110 does not have protocol developers, nor are there enough investors behind it. Michael Saylor He opposed it, as many industry leaders also publicly opposed it or stayed away from it altogether.
In fact, during the Bitcoin Cash fork, the limits of Bitcoin retail contracts were clearly understood. An exchange-run Bitcoin node is an order of magnitude more influential than a retail user node, as it introduces large amounts of new transactions into the Bitcoin network. The Bitcoin node of a major mining pool is much more influential than the node of an individual hobbyist miner, as it often aggregates blocks and chooses which transactions are settled on the blockchain.
Most off-exchange Bitcoin users use mobile wallets to access their Bitcoin. These users and investors can “vote” with their money, so to speak, by moving their bitcoins and economic activity elsewhere, whether that be to a wallet that supports their vision of bitcoin, or their own full node. But while users still use mobile wallets that talk to third-party nodes, those users don’t have much individual influence on Bitcoin consensus. The vast majority of mobile wallets use a Bitcoin-compatible backend.
The same goes for exchanges. Its users effectively delegate consensus decisions to exchange operators. In some cases, exchanges have put consensus issues to a user vote, weighted by their total holdings, handing that decision back to end users burdened with capital; We may see this happen again with BIP-110.
Sounds like this are starting to happen with Foundry today. One of the largest Bitcoin mining pools in the world, Foundry, emailed recently The miners tell them that they can vote on the proposal at their hash rate. High enough support could send Foundry signals for BIP-110, although this remains unlikely. Users who do not vote will effectively be signaling against BIP-110, defending the status quo. So indifference on the subject of BIP-110 would be a win for Bitcoin Core by default. BIP-110 proponents need to culturally win over the Foundry hash rate majority, who must then act to vote against the consensus of Bitcoin Core developers, the most popular Bitcoin implementation and best supported code base.
today, Miners do not indicate support for BIP-110 in any significant way. In fact, according to some data, this is one of Soft fork attempts least supported by miner signals in Bitcoin history. Less than one percent of mined blocks in the current difficulty adjustment period indicate BIP110.
Concluding thoughts
BIP-110 has so far failed to gain consensus across major interest groups within Bitcoin; Neither developers, investors, miners, nor large economic nodes support this agreed-upon change. The result will likely be a chain fork in the coming weeks, which could have serious consequences for Lightning wallets running on BIP-110 compliant nodes, ultimately giving rise to a new but small blockchain that will likely have to change the proof of work used to survive.
