“SegWit a block size increase?! 4MB next year? That’s news to me!”
The Scaling Debate Still Continues!
With BIP148 (User Activated Soft Fork) gaining popularity and attention throughout the Bitcoin community, many are discussing the possible scenarios, including Adam Meister, the Bitcoin Meister, a popular speaker on YouTube discussing Bitcoin and all things crypto.
The Bitcoin Meister has had a wide variety of guests on his show, and in this recent interview he has Rocky Palumbo on to discuss ASICBoost, SegWit, and the User Activated Soft Fork that is happening August 1st.
ASICBoost Controversy – What the Community Isn’t Told!
Since signalling for SegWit began, fierce opposition has worked to delay its activation. Recently discovered is ASICBoost, a way to enhance mining efficiency ahead of the competition.
From the 04:00 mark, Rocky explains the history of Bitcoin mining, with people originally using their CPUs (Satoshi’s original vison of Bitcoin mining) until the realization of GPUs and even more efficient ASIC chips were capable of solving the calculations at an optimised rate.
He continues to explain a common misconception regarding ASICBoost: it doesn’t actually enhance the operations of mining, but reduces the cost of electricity consumed by 20-30%.
This gives miners using this “financial enhancement” a considerable advantage over other miners, enabling them to reinvest 20-30% more back into mining operations and creating a very profitable loophole, ultimately enabling more hashing power to block essential developments, such as SegWit.
The desperate grasp for power over a decentralized network wasn’t just limited to Bitcoin this year. While Litecoin was in the signalling process for SegWit and making considerable progress, similar acts of blocking SegWit and creating more hash power were exposed!
Why Are Some Miners Stalling SegWit? Is it Because They Don’t Want to Lose Their Monopoly?
As with most things, greed and profit are the primary influencers. Miners don’t want to give up their monopoly with the transaction fees that SegWit reduces.
Unlike the other mining enhancements, there is a requirement for ASICBoost. For it to continue to work, the block structure cannot be changed, something that would occur with SegWit being activated. Rocky explains this in detail from the 08:00 mark.
This clearly highlights why SegWit is still not activated. The centralized mining pools are ultimately strangling Bitcoin and hindering its innovative potential. As Rocky says, “ASICBoost is a ball and chain on Bitcoin’s ankle.”
Another interesting insight discussed in the interview is that SegWit should have been activated several months ago, perhaps as early as December 2016, as the majority of Bitcoin’s problems could be solved by activating SegWit and being able to move forward.
User Activated Soft Fork (BIP148) Means SegWit Activates on August 1st!
Regardless of whether or not 90% of miners signal for SegWit, there will be a version of SegWit-activated Bitcoin on August 1st.
The dilemma within the community is whether or not miners will give up their ASICBoost advantage and run mining operations under the new SegWit-activated version of Bitcoin. If they do, then Bitcoin can continue to move forward and develop new features, such as Lightning Network and other off-layer applications, such as Smart Contracts. If they don’t, the community faces the possibility of two Bitcoins competing for dominance, creating huge amounts of fear and confusion in the markets.
GladiaCoin Scam Warning and Cloud Mining Dangers
In the second half of the interview, Rocky and Adam discuss a growing scam called GladiaCoin, which recruits its victims under the pretense of doubling investors’ money and using Bitcoin meet-up events to lure unsuspecting recruits into the Ponzi scheme.
The structure of the Ponzi scheme is broken down. The payment structure investors get is also explained, as well as the self-destructive business model these platforms have.