[Bitcoin-segwit2x] Bitcoin-segwit2x Digest, Vol 6, Issue 23

Alberto De Luigi mail at albertodeluigi.com
Wed Nov 8 14:16:19 UTC 2017

How can you say what will be the mining profitability of the two chains?
At the moment the future volumes are too low, a single early adopter can
completely reverse the prices of the two coins just committing a tiny part
of his account. For people who want to pump or dump the two chains, trading
now is not a good strategy, because it means to waste bullets before the
battle begins. The price is the match of demand and supply at a certain
moment and trading history doesn't matter much, you only have to watch at
the order book at a particular moment.
Suppose a couple of companies like Bitpay or Xapo, or Shapeshift and
btc.com, or whatever, coordinate themselves to pump the s2x coin at block
height 494784. All that matters is how many traders are committed on the
other side. No one knows exactly what will happen, but suppose:

- s2x starts with around 65-70% hashrate (I round down and exclude ViaBTC
due to last statements
- when forks happen, it might also be that average user (the ones completely
ignoring what the hell is happening) might buy the new coins just because
they are new coins, maybe exchanging for fiat money (I saw this behavior in
the case of Bitcoin Cash fork)
- the most experienced and conservative holders, many of them pro s1x, don't
keep much money in the exchanges (ready to dump the s2x). And during the
fork period exchanges will close the doors for a while, tx validation is
slower (exchanges might also require more confirmations) and to move money
is risky due to replay protection.

In that scenario, I think that common people/traders won't risk much at the
very beginning of the split, everything will be determined by the most
courageous whales. When it's clear what will be the price/profitability of
the chains, miners will start switching. The side risking and investing more
at the very beginning of the split (maybe the first hours, or a couple of
days?) might determine which chain will win. In fact if the hashrate begins
to get close to 50-50, then s1x will win for sure, because in the
perspective of s1x chain the split is a "soft fork" from the other chain and
therefore all nodes will reorg, not only spv wallets but also fullnodes like
BU, XT, Bcoin etc. Only btc1 nodes won't reorg because they don't see 494784
block size as required. On the contrary, if the hashrate initially starts
moving to s2x chain, which trader will dare to invest in s1x which will be
the minority chain, less profitable (in that moment), and also losing

Alberto De Luigi 

Date: Wed, 8 Nov 2017 01:04:46 +0100
From: Melvin Carvalho <melvincarvalho at gmail.com>
To: Bitcoin Error Log <bitcoinerrorlog at gmail.com>
Cc: Peter Todd via Bitcoin-segwit2x
	<bitcoin-segwit2x at lists.linuxfoundation.org>,	Alberto De Luigi
	<mail at albertodeluigi.com>
Subject: Re: [Bitcoin-segwit2x] Require a new Statement from NYA

On 3 November 2017 at 00:10, Bitcoin Error Log via Bitcoin-segwit2x <
bitcoin-segwit2x at lists.linuxfoundation.org> wrote:

> There's no such thing as consensus of what Bitcoin is, at least not in 
> the abstract sense you are all yammering on about.
> Bitcoin is the first blockchain, it's protocol defines it and what you 
> can expect from it. You can only add rules, not change them.
> A hard fork can NEVER be "Bitcoin" and Bitcoin can't even "die" 
> (whether miners mine it or not, it remains in hibernation and is 
> secure). These are absolute facts, not beliefs or theories. If you 
> start from these fundamentals, you can make better decisions about how 
> to manage your forks, soft or hard. You will understand you are 
> competing with Bitcoin, not upgrading it.
> You are not reaching consensus, your are campaigning and competing. 
> You are not Bitcoin, you are using Bitcoin history as a proof of stake 
> for a new blockchain.

While an electronic coin chain cannot die, it can be orphaned, meaning that
it becomes uneconomical or undesirable to extend.

The market seems to be suggesting that the cost of mining the segwit2x chain
will be around $25+ per transaction.  Of course this would have been much
lower when segwit was locked in, as the value of mining blocks was smaller.

Therefore, under normal economic circumstances, it is likely that the chain
will be orphaned.  I am curious to know if anyone has thought about what
happens after that?

> On Fri, Nov 3, 2017 at 12:30 AM Luke Dashjr via Bitcoin-segwit2x < 
> bitcoin-segwit2x at lists.linuxfoundation.org> wrote:
>> On Thursday 02 November 2017 4:53:42 PM Alberto De Luigi via 
>> Bitcoin-segwit2x
>> wrote:
>> > Actually the bitcoin Core developers never clarified why they are
>> against
>> > segwit2x. There are no technical reasons.
>> I don't normally post here, but since you're making bogus claims 
>> about me like this... I, at least, absolutely have clarified my 
>> stance on multiple occasions.
>> Please read this reddit comment for a synopsis:
>>     https://www.reddit.com/r/Bitcoin/comments/61yvvv/
>> request_to_core_devs_please_explain_your_vision/dficjhj/
>> >  2mb blocksize hf means very smooth change in 6 months, everybody 
>> > knows
>> it
>> >  and can prepare, fullnodes do not costs more, or the cost increase 
>> > is  negligible.
>> Hardforks are almost* NEVER smooth, due to the design that entails 
>> what a hardfork is.
>> The cost increase is not negligible. You're talking about the 
>> blockchain increasing at a rate of ~263 GB per year. That's almost 
>> double the current blockchain size, which already cuts out far too 
>> many users from running their own node, to the point where Bitcoin 
>> today is not actually secure.
>> Note that 2X is NOT a 2 MB block size. It is up to 8 MB blocks.
>> Luke
>> * The exception is when the network has ceased to be functioning 
>> prior to the change, which forces universal visibility into the 
>> matter. This is clearly NOT the case for November; Bitcoin has been 
>> working fine since 2013.
>> _______________________________________________
>> Bitcoin-segwit2x mailing list
>> Bitcoin-segwit2x at lists.linuxfoundation.org
>> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-segwit2x
> --
> John C
> Bitcoin Error Log
> www.bitcoinerrorlog.com
> _______________________________________________
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