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There is an xcancel thread I have been reading, it's a long one and I don't know why some of these issues haven't been better discussed (at least to the best of my knowledge.)
Doesn't it relate intimately to the conversations around "data"... and Knots and "spam mitigation???"
The conversation is between @Murch and Chris Guida (who's not on Stacker News?). I have tried to post the xcancel links here... it's not easy but I will do my best with links and screenshots as there are some fundamental questions... I wish I had answered.
  1. First of all, there is a fundamental disagreement as to whether or not Bitcoin transactions of a "monetary" purpose can outbid those of a speculative or "arbitrary-data" origin.
Chris says that arbitrary data has significantly more demand... than payment data for you know actual Bitcoin [monetary] transactions.
Chris makes the comment that demand for arbitrary data (relative to monetary) may be 1000x... and the only thing holding back the arbitrary data floodgates is filtering (and/or "hostility").
Murch says that's not true as Bitcoin payments can (and will) be 'more efficient'... while also alluding to the reality of limited blockspace and the need for higher value transactions...

The conversation then goes on to suggest that... the demand for "arbitrary data" (Jpegs on chain + memecoin 'tickers') is so great as to be 1000x that of Bitcoin [monetary]...
To which I say
If that's true we are DONE...
Bitcoin is supposed to support, magnify, and ultimately align with economic incentives. If the 'economic incentives' are for those relating to "arbitrary data" and its storage and "sale" in a very speculative fashion...
How the hell are filters supposed to work??? Aren't people supposed to WANT Bitcoin and WANT to transact with it? How do you "filter" out something with 1000x greater demand that people want to USE?
Wouldn't the JPEG people simply spool up their own nodes with which to transact/speculate AND/OR relay???

(Isn't this basically "information-warfare" on-chain?)

  1. Then the conversation shifts to the nature and reasons for the bloat of the UTXO set. How did the UTXO set get bloated and why???
Chris and Murch discuss BRC20s and Runes transactions (over 50% of transactions today) and how that resulted in more UTXOs.
@Murch says that BRC20 "inscription" tokens can and will in many cases be swept up and consolidated. This is something I (tried to?) address in an earlier post #1211686
This is an example of such a consolidation... right?
From their conversation:
My understanding is that the reason for the 'gazillion outputs' in the BRC20 token "transactions"... was because the spammers were "pretending" that the more outputs, the more "tokens" they could generate in a single transaction.
The thousands of outputs didn't themselves carry any data... they just represented more "tokens" (which is of course completely arbitrary) so the more OUTPUTS the more TOKENS.
But why... exactly would a token system need to be designed this way??? Why not have more tokens with fewer outputs? 2 to 1? 5 to 1? 10 to 1... isn't ALL OF THIS completely arbitrary???
I read this whole thread (LONG conversation between Murch and Chris) 3 times before it dawned on me how arbitrary all these data-storage-token-speculation-schemes are. Who decides "which sat" is special? And how can filters keep degens from coming up with their own...
"json-based client-side validation colored coin scheme"? 🤦

  1. The conversation then briefly turns to the economics of consolidating the "dust" from BRC20s... where the AI bot says that such dust never gets consolidated because it's "irrational to ever spend them."
In an imperfect world... don't we want these low fee-rate consolidations???
  1. Finally... the conversation turns to what to do about "UTXO bloat" in the future?
Chris writes (and makes an interesting point):
So what DOES keep the degens from creating a new "opreturn-rc20" token meta-protocol in the future? Isn't op_return (with 80 bytes + plus the inscription "hack") enough space to create an almost endless number of
  • token protocols
  • memecoins
  • plus other speculative schemes?
  • What makes a "Rune" special when it could be called a "Loon" or "Dune" or "Moon" or "SafeMoon"...
The fastest degen to create the greatest number of outputs and consolidate/NOT consolidate them... Wins the prize???
Which Sat is first? Which is 'last?' Which tokens get 'named' first depending on 'which' exact output?

After all, what prevents a GOVERNMENT from attacking Bitcoin by spending a relatively modest amount of money, taking Bitcoin and "dividing it up" into millions of UTXOs for which only THEY have the keys?
  • Without arbitrary data?
  • Without op_return?
  • Or using the Witness 'exploit'?
If the goal were to 'harm the chain' it's not the 'arbitrary data' doing the harm... UTXOs could be doubled/tripled in number without being filtered by Knots OR Core or without any arbitrary data added.
Within the most conservative relay policy, without changing consensus...
What is the answer to such an attack???
(These "transactions" don't increase the UTXO set beyond op_return... so they aren't an "attack"... Or are they?! 😉)
300 sats \ 37 replies \ @Scoresby 4h
How the hell are filters supposed to work??? Aren't people supposed to WANT Bitcoin and WANT to transact with it? How do you "filter" out something with 1000x greater demand that people want to USE?
I've never understood this about Guida's argument: if a lot of people want to use the chain for data, how does filtering stop it?
After all, what prevents a GOVERNMENT from attacking Bitcoin by spending a relatively modest amount of money, taking Bitcoin and "dividing it up" into millions of UTXOs for which only THEY have the keys?
Even more agree with you here.
The anti-spam crowd says there are valid transactions that can harm bitcoin and potentially even pose an existential threat to it.
If this is true, why wouldn't a state use such transactions to attack bitcoin?
If a state does, do we believe filters will be able to stop them?
If the answer is no -> then anything that can get to the chain can (and probably will) be used as an attack). If there are valid transactions that can threaten the viability of Bitcoin, this is a major problem that we probably ought to address with a consensus change.
If the answer is yes -> what do we even need mining for? If filters can stop state actors from confirming valid chains, why wouldn't state actors use filters themselves to prevent us from sending "illegal" transactions?
The whole thing is nonsensical to me.
Either you think the spam transactions are a real problem and you propose a consensus change or you think they are not a serious problem.
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Bad actors put CSAM directly into OP_Return on BSV, a comparable if inconsequential Blockchain, after they increased the limit to 100kb, exactly as is proposed in v30 of Bitcoin Core.
Why would states or other bad actors not do this as soon as it was possible?
Using specialised techniques to store fragmentary data that can reproduce an illegal image is an entirely different thing to storing the entire data in a single transaction within OP_Return.
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No one is talking about changing what can happen on the Bitcoin blockchain today. There is no change to consensus rules on the table.
Any limit increase only affects the relay of unconfirmed (valid) transactions).
Whatever transactions you are afraid of are valid on Bitcoin's blockchain right now.
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Another staw man argument, I know that, as does every prominent knots advocate. Nobody is saying spam transactions are invalid, but the valid spam transactions are not relayed due to Core defaults, and that has always been known. If a miner is paid directly to include a CSAM transaction that has not been relayed by nodes then they would obviously destroy their reputation by tarnishing that of Bitcoin, so that's never happened.
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If a miner is paid directly to include a CSAM transaction that has not been relayed by nodes then they would obviously destroy their reputation by tarnishing that of Bitcoin, so that's never happened.
Why wouldn't miners feel the same way for relayed transactions?
Using specialised techniques to store fragmentary data that can reproduce an illegal image is an entirely different thing to storing the entire data in a single transaction within OP_Return.
This statement makes it sound like you believed the only way to include an OP_RETURN of more than 80kb was to do the above.
Why would states or other bad actors not do this as soon as it was possible?
I don't know. But I doubt they are avoiding it because the transaction won't get relayed.
Which gets to my second point: if filters are that powerful, what will we do when a government decides to use filters to prevent transactions they don't like?
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: if filters are that powerful, what will we do when a government decides to use filters to prevent transactions they don't like?
Explain the mechanism of co-opting all of the nodes. Its not enough to overwhelm the nodes by number, if that were feasible.
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What percent of nodes on the relay network do you believe a government would need to successfully prevent a transaction from getting to miners?
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Its a bad question, it's not a matter of percentages.
If a government or other bad actors spun up 10% or 900% of the current node count using a Bitcoin Core fork it would identifiably be considered a sybil attack, by overwhelming the policy settings of existing nodes. Countermeasures would be deployed to mitigate the damage and demonstrate hostility to spam and CSAM in particular.
But by getting rid of policy settings entirely via Bitcoin Core software it gets rid of the idea that policies are part of the consensus mechanism and security of the network. You can believe that is the case, and other people disagree, and so we fight it out in public discourse.
Dismissing knots advocates with rhetorical techniques is just the strategy of people who want to change Bitcoin by getting rid of a core function of nodes within the system.
Because by being relayed first they are acting on the tacit approval of the network, or a significant portion of it, and are not more culpable than those nodes who saw the content and chose to relay it.
Bottom line: are nodes relating CSAM today? Would removing the filters as Core policy increase or decrease the likelihood of them doing so?
Bitcoin will always be vulnerable to spam, but being vulnerable doesn't mean that the system is destroyed by the vulnerability, unless nodes decide that this vulnerability is in fact a feature.
If spam is simply data, which has as much a place on the chain as any arbitrary data then bitcoin changes from a system that represents value via transaction data, to a protocol for sending and receiving data with intrinsic value, i.e. not a neutral medium of exchange.
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55 sats \ 6 replies \ @Scoresby 3h
When did this become about CSAM? nobody was talking about this for the last year. It's all been utxo bloat and making it hard for node runners.
The CSAM stuff is a complete red herring.
unless nodes decide that this vulnerability is in fact a feature.
Nodes only decide whether a block is valid or not. And they exert the force of their decision by saying, "I don't want those coins you are trying to give me." They can't do anything else to influence what ends up in blocks.
If you run a node that isn't connected to a wallet (that isn't validating coins you want to receive), the node is useless and does nothing other than keeping an updated copy of the chain.
I'd go even further to say that if the relay network is essential to Bitcoin functioning, we aren't censorship resistant anymore.
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When did this become about CSAM? nobody was talking about this for the last year. It's all been utxo bloat and making it hard for node runners. The CSAM stuff is a complete red herring.
I don't believe it's a red herring at all. I've always been worried about the ability/ease of putting CSAM on the blockchain as an obvious government attack vector.
After all, what prevents a GOVERNMENT from attacking Bitcoin by spending a relatively modest amount of money, taking Bitcoin and "dividing it up" into millions of UTXOs for which only THEY have the keys? Even more agree with you here.
What will this accomplish other that bloating the UTXO set?
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100 sats \ 0 replies \ @siggy47 7h
I think @Murch is the only one who can explain this for everyone to understand. I hope he does.
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This is a good conversation.
My view is that demand for transactions will surpass demand for arbitrary data if adoption of Bitcoin as a MOE increases. If no one uses it for MOE and it stays a SOV, then there will be little demand for monetary transactions, and most of the demand for blockspace will come from people storing data.
The way I see it, storing data isn't the problem. The blocks are all the same size anyway. The problem is bloating the UTXO set and making a node more costly to run.
The point about how the government can also make such an attack is an interesting one. I don't know enough about the technical details behind bitcoin, but if there could be a way to prune the UTXO set, even if the outputs are not provably unspendable, that could be a technical solution to this debate.
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I don't agree with that.
New monetary systems start as collectibles. In that regard bitcoin has already succeeded, everyone agrees.
The next stage can either be MoE or SoV, but it depends upon the reaction of the incumbent system. The incumbent system and entrenched interests will use any technique they can to forestall the adoption of the new system, including sybil attacks that make the general population suspicious or morally opposed to the new system.
In principle Bitcoin should be like gold, in that it can hold out as a SoV for 1000 years without getting corrupted by a sophisticated attacker. It cannot depend upon becoming a MoE in order to succeed, it must succeed to the extent that MoE is inevitable, even if that ultimately takes a very long time.
If it were the case that there were no strong incumbent then Bitcoin would have already succeeded as a MoE, but we would still be having this conversation, because the very permanence of the Blockchain makes it attractive as a data storage and transmission system, although at that point the debate would be more easily resolved because the amount of mainstream investment in Bitcoin as a neutral monetary medium would overwhelm the case for tolerating and facilitating spam.
Bottom line: if bitcoin succeeds as a permanent SoV then it will eventually and inevitably become the dominant MoE even if that is beyond our life times. As the saying goes, society grows strong when men plant trees under whose shade they will never sit.
The only two things that I can see that might thwart that are:
  • a sudden innovation in quantum computing that drains prominent addresses and with the current block size takes a year for all addresses to migrate to quantum safe addresses
  • the evolution at the policy layer of bitcoin from a neutral monetary medium hostile to content rich transactions to a culture that tolerates and facilitates spam, and treats hostility as censorship and all data as equivalent.
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My understanding is that Bitcoin cannot sit forever at 1 sat/vbyte, at least not without considerable increases in exchange rate, without starving miners of revenue and ultimately hashrate.
Bitcoin doesn't have a "tail emission". It eventually FWIU needs fees to provide revenue to miners. There are LOTS of sources of fees if people use Bitcoin to transact and embrace it as transactional capital/currency/medium of exchange...
But it was not designed to "just sit." EVENTUALLY I believe it will be a MoE because it is a store of value in a world awash in fiat and debt and people will want it.
However we are not there today and IMO we do ourselves a disservice by 'becoming comfortable' with half-empty blocks it is not OK long term.
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What is the answer to such an attack???
Point to the actual attack. This hasn't happened and has nothing to do with JPEGs as far as I can tell. Its just muddying the discussion with adjacent speculation.
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