Bitcoin scaling agreements - Consensus 2017

Consensus 2017 concluded this past week in New York. Off the many excellent talks like the one here from Dr. Arvind Krishna at IBM or the one from Stefan Thomas, Ripple's CTO here Consensus 2017 marked a watershed moment in the history of computing per se.

Off the many trade agreements that were reached, there was one that was notable. The Bitcoin scaling agreement amongst the miners, developers and hosting partners of Bitcoin. The Segregated Witness proposal rollout agreement was reached - as stated here in this Medium post . This is going to be the first consensus based hard fork for Bitcoin. The debate around BTU (Bitcoin Unlimited) versus SegWit2MB has with this (hopefully!) been settled. As of now 83.5% of the world's hashing power - has agreed to this hard fork.

What we're seeing now is really very large delays in transaction confirmation. For example, most exchanges or places that accept Bitcoin such as miners are forced to alter policies on payment using BTC because of transaction delays. The transaction delays, increase costs for all parties involved in a bitcoin based transaction - living upto Satoshi's original vision. The following is an excerpt from his work seminal paper...

"Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party."

With SegWit2Mb once the hard fork is rolled out we will see Bitcoin scale to unlimited number of transactions at a much larger pace than ever before. This was one of the major problems with Bitcoin - documented in one of my research papers which I will share - a presentation off shortly...