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maxwell demon writes:

Long time Bitcoin developer Mike Hearn is claiming that the Bitcoin experiment has failed:

Why has Bitcoin failed? It has failed because the community has failed. What was meant to be a new, decentralised form of money that lacked "systemically important institutions" and "too big to fail" has become something even worse: a system completely controlled by just a handful of people. Worse still, the network is on the brink of technical collapse. The mechanisms that should have prevented this outcome have broken down, and as a result there's no longer much reason to think Bitcoin can actually be better than the existing financial system.

Among the problems he lists are:

• A conceptually wrong new feature.

  Allowed buyers to take back payments they'd made after walking out of shops, by simply pressing a button (if you aren't aware of this "feature" that's because Bitcoin was only just changed to allow it)

• Technical problems of the network.

  The block chain is full. You may wonder how it is possible for what is essentially a series of files to be "full". The answer is that an entirely artificial capacity cap of one megabyte per block, put in place as a temporary kludge a long time ago, has not been removed and as a result the network's capacity is now almost completely exhausted.

• Extreme concentration of hash power.

  Why has the capacity limit not been raised? Because the block chain is controlled by Chinese miners, just two of whom control more than 50% of the hash power. At a recent conference over 95% of hashing power was controlled by a handful of guys sitting on a single stage. The miners are not allowing the block chain to grow.

[More after the Break]

• Censorship on bitcoin.org.

  So he decided to do whatever it took to kill XT completely, starting with censorship of Bitcoin's primary communication channels: any post that mentioned the words "Bitcoin XT" was erased from the discussion forums he controlled, XT could not be mentioned or linked to from anywhere on the official bitcoin.org website and, of course, anyone attempting to point users to other uncensored forums was also banned. Massive numbers of users were expelled from the forums and prevented from expressing their views.

• And finally, he traces back the root of the problem to the Bitcoin Core developers.

  One of them, Gregory Maxwell, had an unusual set of views: he once claimed he had mathematically proven Bitcoin to be impossible. More problematically, he did not believe in Satoshi's original vision.
  [...]
  In a company, someone who did not share the goals of the organisation would be dealt with in a simple way: by firing him.

  But Bitcoin Core is an open source project, not a company. Once the 5 developers with commit access to the code had been chosen and Gavin had decided he did not want to be the leader, there was no procedure in place to ever remove one. And there was no interview or screening process to ensure they actually agreed with the project's goals.

• But the first mistake was already made by Satoshi himself:

  When Satoshi left, he handed over the reins of the program we now call Bitcoin Core to Gavin Andresen, an early contributor. Gavin is a solid and experienced leader who can see the big picture. His reliable technical judgement is one of the reasons I had the confidence to quit Google (where I had spent nearly 8 years) and work on Bitcoin full time. Only one tiny problem: Satoshi never actually asked Gavin if he wanted the job, and in fact he didn't.

Is Bitcoin rotten to the Core?

Original Submission