The third Satoshi Roundtable has just concluded in Cancún, Mexico. The Roundtable is a private gathering of 100 movers and shakers within the bitcoin industry, with no media present, and it’s held under Chatham House rules – meaning everybody can use the information shared at the meeting, but never disclose who said what or their affiliation.
First, it can be acknowledged that an event like this can feel like elitism to those who are not invited. Nevertheless, it must be argued it is a very efficient way to make shit happen, and seeing there’s nothing preventing anybody from inviting people to a relaxed meeting, there’s nothing inherently wrong with doing so just because the whole world isn’t invited. This is the third annual Roundtable (and yes, the knight on the picture is the Roundtable mascot).
These are my impressions, and I’m taking the liberty to be blunt. Being blunt saves time that is otherwise needed to guess what people meant.
First, the meeting was superbly arranged by the Bitcoin Foundation and Bruce Fenton. It was set in just the type of location which makes it easy for participants to hang around the meeting venue instead of taking a taxi to whatever favorite other venue and splitting up, which makes all these magic spontaneous small meetings happen.
For me as a Nordic person, it wasn’t too bad to come to 27°C in the air and 23°C in the water in January, either. Not to mention the intense sunlight. (The sun doesn’t rise in large parts of Scandinavia this time of year.)
It was also a breath of very fresh air, after having felt the antagonistic attitude and tensions in online discussions, to see people meet and honestly try to exchange perspectives and gain understanding. In short, people are behaving not just like civilized adults, but like humble thought leaders. You’d never believe this if you just participated in online discussions.
The productivity in a meeting like this is amazing. It’s so intense, you’re having high-impact discussions with everybody you meet, every five to ten minutes at tightest. Almost every single interaction leads to cooperation opportunities. Meeting so many other movers and shakers in such a tight spacetime means there’s an ignition of opportunity pretty much with every person you speak to.
I also had very fruitful and frank – even blunt – discussions with people who represent ideas and objectives seemingly diametrically opposed from mine in the bitcoin sphere, and there was a humility in the air and a willingness to listen and understand that is plain inconceivable if you are judging by the online toxicity. Again, I’m not allowed to disclose whom or their affiliation, but they deserve a metric ton of credit for the attitude. You know who you are.
I’m leaving Cancún with eleven actionable items I wouldn’t have had without meeting all the amazing people here, just one of which would have been sufficient to justify the trip and attendance.
“Blockchain technology is an extinction event to traditional financial institutions. Like the dinosaurs, a few will survive by morphing into agile birds at a small fraction of their previous weight and size, but most will just die.”
I’m not allowed to disclose who said this, but I think it’s a beautiful quote. Roger Ver also posted the first part of it on Twitter, similarly without disclosing who said it, as is appropriate.
There was also a call for leadership among the people present – “we need to act like the leaders we are, and not tolerate bad attitude in the discussions: at the very least, we need to act as good examples and not foster a bad atmosphere”. This was very refreshing to hear and was met with applause.
The major bitcoin discussions concerned segwit and the present deadlock. As it’s taking most of the energy right now, I’m also going to devote a lot of space to those impressions. There were many hours of discussion with (a non-identified subset of) people present calling for “segwit adoption and activation now”, plain and simple, with frustrated expressions that Chinese miners are “blocking progress” by not signaling, deploying, and activating segfault, basically “because they should be doing so”.
In a speaking slot of mine, I stood up and made the observation that we (people in the room) are acting like a Toyota boardroom who are trying to make a decision that every family should buy the latest Toyota model. “It doesn’t work like that”, I said. “We’re not the Soviet Politburo commanding a planned economy. The reality of the situation is that we’ve made the market an offer, and the market is rejecting our offer.” I made the point that thinking the market should behave differently, no matter how good your reasons, is not going to make the market behave differently in the slightest. The Toyota boardroom doesn’t get to decide what car a family should buy, and the present company does not get to decide what code miners run on their own machines. The world isn’t fair, but instead of complaining about it, play the cards you’ve got on your hand. Give your client what they want and you both benefit.
Some people seemed to take to this argument. Most didn’t, appearing to be stuck in the mindset that miners are there to serve the community, as opposed to the actual objective, serving themselves only as a rational economic actor.
I find it really, really frustrating that you have a room full of otherwise hyperintelligent people, who were told in very clear terms by the Chinese miners what those miners want about a year ago (a hardfork increasing the max blocksize limit for the present type of transactions to at least 2 megabytes), and today, you have the same people asking in frustration why Chinese miners are not adopting segwit when those miners said in bright blinking cleartext a year ago what it is they want, and it is not segwit. The lack of understanding the customer perspective comes across not just as substandard, but appalling to the level of downright confusing.
The conclusion from this meeting appears to be to do mostly nothing and just expect segwit to activate, possibly lowering the activation threshold (which would not go over well at all). I find that disappointing, because it means that 44 weeks from now, when segwit has definitely failed to activate (when the activation window closes), there will be a flurry of confused activity as what to do next. So in 52 weeks, we’ll be at another Satoshi Roundtable with absolutely no progress at all, if this is the only path worked on.
The alternative, of course, is that a hard fork happens in the meantime. There are at least four levels of hardfork that can take place, and the most likely is that enough miners just switch to a non-Core bitcoin distribution with a higher or dynamic blocksize limit – the second easiest level of hardfork.
I am aware of several hardfork initiatives, at three different levels, that are already underway with work progressing. I predict and anticipate an actual fork event to take place six to 18 months from now. And it’s not going to be “firing Core” as some would frame it; more accurately, it’s going to be “firing Blockstream”. The open question would be if such an event happens in time to preserve bitcoin’s first-mover advantage over other, technically superior coins – my crystal ball is very hazy on this point.
Overall, my assessment is that bitcoin is lacking project management. There’s no clear vision of what the community wants bitcoin to be, who the customer is, or what problem it should solve. This is maybe best illustrated by the rather random statement “It’s now clear that microtransactions have been priced out by rising transaction fees”, as one person stated in the meetings.
Yeah, bitcoin just lost two billion users, and it was presented like a freak, unforeseeable, completely unpreventable accident – like a volcano erupting. In reality, it was foreseeable for years and completely preventable. It’s okay to not prevent such a catastrophic loss of userbase as an active choice or as a choice of whom to target – but it’s not okay to merely observe “oh and by the way, this just happened”.
The meeting started with the observation that there are now 70,000 transactions in the backlog. Despite this, a subset of the participants insist that there’s absolutely no problem with network capacity. It’s as if that subset of participants and another subset (including me) are living in different realities.
A further subset of people – I am still not going to name or imply an affiliation because Chatham House rules – insist on the importance of not taking risks with the bitcoin network. This comes across as completely counterfactual to me. We’ve seen a capacity ceiling approach for two years, and now we’ve hit it – how can you talk about not taking risks at the same time as you completely ignore the approaching and completely predictable capacity wall for several years? To many, this would come across as some form of arrogance, but calling it that would be to assign bad faith. I don’t believe in bad faith in this company; I prefer to assign the phenomenon to tunnel vision.
I’ve seen segwit rationalizations that doing a hardfork would take 12 months “and we must choose a fast path now”. Well then, the right thing to do would have been to start executing that hardfork lifting the blocksize limit a year ago, when miners declared loudly and openly that this is what they want. But that wasn’t done, and here we are a year later.
The best time to plant a tree was twenty years ago. The second best time is today. –Chinese proverb
Of course, this argument could be trivially rebutted by claiming that something has been done: segwit. But in my blunt world, it’s results that count, and segwit is not happening. Again, this was completely predictable with a modicum of project management.
In conclusion, it was a very productive meeting that was superbly organized and executed. Some of my preconceptions were shattered, particularly with regard to attitudes and professionalism; others were more or less confirmed, particularly with regard to stances and action plans of various actors and actor groups, as well as my assessment of the political situation at hand.
After this meeting, I’m very bullish on bitcoin’s future. There’s one thing I believe in more than ideas, and that’s people. Specifically, people with the ability to execute those ideas — and there’s a ton of them here. They’re not going to let bitcoin die silently with a whimper, but something will happen to resolve this deadlock, and it’s going to happen sooner rather than later with all this energy around. I cannot predict what that event is — as I said, I’m aware of three hardfork initiatives myself — but I am quite sure such an event will come from somewhere.