A Short Note on the Silbert Accord

/A Short Note on the Silbert Accord

A Short Note on the Silbert Accord

The best part of the Silbert Accord is that it was negotiated between the relevant parties: the producers of block space (miners) and the consumers of block space (Bitcoin businesses on behalf of their users). Bitcoin has a tendency of annihilating gate keepers and this meeting was a step towards the disintermediation of another group holding bitcoin back: the developers themselves.

The notion that developers represent a group of “wizards” that know better than the businesses and miners who work each day growing the Bitcoin economy is absurd. Would you want a Bitcoin developer running your mining farm, deciding how to build your blocks? Would you want a Bitcoin developer dictating your corporate strategy or answering your customers’ support calls?

The idea that the Bitcoin developers know better than the wisdom of the market regarding the “correct price” for block space is no more true than the notion that a group of experts at the Fed can set the “correct price” for money. In fact, it’s strictly less true: at least the members of the FOMC were trained in economics!

The future of Bitcoin is one of multiple implementations and multiple development teams. These development teams will work to give their customers — the miners, businesses and users who make up the Bitcoin economy — what they want, rather than dictating what it is that they should want. If one implementation fails to deliver, then they will lose customers to the implementations that do. A market is the collective result of a bunch of people interacting freely with each other. Markets need choice to function efficiently and multiple implementations provide this.

This Silbert Accord proves that Bitcoin businesses and miners recognize that a block-size limit increase is a simple and effective way to continue growing Bitcoin in the same manner that it has successfully grown for the past 8 years: with more on-chain transactions. Although I still fail to understand the urgent need for segwit (segwit is the most significant change to the Bitcoin protocol ever with many potential ramifications that we do not yet understand), at the end of the day, Bitcoin is a creature of the market. If the businesses and users want segwit, and if the miners agree to enforce it, Bitcoin Unlimited nodes will follow along.

What is important is that the planned block-size limit increase, once active, will reduce fees and make confirmation times reliable once again. This is urgently needed today and cannot happen soon enough. With respect to what is needed tomorrow, the first increase in the block size limit will put to rest the fears of “hard forks” (that nearly all major alt-coins have successfully done by the way), and set the precedent that the block size limit should be kept above demand, thereby serving its original intent as a simple mechanism to prevent a malicious miner from producing huge spam blocks. The block size limit was never intended to interfere with the economics of the block space market.


2017-06-05T12:57:52+02:00 5 June 2017|