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From: Eric Voskuil <eric@voskuil.org>
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To: Erik Aronesty <erik@q32.com>,
	Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
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Cc: Chaofan Li <li3939108@gmail.com>
Subject: Re: [bitcoin-dev] Blockchain Voluntary Fork (Split) Proposal
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All other things being equal, the money with the larger network is more usef=
ul due to the cost of exchange between them, which can only be eliminated by=
 one absorbing the network of the other. According the Thiers=E2=80=99 law (=
i.e. in the absence of currency controls), the more useful money will get us=
ed. It is not the case that they will just become the same value.

However, all other things are not equal. As a Bitcoin becomes more useful it=
s use rises. Rising use implies rising fees, which in turn reduces usefulnes=
s (stability property). While the better money prices out certain scenarios,=
 they remain viable in the lesser money. But eventually this will happen the=
re as well, and the better money will absorb the lesser.

The perpetual creation of new monies with exchange between them and the best=
 money (largest network) could certainly exist, but layering proposes an app=
roach that doesn=E2=80=99t require all merchants to perpetually be accepting=
 different monies. It has a similar security trade-off (lower security for t=
ransacting off of the better money), which is the source of decreased transa=
ction cost. But without the exchange and overhead cost the layered money can=
 be better than multiple monies.

Also, all splits are voluntary.

e

> On Jan 22, 2018, at 12:40, Erik Aronesty via bitcoin-dev <bitcoin-dev@list=
s.linuxfoundation.org> wrote:
>=20
> Without enforcement liquidity will diverge.  =20
>=20
>> On Mon, Jan 22, 2018 at 1:46 PM, Chaofan Li via bitcoin-dev <bitcoin-dev@=
lists.linuxfoundation.org> wrote:
>> Hi ZmnSCPxj
>>=20
>> I dont think they need to be ENFORCED to be worth the same.=20
>> If the two chains=E2=80=99 algorithms are the same , except some identifi=
ers (eg. btc.0 btc.1=EF=BC=89, they have no reason to have different value. I=
f so, the market will adjust the value.
>>=20
>> Also, the total supply can be the same. The amount in blockchains  is jus=
t some numbers. The  wallet can display correct amount, according to the ide=
ntifiers.
>>=20
>> The voluntary split is also backward compatible with old version transact=
ions, they can be treated as tx for both chains and included in both chains l=
ater. For new version Tx after fork, some identifiers must be added , to mar=
k the tx is for that chain only. The miners need to choose one chain to mine=
.
>>=20
>> After several voluntary splits , the Blockchain basically become a blockt=
ree, new blocks are added to the leaves(eg. btc.00 btc.01 btc.10 btc.11 ), p=
roviding even more capacity.=20
>>=20
>> Chaofan
>>=20
>>=20
>>> On Mon, Jan 22, 2018 at 5:13 AM ZmnSCPxj <ZmnSCPxj@protonmail.com> wrote=
:
>>> Good morning Chaofan Li,
>>>=20
>>> What enforces that bitcoin A is worth the same as bitcoin B?  Or are the=
y allowed to eventually diverge in price?  If they diverge in price, how is t=
hat different from the current situation with Bitcoin, BCash, Bitcoin Gold, B=
itcoin Hardfork-of-the-week, and so on?
>>>=20
>>> Regards,
>>> ZmnSCPxj
>>>=20
>>>=20
>>> Sent with ProtonMail Secure Email.
>>>=20
>>> -------- Original Message --------
>>>> On January 17, 2018 3:55 PM, Chaofan Li via bitcoin-dev <bitcoin-dev@li=
sts.linuxfoundation.org> wrote:
>>>>=20
>>>>=20
>>>>=20
>>>> Here I propose a simple method to solve the scalability issue of blockc=
hain.
>>>> It is more like a financial trick rather than a technical solution.=20
>>>>=20
>>>> The technical part is very simple:=20
>>>> Split ( hard fork ) the blockchain into two or more blockchains (e.g. t=
wo blockchain A and B), voluntarily.=20
>>>> The two blockchains are the same except for some identifiers to disting=
uish the two blockchains.
>>>> The coins on one blockchains cannot be sent to the other one or interfe=
red by the other blockchain (  considering so many hard forks in the last ye=
ar, the replay protection should work in this situation)
>>>> Everyone get double bitcoins. Each has half  value of original one bitc=
oin.=20
>>>> Then, we have two almost same blockchains and the capacity of the origi=
nal blockchain is doubled theoretically.
>>>> When sending coin, the wallet should select one blockchain randomly and=
 try to send through only  one blockchain (If there is enough bitcoins)
>>>> I think it is a  possible solution, if the community realize  no previo=
usly owned asset value  is lost.
>>>>=20
>>>> The method is inspired by the stock split.
>>>> When a stock share is split, for example into two shares, the price hal=
ves.
>>>> The market capitalization remains the same.
>>>> There is no dilution of every shareholders' total assets.
>>>>=20
>>>> The bitcoin often emphasizes that the total coin supply should not be c=
hanged.
>>>> If the total supply increases, the value of a single coin will be dilut=
ed.
>>>> That is true.
>>>> However, the bad part of inflation of fiat money is not  diluted value o=
f every unit of fiat money caused by total supply increase.
>>>> The problem is the increased supply is not delivered to everyone propor=
tional to their previously owned money.
>>>> The increased supply is released through debt expansion.
>>>> The people that can borrow more money with low interest ratio (during Q=
E, it was nearly 0) can invest  and get profit.
>>>> Or they don't even need to pay back the debt. The debt is left to gover=
nment, which might never pay back the debt, and some  get more money from go=
vernment.
>>>> Others' money are diluted.
>>>>=20
>>>> With voluntary split of bitcoin, dilution of anyone's bitcoin assets wo=
n't happen.
>>>>=20
>>>>=20
>>>>=20
>>>>=20
>>>>=20
>>>=20
>>=20
>> _______________________________________________
>> bitcoin-dev mailing list
>> bitcoin-dev@lists.linuxfoundation.org
>> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>>=20
>=20
> _______________________________________________
> bitcoin-dev mailing list
> bitcoin-dev@lists.linuxfoundation.org
> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev

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<html><head><meta http-equiv=3D"content-type" content=3D"text/html; charset=3D=
utf-8"></head><body dir=3D"auto"><div></div><div>All other things being equa=
l, the money with the larger network is more useful due to the cost of excha=
nge between them, which can only be eliminated by one absorbing the network o=
f the other. According the Thiers=E2=80=99 law (i.e. in the absence of curre=
ncy controls), the more useful money will get used. It is not the case that t=
hey will just become the same value.</div><div><br></div><div>However, all o=
ther things are not equal. As a Bitcoin becomes more useful its use rises. R=
ising use implies rising fees, which in turn reduces usefulness (stability p=
roperty). While the better money prices out certain scenarios, they remain v=
iable in the lesser money. But eventually this will happen there as well, an=
d the better money will absorb the lesser.</div><div><br></div><div>The perp=
etual creation of new monies with exchange between them and the best money (=
largest network) could certainly exist, but layering proposes an approach th=
at doesn=E2=80=99t require all merchants to perpetually be accepting differe=
nt monies. <span style=3D"background-color: rgba(255, 255, 255, 0);">It has a=
 similar security trade-off (lower security for transacting off of the bette=
r money), which is the source of decreased transaction cost. But without the=
 exchange and overhead cost the layered money can be better than multiple mo=
nies.</span></div><div><span style=3D"background-color: rgba(255, 255, 255, 0=
);"><br></span></div><div><span style=3D"background-color: rgba(255, 255, 25=
5, 0);">Also, all splits are voluntary.</span></div><div><br></div><div>e</d=
iv><div><br>On Jan 22, 2018, at 12:40, Erik Aronesty via bitcoin-dev &lt;<a h=
ref=3D"mailto:bitcoin-dev@lists.linuxfoundation.org">bitcoin-dev@lists.linux=
foundation.org</a>&gt; wrote:<br><br></div><blockquote type=3D"cite"><div><d=
iv dir=3D"ltr">Without enforcement liquidity will diverge.&nbsp;&nbsp; <br><=
/div><div class=3D"gmail_extra"><br><div class=3D"gmail_quote">On Mon, Jan 2=
2, 2018 at 1:46 PM, Chaofan Li via bitcoin-dev <span dir=3D"ltr">&lt;<a href=
=3D"mailto:bitcoin-dev@lists.linuxfoundation.org" target=3D"_blank">bitcoin-=
dev@lists.linuxfoundation.org</a>&gt;</span> wrote:<br><blockquote class=3D"=
gmail_quote" style=3D"margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-l=
eft:1ex"><div><div dir=3D"auto">Hi ZmnSCPxj</div><div dir=3D"auto"><br></div=
><div dir=3D"auto">I dont think they need to be ENFORCED to be worth the sam=
e.&nbsp;</div><div dir=3D"auto">If the two chains=E2=80=99 algorithms are th=
e same , except some identifiers (eg. btc.0 btc.1=EF=BC=89, they have no rea=
son to have different value. If so, the market will adjust the value.</div><=
div dir=3D"auto"><br></div><div dir=3D"auto">Also, the total supply can be t=
he same. The amount in blockchains &nbsp;is just some numbers. The &nbsp;wal=
let can display correct amount, according to the identifiers.</div><div dir=3D=
"auto"><br></div><div dir=3D"auto">The voluntary split is also backward comp=
atible with old version transactions, they can be treated as tx for both cha=
ins and included in both chains later. For new version Tx after fork, some i=
dentifiers must be added , to mark the tx is for that chain only. The miners=
 need to choose one chain to mine.</div><div dir=3D"auto"><br></div><div dir=
=3D"auto">After several voluntary splits , the Blockchain basically become a=
 blocktree, new blocks are added to the leaves(eg. btc.00 btc.01 btc.10 btc.=
11 ), providing even more capacity.&nbsp;</div></div><div><span class=3D"HOE=
nZb"><font color=3D"#888888"><div><div dir=3D"auto"><br></div><div dir=3D"au=
to">Chaofan</div></div></font></span><div><div class=3D"h5"><div><div dir=3D=
"auto"><br></div><br><div class=3D"gmail_quote"><div>On Mon, Jan 22, 2018 at=
 5:13 AM ZmnSCPxj &lt;<a href=3D"mailto:ZmnSCPxj@protonmail.com" target=3D"_=
blank">ZmnSCPxj@protonmail.com</a>&gt; wrote:<br></div><blockquote class=3D"=
gmail_quote" style=3D"margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-l=
eft:1ex"><div>Good morning Chaofan Li,<br></div><div><br></div><div>What enf=
orces that bitcoin A is worth the same as bitcoin B?&nbsp; Or are they allow=
ed to eventually diverge in price?&nbsp; If they diverge in price, how is th=
at different from the current situation with Bitcoin, BCash, Bitcoin Gold, B=
itcoin Hardfork-of-the-week, and so on?<br></div><div><br></div><div>Regards=
,<br></div><div>ZmnSCPxj<br></div><div><br></div><div class=3D"m_-5954414837=
857291361m_-6919424486659141598m_-1349810909568960831protonmail_signature_bl=
ock"><div class=3D"m_-5954414837857291361m_-6919424486659141598m_-1349810909=
568960831protonmail_signature_block-user m_-5954414837857291361m_-6919424486=
659141598m_-1349810909568960831protonmail_signature_block-empty"><br></div><=
div class=3D"m_-5954414837857291361m_-6919424486659141598m_-1349810909568960=
831protonmail_signature_block-proton">Sent with <a href=3D"https://protonmai=
l.com" target=3D"_blank">ProtonMail</a> Secure Email.<br></div></div><div><b=
r></div><div>-------- Original Message --------<br></div><div> On January 17=
, 2018 3:55 PM, Chaofan Li via bitcoin-dev &lt;<a href=3D"mailto:bitcoin-dev=
@lists.linuxfoundation.org" target=3D"_blank">bitcoin-dev@lists.<wbr>linuxfo=
undation.org</a>&gt; wrote:<br></div><div> <br></div><blockquote class=3D"m_=
-5954414837857291361m_-6919424486659141598m_-1349810909568960831protonmail_q=
uote" type=3D"cite"><div><div><br></div><div><br></div><div>Here I propose a=
 simple method to solve the scalability issue of blockchain.<br></div><div>I=
t is more like a financial trick rather than a technical solution.&nbsp;<br>=
</div><div><br></div><div>The technical part is very simple:&nbsp;<br></div>=
<div>Split ( hard fork ) the blockchain into two or more blockchains (e.g. t=
wo blockchain A and B), voluntarily.&nbsp;<br></div><div>The two blockchains=
 are the same except for some identifiers to distinguish the two blockchains=
.<br></div><div>The coins on one blockchains cannot be sent to the other one=
 or interfered by the other blockchain (&nbsp; considering so many hard fork=
s in the last year, the replay protection should work in this situation)<br>=
</div><div>Everyone get double bitcoins. Each has half&nbsp; value of origin=
al one bitcoin.&nbsp;<br></div><div>Then, we have two almost same blockchain=
s and the capacity of the original blockchain is doubled theoretically.<br><=
/div><div>When sending coin, the wallet should select one blockchain randoml=
y and try to send through only&nbsp; one blockchain (If there is enough bitc=
oins)<br></div><div>I think it is a&nbsp; possible solution, if the communit=
y realize&nbsp; no previously owned asset value&nbsp; is lost.<br></div><div=
><br></div><div>The method is inspired by the <a href=3D"https://en.wikipedi=
a.org/wiki/Stock_split" target=3D"_blank">stock split</a>.<br></div><div>Whe=
n a stock share is split, for example into two shares, the price halves.<br>=
</div><div>The market capitalization remains the same.<br></div><div>There i=
s no dilution of every shareholders' total assets.<br></div><div><br></div><=
div>The bitcoin often emphasizes that the total coin supply should not be ch=
anged.<br></div><div>If the total supply increases, the value of a single co=
in will be diluted.<br></div><div>That is true.<br></div><div>However, the b=
ad part of inflation of fiat money is not&nbsp; diluted value of every unit o=
f fiat money caused by total supply increase.<br></div><div>The problem is t=
he increased supply is not delivered to everyone proportional to their previ=
ously owned money.<br></div><div>The increased supply is released through de=
bt expansion.<br></div><div>The people that can borrow more money with low i=
nterest ratio (during QE, it was nearly 0) can invest&nbsp; and get profit.<=
br></div><div>Or they don't even need to pay back the debt. The debt is left=
 to government, which might never pay back the debt, and some&nbsp; get more=
 money from government.<br></div><div>Others' money are diluted.<br></div><d=
iv><br></div><div>With voluntary split of bitcoin, dilution of anyone's bitc=
oin assets won't happen.<br></div><div><br></div><div><br></div><div><br></d=
iv><div><br></div><div><br></div></div></blockquote><div><br></div></blockqu=
ote></div></div></div></div></div>
<br>______________________________<wbr>_________________<br>
bitcoin-dev mailing list<br>
<a href=3D"mailto:bitcoin-dev@lists.linuxfoundation.org">bitcoin-dev@lists.<=
wbr>linuxfoundation.org</a><br>
<a href=3D"https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev" r=
el=3D"noreferrer" target=3D"_blank">https://lists.linuxfoundation.<wbr>org/m=
ailman/listinfo/bitcoin-<wbr>dev</a><br>
<br></blockquote></div><br></div>
</div></blockquote><blockquote type=3D"cite"><div><span>____________________=
___________________________</span><br><span>bitcoin-dev mailing list</span><=
br><span><a href=3D"mailto:bitcoin-dev@lists.linuxfoundation.org">bitcoin-de=
v@lists.linuxfoundation.org</a></span><br><span><a href=3D"https://lists.lin=
uxfoundation.org/mailman/listinfo/bitcoin-dev">https://lists.linuxfoundation=
.org/mailman/listinfo/bitcoin-dev</a></span><br></div></blockquote></body></=
html>=

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