Why Did Blockstream Become A Bitcoin Focal Point At The Core Of BTC Vs BCH Consensus Split?
The Bitcoin oriented company Blockstream has managed to raise over $100 million in public funding. In spite of this, it's yet to be anything but hesitant in being forthright with the Bitcoin community about what its aims are. It's high time that people within the Bitcoin space start demanding answers and holding Blockstream accountable.
Blockstream as a company, has been responsible for a number of things that can be widely regarded as deceitful and dishonest and it deserves to have a bright light shone on it in order for people to be made more aware of its practices.
Back in late 2014, the Blockstream company went public with its company being financed by a series of banking and Venture capital firms such as AXA, Khosla Ventures, Horizon Ventures, among a number of others.
Within the first six months of this, Blockstream announced that it would be dedicating time, not only on the development of sidechains, which it was founded upon, but on the lightning network also. Since that time, however, the company has done little to produces what it proclaimed it would, proving that it's done scant little to contribute to advancing the Bitcoin ecosystem. However, there have been a number of things that it's done to derail, and cause it unnecessary harm.
Re-Inventing The SWIFT Network
It's officially been four years since Blockstream went public, and in that time it finally released its much anticipated sidechain system for the public. Good news, right? Well, the only problem is that the final product, dubbed Liquid, isn't intended for general use. It's made more specifically for private Bitcoin exchanges.
The underlying premise of Liquid is to take Bitcoin transactions off chain, and move them to a private sidechain of federated exchanges. This is something that Frances Coppola of Forbes Magazine pointed out at the time:
“It isn’t possible to improve liquidity while maintaining full decentralization and trustlessness. So Blockstream cheerfully compromises both of these prized features. It appoints a small group of trusted institutions to validate transactions and submit them to the main Bitcoin chain.”
Apart from the Blockstream Liquid sidechain being more useful for a private coalition of businesses / exchanges, surprisingly, Blockstream CEO Adam Back is actively urging individuals to convert their already existing volumes of bitcoin into Bitcoin Liquid to make use of it.
So if there's any round of applause to be given to the company here, it's this one: All they've done is effectively create a Bitcoin version of SWIFT.
The Lightning Network
It took four years for Blockstream to produce a working product, and the community is still waiting on a working version of Lightning Network (LN). Overall, the project itself has been in development since 2015, and it seems as though it's nowhere near being close to completion as was initially advertised.
The protocol itself is definitely not a decentralized peer to peer network which seeks to disavow trusted third parties. In order for this sort of platform to function in the way the company has been stating that it would, both LN Developers and Blockstream have to effectively solve what is regarded as the path routing problem.
Until they find a way of doing this, LN Developers have suggested that users just use Watchtowers in order to prevent any potential fraud. What are Watchtowers? They're pretty much a fancy way of saying trusted third parties. Apart from the Lightning network not being a trustless entity, the underlying cost of conducting business will make Bitcoin and crypto only for the elite.
Blockstream seems to be working tirelessly to make BTC transaction fees as high as possible. Both the on and off ramps associated with the Network will all require some on-chain transactions to the BTC blockchain. What will happen when fees on Bitcoin get to be so expensive that users begin to realize it's a far cheaper and more effective call to just stay on the Lightning Network?
Dishonesty And Manipulation
Apart from the previously mentioned pitfalls and otherwise shadowy underbelly that seems to be endemic with Blockstream, censorship campaigns and residual toxicity within its existing community has already proven successful in driving all but the fanatically loyal away. But who is that's allowing for this toxic environment to fester and grow?
It's not exactly an easy task to point to specific actors, but it's crucial to highlight what the community sees as being thoroughly bad behavior.
The company has proven to be thoroughly censorious when it comes to its community, and it's done nothing but exacerbate the already toxic environment over the last three years. It's been prevalent across the Bitcoin ecosystem, and it has created a number of echo chambers and fake news circulatory systems. All of which serve to manipulate readers to the point where they're effectively brainwashed into thinking along lines which are agreeable to the mass.
The negative impact of censorship in the Bitcoin world is a very real issue.
“Censorship can really hinder a society if it is bad enough. Because media is such a large part of people’s lives today and it is the source of basically all information, if the information is not being given in full or truthfully then the society is left uneducated […] Censorship is probably the number one way to lower people’s right to freedom of speech.”
Dirty Games: Hacking And Vote Manipulation
Apart from censorship, there have been all kinds of toxic and dirty strategies being played by the company. Let’s take an instance last year where the community discovered that moderators of the r/Bitcoin subreddit were involved in hacking and vote manipulation. Along with the discovery process and evidence, it was discovered that its former CTO, Gregory Maxwell, was a significant contributing player in the event in question.
Not only has this company been particularly bad when it comes to social media, but they've also been engaging in what can almost be described as social-media based espionage.
An example of this was in the past summer, where individuals in the community discovered Blockstream is working with former national spies to run counter-intelligence on the Bitcoin community. Adam Back, the company's CEO, admitted that he had hired a team to promote Blockstream's propaganda in order to manipulate the overarching narrative.
Secret Work And Hidden Agendas
Not only have full fledged spies been involved in Blockstream's operations, but they've also hired members of the community in order to work on Blockstream products. Just two months ago, for example, it was uncovered that another independent BTC developer that was actually an employee of the company, a fact that was kept from the public.
This isn't the first time that Blockstream has been responsible for this sort of thing. In some instances, the hirings have been a mixture of scandal riddled, and just plain weird, which can be almost regarded as illegal. It’s obvious now why Blockstream took down their team page nearly a year ago and never put it back up.
Now, it's been uncovered that other well known individuals in the Bitcoin space has also been working with Blockstream in a similar fashion. Repeatedly, the community was completely unaware these individuals were working for the company in some capacity in order to further its wider agenda as opposed to contributing in a positive fashion to Bitcoin's development.
Two days ago, there was a public video interview that took place with Crypto Insider, Allen Piscitello, who publicly admitted that he'd been working for Blockstream for the past year as one of their product managers.
Many people won't even know him. Some of the old-school Bitcoiners will otherwise know him as the otherwise infamous user AlpacaSW, the username that he uses on Twitter, Also known as Alphonse Pace. He was previously responsible for a series of social media attacks. He was also one of the most vocal drivers behind the UASF in 2017.
UASF: The Fake Grassroots Movement
The UASF, or User Activated Soft Fork was initially promoted in 2017. It works in the following way: rather than having miners activate a consensus rule change in Bitcoin, individual participants from within the BTC ecosystem have the ability to activate a form by running whichever software they choose.
By coordinating with each other on a specific date (flag day), they could all run the software with the rule changes in place.
The theory stands on the idea that the UASF is coordinated successfully by the majority within the user network, miners would also follow. However, at the end of the day, it would take the miners to cooperate with the UASF for it to be successful. Without miner cooperation, the UASF could cause a chain split.
Since there is no proof of work in operation within the UASF, as it's just a series of users and network participants, it would be highly susceptible to a Sybil attack. As a result, it became clear in 2017 that it was merely a fake grassroots movement in order . to activate segwit under highly controversial grounds.
But who was jockeying for this system? It was none other than the Blockstream team, serving as the champions pushing for this soft fork, this is according to a series of posts such as ‘UASF is a user driven protocol development,' and ‘User-activated soft forks and the intolerant minority.'
Best Policy? Tell The Truth
It honestly makes one think the following: When exactly will this company stop with this onslaught of lies and deceit? The major consensus is that it won't and never will.
As a community, it has a wider responsibility to be diligent, critical thinkers and independent ones at that. The community should insulate itself from companies that say they have the best interest of Bitcoin in mind, but are only working to further their bottom line and fill the coffers of major investors.