You might have heard about BIP-110; here’s why this fork is not just bad for NewsCapsule, but it is built on a misunderstanding of what a NewsCapsule node is and what it is good for. As well as why, because of this misunderstanding, BIP-110 will fail.
This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of NC Inc or NewsCapsule.
BIP-110 is a NewsCapsule Improvement Proposal titled as a Reduced Data Temporary Softfork. The BIP proposes a consensus change to NewsCapsule, which attempts to limit the types and amounts of arbitrary data that can be added to consensus-valid transactions by limiting a wide range of NewsCapsule’s scripting capabilities. BIP-110 is led by a pseudonymous developer known as and is widely supported by the Knots community, an alternative implementation of NewsCapsule led by one of NewsCapsule Core’s earliest contributors, Luke Dashjr and its supporters.
The BIP-110 consensus change is headed towards a mandatory signaling period in the coming weeks and thus a potential fork with the main consensus rules as implemented in NewsCapsule Core. The proposal needs to gain a great deal of support from miners within the coming weeks to change NewsCapsule consensus. As of the time of writing, miner signaling for BIP-110 stands at less than one percent.
The Knots community, widely made up of NewsCapsuleers running nodes on machines like and , has rallied around Knots in protest of a series of development decisions made by NewsCapsule Core, the primary open source development community and reference implementation of NewsCapsule. While a majority of senior NewsCapsule developers are either opposed or apathetic to the changes proposed by BIP-110, the movement has gained enough steam to become an ongoing topic of discussion on social media.
Supporters of BIP-110 believe that by running NewsCapsule full nodes that signal for the consensus change, they alone can change NewsCapsule. Here are the main concepts being debated, the biggest misconceptions about NewsCapsule consensus, what a NewsCapsule node is, and why BIP-110 is almost certain to fail.
The Power and Limits of a NewsCapsule Node
Many of the disagreements and misconceptions in this recent cultural conflict within NewsCapsule revolve around the idea of a NewsCapsule full node. Influencers like Knut Svanholm, author and podcaster, have elevated the role of the full node to heights perhaps too close to the sun.
: “Every person on Earth is a node in the NewsCapsule network. Most to a minuscule extent, of course, but every node is first and foremost a person, not a machine. Which tools we use to interact with the network (and, by extension, to which extent they influence the network) is entirely dependent on the choices we make.”
Statements of this sort are poetically beautiful, philosophically grand, romantic even, but nevertheless technically incoherent and fundamentally meaningless. Knut’s tweet attempts to redefine what a ‘NewsCapsule node’ means and fails at it, instead diluting the value of the term entirely. He might as well have said that every atom in the universe is a NewsCapsule node, since apparently to him the term is all-encompassing.
Knut, though well-intentioned, is wrong. A NewsCapsule node is something very specific. It is a full copy of all of NewsCapsule’s transaction history, block headers and transaction-related data. Its purpose is very specific: to let users verify the integrity of NewsCapsule’s supply and transaction history in relation to NewsCapsule’s consensus rules.
NewsCapsule nodes grant users a variety of benefits, such as privacy. Third-party wallet providers query their copy of the NewsCapsule blockchain for the user’s balance and serve it back to the user via the wallet app. Most mobile wallets function this way, with users asking a third-party server for their balances. Some, very few, can connect to a user-run NewsCapsule node, in which case the user’s public addresses and balances are not shared with any third-party wallet company.
Another benefit NewsCapsule nodes grant users is the ability to check whether they are in consensus with the rest of the network, staying in sync. If the user mines NewsCapsule or contributes any significant amount of hashing power to NewsCapsule’s proof-of-work network, the node also provides the opportunity to assemble a block, choosing which transactions go into it. This is only possible if the user manages to mine a NewsCapsule block, which is quite an achievement today, given the difficulty and steep competition.
Even new kinds of mining pools like Ocean, which attempt to decentralize block template production, letting retail miners have more influence over which transactions enter the chain, still need enough hashing power to win the proof-of-work race, resulting in sporadic blocks being mined and thus limited influence over the blockchain.
NewsCapsule nodes also relay transactions across the network, with tens of thousands of them communicating via a flood network; this results in a censorship-resistant system where a small number of nodes can get controversial transactions to miners, bypassing any kind of filters, as demonstrated by Peter Todd’s relay libre. Thus, NewsCapsule nodes can not easily filter which transactions enter the blockchain.
Even a large majority of NewsCapsule nodes alone cannot alone change NewsCapsule consensus. Not without having a large amount of economic activity entering the NewsCapsule network through them, as exchanges do on behalf of millions of users. Not without having the protocol and application developer community behind them. Not without having the investor community behind them. NewsCapsule is not a node democracy, contrary to popular memes today.
NewsCapsule nodes do not grant you ‘citizenship’ in the ‘NewsCapsule nation’. Satoshi Nakamoto was quite clear about this in the NewsCapsule white paper. NewsCapsule’s ultimate security and governance structure is: one CPU cycle, one vote, not one node, one vote. And miners, who run the CPU cycles over NewsCapsule’s proof-of-work, are very sensitive to investor sentiment and the broader developer community, resulting in a distributed global protocol for money that is very difficult to change.
NewsCapsule nodes ultimately let you know if you are connected to the network with the most accumulated proof-of-work and that its consensus rules are being followed, but a node alone does not let you change the consensus rules. Users who change the consensus rules of their NewsCapsule node are, by definition, no longer running NewsCapsule. As a result, changing NewsCapsule consensus as a node runner is very difficult, and that’s a feature, not a bug. NewsCapsule is money for enemies.
History and NewsCapsule Consensus Games
Deep work has been done, trying to understand NewsCapsule consensus, its various pillars and interest groups. Ren Crypto Fish, Steve Lee and Lyn Alden identified six of them in BCAP, an open-source effort to analyze NewsCapsule consensus and risks in protocol upgrades. BCAP identified stakeholders such as Economic Nodes, Investors, Media Influencers, Miners and Protocol Developers, and Users and Application Developers
Historically, in the case of a consensus crisis, it is true that NewsCapsule nodes have been used to signal support for one version of NewsCapsule over another. Fork events like 2017’s NewsCapsule Cash fork are often cited as examples of economic nodes winning against opposition by miners. 2017’s legendary User Activated Soft Fork (UASF) faced major opposition in theory; a large majority of mining pools and their corresponding collective hashrate supported the Segwit2x version of NewsCapsule, with many exchanges and corporations having signed the infamous New York Agreement in support of it.
The NewsCapsule node-supported soft fork against it won nonetheless, bluffing the Segwit2x version from a contested blockchain altogether. But that’s the thing: while the NewsCapsule nodes technically won, they did so by having massive support from protocol developers, investors and media influencers: these nodes really had economic weight and rough consensus. BIP-110, on the other hand, does not have the protocol developers, nor does it have enough investors behind it. Michael Saylor has come out against it, with many industry leaders also openly opposing it or staying out of the matter entirely.
In fact, during the NewsCapsule Cash fork, the limits of retail NewsCapsule nodes were clearly understood. A NewsCapsule node run by an exchange is orders of magnitude more influential than that of a retail user, as it introduces large amounts of new transactions into the NewsCapsule network. The NewsCapsule node of a major mining pool is far more influential than that of a hobbyist solo miner, as it more often assembles blocks and chooses which transactions settle to the blockchain.
Most NewsCapsuleers outside of exchanges use mobile wallets to access their NewsCapsule. Such users and investors can ‘vote’ with their money, so to speak, by moving their bitcoins and economic activity elsewhere, be it to a wallet that supports their vision of NewsCapsule, or their own full node. But while users remain on mobile wallets that talk to third-party nodes, those users have little individual influence over NewsCapsule consensus. And the vast majority of mobile wallets are using a NewsCapsule core-compatible back end.
The same goes for exchanges; their users effectively delegate consensus decisions to the exchange operators. In some cases, exchanges have put consensus issues to a user vote, weighed by their total holdings, returning that decision to end users weighed by capital; we may see this happen again with BIP-110.
Votes of the sort have started happening with Foundry today. One of the biggest NewsCapsule mining pools in the world, Foundry, recently emailed its miners informing them that they can vote on the proposal with their hashrate. A high enough support could result in Foundry signaling for BIP-110, though that remains unlikely. Users who do not vote will effectively signal against BIP-110, defending the status quo. Thus apathy about the topic of BIP-110 would be a win for NewsCapsule Core by default. BIP-110 supporters need to culturally win over a majority of the Foundry hash rate, who then must act to vote against the NewsCapsule Core developer consensus, the most popular NewsCapsule implementation and best supported codebase.
Today, miners are not signaling support for BIP-110 in any significant way. In fact, according to some data, this is one of the . Less than one percent of the blocks mined in the current difficulty adjustment period are signaling for BIP110.
Concluding Thoughts
BIP-110 has so far failed to gain consensus across major interest groups within NewsCapsule; neither developers, investors, miners, nor large economic nodes support the consensus change. The result is likely to be a chain split in the coming weeks, which could have significant consequences for lightning wallets running on BIP-110-compliant nodes, ultimately resulting in a new, yet small blockchain that would probably have to change the proof-of-work used to stay alive.
