The Hardfork will happen: Bitcoin Cash, SegWit2x, ViaBTC and why I want a Bitcoin chain split.

in bitcoin •  11 months ago

Two communities with different visions should evolve independently.


Segwitbtc


With all the chaos and propagandist rhetoric surrounding Bitcoin right now, I want to outline why a chain split in Bitcoin is not the end of the world. In fact, I personally think a chain split is the most reasonable solution moving forward. The Bitcoin community is fractured between two incompatible ideologies. There will be volatility; a huge rally in the majority fork to a new outrageous ATH or both chains could suffer with the sum of their value no longer worth what Bitcoin is today. Even given the second (possibly less exciting) scenario, in the short term term this value may or may not be recovered but in the long term the communities will be better served and with that much more value potential exists.

Those who follow the Core developers scaling roadmap and reddit propaganda want to see SegWit now. There also exists a group who will oppose SegWit at all costs; SegWit fundamentally changes the incentive structures that comprise Bitcoin - a point well understood from several angles by Bitcoin developers from every fraction, including Core (see Is SegWit Bitcoin? Whose side should I be on? for more information). These are entirely incompatible desires.

It will be much better to have a chain split than a one size fits all solution (like SegWit2x was supposed to be). Like I have discussed before in my cornerstone post Hardfork: the tale of the full node referendum, hardforks (chain splits more specifically) are one of the wonderful beauties of decentralized consensus and blockchains. They allow fractioned communities to diverge while providing safe and explicit user choice.


So Bitcoin Cash?

So irregardless of how you feel about hardforks and chain splits, as it stands today:

There will be a chain split, it will be economically viable, and it will be mined even if it is a minority chain.

Bitmain, ViaBTC, and BTC.TOP have all stated that they will be mining the hardfork chain. This follows part of the Bitmain UAHF contingency plan.

When they do, a chain split will occur. If you had bitcoins before, you now have some on both chains. You are free to double down when/if you choose.

Big, non-SegWit blocks have miner support. Despite the 95% signaling for SegWit2x, there is still more than 40% signaling for Bitcoin Unlimited and emergent consensus. Also, just because 95% are "signaling" for SegWit2x, does not mean they all have to enforce it. In fact, the miners are incentivized to signal for SegWit2x no matter what they will do come August 1st. Their blocks will be orphaned if they don't fake it so of course all of the miners will signal. The miners are economically incentivized to lie.

A sincere promise.

I personally have serious doubts that the SegWit2x chain ("signaled" by 95% of miners) will go through with the 2x part of the agreement. There are well funded organizations whose livelihood relies 7on small blocks and SegWit. Their will be lots of arguments after SegWit 'locks in' on August 1st.

SegWit2x is only a promise.



I want Bitcoin Cash because I have serious concerns about how SegWit changes Bitcoin. Lightning Network is working on Bitcoin main-net today. There are other ways to fix transaction malleability.

Stay decentralized,
Kyle


Check out my recent post about self-votes on steem here:
Subjective Proof of Work: some rational comments on the self-voting trend

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Seems logical that two independent visions should go their own ways. And each can realize their own vision, we will see who made the right choice.

But what if the split puts one of the chains under effective control of the Chinese government -who else can subsidize energy for the next 20 years? Is that an acceptable outcome?

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Doesn't matter if the Chinese government subsidizes mining. Bitcoin is still Bitcoin. The USA should start paying for mining.

"Effective control of the Chinese government" is also pretty inaccurate as a description of the mining industry or Bitcoin itself. Miners have a lot less power than you might think.

Good post, totally agree that split should be the best option in the long term - better now then later. Although isn't it worrying for you, that only Chinese pools and exchanges are supporting Bitcoin Cash? Like they have a hidden interest in it.

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Not at all. The hidden interests reside around SegWit.

Chinese Bitcoiners are some of the most in tune with decentralization and the vision of Satoshi.
ViaBTC, Bitmain etc. all have the original vision in mind.

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Can't really call it decentralization if Bitman controls them all as the ASICs provider.

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Canaan.io

Doesn't matter who makes the ASICs (at least for this discussion). The security in Bitcoin is from the energy not the worth of the miners. Those are chump change.

Personally I don't see this as being the split at all. A minority splitting off will just create a new altcoin to add to all the other alts with the Bitcoin name - they are long forgotten. I think the real split will likely arise during the hard fork period it is hard to know what will happen, might go smoother than expected might be a lot worse.

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Not quite sure what you mean about the hardfork period.

There will be a split on August first. That much we know. There is definitely the possibility of there being another come 2x enforcement time.

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I'm talking about the hard fork that will be required as part of 2 x. As for August 1st I don't consider that I split at all if a few people decide they are going to split with a fraction of the hashing power it is meaningless.

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Well I am not so sure it will be as small as you suggest. At least initially. Bitmain and ViaBTC ain't nothing to fuk with.

A split is a split. Bitcoin Cash is happening regardless if it is 300$ or 500$.

A fraction that becomes meaningful in the future is also a possibility.


Otherwise I agree that what you describe about the 2x part will happen.

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I think it will be very small. That is proven by the BIP 91 signalling period - if Bitmain and ViaBTC had any significance we would have seen it then. I think calling this a split is a mischaracterisation - it is a tiny fraction of miners spinning off their own version of bitcoin. IMO It will end up as an altcoin despite its origin.

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Even it it is just me mining it is still a split.

I see your point though, I think you might be right.

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Right and I don't think even the people behind it necessarily expect BCC to succeed. I think it is more symbolic.

The true issue will come in November.

I just hope we can come to some agreement because Segwit on it's own is not really that helpful.

We need larger blocks.

Even the 2MB size will only be a temporary measure but the fact that people have been resistant thus far to even small changes is something we need to move beyond.

We can't keep having a crisis every time we need to scale - if it keeps happening I fear we may end up in a situation where an altcoin does actually take the place of bitcoin.

Yup it for sure is going to hard fork it just depends on how many old the classic to the new version. This is the same thing that happened with Ethereum and while ETH classic still holds decent value the other is the updated version. It makes sense to only use the updated version but people will still mine the old original.

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Less about updated version/old original.

There are fundamentally different concepts at play here.

Great, clearly written post. There's uncertainty everywhere I look and as a small scale miner (I've only got four GPUs) I need to decide what to do with the hash power I've got pointed at nicehash, because my chosen local exchange (where I can liquidate to FIAT if I choose) won't be supporting the same side of the chain as nicehash.

I think the volatility caused by this has been factored into the price of LTC, and perhaps ETH but I think we will see utter chaos in the short term as people say "this is the dominant chain", "no this is the dominant chain"; It is hard to get reliable and accurate news about the upcoming changes to the chains, and thank you for clearly (and accurately) sharing information about the chain split.

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Well you want to make sure you own your private keys.

The LTC BTC, BTC ETH, and BTC BCC pairs will be the ones to see the rocky waters.

I will be sure to keep everyone updated on the bigger picture - you are right, the propaganda "my chain is the dominate" will be there. Although you can't fake hashrate. So it will be pretty clear where the POW is. Same with the exchange rates.

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Definitely. The inherent volatility with the BTC/USD pairing will also impact all alts naturally due to the way in which they are traded against BTC on all major exchanges.

Very interesting times ahead. :)

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Yeah for sure!

Kyle, you made some good points in that post.

"Big, non-SegWit blocks have miner support. Despite the 95% signaling for SegWit2x, there is still more than 40% signaling for Bitcoin Unlimited and emergent consensus."

This.^

BCC will have significant hashrate when it launches just because of the sheer amount of mining power in the hands of big-blockers. Secondly, I'm fairly confident that Antpool will divert a portion of their mining power away from Segwit2x to BCC after the fork occurs!!

I have a hard time believing that Jihan will keep mining 2x for the next 3 months with no guarantee of a 2MB HF and plenty of BS from core and Blockstream.

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I have a hard time believing much of anything.

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At this point, even Jihan is probably not sure what is really going on in Bitcoinland.

Uncertainty about the events set for the near future remain uncertain. Likely best to be prepared for all probable potential outcomes.

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Yessir!

Welcome to steem!

I don't necessarily agree with you but I'm upvoting anyway for your clear-headedness and even-handedness in addressing the subject.

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I appreciate that a lot! - followed

Do you mind clarifying your position? Are you against the fork? Pro SegWit?

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I do favor segwit, though I also favor a block size increase.

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I want malleability to be fixed as much as you do but are you aware of the other, safer fixes for malleability?

Do you know that the lightning network is working today on main net?

Let me send you some transactions on a floppy disk drive ;)

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Yeah no. Hahaha :P

You still have decentralization even if you need Xeon Phi card to process all the sig-ops. You just have a much more valuable Bitcoin.

By reflecting rightly you are right. You have convinced me.

This post received a 4.8% upvote from @randowhale thanks to @kyle.anderson! For more information, click here!

Wow, great blog, this opens minded and thought to myself that hard fork would be the end of cryptocurrency era or Bitcoin era... Personally, don't want to see any coin on top of Bitcoin but the scalability issue is real, hope it will be good after August 1... Followed you

This debacle needs to be over with. I'm a little more concerned about exchanges.

Great post!

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Exchanges will be pretty much forced to pick a side.

With Coinbase holding like 10% of all btc in circulation, either face revolt or handle your customers wants and needs.

What do you think would be the market reaction to a split? I am a bit upset about the fact that the miners are incentivized to lie. Manipulation never ends.

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Who knows haha

Only time will tell

What Do you think? Hard fork is still possible?
Find out with: @CharlieShrem, @LlewClaasen , @AnsonZeall, @SusanneTarkowski #BlockShow Asia 2017
http://bit.ly/2uBNUCj