Why Consensus: the tale of two Ethereums - an opinion on Ethereum and Ethereum Classic

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After a controversial hard fork, two versions of the Ethereum blockchain remain; development and market valuation have shown Ethereum (ETH) as the community choice. Here I will outline why hard forks preserve decentralization and how a vision of immutability may be less important than one of consensus. Let this post be a continuation of Hardfork: the tale of the full node refrendum

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Why are there two Ethereums? The story of the hard fork

On June 17, 2016, a hacker was able to exploit a contract deployed to the Ethereum blockchain, moving $60 million in tokens to an account controlled by the hacker. The community scrambled to remedy the situation - given 30 days until the code would allow the hacker to withdraw funds. As other solutions and proposals failed, the consensus in the community settled around using a hard fork to rescue the stolen funds. This involved directly changing the protocol, requiring all users to update their clients to remain on the chain. At the time of the fork, the nodes in disagreement with the changes to consensus continued the unchanged blockchain. The Ethereum Foundation and most developers/users updated their clients. This resulted in the unmodified (ETC) and modified (ETH) chains splitting - with Ether on each chain independently tradeable.

The Ethereum Foundation issued the following statement on their blog regarding the fork:

The foundation has committed to support the community consensus on the admittedly difficult hard fork decision. Seeing the results of various metrics, including carbonvote, dapp and ecosystem infrastructure adoption, this means that we will focus our resources and attention on the chain which is now called ETH (ie. the fork chain). That said, we recognize that the Ethereum code can be used to instantiate other blockchains with the same consensus rules, including testnets, consortium and private chains, clones and spinoffs, and have never been opposed to such instantiations.
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Users are generally advised that most Ethereum client defaults, including clients developed by the Foundation and by third parties (eg. Parity), will select the ETH chain
-Ethereum Blog

After the fork, The Foundation committed to developing the ETH chain after following community support. In the months following this split, development on Ethereum has exploded with a majority following The Foundation's footsteps. It is important to note how The Ethereum Foundation addresses Ethereum Classic's right to utilize the Ethereum code how they see fit. It is this user agnostic property that makes decentralized applications so valuable.

This should not serve as a comprehensive history of what happened during the time between the hack and the hard fork nor the actions taken by Ethereum Classic shortly after the fork for that matter. See the Ethereum Blog and read some of the Classic user's arguments.

Criticism of a hard fork - is code law?

Many users were critical of the hard fork, hence the Ethereum Classic chain; users felt betrayed from an unwritten social contract that "code is law" where whatever is in the blockchain is taken as the final truth. The hard fork edited the transaction history of what some assumed was an immutable blockchain.
Critics of the fork emphasize the perceived necessity of immutability - where the truth whatever the code outputs, even if that "truth" has no bearing on what the humans wanted.

The Ethereum Classic project describes itself:

Ethereum Classic is a continuation of the original Ethereum blockchain - the classic version preserving untampered history; free from external interference and subjective tampering of transactions.

The takeaway from this is that code is not law but rather exists as a tool for humans to assess and ultimately reach consensus. As users of blockchain technology, we must understand the deep social contracts that go far beyond the code forming consensus. Humans might not always want to accept code as law, especially if doing so provides them no value (i.e. malfunctioning contract). Humans find much deeper Schelling points when reasoning, code can never be guaranteed to align with human's intentions at all times. Especially when those intentions encompass the complexities of value and money.

Full node referendum - why hardforks

With respect to decentralized applications - hard forks are what allow users to align code to the deep nuances of human's changing consensus. With hard forks, it is ultimately up to you to choose to participate. If the social referendum is controversial, users are able to follow their principals by choice: as per Ethereum Classic. It is important that we avoid soft forks or other protocol changes that could endanger the explicit choice of a hard fork.

Vitalik, founder of Ethereum writes:

I personally like hardforks. Particularly, I like the fact that they give users a measure of control, requiring them to opt into protocol changes. Sure, they can be a little more chaotic if they're controversial, but that's the price of freedom.
-Vitalik Butein

Even with the benefits hard forks have, Vitalik makes it clear that they are not a stop-gap for other technology. It is clear from history that hard forks are not an agile way to protect a blockchain. New solutions will be needed in the future.

FYI I personally am not in favor of accepting a long-term commitment to activist forking norms. I also think that hard forks will become technologically riskier and riskier over time and at some point assuming sufficient institutional adoption they just won't be available as an option anymore; our job is to make sure that by that time contract safety features are easily implementable and usable as a layer on top of the protocol.
-Vitalik Buterin

Why not Classic?

It is probably clear at this point, I align with the values and social contract established by the ETH chain. Although I support ETC's right to continue the history they see fit, I strain to see a future where their version of history will have the same utility as ETH. Right now ETH has a market cap of more than 6 billion USD, ETC is barely at 500 million; from this, the market has clearly evaluated the value of either history.

I dedicate my time to ETH because that is where development is centered. The ETH chain is the only one working on the code verification and consensus upgrades needed for the future.

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I will close with a quote from the first post in this series:

The moral of this story is the hard fork gave users choice. Although the fork resulted in a smaller community of "Ethereum Classic" with a tenth of the market cap, this community was not censored with a soft fork (despite the attempt). Their ability to hard fork represents the ability of choice in a decentralized network. The majority of the community did choose to freeze the funds, in my assessment, this is what the essence of social consensus is meant to be in a decentralized world. Code might be law, but we humans still have the ability to form consensus too.

Stay decentralized,
-Kyle