Hacker News new | comments | show | ask | jobs | submit login
What is a Bitcoin fork? (coinbase.com)
174 points by sds111 10 months ago | hide | past | web | favorite | 111 comments



FYI the segwit2x fork this post was probably mainly motivated by appears to have been called off: https://lists.linuxfoundation.org/pipermail/bitcoin-segwit2x...


Someone claiming to be a group of miners have said that they are going to go through with the fork.

https://lists.linuxfoundation.org/pipermail/bitcoin-segwit2x...

https://bitcoin2x.org/

Of course it's entirely possible that this person or group of people is just someone who bought B2X futures and is trying to push the price back up to minimize their losses.


This is not a recognized group of individuals, and is likely a pump attempt. Subsequent posts to the list reflect the lack of acknowledgement.


Jackson Palmer (Dogecoin founder) talks all about the Bitcoin fork at the last local Hack Days meetup[0]. It's actually a really great talk.

[0](Skip to 30m) https://www.facebook.com/hackdays4all/videos/549774142034920...


Do you have a non-fb link?


Not at the moment. I'm sure I can get this re-uploaded to youtube later tomorrow and follow up with a link.


+1 on YouTube link would be great


Until it's on again. Didn't they fork a few months ago too (Bitcoin Cash)?


Coinbase didn't sign the notice calling off segwit2x[0] even tho they were an NYA signatory - but rather said they were "monitoring"[1] the situation

I sense some uncertainty from Coinbase on what they want to do next.

edit: also interesting that the price for segwit2x futures has increased today to ~$380 after a low of $198[2]

[0] https://lists.linuxfoundation.org/pipermail/bitcoin-segwit2x...

[1] https://twitter.com/coinbase/status/928476503062462464

[2] https://coinmarketcap.com/currencies/segwit2x/


What is bitcoin futures? Is this speculative pricing on the speculative 2x fork?


This reminds me of the scene in The Big Short where a manager casually talks about CDOs, synthetic CDOs and squared CDOs. And Steve Carell's character start asking: "what are squared CDOs... ?"


Different camps, different forks, pushing different kind of agenda


We attempted to snapshot the current situation with https://imgur.com/Zlopq7S

May be outdated now that 2X has been called off


Nice infographic! oh I just got an email from the Bitcoin Gold peeps saying they were going live in 2 days


I like your graphic. A cool metric to have on it would be transactions per second for each new fork.


That helped but I do not understand the economic compatibility of a fork. How do they not wreak havoc and chaos on that coin's economy? Do I get coins for each of the new coins or do I have to pick? It all feels really risky and that risk feels foisted upon me. Can I cash out before the fork?


A fork is just a protocol upgrade that is non-backward-compatible and where both the old and new protocols have significant amount of validators (in PoW, this means miners) operating with that protocol. Since the protocols are not compatible, they have a different transaction history after the fork. Since they used to be compatible, if you had 1 BTC before the fork, after the fork, all validators still agree that you have 1 BTC, but 1 BTC on one chain is not the same as 1 BTC on the other chain, so it's equivalent to having (say) 1 BTC and 1 BCH.

Everything else is just supply and demand, ie what's the market-clearing price for 1 BTC and for 1 BCH and how does it compare to before.


Could I trade with that btc on both forks at the same time?


After the fork you have 1 BTC which you can use only on the BTC chain, and 1 BTH which you can use only on the BTH chain. And these are completely separate.


Think about it using my definition of fork, the answer should be clear


I wouldn't use expression 'protocol upgrade', that implies it's mandatory and that current protocol is rendered obsolete. I think 'fork' better explains the mechanics.


Realistically, the value of the chain pre-fork should equal the value of the two chains post fork.

However, this is not always the case - due to people thinking they can get 'free coins' from the other chain (price goes up), people being afraid of a fork (price goes down), etc


When a fork occurs, you do not simply split the assets and community in two, you form 2 better-aligned independent groups pursuing currency success under two different sets of operative rules. Therefore new value is potentially created both in alignment and in the greater chance of one of these currencies hitting upon the set of rules that is ultimately successful in the space. Obviously this has limits - eg when the rules are already being exhaustively explored, there are no takers for the new currency, or developer attention is already the limiting factor.


Sort of like when a company splits and the two parts are more valuable than the whole. Not common, but I believe Ebay and PayPal were more valuable post split. It idea floated at the time was PayPal growth was being held back by Ebay management.


Conservation of value. The first law of forkodynamics.


"The only winning move is not to play" is always great advice.


Tell that to my 8000% returns.



Fully aware of that, it was meant in jest.


More like the only losing move is to not play.


I don't either. Fiat currencies don't fork - you can simply exchange one for another. Another close comparison is a traded equity having a 2:1 split, except shareholders technically lose nothing. Another case would be stock dilution - though, I have never heard of a public stock diluting to 50% value... that seems unlikely. If a specific commodity were to suddenly decide it had an unreported surplus on the order of 100% of current market estimates, the consequences on valuation would be pretty significant (maybe not a 2x loss...).

I guess the closest comparison to bitcoin is; oil price is at $60 / barrel today and speculators believe there is a 30% chance that they mis-estimated the number of barrels by 100% - but you won't know for sure for another 3 months. What's should the price of oil be tomorrow?


> Fiat currencies don't fork

There was an interesting situation after the fall of the Soviet Union. Because most of the states didn't have economies strong enough to support their own currency, they remained a unified currency union as part of the CIS

The only problem was that each state then started printing the money like mad and then sending it to other states to be sold / traded. Some of the states then introduced what was a quasi two-currency system - to buy local currency or to exchange it, you required both the old Soviet Ruble and a new "permission" note from the state to exchange.

In theory this placed a cap on the inflation but the result was almost like a currency fork. A lot of these states ended up establishing their own currencies but still had problems with "swaps" from the old currency - so they were constantly reissuing new notes and new coins that needed to be exchanged - but many of the old notes or permission slips would have value on the black market


> Fiat currencies don't fork

Another situation: in Brazil 90's, inflation was rampant and a new currency was being planned. But, until BRL was printed as the final currency, a few "forks"/new money were introduced, like URV (for one year), which set the market value for the new BRL, something like 2500:1 old-money:URV then 1:1 URV:BRL. So, the analogy: a fiat fork did happen and a two-currency system was put in play, until the "miners" decided to ultimately put the hash power into just one fork.


I forgot about that! Interesting point.


A lot of European currencies changed to Euro in 2002. A "fork" would've been if e.g. Deutschmarks were still accepted as legal tender, indeed some nostalgia shops/events like a "90's party" would accept this currency, but not the general economy. And indeed Deutschmarks can still be traded to Euros, but at a fixed rate. If a Bitcoin fork had happened and neither currency crashed, you can still trade each other like Dollars to Euros, as long as you can find someone who wants to sell you Dollars (BTC) and be paid in Euros (BTH) or the other way around.


For the analogy to hold, wouldn’t each holder of a Deutschmark also need to be given a (portion of a) Euro? That wouldn’t be easy to do with physical currency, since there’s no easy way to mark each Deutschmark currency as having been awarded.


That's not a close comparison at all.

When a cryptocurrency forks, you keep the same amount of coins on both sides but the 2 are wholly incompatible with one another.

A closer comparison is that you it's like 2 simultaneous futures, but with different consensus rules.


Oil futures exist and option prices are usually tied to speculation of quantity. If the price becomes wholly detached from scarcity; it's not a commodity or a currency, it's just means for speculative gambling.


When a chain splits, your full previous balance exists now on both child chains. The price of each chain's coins is set by supply and demand.

Typically people prefer to hold on to both coins after a split. So there's not actually that much sell pressure, meaning both coins can tend to exist together.


Yes, if you hold during the fork you get coins on both forks. Yes you can cash out before the fork.


You get coins for each of the forks. It's literally a fork in the timeline of the currency, as if you're exploring 2 simultaneous future timelines.

You can "cash out" whenever you like, obviously.


Do a little searching on the people pushing the "2x" Fork - Here's one example, CEO of OP's link Coinbase.com:

>Coinbase CEO Owns More Ether Than Bitcoin - Coinjournal

>Coinbase CEO Armstrong: Ethereum Scaling Better Than Bitcoin

Another example, The head coder on the "2x" fork has announced his own coin to ICO soon,

> Jeff Garzik, ... has seen its shortcomings firsthand. So he decided to create a better digital currency.

All the people pushing the 2x fork are very heavily invested in coins competing with Bitcoin. It's odd.


Both Brian & Jeff are still both heavily invested in businesses that rely on Bitcoin, they are not just speculators who simply buy and hold.

Their business plans are ruined if Bitcoin fees get too high. Note that 'extremely low fees' was the original selling point of Bitcoin which now has been ruined. So they were simply defending their businesses.


Jeff's business model relies more on ETH than Bitcoin:

"The current launch plan includes launching on Ethereum chain, which will require paying ETH to obtain MTN tokens"

20% pre-mine

price starts at 1.67 ETH per MTN token

Remember Tezos? That raised a quarter of a billion dollars. There is way more money in making an ICO and saying "Bitcoin is broken! You need [new coin]!"

Brian makes money when you convert USD/BTC/ETH into USD/BTC/ETH. They announced they are adding more coins soon.

The main "2x" supporter runs "Grayscale Ethereum Classic Investment Trust" and tries to sell investors on a coin that nobody has ever used for anything ever.

The people who are "all in" on Bitcoin (the developers for example) think the "2x" fork is a terrible terrible idea. The people who are heavily invested in other coins want the "2x" fork to happen.


Oh, I was referring to bitpay, which probably will not last long unless it pivots into b2b or altcoins.

It's also hard to tell if Bitcoin developers are all in or not. Note that developers can have different interests than holders (eg. The want to get control of the codebase in order to get status and recognition & hopefully future consulting contracts). Note that the current bitcoin devs are mostly a new generation that got later in the game. Source & analysis about this point here http://hackingdistributed.com/2017/08/26/whos-your-crypto-bu...


> Note that the current bitcoin devs are mostly a new generation that got later in the game.

this is 100% false, see this post:

https://www.reddit.com/r/Bitcoin/comments/72lwzv/if_bitcoin_...


citing reddit? I'm guessing you'd like to point out the commit history table. Nice.

You might notice that the table (conveniently) starts from 2010, after a good chunk of coins already has been mined. 2011-2012 is when a lot of the new devs came in which is the new generation, but it was getting much more difficult to mine then.

There's also so many problems with git commit history, so let's be honest here, ie. How many commits doesn't tell the whole story.

Hey, btw, my comments are just observations & not meant to criticize, sorry if you think I'm attacking you. I'm pretty positive about bitcoin and I think it's good that it can re-invent itself and find a good niche (the b2b / institutional market could be huge and certainly would see Bitcoin really growing up). The direction that the current team has chosen to lead it to has certainly paid off well. I sincerely wish the project more success in the future!


There were very few people involved in Bitcoin before 2010. Probably guys like Finney and theymos. The software was more like a proof of concept back then, I believe. I think we have to count even people getting involved after it became mainstream in 2013 as early adopters in the larger scope of things.


-Sees the flaws in bitcoin

--Wants to fix it with a hardfork

--Wants to fix it with a new coin

I think the reason for your observation is pretty obvious


>--Wants to fix it with a hardfork

That does not explain why He still won't adopt Segwit (the network upgrade that recently took place) on his sites coinbase.com and Gdax, which allows for 4MB blocks and cheaper transactions for his customers, in a backwards-compatible way (a Soft fork). Instead pushes for a second fork, a "hard fork", which would require every user in the ecosystem to switch to a new software (who's author is pushing an ICO coin sale of his own!). A fork which every single bitcoin developer (except the ICO-guy who hasn't contributed in 2 years) strongly opposes.

Yes, not surprising that he blogs about Ether and owns more Ether and profits when people trade their Bitcoin into Ether on his sites. Same with the other big "2x" pusher who runs "Shapeshift" a site that turns your bitcoin into other coins and takes a cut%. These guys don't want to help bitcoin, they want to make money off the cryptocurrency space.


Here's another stupid question: Can anybody start a new fork?

Let's say, I invested in the original Bitcoin. Then somebody who has the marketing resources to build enough interest in a new coin comes along and decides to fork. Because of the hype around the new coin type, enough people are willing to trade it after the fork.

I'm being given the same number of coins of the forked kind and the value of my original coins drops by the difference in value compared to the new coins (or around that).

If I'd rather only invest in the original Bitcoin, I'd have to sell the forked coins immediately and buy the original Bitcoin back just to keep my investment value the same.

If anybody can come along and fork:

That sounds like in the world of stocks, a competitor could come along and decide to split the stocks of MY company from the outside, driving down the price of my stocks (me as the company's owner or investor) and there's nothing I can do about it.


> That sounds like in the world of stocks, a competitor could come along and decide to split the stocks of MY company from the outside

That's not really a good analogy. Suppose someone decided to offer one of their securities (or pay a dividend, or give some 'thing') to everyone who has one of your company's shares. All investors have to do is show a share certificate, and get a one-off gift proportional to how many they own.

If the new thing has value, your company's shares should all go up in value by roughly its value. Then shares which have already had the thing claimed, should go down by the same amount, leaving them roughly where they were before. If you decide not to claim the thing, you lose out by its value, but your original shares are still the same and you shouldn't have made a loss on them, just as a result of this split.

Of course, if the new thing is something which competes with your company, your company's shares might go down in response. But this isn't directly related to the value of a share in the new thing.


> If the new thing has value, your company's shares should all go up in value by roughly its value.

Should.


Yes, that's the word "should", which I used.


And why would this translate to something like cryptocurrency?


I honestly don't understand the point you're trying to make.


It's the same value argument that was made when bch was created. Didn't work out. Value didn't automatically transfer. Market attributed arbitrary value instantly.


> That sounds like in the world of stocks, a competitor could come along and decide to split the stocks of MY company from the outside, driving down the price of my stocks (me as the company's owner or investor) and there's nothing I can do about it.

It's more like someone saying to all the shareholders of Apple "hey, you like companies that make mobile phones, and I've started a great mobile phone company, and I think it'd be great if you were a shareholder in my company too, so I've sent you some shares in my company too, I hope you like them!"

Is that a thing you could do? Yes.

Does it benefit you in any way? Probably not. There's certainly no reason to think it increases the value of your company.

Does it hurt Apple in any way? Almost certainly not. I mean, if everyone decided your startup was much cooler than Apple, then it might, but it's hard to see how you mailing strangers shares would bring that about.

A bitcoin fork is, in some ways, a little bit like a stock split or a dividend, but it's a lot more like someone randomly mailing strangers scraps of paper which are almost certainly worthless.


Yes, anyone can start a fork. It's hard to get momentum on it though, as it'll likely just be a shitcoin that no one cares about. Witness what happened with Bitcoin Gold.

So far there's only been one successful hardfork of Bitcoin (Bitcoin Cash) in all its history. Anyone can try, but few succeed.


Yes, but it doesn't answer the OP's question. What if government, official bank or other strong entity with virtually unlimited resources starts a fork (something like Ecoin for those who watch Mr. Robot)? I wouldn't call such event improbable.


I strongly assume that a strong entity would prefer to create a new coin from scratch instead of donating huge amounts of value to existing bitcoin owners.


> virtually unlimited resources

Having resources doesn't matter, it's a hype-based economy


It is much too early to judge Bitcoin Gold. The launch has not even taken place yet. They forked a few weeks ago, the developers are currently mining privately, and the public launch will take place in a few days. People criticize the pre-mine, but it's only 0.6% of the total supply of coins. Perfectly reasonable IMHO.


Most people don't think that pre-mines are reasonable at all. That's a good way to know which coins are scams. Why do they deserve 0.6% of a total market that could be worth billions of dollars, exactly? Because they changed a hash algorithm and released a marketing website?


That used to be the prevailing opinion. Pre-mined coins were generally regarded as scams or pump-and-dumps. But after Ethereum which is almost all pre-mined sharply rose in value, there seems to have been a change in public perception. This is what opened the gates for the new generation of altcoins, also known as ICOs. They don't pretend that they're anything else than pre-mined. In fact, the huge sums that the pre-mined coins are sold for is used for marketing as a measure of interest in their coin. It's a strange new world.


Why did Airbnb founders deserve X% of the shares of their company that could be worth billions of dollars? Because they made a stupid simple website to rent out your apartment? Same question, same answer. We live in a capitalistic world, I think it is reasonable that people try to launch for-profit ventures. Ethereum did something equivalent to a pre-mine + instant sale: they created the initial ETH supply out of thin air, and immediately sold it for BTC to investors.


Startups aren't comparable to cryptocurrencies. There is serious resistance to pre-mining in the cryptocurrency world.


Perhaps cryptos simulate "religions" whereas a single idea fragments in tens-of-thousands of variations? Look how many sects Christianity has after the Protestant Reformation "Hard Fork"


[deleted]


Not in the sense meant here.

Litecoin is a fork of the Bitcoin core codebase, but its blockchain is not rooted in the Bitcoin blockchain (i.e. Bitcoin owners did not automatically inherit Litecoin at the time of that fork).


> Here's another stupid question: Can anybody start a new fork?

Not a stupid question at all. The answer is: sure, anybody can start a new fork.

From a philosophical point of view, the alternative is that only a few designated somebodies can fork, which goes against the design goal of a having a fully decentralised network with no privileged nodes.

You can also see this as a distributed systems problem. A fork is just a divergence in the consensus layer. These happen all the time as short-lived forks when different miners produce different blocks with different sets of transactions. Typically, one of those forks gets abandoned immediately — only occasionally do you see a second block mined on the losing branch. In this sense, and from a technical perspective, the only thing that's special about the Segwit2X fork was planned for the coming weeks is that it would also change the consensus rules (by enabling larger blocks, up to 2MB from the current 1MB). Because the consensus rules change is a highly politicised issue, there's a distinct probability that whichever side ended up losing would decide to continue building on their own chain anyhow, thus effectively breaking the currency into two.


> the value of my original coins drops by the difference in value compared to the new coins (or around that).

Prices of cryptocurrencies are very unstable even without any forks, so what you are describing doesn't make any sense.


Yes its coming.

When this goldrush started exchanges were the ones who made money so everyone wanted one.

Then came altcoins ...

Then ERC20 /ICOs...

Next up in 2018 - forks...


Ok, stupid question: in real dollars, if I sell my ONE coin just before a fork or my then TWO coins right after the fork, will I end up with the same dollar amount?

For that to happen the old coin type would have to lose in price at which the fork starts. How is the price for a coin of a fork determined?


For all intents and purposes, from the point of view of each chain, the other does not exists but it merely turns out their past are the same. IOW BTC is B2X (the money, not the unit) before the fork, and each one considers that its own blockchain is the Truth†. So:

    - from the BTC point of view, there is 1 BTC both before and after the fork
    - from the B2X point of view, there is 1 B2X both before and after the fork
    - at any one time the value of 1 BTC is whatever people want to exchange it for
    - at any one time the value of 1 B2X is whatever people want to exchange it for
    - it just turns out that BTC == B2X before the fork
Therefore the value of each one merely depends on how much people care to trade them for, and the fork may affect this value, both before and after. Both may crash, both may shoot through the roof, or anything in between independently. But yes indeed since they come from the same past, if T is the last common transaction on the blockchain, then in between T and T+1 your 1(BTC+B2X) == X$ just became 1BTC + 1B2X == Y$ + Z$ (which at that precise, immaterial, instant == X$ + X$) by virtue of the fact that they disagree about the validity of any transaction you may make on each chain, including ones that get $$ out of the system. Hence you can "double spend" the coin. But speculation may shortly thereafter make Y and Z stay == X$ + X$, or become X$ + 0$, or X/2$ + X/2$).

† Without replay protection, transactions may or may not be replayed, but the blockchains do differ.


So if the exchange price for BTC does not drop by the same amount of the exchange price for B2X, a fork essentially means money (dollars) is generated out of nothing and given to me as the owner of now 2 coins (one of each type)?

Or in the opposite case, a fork could mean I lose money, just because somebody else decided to create fork?


In fairness you could also lose money because it's Bitcoin and its value is all over the place, fork or no fork


Theoretically, this is true. The value, and hence the price, is splitted. But markets are not perfectly efficient, and Bitcoin markets in particular are very inefficient and totally driven by psychology, particularly speculation and greed.

This can make you end up with either a larger sum if you buy exactly before and sell shortly after the fork, or a smaller sum. Why should the sum be larger? Because there's people on both sides of the fence (the original coin and the forked coin) which think that their coin will "win the race", thus they include a certain additional, speculative value deducted from assumed future price increases into their estimates of the current value of their preferred coin. This drives up the speculative value of both coins simultaneously, and since either side focuses mostly on its preferred coin, driving up the perceived value of it, and neglects "driving down" the perceived value of the other sides' coin (because of disinterest or simply because driving down perceived value is much harder than driving it up, as humans are usually focused on positive things), this can result in a situation in which the mathematical sum of the speculative value added to both post-fork coins is quite a bit larger than the "combined" speculative value that was previously included in the original coin.

This is, in my opinion, exactly what happened with the Bitcoin Cash fork earlier this year. For this Segwit fork, people saw that the earlier fork "created value out of thin air" and thus began to incorporate some of this assumed future value into their value proposition of the coin pre-fork. This drove the price increase right before the fork (well, partly - there was also the CME news, which was a big driver, too). Funny enough, this time it probably won't work out as it did last time - the fork was "called off", and even if it would happen, it most likely will not result in a similar situation due to a) the "free money" having already been priced in during the time before the fork and b) the fork being a "colliding fork" this time, with both coins wanting to be "the real Bitcoin", having no replay protection or real separation of both networks. They wouldn't have coexisted for long - one of them would have "won" and captured the vast majority of value, while the other one would have diminished to the low 3-digit or even 2-digit price realm (effectively equaling a worthless coin, as in crypto, there is NEVER a really worthless coin in terms of having a price of zero - there is always someone wanting to pay some price, albeit very low, for anything that has "crypto" attached to it ;-) ).


You are attaching way too much logic to working out the bitcoin price.


That's a hard question, based around the market sentiment of the new coin.

In theory, yes, the value is split. The value is only derived from speculation, and the speculative value of the coin 1ms pre-fork must be the same as the value of the two coins 1ms post-fork, since otherwise people would simply buy immediately before the fork, and then sell immediately after, driving the prices to an equilibrium.

In reality, this is what has happened with this fork hype, people were buying w/ the idea of getting a 'free' coin, like how last time the value of Bitcoin + Bitcoin Cash was far higher than the original pre-fork value of Bitcoin. However, this has driven the price up, causing there to be even MORE hype, which will likely see the price of Bitcoin stay high, since it is now "trending up".


That applies to stock split; before the bitcoin cash split, everyone was expecting that should be the case.

However in this market; market is irrational and it all depends on how the market is willing to price it pre/post fork. No, you won't wind up with the same dollar amount.


> How is the price for a coin of a fork determined?

The same way the price of any coin is determined, the market-clearing price on exchanges.


No you wouldn't. The price is determined by the orders that people place on the exchange and those can be anything


A bitcoin fork is a political decision on the currency, like the ones central banks make.

There are going to be a lot of forks in the future.


> There are going to be a lot of forks in the future.

I tend to agree. The problem, then, is what happens after 3 forks? 4? 10? We're going to keep increasing the number of crypto currencies we own and then we figure to figure out who supports what version of the currency we have to figure out how to cash out...

The entire idea of a fork sounds like an absolute nightmare. This is why I'm not putting any serious amount of money in crypto currencies.


Yes, bitcoiners like to say "It's deflationary because the number of bitcoin is fixed" but you can instantly double all bitcoin in existence by forking to two otherwise identical (but incompatible) chains.


More dangerous than the tech part of the fork IMO is that with any one fork one or more of the bitcoin deposit holding companies can decide at-will that they'll follow a fork as the "new" bitcoin

This is an even bigger threat when you consider that they could be incentivized to follow a less valuable fork: exchange your new bitcoin for the old, convert all your users to the new bitcoin - you can now pocket the difference.

On the other hand you can also attempt to keep the airdropped funds from forks. Coinbase at first didn't recognize the Bitcoin Cash fork - it was only with pressure that they relented. But there have been other trusted holders who just "ignored" forks


Or you could hold your own bitcoin in your own wallet.


That's the moral of the story - but a lot of people don't

I still haven't convinced my own brother that he needs to move his coins off-market - he said he'll "get around to it at some point"

Also have tech friends who keep coins in Coinbase/Coinbase Vault


It's hard to ignore how handy it is when someone else holds your money. When my bank holds my money I can send it to anywhere from any place. Using a crypto wallet I now have this file I have to somehow keep safe and with me at all times. What happens when or if it gets stolen? Like cash it's gone.

So I understand why people do it. Ease of use typically outshines most security issues. Someone needs to figure out how to strike a better balance.


Keep a paper or electronic backup at home and/or another safe place.

Also your should protect mobile/app wallet with a passphrase so it is safe if you lose it.


So you have a ledger... Somebody makes a copy of it and adds "Gold" or "Cash" to the title. Then continues to use that ledger with some people however they want.


This is an interesting paradox because the whole point of the system was that it was decentralized, and once set in motion the rules could not be changed.

Or so they can?

And who decides?

Because these forks can have considerably favourable or negative outcomes for specific stakeholders, it's nary impossible to make the decision 'fairly' and this rather undermines the whole thing, no? And yes, I do understand that 'value' may be the same after such 'forks' but different post-fork mechanisms will imply different outcomes, surely.

Would it be possible for nefarious actors to wedge themselves into this process? ... Because we were all looking for the 'technical fault' in the maths/encryption, we possibly missed this aspect of risk?


>and once set in motion the rules could not be changed.

This was not the case, nor has it ever been. There have been many consensus changes in the past, and bitcoin has had forks that were reverted by the bitcoin community previously. (See the bitcoin 0.8 fork).

There have been multiple revisions of bitcoin which would have changed the rules. They haven't yet resulted in a hard fork permanently (except for bitcoin cash) because people have updated before the new consensus rules were activated.


It is decentralized, therefore the rules can change. The core devs can try to push changes, but miners and users can choose whether they upgrade (e.g. adopt the new rules) or not. If people disagree about the rules, then you have an actual fork with diverging histories (e.g. Bitcoin Cash vs Bitcoin)


Saying the rules can be changed is like saying that your eyes changed color if you have a child with different color eyes. A fork is not the same chain as the original.


All of the comments above lead me to understand that basically anything can happen with BTC and this kind of undermines it's value as a 'hard currency'.

The whole point of decentralization was that nobody could control it, and devaluation was based on some algorithm, limited by tech.

If these rules can change, then the intrinsic value of BTC is truly up in the air.

What business would invest in using BTC as a currency knowing such things can arbitrarily happen?


Businesses don't invest in currency, they invest with it. Businesses don't use cash for investments, either. Investing is buying something that will generate returns, and cash cannot generate any return, kind of by definition. Fiat currencies have no intrinsic value, either, but everyone still uses them. But since one has to keep some cash on hand, a stable currency is preferable.

The only reason people are investing in BTC is that the price is going up because demand is going up faster than supply is increasing. It's not really any different than if Confederate paper money became the hot thing, and stores started accepting it for payment, despite it not being legally currency. Since they only discover new sources of Confederate money every so often, if everyone wants to buy the stuff, the price is going to go up. If this keeps on happening year after year, people are going to start thinking it always goes up and buy it expecting it to go up.


Yes, I get what you are saying but BTC - as a currency - will require a lot of investment 'in' BTC for transactional purposes, accounting etc..

BTC is already waning as a currency - fewer vendors using it.

As a 'store of value' it's really too volatile - there are just too many other, better options.

So what's left?


> Investing is buying something that will generate returns, and cash cannot generate any return, kind of by definition.

During the hyperinflation of the 90s, if I bought US dollars and sold them a month later, I could have a return in the double digits. That looks like a good investment.


Physically a BitCoin is, when you look at it with your own eyes, nothing, not even air. And probably everyone knows what a fork is (metal thingy for eating stuff) ... so here is your answer. Everyone else who says otherwise, is probably employed by Bitcoin ;)


I'm sorry what was your answer??


Lately, it's an insider cash grab and market manipulation technique.


So a Bitcoin fork is a kind of a git branch or at least one could think of it so. In this sense, it would be interesting to implement this possibility as a feature. Then everybody could start a new branch using new software branch. What is important, all such forks/branches will share the same parent paths (previous transactions). Essentially, all transactions will be represented as a git-like tree where each branch is managed by the corresponding software version.


If Coinbase only supports one version, what happens to the forked coins?


> What is a Bitcoin fork?

An attempt to pretend that an inherently inefficient non-scalable technology can be made efficient and scalable.


Forks foster creativity


Informative post


Coinbase is going to only support Bitcoin Cash.


This is flat out false. They have no plan to even support it at all, let alone default to it


"We are planning to have support for bitcoin cash by January 1, 2018"

https://blog.coinbase.com/update-on-bitcoin-cash-8a67a7e8dbd...


“assuming no additional risks emerge during that time...We’ll make a determination at a later date about adding trading support”

They do not have a plan to add it to the trading platform, which is the only thing that would drive any real value to the Bitcoin Cash market. The only reason they added it at all is to allow people to take their coin and sell it on another exchange, to avoid lawsuits.

If they had any plan to add it to add it to the exchange. It would make much more sense to release it at the same time, thereby profiting off of the trading fees




Applications are open for YC Winter 2019

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact

Search: