The November 2018 Bitcoin Cash Consensus battle
Bitcoin is a remarkable technology with great promise. It has the potential to bring financial stability to global markets, to enable an environment where people can exchange value with minimal friction and to ensure that monetary hyperinflation is finally relegated to history.
It has not, however, been a smooth journey. Bitcoin is an economic system and truth in the “dismal science” is always subject to opinion.
The Bitcoin community split in two in August 2017 because of a difference in economic opinion. There are now two histories being played out between the Bitcoin Core (BTC) and Bitcoin Cash (BCH) communities but the dust has by no means settled.
While those in the BTC camp work on building a framework for “digital gold” the BCH community have been striving hard to maintain the vision of a peer-to-peer digital cash system that was outlined in Satoshi Nakamoto’s 2009 White Paper. Both communities have the same goal in mind which is to create a fair system of sound money. Only one, or neither, will succeed.
Divining the future of these two different experiments has become the past-time of countless social media “thought leaders” and many enjoy a following of thousands. Choosing the right blockchain and investing, or HODLing, wisely could mean the difference between owning “lambos” or getting “rekt”. So, it is imperative to pick a pundit that demonstrates deep insight and a gilded gift of the gab.
This is, however, rather difficult since no precedent for blockchain-based currencies exists prior to 2009. Does this mean that it’s anybody’s guess? Is there enough between the pages of Keynes and Mises that could lead one to pick the right pony? Does one need a masters degree in finance and a doctorate in computer science to have the vaguest notion of viability?
Blockchains are new but there is a technology staring us in the face that plainly demonstrates what is required to provide a foundation for a new economic system. The Internet itself.
We have learned, in the almost 3 decades of its existence, that the most important feature of a foundational system is that it remains stable. Without a stable foundation anything built upon it becomes fragile. If the protocol that underpins the internet had been subject to change all the businesses and applications that have been built on top of it over the years would have had a hard time rolling with the changes.
Money is no different. Without a stable protocol that defines the rules and sets them in stone the money that is created upon it becomes unsound by definition. It can then be subject to the whims of central planners, a community or “the best developers in the world”.
If we are to believe in the notion of sound money, money we can trust and that stands the test of time, we must believe in a sound foundation for it to be built upon.
Satoshi Nakamoto, in his insight, declared that “once version 0.1 was released, the core design was set in stone for the rest of its lifetime”. This was a pronouncement of the understanding that for Bitcoin to be considered sound money it must be unchangeable.
There are many in the Bitcoin communities that do not understand or who wilfully reject this core principle. They certainly have every right to their opinions. But if we are to pursue the basic ideal of sound and stable money then we must resist those who seek to undermine it.
On the 15th of November 2018 a battle will play out in the Bitcoin Cash community between those that understand the principles of sound money and those that don’t. On one side there are those who believe that having a foundation that morphs and evolves is a good thing. This side is represented by the Bitcoin ABC implementation. The rest that seek a sound framework are represented by Bitcoin SV. Many fear that another split will occur which will divide the chain yet again.
This is unlikely.
Instead we will all get to witness the process of Nakamoto Consensus which was described in Satoshi’s white paper. The process that arbitrates disputes through economic incentives and makes clear which path leads to greater economic benefit for all.
I seek a world of sound money and so I support Bitcoin SV.