Replacing the Core in Bitcoin Cash
If you thought that the August split of the Bitcoin network eased some tension and relieved a little bit of pressure, there’s some news that might get you to reconsider that notion.
In a surprising turn of events, the network client Bitcoin ABC has unilaterally announced that a new implementation of the Difficulty Adjustment Algorithm (DAA) will be forced onto the network two weeks from now, the 13th of November.
The circumstantial evidence points to that this is a decision taken singlehandedly by Amaury Séchet, the lead developer of ABC. The proposal is created by him, there has been no public endorsement of it, and there are indications that it has been promoted in secret to the miners. In the open discussions that do have been happening on the subject, the proposal has been generally regarded as flawed from some perspectives. The main one being that it can be actively exploited in a similar way as the current Emergency Adjustment Algorithm (EDA).
This attempt of a power grab has grave implications for Bitcoin Cash.
The processes of evolution
The process for changing the rules of the Bitcoin Cash network in any substantial way differs quite a bit from the way that things have worked in ye olde Bitcoin (BTC). For the last four years, network changes in BTC have been closely guarded by the development group Core. Due to historical reasons and a fair amount of petty scheming, they have been in a position where they have exercised full control over the evolution of the network. This is the primary reason that Cash came to life.
To prevent this from happening again, one credo of Cash has been to not have a single reference implementation, or a central group deciding on which changes gets implemented. Instead the evolutionary process looks something like this:
A development group openly proposes changes to the miners, single-handedly or in coalition with each other. The miners are then free to accept those changes if they deem them useful for the network or suitable for their purposes in some other way. Once the miners start using the proposed changes publicly, the economic majority is free to accept or reject the changes. Only if all three steps are fulfilled, the network changes. If there would be major disagreement somewhere along the way, there is risk of a network split. The disagreeing parts of the network take different paths, splitting the network in two. This isn’t necessarily a bad thing. On the contrary actually. It is more or less the ideal way to let the network evolve at a pace that comes naturally. When the pressure to perform a change is big enough, most everyone will align.
When such central things as the DAA is discussed, alignment among the developers is crucial, for several reasons. If the decision is rushed or there isn’t agreement on the way forward, it can be very costly to the network. A suboptimal solution costs in lost opportunity. The current EDA is already an example of this and in networks of this size, the loss counts in the billions. Disagreement among the developers could create a rift that makes development efforts drift apart or stop altogether. The wrong implementation could be bad, costing the network a lot of value, but not so bad that the network has the power to rid itself of the pain. It could get stuck in a permanent state of value drain.
When reading between the lines, you can see that an agreement probably already has been made between ABC and one or several miners, to provide them with a new DAA in Cash before the upcoming potential BTC split in November. The miners share their mining power between BTC and Cash. In the potential split, they might be interested in a more stable DAA in Cash, which they can use to their advantage. If that is the case, they want a change before that event.
Take note that the miners not in any way can be blamed for this. They are doing what they can to protect their own interests. As they should. The blame should fall squarely on Bitcoin ABC, and as it seems the person who is the main driver behind the forced proposition.
What ABC are doing is compromising with the model that is at the heart of the security of the network. If the different actors in the Bitcoin trias politica can subvert or bypass the model, the network isn’t free and can be controlled. If the network can be controlled, it does not hold long term value. The main property that carries value is that two parties can transact with each other without the need or possibility of a third party to interfere. The underhanded tactics displayed yesterday is in other words one party dabbling with the central value proposition of Bitcoin. ABC is claiming right of way, for a proposition that is generally considered sub-par, subverting the network to fit their own goals. They are also doing so in direct confrontation with the rest of the network.
Putting the Core back in place
If this proposal is forced through there is no reason to believe that something similar won’t happen again. In fact you should expect it to. The precedent set by this action will probably be so strong that the ramifications will be seen years down the line. And you can be certain that someone who gets the power to push their will through in this way is going to have a desire for more. It worked the first time, right? This is very much a return to the old ways, where Core controlled the agenda and everyone else were allowed to go on the ride if they had a ticket in their hand and sat where they were told. ABC just made a move that clearly indicates that they are aiming to put themselves into the spot left by Core.
Why are they doing this? When it comes to the miners, it’s a natural choice. They want a stable option for the upcoming BTC clash in November. It’s difficult to hold that against them. Miners do what they need and they are acting in a very competitive market. But ABC? When Core were controlling BTC, they did it to eventually be able to extract rent from the network, a very long game and out of purely economical reasons. In the case of the main culprit to the current debacle, as it seems there’s a much cheaper and simpler explanation. Bragging rights and ego.
You be the judge if that is a worthy cause to compromise with the security of a multi billion dollar network.
