Hard-forks

I’ll leave here an overview of my analysis of the current events, for whoever cares or has nothing better to do.

I understand the frustration of some around here. Most who are unhappy with the situation are those who invested since early times. They’ve been following Ethereum since the beginning; they’ve put their money on it because they truly believed on the future of the technology and wanted to be part of it. Moreover, when they tried to spread the word among other crypto-enthusiasts, they had to deal with a lot of hate and disdain. “Turing-complete pyramid-chain”, “scam”, “pump&dump shitcoin”. Nether less, they kept faithful to their beliefs.

Fast forward, Ethereum is all around the news, the time has come for those faithful believers to be rewarded for their endurance and then… suddenly… surprise, those who for long disdained the tech now absolutely love smart contracts! And they’re raiding your community, forking your project and claiming all over the place that their fork will take over yours, excluding you from the world you built. It is not just about money; it is about getting robbed from the reward for the risk you took. It is frustrating and scary, isn’t it? I understand that feeling and I can sympathize with it.

But there are two sides to every conflict. Almost nobody here is evil, but we are all selfish. If you want to acquire an understanding of the whole, you must incorporate the other side. Imagine you were a Bitcoiner. You’ve been following it since the beginning; you’ve put your money on it because you truly believed on the future of the technology and wanted to be part of it. Moreover, when you tried to spread the word among other internet people, you had to deal with a lot of hate and disdain. “MtGox”, “pyramid scheme”, “silkroad”, “that currency used to hire hitmen?”

Fast forward, Bitcoin is bigger than ever, an then, suddenly… surprise, a new technology emerged and they’re raiding your community, sending spam messages, copying your ideas and claiming all over the place that their project will take over yours, excluding you from the world you built. Can you see where I’m going? As soon as Ethereum emerged and manifested itself as a potential threat to Bitcoin, it was obvious that a conflict was born. For every action there is a reaction, and you could see on the air a revenge was due.

In the end, we are all making excuses. “Code is law”, “bailout chain” — none of those are the real reasons behind our actions, those are all just excuses crafted by each one of us for our own benefit. Those who don’t have a huge stack of ETH are the vast majority of ETC supporters, and vice-versa. It is simple as that.

So, what happens now? Well, people are going to do what people do. Some will keep pumping ETC, some will keep pumping ETH. It is war, and eventually a fork might win, possibly the first one to score a fatal blow in the shape of a catastrophic news to the other side. A big company endorsing ETC, it being hacked; stuff that happens. You can’t predict that, so, the only way to be safe is to stay on both sides and watch it neutrally. Nether less, this does raise another significant issue about cryptocurrencies in general.

Are you here for the money, or are you here for the future? If the former, I appreciate your honesty. If for the later, you might consider thinking: are you aware that the future you dream of is the present you dread today? The only difference is that you will be the top 0.01%. If that is what you want, then you don’t want a better future, you want a better future for you. Or is it that your definition of “better future” implies that you deserve to be rich for being a “visionary” and buying some internet money at the right time? More than the doctor who was too busy researching cancer, or the police officer who was being shot to save a life? There is a logical incompatibility between “better world” and “moon” — you can only have one.

Interestingly, I think that no cryptocurrency will ever truly go to the moon, for that very reason: as a chain gets bigger, there are higher and higher incentives for newcomers not to join it but, instead, to plot against it by creating their own fork. Forks are a capitalist self-regulatory mechanism against mooning. Ethereum, in a sense, took advantage of that effect. And that is exactly what is going on with ETC right now — those who were left behind are starting it all over again. This is not the first time that this happens and will not be the last. If ETC eventually gets too big, it will have the same fate: something will replace it, because something can.

Looking at the big picture, that is inefficient. If the future economy includes many chains that keep forking and forking “resetting the wealth status-quo”, then why not just have a single chain and distribute wealth equally? That is, ultimately, what I think will happen. The emergency of a currency that uses, perhaps, a combination of proof-of-humanity and proof-of-human-work as the major driving force for wealth distribution. Proof-of-humanity for basic living goals, proof-of-contribution for the advancement of technology. Then, and only then, we can truly have a better world.

tl;dr you won’t be a billionaire by investing in a cryptocoin* and waiting for the moon because, in the same way that competition is the driving factor that makes a capitalist system eventually converge to wealth unequally, hard forks are the driving factor that naturally makes any sufficiently big crypto-currency to eventually converge to wealth equality.

* You can probably get rich riding the waves…