The Coming Bitcoin “Pitchfork”
“This is the radical Bitcoin upgrade insiders never saw coming.”
Alex Fredericks, head of DigitalLaunch.com and leader of the Billion Hero Campaign to give away a billion dollars promoting digital currency adoption, recently sat down with Stan Larimer, the Godfather of BitShares, at his possibly fictitious country farm in Virginia to plot the upcoming Campaign strategy. We join the conversation in progress…
Alex Fredericks: This blows my mind! Just when I thought this couldn’t get any better you throw in a complete overhaul of Bitcoin itself!
Stan Larimer: Heh, yeah, we tend to be full of surprises…
Alex: But how can you do that? I mean, doesn’t Bitcoin have an official set of software developers that decide what changes to make? How can you just walk in and upgrade the whole thing?
Stan: Well, they sort of used to … but these days there are multiple sets of developers backed by different special interests in the industry. There’s a constant struggle to determine which group will prevail. This pretty much gridlocks development since they can’t agree on much and will eventually split Bitcoin into two or more coins. Almost happened in August…still might.
Alex: So you think it’s better to have three?
Stan: We’d really prefer that Bitcoin not split, but if there are going to be factions taking separate baby steps splitting Bitcoin into multiple coins anyway, we figure we might as well offer a robust version that fixes everything. Still, all things considered we’d prefer them to leave Bitcoin alone and quit trying to make it something it’s not. It’s a great store of wealth, “digital gold”, but it’s awful as a medium of exchange. It’s the electronic equivalent of a slow armored car moving physical gold.
Alex: Slow? I thought Bitcoin’s claim to fame was fast transactions?
Stan: Well, compared to the many days it takes for the banks to wire money, sure. But lately it can take days to transfer Bitcoin too, unless you are willing to pay extra to move up in the backlog. Even then it takes a big chunk out of an hour. On the other hand, Bitcoin United will complete every transaction in less than three seconds at the full workload of any major credit card. We can deal BTC-U faster than you can spin a slot machine.
Alex: But they can’t really leave it alone, can they? It’s saturated already and demand is growing exponentially. People are complaining about waiting days…
Stan: That’s because they are trying to use it as a medium of exchange. There are better, faster, cheaper currencies for that. Hundreds of them on the BitShares network alone, take your pick! If people used any one of them for daily transactions it would offload Bitcoin for the occasional transfer of “digital gold” from one cold wallet to another. That’s really what happens on most exchanges anyway. A customer does one slow Bitcoin transaction to establish a balance and then leaves them there in the exchange’s cold wallet while trading with exchange issued tokens — like casino chips. BitShares tokens work the same way; only there is no counterparty risk like in the centralized exchanges.
Alex: So, your saying people can use slow BTC to buy fast BTC-U on the BitShares platform and then trade with them at light speed until the time comes to exit, then buy slow BTC again just before shoving them in their safe on a stick next to their gold coins?
Stan: Or trade them directly to fiat. I don’t think people will ever see the need to go back to slow BTC when their fast BTC-U are just as secure on a state of the art BitShares blockchain. Have been for years. But, I guess they could…
Alex: So why do you call it a “pitch fork”?
Stan: Well, a fork is just any change in the software that causes two differing blockchains to spin off with differing ledgers. A “pitch fork” is where you pitch the whole code base and replace it with something better. That’s what BitShares did a couple of years ago when it upgraded to real time. It took three seconds to switch and was immediately available to claim in the new wallet. That’s all we are offering Bitcoin.
Alex: But BitShares’ pitch fork shut off the old chain so there was only one true BitShares still running. Doesn’t seem likely here…
Stan: No, just like Ethereum now has two competing chains, Bitcoin will have three to choose from. If the fork is done intentionally like the Bitcoin factions often threaten to do, the competing ledgers start out the same and everybody gets a copy of their balances on each chain. After that they can be spent differently and tend to take on different prices depending on relative demand. Right now the two Ethereum forks have settled in with a factor of 10 or so difference in price.
Alex: So won’t that happen to BTC, and BTC-U and, say, BCC, too? What makes you think BTC-U will have the same price as the others?
Stan: Oh I’m sure it won’t. Initially the demand for the two slow BTC forks will probably be greater because their factions are better known. But, while folks are sorting out which of those two is best, BTC-U will be basking in the same discussion with best performance in every way. Some speculators are bound to see the opportunity to scarf some up cheap — dreaming of being one of those famous Bitcoin millionaires one day. This is the stuff of legends!
Alex: So as people claim their BTC-U, some will dump theirs into the eager hands of speculators, who will compete for them driving up the price, I suppose. Won’t the dumpers overpower the speculators?
Stan: They might, but I don’t think so. Consider this. Initially 100% of the BTC-U supply will be locked up on the BitShares blockchain — unclaimed. BitShares lovers will claim theirs and probably hold onto them tightly. So the total available supply to for speculators to buy will be just those who a) have heard of BTC-U and b) take it seriously enough to claim them, but c) aren’t smart enough to see their value yet. That’s a pretty small cross section. I think the buy pressure from speculators will far exceed the sell pressure from dumpers long enough to establish a great price on coinmarketcap.
Alex: This sounds like it could be the equivalent of the World’s Biggest ICO…
Stan: People who remember how early bitcoin holders were able to buy up millions of bitcoins for pennies will be there bidding for these. This will bid the price of the few of them up establishing BTC-U with a serious market cap, which will get it noticed. This might bring both buyers and sellers to BitShares to claim the supply as it is gradually unlocked in a new gold rush. Since most Bitcoin maximalists will decline to claim their BTC-U, these will remain locked up for a long time. So we just need to bring in more new people than BTC-U dumpers to cause the price of BTC-U to grow …especially since we’ll be giving away a billion dollars in prizes to draw attention to it.
Alex: Speaking of which, we’re supposed to be planning the Billion Hero Campaign…
Stan: Let me go grab a couple of cold sarsaparillas and we’ll get started.
