This post is not really about the substance of the recent BCHABC/BTCSV hard fork, but rather the impression it made on external spectators, and one in particular.
This article gives a good summary of the scenario that led to the fork and what’s at stake.
This fork had Craig S Wright on the Satoshi’s Vision side, in the role of cartoon villain.
According to CSW, this would not be a fork in which the chains could gracefully divide and do their own thing, they were going to have to fight to the death.
On the ABC side, Roger Ver and Jihan Wu were major supporters, both with significant hashpower at their disposal. The smack talk from the ABC side was much milder in tone, Jihan Wu tweeted that he was determined to kick “Fake Satoshi” (CSW) out. John McAfee tweeted a stirring statement pledging the service of an old warrior to Jihan Wu on the eve of battle.
With threats being made, we were treated to some thoughtful and edifying discussion of various attack strategies that may come into play.
There was coin dance to follow the action on, a nice little site that tracks all sorts of relevant metrics (like hash rates) in real time. Someone on /r/btc helpfully collected a host of other resources in this mega-thread.
The whole thing was quite exciting, even for someone with only a passing interest in Bitcoin Cash, just to see what was going to happen as a fairly major blockchain was riven in two. For this fork it seemed the two chains had comparable miner support, and there was to be no replay protection for transactions. The SV side in particular seemed keen that only one chain would survive.
Then the forking block came, and all the miners’ ASICs followed their instructions, and the chains diverged, and ABC had more hashpower. Roger Ver re-directed significant hashing power from the Bitcoin.com BTC mining pool, apparently unbeknownst to the miners in the pool. This article has a good commentary on the power of mining pools displayed in this fork.
I watched part of a live stream in which people from around the world watched screens showing relevant metrics and discussing what they meant. It had “guest appearances” by Roger Ver, Vitalik Buterin and Emin Gün Sirer, among others. Quite interesting to watch, and one of the nerdiest things I’ve ever seen.
This article has a good dissection of the fork (much easier than watching an 8 hour livestream) one day later.
Bizarrely, the ABC devs implemented protection against one line of attack by unilaterally changing BCH’s consensus rules. ABC devs released a new version hours after the fork which sneaks in a new rule — that the chain must include the first block found on the ABC chain. This checkpoint has proven fairly controversial.
No attacks have happened so far. I’d call it an anticlimax, but that would be like wishing ill to innocent BCH bystanders.
Perhaps people who are more engaged with BCH didn’t find so much entertainment value in all of this. I imagine that many BCH holders would have preferred that the fork not happen, and could have done without all the drama.
This fork was really one for the miners to hash out, with accumulated proof of work being the preferred metric for deciding which chain would retain the coveted BCH ticker and branding. The regular BCH miners seemed fairly evenly split.
It was being suggested that a hashpower advantage for SV would be used to attack and kill the ABC chain with an empty block mining, or at least render it useless for some time with reorgs.
This fork also had a key role for a class of actors I’m going to call celebrity cash burners, people (maybe just CSW, I’m not sure) who were threatening to take action that would harm themselves but harm their enemy more. For example, pour money into pernicious mining to mess up the other chain. On the other side, Jihan Wu made a comment about moving coins to an exchange, which was interpreted as a threat to dump the BCH SV price.
The fact that BCH shares the same hash function as BTC was also relevant here, because it means that miners who usually mine BTC could switch to BCH temporarily to affect how the hash war played out (as the Bitcoin.com pool did).
Developers were important because they defined the sides, as they always do. Supporting a particular BCH variant meant using a particular piece of software, Bitcoin ABC and Bitcoin Unlimited followed one set of consensus rules, while BSV was diverging to do its own thing. This fork was a case of choosing whose roadmap to follow and who to trust with the job of getting it done — as it always is.
The unilateral change to consensus rules by ABC devs, adding a hard-coded checkpoint as a “war time defensive measure”, underlines the power that developer groups have.
Exchanges and payment processors played a kind of adjudication role and declared the winner. BCH ABC seemed to have explicit support from more significant exchanges, with some taking a wait and see approach.
Exchanges and payment processors have power because they decide which chains their users are transacting with, i.e. when they buy/sell BCH or make a payment with BCH.
Some exchanges open trading on both chains and/or futures markets before the fork happens. Relative price is a signal that people pay attention to, and this gives whales with a lot of coins levers they can pull to exert influence.
It is not clear that BCH SV would have enjoyed the support of the “BCH economy” even if it had won the hash war and made the ABC chain unusable, as threatened. ABC devs would still have had options to change the PoW algorithm and render Bitcoin ASICs irrelevant, or even change the consensus mechanism entirely to incorporate a PoS component, as suggested by this post.
I haven’t considered the “BCH community” on platforms like reddit and twitter because, without much familiarity with that community, it would require some effort to discern whether sybil or sockpuppet attacks were occurring. On /r/btc it looked like people were pretty pro-ABC (or anti-CSW), but reddit would tend to marginalize the minority perspective to some degree. I think I saw a post on /r/cryptocurrency that had a lot of pro-SV comments, and they looked a little suspect.
The scorched-earth economic warfare promised by CSW is yet to materialize, so it seems like the financial costs are limited to some hashpower being sub-optimally directed.
The “hash war” is still going, and BCH SV has diminished ABC’s early lead of around 45%, to 26% as of late November 25th.
The costs in terms of community fragmentation are unclear. There is less obvious splitting effect than with the BTC/BCH fork because the BSV supporters don’t seem to have any particular place where they congregate.
There has undoubtedly also been a cost in terms of community time. Forks with existential risk factors will tend to dominate the discourse, and this seems on the whole quite counterproductive. People spend time on defensive code or messaging or alliance-building to try and retain as much of the formerly unified community as possible post-split. That time could be better spent elsewhere.
The prevalence of chain-splitting forks in the last year and a half seems to me like a threat to the whole cryptocurrency concept. A tendency towards fragmentation and balkanization, in which the fragments are openly hostile to each other, is a fairly significant weakness.
In my view the highly technical and opaque nature of these forks as a fundamental governance process increases the barrier to adoption of cryptocurrencies.
These events are prominent, they can be as significant as the secession of a faction from the network, or in some cases threaten the network’s utility — temporarily or perhaps even permanently. They are also difficult to understand in depth, even for people who get the basic concepts of cryptocurrencies.
Chain splits like this one, accompanied by celebrity posturing and social media bickering and botting, and a “hash war” to sort it all out — do not reflect well on the space.
Maintaining cohesion around one chain seems to be quite challenging. It appears that procedures for fork-exits are being honed, while it’s harder to point to evidence that cryptocurrency communities are getting better at finding consensus-preserving compromises.
Some structured and binding approach to making decisions and resolving disputes seems like a good answer to me. If we can’t all agree now on what the project’s roadmap will be for the next 10 years, let’s agree now on a method and principles for making those decisions as they arise.
I like Decred’s approach, the fact that there are roles in that project for people like me to fill, and the broader aims of the project. I like that I can follow and participate in decision-making — that it’s happening now, in the open, not in the mind’s eye of a whitepaper author.
I like that the power of miners is curtailed, that they’re not the only constituency that is rewarded for their work and that has an on-chain presence. Decred’s PoS Voters must approve the work of miners in order for miners to receive their rewards — limiting the power that miners can exert.
Decred rewards those who work on the project through a Treasury that receives 10% of the block reward — because there’s more to running a blockchain than pointing hashpower at it.