Another BTC fork???
I just read about another bitcoin fork coming up. This time around it will go the way of ethereum and split into BTC and BTU. Some say BTC will then become just another altcoin. What’s really going on here? Could this be a “divide and conquer” strategy of the big banks, or am I being paranoid?
There has been a bit of war for bitcoin as nobody is in charge. One tribe likes it acting as GOLD 2.0. We don't trade much gold in the world. Three to seven transactions per second is probably sufficient for the amount of gold that changes hands on earth. It's no longer a currency. Mostly big banks and institutions trade it as a settlement layer.
The other side of the debate has always wanted bitcoin transactions to compete with Visa which can approach 10,000 per second during busy seasons. There is a technically easy way to solve much of this as the bottleneck was set as an artificial limit in the early years, But bitcoin is a democracy so all the code was written doesn't mean anything without the transaction processors most must be running on the same version that allows it. With the bottleneck as it exists now, the processors (Miners) are paid a 'tip' by the users to prioritize their transactions through the bottleneck first. The current miners are good with this arrangement as they make more revenue to pay for the electricity and hardware costs that they've invested.
But, the network has been running at full capacity for months – a victim of its own success. So the other side (Visa AKA Bitcoin Unlimited) is frustrated as merchants and businesses relying on it to act as a payment network have trouble conducting business as usual.
So it's to the point where they can't convince the other side to keepmake the change. It's typical politics where you have censorship of opinions, and we are seeing a micro-version of why centralized leaders eventually emerge in naturepeople.
Miners processors vote essentially by which version of the software they run. (51%) Will essentially get the version of the network they like. So after years of frustration – there seems to be a solution that both sides can get what they want – but it will require a fork.
This would be the first fork in Bitcoin. Other cryptocurrencies have forked – and remained split including Ethereum. In my opinion, forking would be a good thing in the long run. I see a market for both versions as they both meet existing needs. Some people think there must be one or the other. If we only need one version, the free-market could decide. People would use the version that suits their needs.
What would happen in a fork? People that own bitcoin before the fork would then own two. One for each chain. I suspect the market of the world that doesn't understand Bitcoin might panic and we will likely see the price drop significantly for a while until the world adjusts. Perhaps one or the other chain might die off if it's unpopular or a bug is found. It's also possible that one side might try to derail the other by attacking the other network with a 51% attack.
These are very interesting times that I'm watching with a bag of popcorn. The world is finding out there is a real use for having a world-wide payment system that isn't based on a promise to pay. A bearer instrument that works on the internet anywhere around the world is an obvious idea whose time has come.
The Ethereum split was financially great for me as I suddenly had two coins and after the dust had settled after a couple of weeks I was more than happy to sell the smaller version – then bought more of the major version with my newfound unexpected wealth. For the naive, they may be freaked out – if the price goes low, I will likely try to scoop up all I can. I don't see a downside in the long term. If both coins do well, I've doubled my money. If one side goes away – I can sell the one that looks to be dying, and I'll make money on that. The price will rise as the dust settles and it will be an interesting case study that will likely be studied by historians for years. It's fun to be a part of that history.
I expect that in months, or perhaps years (Months is my
Guess) the price will recover and reach new highs as was the case with Ethereum. In the meantime – I suspect much of the wealth will move to other promising coins as a safe haven as crypto people usually don't want to return to national currencies after they've been bitten by the crypto-bug.
Ethereum will likely get a nice boost, and I prefer its transaction speed of 15 seconds much better than 10 minutes of bitcoin. – Although bitcoin time will be reduced to microseconds once the layer two technologies (Lighting network) are built out and will make Visa transactions look like turtles, with millions possible per second.
Now, where's that popcorn?
I still think that there is something strange going on with cryptos. I'm definitely not a financial genius, but at least I'm aware of the fractional reserve banking Ponzi scheme. If the banks and their Wall Street minions play the paper gold/silver game to keep real gold/silver down, and if they see decentralized cryptos as a serious challenge to their centralized power, I bet they will do something like divide-and-conquer to stay on top. They are already developing a centralized blockchain. Would splitting BTC into BTC, BTU, BTU2, etc etc also do the job?
OK, I may be way out there since I think that the official 911 story is bullshit, but at least my professional background includes structural engineering.
Nope Skip, I can absolutely agree with you. I am a novice in the Bitcoin Unlimited vs Segregated Witness (SegWit) and FORK discussions.
Right now the way I understand it the SegWit camp are the BIG bitcoin players, I like the faster transaction times they are proposing but do not agree with the much higher exchange fees involved. I listen to a guy named Bix Wier (road to roota theory creator) who says SegWit, if implemented would take bitcoin away from every day transactions and steer it more towards large government or corporate payments. If it costs say, $100 per transaction then no one will use it to buy Starbucks coffee anymore. Lastly, there is a lot of big money and a lot more PAID programmers working on SegWit. In this day and age I’m tempted to simply reject any idea that comes with a lot of money thrown behind it because our current system has made me very cynical.
Bitcoin Unlimited (Visa option) has its problems as well, the main arguments against is that is gives miners (China) too much power in decision making. At the present time I see China as looking out for the future of bitcoin. They have shut down fraudulent trading on three of their biggest exchanges, causing volumes to severely drop, but value wasn’t harmed.
In regards to BTC1 BTC2 etc. I wouldn’t worry as much about that. The dominant tech will prevail in a free market. This already happened when ETH/ETC forked and as mrees said, its a chance to potentially profit. In regards to a centralized block chain.. Interesting question. There have been several recent articles here at PP about the damage the FED has done. I hope that the US citizenry will reject any proposal put forth by the FED that is in essence another fiat currency.
Did I get close to the difference in your opinion mrees? or is Bix full of crap 🙂
I to think the world is ready for an easy, transparent, asset form of payment as opposed to to current debt based form. IF we went back to a form of gold standard it wouldn't be terrible either, with GoldMoney people don't have to walk around with physical in their pocket. If they wanted to hold gold in their possession however it is possible. The idea is asset based as opposed to debt based. How much longer until people wake up and realize this?
Some BTC EFT comic relief 🙂