BTC issuance, BCH miners stealing coins, a "hand-to-hand fight" between cryptocurrency camps

Since the birth of the crypto community, the debate has never stopped.

After BTC forked into BCH in 2017 and BCH forked into BSV in 2018, the tension between the crypto camps became increasingly intense, and the arguments shifted from respectable and private venues such as the "Hong Kong Consensus" and the "New York Consensus" to social media such as Twitter and Weibo, where the dark history and shameful past of every stakeholder were exposed.

BTC issuance, BCH miners stealing coins, these sensitive topics have also been thrown on the table, and a "hand-to-hand combat" between the cryptocurrency camps is taking place.

1 Peter Todd's controversy

"The 21 million bitcoin supply cap is effectively a 'religious belief'."

On February 25, Peter Todd, a supporter of the 1M block and a senior member of the Bitcoin Core Development Group, caused a heated debate in the community. He also said that anyone with economic awareness knows that we do have a high inflation rate, but this is not bad, and the difference between 0% and 0.5% sounds insignificant.

Peter Todd's remarks imply that he believes Bitcoin should break through the 21 million upper limit and that issuing more coins is correct.

Peter's argument is exactly in line with the view of the BCH community: as long as BTC still maintains 1M blocks and does not expand, the only way to go is to increase the issuance of Bitcoin. The Bitcoin community is shocked: Issuing more Bitcoins is a "big gamble" argument. As a member of the Bitcoin core development team, how can Peter make such an argument?

Therefore, once Peter's opinion came out, the entire crypto community had a heated debate about it.

So why could Peter's words cause such a huge wave?

This is related to Peter's extensive experience in Bitcoin development and his status in the Bitcoin community, which can also be seen from his code contributions to the Bitcoin code base.

According to the latest data from Github, a total of 682 developers (Contributores) have contributed code to the Bitcoin core code base, and Github will automatically display the top 100 most outstanding developers.

Among them, Peter Todd ranked 26th in terms of code contribution excellence, and Peter's code submissions were concentrated between 2013 and 2016. That is to say, even though Peter had almost never submitted any code in the past four years, his ranking in the Bitcoin core code base was still higher than 95% of Bitcoin developers.

In addition, the development contribution of Gavin Andresen, the successor of Satoshi Nakamoto, ranked ninth in 2016. Since 2016, Gavin has also stopped submitting code to the core code base.

It is for this reason that Peter’s remarks have attracted the attention of the domestic and international cryptocurrency circles.

In response to Peter's point of view, Jiang Zhuoer, a staunch supporter of the BCH route, said that Core attempted to issue more BTC (more than 21 million) because issuing more BTC was the only logical choice after locking in 1M.

To this end, on February 25, Jiang Zhuoer published an article titled "Why does Core persevere in trying to issue more BTC?" The article comprehensively refuted the Bitcoin route through 10 aspects, including "Core would persevere in issuing more BTC (more than 21 million)", "Core's locking of 1M violates Satoshi Nakamoto's plan", and "Now that BTC has locked 1M, the transaction fee has surged in a short period of time due to congestion, which is an overdraft and a last gasp".

However, Jiang Zhuoer’s dissenting voices triggered public rebuttals from the BTC community, which also brought up the old story of BCH miners stealing coins in the early days. [1]

The fight between the BTC community and BCH is still within the technical scope (the route dispute is the block size dispute), but subsequent developments exceeded expectations and are also a continuation of the dispute between the BCH and BTC communities, and these disputes have gone beyond the technical scope.

At 9 pm on February 26, Jiang Zhuoer published his thoughts on buying cryptocurrencies through OTC financing on Weibo, saying: "Find a way to borrow money (without risking liquidation) from the OTC market. Most white-collar workers can still borrow one to several million yuan. It is not difficult to increase their wealth by hundreds of times in one cycle."

BTC community supporter Xiong Yue responded to this remotely a few minutes later.

At 10 pm on February 26, Xiong Yue said on Weibo: "I heard that someone encouraged everyone to borrow millions to buy BCash (a bad name for BCH) to take over for themselves. Don't you know what BCash will do? I don't know if BCash will still be alive this time next year... The price of 0.003 means that it can be 51 (51% attack) with just a little effort."

As a result, the dispute caused by Bitcoin developer Peter escalated again.

Later, on February 27, Jiang Zhuoer responded to Xiong Yue's statement that "I don't know if BCash is still alive... the price is 0.003" by expressing his willingness to verify the right and wrong through a 3000BCH/108BTC bet. He also exposed the past of TumbleBit selling coins at a price of 6,000 yuan to buy a Mercedes-Benz.

At present, TumbleBit, the blogger mentioned by Xiong Yue and Jiang Zhuoer on Weibo, has not indicated that he is ready to meet the challenge.

At this point, the dispute between the two communities caused by Peter's view on the issuance of additional Bitcoins has completely gone beyond the technical scope. Of course, we will have to wait and see to what extent this close combat will end.

In fact, as early as the beginning of 2019, Peter expressed similar views and caused similar disputes.

On February 4, 2019, Peter discussed the inflation rate of Bitcoin with Twitter user The Bitcoin Rabbi and said: “Will the mining industry fail because the mining rewards become too low? Of course it will, maybe not in 10 years, but at some point in the future.”

What Peter meant was to make a judgment on whether Bitcoin would be issued in the future. This remark also caused extremely fierce community disputes at the time.

However, Peter showed strong aversion to the reduction of Bitcoin blocks. In February 2019, in response to Bitcoin core developer Luke Dash Jr's proposal to reduce the block size of BTC to 300kb, Peter, who is also a Bitcoin core developer, said that this was a stupid idea and a high-cost adjustment.

So why is there such a big divide within the cryptocurrency community? What are the deep reasons behind this?

2 Behind the Dispute

“The fundamental reason is still the competition among computing power, technology and users.”

As a senior investor in the cryptocurrency industry, Zhongnan has written many articles analyzing the root causes of "fights" in the crypto community. When asked why investors in the crypto world are fighting, Zhongnan made this analysis.

“Let’s break it down and analyze it. Bitcoin was born from a loose alliance of “cypherpunks” composed of mathematical hackers, civil libertarians, programmers, and cryptographers who changed their flags. They advocated the protection of personal privacy and wanted to create a free world of free competition. The tokens motivated them to form these loose organizations.”

In Zhongnan’s view, since it is a loose organization, these capital, talents, and computing power are basically free-flowing, "so you need some stories to attract these resources to support your project."

Whether it is BTC or BCH, they are essentially projects, but the scale is different.

"Core accused BCH of being overwhelmed by the huge computing power, accused BCH of being a token forked from Bitmain, and accused large blocks of being superfluous. The BCH community accused BTC development of being interfered with by Blockstream, and the curve expansion of Segregated Witness plus Lightning Network was simply not feasible, etc." Zhongnan said.

In Zhongnan’s view, the disputes between the two camps are essentially about telling stories within their own logical framework.

“The story of BCH goes like this: With a 1M block size, the network will definitely be congested in the future, which will lead to extremely high transaction fees. If the transaction fee for a transfer is tens of thousands, no one will be willing to continue to invest money. This does not meet Satoshi Nakamoto’s definition of the Peer-to-Peer Electronic Cash System. Therefore, the block size of BCH must be large enough, while also meeting the needs of current network infrastructure.”

In Zhongnan’s view, the reason why BCH chose to fork is because the BTC block is too small to meet market demand.

“The story of BTC goes like this: Although the block size is only 1M, Segregated Witness and Lightning Network can solve the problem of network congestion. On the contrary, BCH has enlarged the block size through forks, but it is still a forked coin in essence. The block size is too large, and the miner fee is very low. If the production is reduced several times in the future, won’t no one be willing to mine on it anymore?”

"In fact, whether it is Jiang Zhuoer or Xiong Yue, they are essentially arguing over the issue of route. Whoever has a more self-consistent logic can win the support of capital," said Zhongnan.

In addition, in Zhongnan’s view, all supporters will hoard a lot of this currency, and they are actually waving the flag for their own interests.

Whose logic is more self-consistent and who will win in future competition?

“No one can predict the future, but at least in terms of computing power and market value, BCH is much weaker, but this does not represent the future,” Zhongnan said.

According to the latest data from bitinfocharts, the BTC network computing power is 107.58Eh/s, while the BCH network computing power is 4.08Eh/s, which is 26 times that of the latter. The latest data from coin360 shows that the BTC market value accounts for 64.21% of the total market value of cryptocurrencies, while the BCH market value accounts for 1.1% of the total market value of cryptocurrencies, which is 58 times that of the latter.

“But there is one thing we must pay attention to. People like Wu Jihan, Jiang Zhuoer, Yang Haibo, Roger Ver, etc. are all veteran investors in the cryptocurrency field. They are also staunch supporters of BCH. I don’t believe they will make the wrong choice.”

BTC and BCH are the main forces in the encryption market and practitioners of different encryption routes. On two different paths, I believe they will continue to quarrel in the future, but they will also be able to go further and further because of this.

[1] More than 19,000 BCH were sent by mistake, and nearly half of them were stolen. This problem is very distressing to miners