Taking a different approach, analyzing the rationality and necessity of BCC from the perspective of game theory

Last night, OKCOIN launched BCC trading. Although the trading volume was not large, the price was still strong, which was beyond some people's expectations. The emergence of BCC originated from the sudden announcement on July 28th, when viabtc, invested by Bitmain, announced that it would send BCC to all users at 12:20 UTC time on August 1, 2017 (20:20 Beijing time), and claimed that this was to cope with the new changes that may occur after the implementation of segregated witness. The content of the announcement was also written very deeply, meaning that they were afraid that after the implementation of Segwit2x, the core team would have a great increase in power, resulting in the power and interests of mining pools and miners being unprotected, and even suffering a heavy blow, so they created a BCC as a backup to cope with unexpected events.

The issue of capacity expansion has been going on for several years and has not been well resolved. The breakthrough point came this year, especially when the prices of competing coins represented by Ethereum skyrocketed, and Ethereum's market value was even about to surpass Bitcoin. When Ethereum's market value was only 30% away from Bitcoin, miners, mining pools, developers, and trading platforms could no longer sit still and were finally willing to sit down and talk. Everyone reached a compromise and was willing to abide by the New York Consensus, which is the BIP91 plan we are familiar with. This is a compromise plan. Under the premise of this consensus, Bitcoin ushered in a small upward wave, while the price of Ethereum fell from 2884 to a low of more than 900 during the same period. Of course, the current price is around 1500.

So why are the mining pools led by Bitmain still "making trouble"? That's because the price of Ethereum has plummeted, and there is no threat to Bitcoin for the time being. Of course, as the uncertainty of Bitcoin increases, the price of Ethereum has rebounded strongly since yesterday, and the price of Bitcoin on Poloniex has risen by nearly 20%. Under the premise of no competitors, the mining tyrants want to maximize their profits. B1P91 will essentially weaken the profits of mining pools and mining machine manufacturers. Sometimes it is more like drawing a ceiling, making companies whose main business is mining gradually marginalized by the industry. If this is really implemented, in the second half of Bitcoin, everyone's business model will undergo major changes, and chips and mining will become less important.

Let's talk about the Core team and Blocksteam. They are not much better. Although many foreign companies pursue long-term interests, in essence, the corporate system is not suitable for managing Bitcoin. Bitcoin, like air and water, does not belong to anyone, organization, or country. Bitcoin belongs to each of us. Bitcoin governance (blockchain), especially the expansion and fork of the core, is not suitable for companies to participate. Of course, Bitmain is actually a company. The Core team and the Blocksteam team have a close relationship. It can be said that Core was supported by Blocksteam and is also their interest spokesperson. Of course, it is undeniable that Core has also done a lot.

Bit XX has recently invested in several companies such as RSK and Bikan, which are all companies that contribute to the Bitcoin ecosystem. The common feature of these companies is that they will not affect Bitmain's core business (mining income). Of course, from a personal point of view, investing in rootstock is a relatively bad investment in terms of pure investment transactions. The ability and quality of this team are really too poor compared to its competitors (Ethereum), and it can be said that they are not at the same level at all. Of course, the Bitcoin community actually has many smart contracts and other application solutions, which cannot be promoted well because of interest disputes. The Bitcoin community is not short of talents and good projects, but is now restricted by various interest groups.

The nature of the event:

First there was the Ethereum fork, and then there was the Bitcoin BCC incident. This actually raises a very serious question for us, that is, how to agree on opinions and implement consensus when the community disagrees? I think that although the Bitcoin issue has been bumpy for more than two years and there have been many problems, at least the way it is handled is 100 times better than Ethereum. Bitcoin is more open like the Internet, while Ethereum is more like a closed company (efficient and dictatorial). In the long run, Bitcoin is like Moutai, while Ethereum is at most a high-priced stock on the Growth Enterprise Market, full of uncertainty.

About the future:

From the company system to the foundation and then to the autonomous organization, I think this is an inevitable trend of development and is also suitable for the governance of virtual currencies. The upgrade of the blockchain and the change of consensus require group decision-making. How to design such a system is a difficult problem before us. If the mining rights and voting rights of Bitcoin can be separated (i.e. POW accounting, people who hold coins make voting decisions), I believe there will be fewer such disputes. Of course, the community currently has many plans for how to upgrade and reach consensus on the blockchain. The best one is Tezos. When making major decisions, a voting mechanism will be introduced. After the voting is completed, the blockchain will be automatically upgraded, and there will be system rewards.

Summarize:

Innovation Coin is an experiment based on Bitcoin. Bitcoin can learn from the advantages of Innovation Coin and constantly improve itself. Only in this way will the prospects of Bitcoin become better and better. Of course, this matter cannot be rushed and needs to be done step by step.

Personal opinion:

From my personal point of view, companies and foundations are corrupt, they only care about their own interests, Bitcoin should not be handed over to these people, of course, most of the time such interests are not contradictory to the development of Bitcoin. Regarding the expansion, Bitmain and Blocksteam behind Core are fighting for their own interests. I think miners and users should not blindly join the team, nor trust others easily, because these two are not very reliable.

About BCC

I am not against the existence of BCC, nor am I against segregated witness. I think it is difficult to choose a good person from two bad guys. In the case of uncertainty, I am willing to appropriately support such a backup (BCC) to deal with uncertainty. Of course, it will take time to see which of the two bad guys will become a good person or whether other good people will stand up. But I always believe that only the longgest chain is Bitcoin.