The Bitcoin Civil War: The Politics of Apolitical Money

Rage Comment: The recent struggle between the two lines of Bitcoin has reached a fever pitch, and due to some emotional remarks made by Mike, one of the developers, some media who are completely ignorant of the truth or have ulterior motives have interpreted and misinterpreted it as a major failure of digital currency. There are decentralized system solutions to decentralized system problems, and what is the best way is something that needs to be explored by the participants. The author of this article, Jim Harper, is a senior researcher at the Cato Institute. His main work is to adapt laws and policies to the requirements of the information age. He served as a former legal counsel for the U.S. House of Representatives and the U.S. Senate, and served as a global policy advisor to the Bitcoin Foundation in 2014. In this article, Jim Harper discusses why Bitcoin, as a non-political digital currency, needs calm association members to survive.

Translation: Li Qingnan

An early metaphor for Bitcoin was that of “apolitical” money. Given the ugliness of politics, this is a tempting concept. However, monetary systems are social systems, technology is artificial, and open source software development requires intensive human collaboration, especially around rules for exchanging data over networks with strong network effects. When the groups are large enough and the subjective issues are important enough, human relations become political. I think this phenomenon is real even when government (or, rather, coercive) power is not in crisis.

The politics of Bitcoin suddenly came into the public eye last week with the news that developer Mike Hearn “left the game in a rage.” Before the New York Times published an article about his disappointment and departure from the Bitcoin industry, he had already written in a newspaper that Bitcoin had “failed,” and had some thoughts on that. Like most people reacting to the news, I like Mike and think he has reason to be upset. But instead of seeing the merits of Bitcoin, his exit speaks more to the way a smarter, but impatient, person would react to the attractive rules of data exchange on the network.

But there are many key details to be discovered about how to govern a project like Bitcoin so that it can grow with minimal (in a pejorative sense) politics. Stable governance will help Bitcoin compete with government currencies and record-keeping systems; chaotic and disorganized governance will hinder Bitcoin’s further development. We just need to figure out what “stable governance” actually is.

Jim Harpe

Growing discontent

If you're new to Bitcoin, you'll notice that usage has been steadily increasing, reaching 150,000 transactions per day. This is putting pressure on the network's ability to handle transactions (a fact that also reduces the superficial opportunism of "Bitcoin is dead" arguments). Anticipating this rapid growth, last May, developer Gavin Andresen began a campaign to expand the network's capacity by increasing the size of "blocks," or pages of Bitcoin's global public ledger. A limit of about 1MB per 10 minutes supports a transaction rate of about three transactions per second.

Eleven months ago, Gavin had stepped away from his position as Bitcoin's lead developer to work on a wider range of issues. He handed over the reins of Bitcoin Core to a small group - which, it turned out, did not agree with him. Over the summer and fall of last year, the debate over block size became increasingly heated. In August, Gavin and Mike introduced a competing version of the Bitcoin software called Bitcoin XT. Among other things, the block size would be increased to 8MB. The disagreement over whether to adopt the software led to a vote that required more than 75% support to pass, leading to it being dubbed the "Bitcoin Constitution Amendment."

This move has undoubtedly catalyzed discussion, but it has also fueled discontent in some quarters. Notably, the controllers of various online forums have begun deleting discussions based on the premise that XT is no longer Bitcoin. Nodes running XT are frequently subject to DDoS attacks (i.e., attacks with huge data streams from neutral computers) from supporters of the original core.

Seeking a solution

A set of meetings called “Controlling Bitcoin Scaling” brought developers together to solve problems, and the meetings solved a lot of useful problems, but they didn’t solve the “block” size debate. The Bitcoin Association is in political mode, and the ugliest side of politics has been revealed. Well, it’s not the worst. The worst political situation is that the winner can force everyone to play by their rules or completely ban the public discussion of competing ideas. Competing ideas and competing software seem to me to be structural solutions to the governance challenges facing Bitcoin right now. The relatively small Bitcoin Association has become accustomed to using a small number of websites for communication and interaction. These websites deviate from the Bitcoin Association’s philosophy of openness, which promotes the emergence of competing alternatives.

Partly because Bitcoin coding talent is so rare, the association has inevitably developed a habit of relying on a small number of developers. Now, despite the interference of censorship agencies and DDoS attacks, BXT (bitcoinXT) has been seen as a competitor to Bitcoin Core and is classified between BU (Bitcoin Unlimited) and BC (Bitcoin Classic). Developers of each version of the Bitcoin software must convince the association that their version is the best. It is difficult, and it should be difficult. Competition is good for everyone, except competitors.

The core issue in these competitions and debates is credibility. Each software team must share the full content of their philosophy and how their software implements that philosophy. They must convince users that they have considered and addressed all the technical issues that could affect Bitcoin's success. I admit that the core team's philosophy is still relatively opaque to me. I think they are more focused on mining centralization than others, and therefore oppose the centralizing effects of larger "block" sizes. As a technical layman, I found that the best entry point to understand the core team's views is the reply from Valery Vavilov of BitFury to Mike Hearn. In his reply, we can at least see the resonance of Mike's views. The recent statements of the core group and the discussion about increasing capacity in December do not address the need to give more attention to the future direction of Bitcoin and the correctness of its path.

The need for credibility

I’m sure they wanted to do the best they could, and I’m sure they felt they had done their best to articulate their plans. The Association as a whole benefits from more. Peter R’s speech in Montreal (despite the unnecessary irritation at the end) is the clearest and most dignified explanation of the economic benefits of block size that I can find. Mike Hearn was able to “resign” because he no longer needed his position in the Bitcoin Association. He put all his political capital to the test. Everyone in the Bitcoin Association, especially the developers, must do everything they can to earn political capital. They must explain the advantages of their own arguments and point out the shortcomings of their opponents on as fair terms as possible. They can support their arguments with persuasive evidence as the open technical system allows.

They should stay away from "allies" who delete posts on forums or sponsor DDoS attacks, and avoid the motivation to blame others. In this way, even if they lose, they lose with dignity. These behaviors cultivate credibility and long-term persuasiveness. And credibility provides them with the premise for long-term success in the Bitcoin world, and also lays the foundation for the success of the Bitcoin ecosystem. Good behavior is good "politics", which is what some non-political currencies need.