The only way to decentralization - Talk about Bitcoin hard fork and central bank digital currency

Bitcoin is facing a situation where the 1M block size limit is about to be insufficient, and a major upgrade is needed. But how to upgrade? Different people have proposed different plans. If a backward-incompatible plan is launched without consensus, some people choose the new plan, while others do not update or choose other plans, then the result is the so-called "hard fork."

There was XT a while ago, and classic recently, but in the end the hard fork seemed to have been avoided. Many people were probably relieved, but I did have some regrets. In my opinion, hard forks are not terrible. On the contrary, they are the necessary price for decentralization. The test of hard forks may appear again at any time. Learning to adapt to this situation early may not be a bad thing for the development of the Bitcoin community.

What is a hard fork and why is it inevitable? Let me start from the beginning.

First of all, Bitcoin can be upgraded. It is not a work of God that can solve all problems once and for all from the beginning. Like all great software, it is constantly updated.

Secondly, Bitcoin is an open source software. Anyone can access its code, improve it, and share their improvements.

Then, the spirit of Bitcoin is decentralization, that is, it is not controlled by a single authority. Satoshi Nakamoto developed the early version of Bitcoin, and later more and more programmers joined in. After Satoshi Nakamoto faded out, the "official" version was provided by the Bitcoin Foundation, but this is not inevitable. The foundation may split, and other associations may replace it at any time. The upgraded versions of Bitcoin provided by the existing foundation may not always be widely accepted. The community and miners may reject the new upgrade. This has already happened from 0.7 to 0.8.

Of course, the hard fork that occurred when upgrading from 0.7 to 0.8 was more due to mistakes than differences in ideas and routes, and Bitcoin's influence was relatively small at the time. The recent fork crisis was due to differences in development routes, and it was deliberately planned. Although the recent fork was not successful, whether it was due to an accident or a disagreement, the possibility of a fork can never be ruled out.

The reason is simple. Unless Bitcoin is never upgraded, if it is to be upgraded, then according to the spirit of decentralization, there is no mandatory authority to ensure that the updated version released by a certain person or organization must be accepted by everyone. In theory, you and I have the right to fork Bitcoin. The new version I release may only be used by three people, while the new version released by the Bitcoin Foundation is used by three million people, but this is only a difference in quantity. Three people are certainly not worth mentioning in front of three million people, but what if it is 300,000 and 3 million? What if it is 3 million and 3.3 million?

In any case, we must make it clear that whether a certain version of Bitcoin becomes the so-called official or authoritative version does not depend on the ruling of a certain "official" or a certain "authority", but depends on the choice of each of us. Do you choose to join those three people, or join those 300,000 people, or join those 3 million people? There is no such thing as "consensus" objectively existing. If you join the group of 300,000 people, then you have a "consensus" with those 300,000 people. If you join the group of 3 million people, then you have a "consensus" with those 3 million people.

This is not quite the same as the presidential election. After the presidential election, the party with fewer votes will naturally fail, but Bitcoin forks do not necessarily have to fail. It is entirely possible that multiple forks will coexist after the split. There is no absolutely neutral standard to measure which one is more victorious. Maybe one side has more people, and the other side has stronger computing power, one side has more funds, and the other side has better technology...

In a sense, the numerous "altcoins" are also a kind of "fork" of Bitcoin. In fact, the difference between altcoins and Bitcoin hard forks is only the redistribution. Most altcoins no longer recognize the Bitcoin blockchain, which means that the original Bitcoin has nothing to do with the newly issued altcoins. But if the altcoin retains the original Bitcoin account, it can also be regarded as a hard fork.

For example, the main purpose of Litecoin is to change the mining algorithm of Bitcoin and shorten the verification time, and these changes can also be made to Bitcoin itself. If Litecoin inherits the Bitcoin ledger when it is released, and is named Bitcoin XT or Bitcoin Classic, then it will be a hard fork.

Therefore, when XT and Classic were recently proposed, some people denounced them as copycat coins. This is indeed not wrong. Whether you choose the consensus of 300,000 people or the consensus of 3 million people, if you regard your own side as orthodox, then you will naturally regard other parties as copycats.

If a new version dies, you can regard it as an unaccepted update of the official software, or as a failed altcoin, which depends on your personal attitude; if a new version is successfully released, you can regard it as a successful update of the official software, or as a separate altcoin, which also depends on your choice; if a successfully released new version dies, you can regard it as a "rollback" of the official version, or as a "return to zero" of a new coin.

The key is that you are the one who makes the judgment, not Satoshi Nakamoto, the Bitcoin Foundation, or some mining farm owners. They will also make their own choices, but no one can replace your own choice.

The greater the freedom, the greater the responsibility. The main purpose of Bitcoin is decentralized currency freedom. It liberates the control of currency from the central bank and returns it to every currency holder. However, along with freedom, there are also responsibilities - the responsibility to properly preserve one's own currency, the responsibility to think and judge independently. There is no freedom without a price. The possibility of forks and the mission of having to make choices in the face of forks are the necessary costs of decentralization.

So far, the differences in the development path of Bitcoin are basically limited to the traditional Bitcoin ecosystem, specifically, the differences between developers and miners. But as Bitcoin develops further, greater forces may join in. For example, many banks have recently begun to study the so-called blockchain technology, and even the People's Bank of China is going to issue its own digital currency. Now they have not directly challenged Bitcoin, but who knows? Maybe someone has already started secretly, such as Mike Hearn, who recently put forward the theory of Bitcoin failure, and there seems to be a shadow of the banking industry behind him. If banks find that the digital currency they have developed cannot eliminate Bitcoin in the end, then secret infiltration and peaceful evolution may become common strategies.

I said in an interview with Yangyang that Bitcoin is not afraid of being banned. Like drugs, the more it is banned, the more valuable it is. At worst, it will go underground. But Bitcoin is afraid of being "praised to death". Suppose the central bank says: Bitcoin is a good thing, but it has no endorsement. I will endorse it. I guarantee that one Bitcoin can be exchanged for at least X yuan. Then, will many holders welcome it with open arms? If the central bank is more kind and provides computing resources to maintain the Bitcoin network and technical resources to maintain Bitcoin updates, then will many people be grateful? Then will a large number of stockholders and aunties who originally did not believe in Bitcoin join? In this way, peaceful evolution will begin. The central bank may diligently and responsibly provide various "patches" and "upgrades" for Bitcoin.

The central bank may bring another 30 million supporters to Bitcoin, and then get more than half of the original 3 million supporters to join. In the end, there may only be 300,000 people left who feel that the concept of Bitcoin conflicts with the central bank and insist on resisting the central bank's "good intentions."

"Escape from freedom" is a deep-rooted characteristic of the people. This can be clearly seen from the current Chinese stock investors. They would rather be abused by managers countless times than think of taking personal responsibility. It is conceivable that if the central bank really issues digital currency, whether it is a copycat currency or a forked version of Bitcoin, it is possible to gain a larger "consensus". There are hundreds of millions of Chinese stock investors, but there may be less than 300,000 Bitcoin enthusiasts. Compared with the central bank banning Bitcoin, if the central bank suddenly encourages those lambs in the stock market to participate in Bitcoin, it will be a disaster. Of course, I have said before that the choice of three million people may not necessarily be better than the consensus of three hundred thousand people. Similarly, the consensus of 30 million people may not be better than that of three million people. I believe that even if the central bank's digital currency is supported by one billion people, it is not as good as Bitcoin.

Finally, let's talk about the actual problem: When the Bitcoin community has a fork crisis, what should ordinary individual holders do? It's very simple, there is no need to panic, we have to make our own choices, but it is not urgent. For mine owners and developers, choosing a team is more urgent. For example, a certain version may make all mining machines scrapped, so the mine owner must of course resolutely avoid it. If a certain version may increase the cost of the mine owner, but at the same time it is conducive to the increase of the currency price, then the mine owner must carefully consider it. But for ordinary holders of coins, there is no need to waste their brains, because generally speaking, the coins held before the hard fork can be used on both branches, and double spending of one coin is not a dream, so if you have confidence in Bitcoin, just hold it and don't move. On the contrary, if you sell it before the fork, when you want to buy it back later, you have to pay attention to whether to buy this Bitcoin or that Bitcoin.

The more problematic thing is the coins stored in the platform, because the coins stored in the platform are not your own coins in essence. What you have is nothing more than a custody certificate. With this certificate, you can withdraw coins from the platform at any time under the rules set by the platform. However, it seems that various platforms have not stated the detailed rules for withdrawing coins after the coin forks. So after the fork, if you go to the platform to withdraw coins, whether you get this coin or that coin depends on the mood of the platform. Maybe because you stand in the wrong team or the run tide, the platform will go bankrupt, and then both the coin and the coin will be lost. So for ordinary coin holders, the bold ones can of course take the opportunity to make a difference on the platform, and if you want to be safe, just hold the coins in your hands.

I am not saying lightly that hard forks are not a big deal. On the contrary, I am emphasizing that every coin holder who cherishes freedom has the responsibility to pay attention to the development of Bitcoin, rather than just caring about the "market conditions."

Original link: http://yilinhut.com/2016/01/21/5577.html
Author: Hu Yilin
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