Roger was in disbelief. The community that had once revered his opinions so much that they called him “Bitcoin Jesus” had left him in its dust. His proselytizing hadn’t worked, and the market had chosen the Bitcoin he had abandoned.
He believed so strongly that Bitcoin needed to be usable in day-to-day transactions NOW, no matter the costs. So could the community be wrong? Or was it him who had messed up?
He’d know soon enough. The market had a way of figuring those things out.
The above account is a dramatization that is loosely based on reported events surrounding the Bitcoin Cash hard fork and its most well-known supporter, Roger Ver. As such, it should not be taken as factual.
Dear Readers,
In our last conversation, we focused on aspects of Bitcoin’s decentralization that get far less attention than they’re due: the lack of leaders on the blockchain and its open-source code. Both characteristics contribute to securing Bitcoin’s future by ensuring that users are always able to access Bitcoin however they choose, no matter what attackers may try.
To prove that point, we discussed the smear campaign that was recently launched by Greenpeace and the blockchain company Ripple against Bitcoin and its Proof of Work consensus mechanism. That campaign incorrectly asserted that the Bitcoin blockchain was controlled by a handful of miners, exchanges, and developers who could unilaterally change Bitcoin’s code if they chose.
Although that smear campaign is still playing itself out, I’m highly confident that history will show that the campaign and its backers will have had no ability to forcibly alter the Bitcoin blockchain. Why? Because others have been down that path before and they failed. As the saying goes, history may not repeat itself, but it often rhymes.
A Battle Over Blocksize
For a reminder that Bitcoin is controlled solely by its community of users, one has to look no further than the Bitcoin hard fork from which the Bitcoin Cash altcoin was born.
The Bitcoin whitepaper begins with the following description of the blockchain’s purpose:
A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.
In reality, there are different ways that the idea of “electronic cash” can manifest itself, and a dispute on that topic within the Bitcoin community simmered over the course of a couple years leading up to late 2017. On one side were community members who staunchly supported the idea of small blocks and the decentralization they afforded, regardless of the resultant per-transaction cost or overall transaction throughput on the base-layer blockchain. On the other side were supporters of a proposal to increase the blockchain’s block size to lower transaction costs and increase transaction capacity on the base-layer blockchain, no matter the consequences of the subsequent centralization that would happen.
The vast majority of the Bitcoin community was in favor of keeping blocks small, which would ensure that the memory requirements to run the blockchain would remain lower and enable as many users as possible to operate miners and nodes. However, several key developers, large mining operations, and well-funded cryptocurrency exchanges supported the large-block proposal.
Does that sound familiar? Greenpeace and Chris Larsen of Ripple would have you believe that the big blockers were able to force everyone onto their desired code base against their will. But is that how history played out? Definitely not. When the big blockers tried to enforce their plans on the blockchain, the rest of the Bitcoin community simply opted out of using the offending code base. That split resulted in the big blockers creating an altcoin version of Bitcoin called Bitcoin Cash.
The intervening years have not been kind to Bitcoin Cash under various metrics when compared to Bitcoin. Bitcoin’s per coin value and market cap have soared to incredible heights, while Bitcoin Cash’s value has stagnated and even dropped considerably when inflation of fiat currencies is factored in. Similarly, websites dedicated to helping users explore each respective blockchain show massive differences in the amount of computing power and transactions processed, with Bitcoin solidly in the lead in both categories. These facts demonstrate the reality that the community made its choice on which blockchain codebase to use, regardless of what well-funded and supposedly powerful entities in the community demanded.
Do not allow yourself to fall victim to those who would have you believe that Bitcoin can be manipulated and controlled. Do your research diligently and I am confident that you will find that the Bitcoin revolution is open to all and controlled by no one.
Read the next article in this series:
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This is not financial or business advice. This newsletter and related content are for informational purposes only. Cryptocurrencies and digital assets can be risky. Always do your own research before making any sort of investment.
Letter #102: Bitcoin and the Story of Antifragility #6 - Power to the Users (Bitcoin and the BCH Hard Fork)