Bitcoin is heading straight for a controversial code change that would split the digital currency into two different versions. Everyone in the bitcoin community is taking sides, and its Canadian users aren't sitting on the sidelines of the debate.
On Wednesday, a group of 16 exchanges, merchants, and individual traders from across Canada released an open letter unequivocally condemning the most popular proposal for implementing the change, known as Bitcoin Unlimited.
"We are on the ground, and we physically interact with bitcoiners all day, or over the phone," said Francis Pouliot, CEO of Quebec-based bitcoin exchange and development company Satoshi Portal, in an interview. "We are convinced that if there are two denominations of bitcoin, there would be absolute confusion."
The issue at hand is basically a battle between two implementations of bitcoin. Core is the "original" bitcoin that we all know, and Bitcoin Unlimited is a new version that supports larger "blocks" of transaction data that are uploaded to the blockchain. The idea is that bigger blocks would allow more people to use bitcoin, and faster. If enough people use Unlimited and signal their intent to support larger blocks, Unlimited will split off from the Core blockchain. This would essentially create two competing versions of bitcoin in what's known as a "hard fork." Basically, a new coin.
"We have all agreed to not list the [Unlimited] coin—ever," said Pouliot. "As bitcoin businesses, we've tied our brand to bitcoin, and we had certain expectations and standards in mind when we did that. Those aren't necessarily the same standards that we believe we can expect from Bitcoin Unlimited."
A hard fork in itself isn't a bad thing, but a hard fork that becomes mired in disagreement could leave a substantial number of people on both chains, causing economic and technical problems. According to the open letter, Bitcoin Unlimited is an example of such a controversial hard fork, and if it occurs, the signatories will not list the new bitcoin as an asset on their exchanges.
"We don't want to offer anything that we see as a defective product, and would lead to problems for our users," Pouliot said.
As an example of how contentious this hard fork really is, just last week a separate group of major (non-Canadian) bitcoin exchanges released a letter stating that they would support and list the new Unlimited version of bitcoin, albeit with a few conditions.
One of the main issues with Unlimited, as Pouliot and the other signees see it, is the risk of a "replay" bug that would duplicate transactions from one chain, onto the other. This affected the hard fork of bitcoin alternative Ethereum last year, causing some initial chaos. Pouliot said he and the others are also concerned about Unlimited's code, since a bug briefly knocked network nodes offline earlier this month.
Still, Pouliot and the other signatories say they are open to a hard fork, as long as it isn't contentious and has rock-solid code. From their perspective, however, that's not Bitcoin Unlimited.
But, as with most things in bitcoin, there's massive disagreement on this point, and it's really anybody's game right now. Still, Pouliot said, "We need to be prepared."
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