Bitcoin, You’re Doing Amazing Sweetie
Despite the fork.
Image: Shutterstock. Edit door auteur
Bitcoin is a committed shitshow known for its chronic infighting. This week appeared to be no different: in a last-minute twist to a years-long debate that seemed to have finally reached an amicable end, a "hard fork" split bitcoin into two versions on Tuesday.
Now, there are two different bitcoin implementations—the original, and a new one called Bitcoin Cash—to suit two very different ideas about how the technology can scale up to handle worldwide adoption. Bitcoin proper is changing how data is bundled to reduce network congestion, and Bitcoin Cash enlarged the size of data blocks to a max of eight megabytes (up from bitcoin's one). It's exactly the kind of entertaining bullshit bitcoin observers have come to expect from the virtual currency, and it's tempting to focus on the split as bitcoin's main event.
But if you take a step back, bitcoin also had some surprising recent victories that bode well for its future.
The thing about a "hard fork," the technical term for splitting bitcoin, is that it's actually pretty easy to do. You don't need the whole bitcoin community or even a significant fraction of it to support you in order to fork, you mostly just have to write some code. Code is easy, but people are hard. People have beliefs, material investments, and worse—egos. When the bitcoin "scaling debate" kicked off in 2015, a hard fork was a looming prospect from the jump. And in a system that is itself a form of self-fulfilling prophecy, as soon as it was spoken, it was virtually guaranteed to occur.
Far more impressive is the fact that the vast majority of bitcoiners actually did come together to support a solution to the scaling debate in the form of a rule change called "Segregated Witness."
It's hard to understate how deeply divided the bitcoin community was in 2015, when the debate about how to lessen congestion in the bitcoin network started. A portion of the community didn't believe that any change was needed in the first place. Former leaders of protocol development were driven out of the space altogether. It became, as some put it, a "civil war." But two years later, attitudes changed, and everyone started to agree that a change in bitcoin's code had to be made. After numerous failed proposals, spam attacks, and arguments, a dominant solution emerged: Segregated Witness.
Segregated Witness, or segwit, was a watershed. It wasn't perfect (it only increased space inside bitcoin's "blocks" of transaction data slightly), but it had a wide base of support. The community rallied to enforce segwit with a series of deadlines and proposals, and everyone fell in line. Segwit was adopted with, eventually, 100 percent support from the "miners" who dedicate server farms to maintaining the bitcoin network.
The Bitcoin Cash hard fork, in fact, was initially coded as a contingency plan if this community initiative failed to deliver. But it didn't. It worked. All of the many frustrating, frequently impossible people in bitcoin had actually agreed on something.
The fact that a small group of developers and miners decided at the last minute to give a big middle finger to everybody else shouldn't distract from that. It is, frankly, incredible, and a bunch of people who don't trust each other coming together to make a decision is arguably the entire point of bitcoin.
This proven network solidarity is likely the reason for bitcoin's second notable success: the Bitcoin Cash hard fork had a negligible effect on bitcoin's value.
Bitcoin, if you missed the news, is is reaching never-before seen prices in its nearly decade-long history. And 24 hours after the Bitcoin Cash hard fork, bitcoin is still trading for far more than it was worth in mid-July: around $2,700 USD. Bitcoin valuation can be an indicator of many things, but perhaps chiefly of people's optimism or pessimism regarding the technology. And it seems like people are feeling just fine.
None of this should be taken as denigrating Bitcoin Cash or its promise—if nothing else, it's absolutely fascinating. And over the next several weeks or months, we'll start to see if enough people get on board to turn it into a thriving ecosystem to rival bitcoin. More importantly, we'll be able to observe a live test of the competing scaling ideologies of bitcoin proper and Bitcoin Cash.
For now, however, bitcoin has sailed through another crisis with nary a scratch.
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