hard fork

Coinbase CEO Bets $5,000 Bitcoin Hard Fork ‘Will Be Just Fine’

Coinbase CEO Brian Armstrong feels pretty confident about the outcome of a block size hard fork. In fact, he’s willing to bet $5,000 that “Bitcoin’s first hard fork works out just fine.” In a Medium post by the Coinbase founder, Armstrong declares that the code will not be a split and is merely upgrading.  

Also read: Jaxx: The new Fleet of Bitcoin & Ethereum Wallets 

I’m not 100% sure I’m right, but I am sure enough that I’m willing to bet $5,000 (payable in any equivalent amount of crypto or fiat currency to the charity of the winner’s choice) that bitcoin’s first hard fork will be an upgrade of one single currency, not a split, and everything will work out fine. I think the economic incentives are aligned for that to happen.

— Brian Armstrong, CEO of Coinbase

 

The $5,000 Hard Fork Wager

Hard ForkBrian Armstrong has been very vocal about the block size debate and would like to see an increase. A few arguments have spurred when Armstrong had announced that Coinbase would test the XT code and the company was temporarily banned from the wallet page at Bitcoin.org.

Recently, Armstrong has been a supporter of the Bitcoin Classic implementation and has told the public that Coinbase will back this change as well. However, there are some in the community and development space that are against a hard fork. People with the opinion that things will go drastically wrong have possibly invoked the Coinbase CEO to start a wager. Armstrong gives detail to some of the arguments against a hard fork within his blog.

“I don’t mean to call those people out in particular, they are certainly not alone in their view — they are just recent examples I saw this morning,” he said.

Armstrong then goes into the rules of his wager and what he believes “everything will be just fine,” means. The stipulations are as follows:

  • At the moment the network upgrades (or forks), 95% or more of all hashing power will be on a single chain. This will be true regardless of what threshold is used to trigger the upgrade — for example, Bitcoin Classic uses a threshold of 75%, and other forks could use an even lower threshold — but, irrespective, 95% or more will be on a single chain by the time the network upgrades.
  • At the moment, the network upgrades (or forks), 95% or more of all consumer wallet and merchant companies (by number of users) and exchanges (by trading volume) will support the new version. This may be tough to measure, but for example, we can look at public numbers of users for major wallet and merchant software, and the trading volume is public on most exchanges, so I think we can reasonably approximate a 95%+ threshold.
  • Two days after the upgrade (or fork) takes effect, the bitcoin price will be higher than it was 1 month prior to the upgrade (or fork) happening.

The “winning fork” to Armstrong means the longest chain coming from Satoshi’s original start. He defines the “moment the network upgrades” to when the proposed changes take effect.

Armstrong says he will keep the wager going for 12 months, and if the hard fork does not occur then obviously, there will be no winner. The Coinbase CEO believes that there will be a fork within that time frame. The Bitcoin community members will have to have over 70% of the hash power within the network, or a code change will not take effect. Armstrong gave a shout out to the tech-writer Sam Altman for giving him the inspiration to announce this wager.

What do you think about Brian Armstrong’s bet? Let us know in the comments below!


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