How Bitcoin Cash Can Avoid the Same Mistakes as Bitcoin Core, Part 2
The following opinion piece was written by Jonald Fyookball.
In part 1 of this series, I highlighted the importance of education. A community that is educated will be less influenced by propaganda. The second principle is that of clarity. The community needs to be “on the same page”. There is never going to be a perfect alignment of opinions among a large group of people, but… we need to have the same basic vision for Bitcoin Cash.
Also read: How Bitcoin Cash Can Avoid the Same Mistakes as Bitcoin Core, Part 1
It’s Not Complicated, Bitcoin Cash is Money
If you have something of value to offer me, and I’m willing to pay for it, then I send you bitcoin cash. No middleman and low fees.
Done. Instantly.
That’s the vision.
The Challenge of Distributed Consensus
In bitcoin, everyone needs to be using the same set of rules — also called consensus rules, network rules, or protocol rules. What happens when we need to upgrade or change the rules?
We have this nifty thing in bitcoin called “Proof of Work”. It secures the network, and it keeps everyone on the same set of rules.
It’s also a voting mechanism: The miners can vote on changing the rules because the “longest” chain (the chain with the most accumulated proof of work) is accepted by convention.
In other words, the ultimate decision as to what rules the network follows are in the hands of the largest combined group of mining power. This is commonly known as Nakamoto Consensus.
Forking Off
Because of Metcalf’s Law, commonly referred to as “the network effect”, miners with a dissenting opinion are highly incentivized to capitulate and rejoin the majority.
Their only alternative is to “fork off” and continue mining a minority chain. This is usually not worth it, unless the direction that the majority wants to go is so radical that it’s deemed unacceptable.
…which is precisely what happened when Bitcoin Cash forked off from BTC on August 1st, 2017.
The BTC community had wandered too far off the reservation. They focused on making it cheap to run a node even if it was expensive to send a transaction. They valued being a digital commodity over being a payment system. They worked on ethereal problems of the future rather than the real problems facing us today. And worst of all, they allowed censorship to flourish.
Nakamoto Consensus works and is simple. We all stay together until it no longer makes sense.
Its limitation is that bitcoin is also a social experiment — it’s not just miners that make up the ecosystem. The miners (who are actually voting) are also trying to make the decisions they believe the developers, users, investors, and businesses will support. That’s why education (and communication) are so important.
A Magic Formula For Governance?
What happens when we think we all want the same thing, but disagree on the best way to achieve it?
For example, last year Bitcoin Cash’s difficulty adjustment algorithm (DAA) was updated but there was some contention between developers on the best algorithm to use.
It would be nice to have some governance process by which competing ideas could be resolved. So far, no one has invented a “magic formula” one-size-fits-all solution, although some have tried. For example, here is a proposal that attempts to create a simple, effective governance process.
In the above proposal, who decides if “a fix/improvement is under time pressure”, and what the “period of time” should be for voting on a proposal? Most importantly, how do you make sure miners have enough time (and unbiased information) to make the proper voting decisions?
Even though there’s no silver bullet or magic formula, that may be ok. In the end, decisions are made and Bitcoin Cash moves on.
BCH is a Peer to Peer Electronic Cash System
The Bitcoin Core approach was to avoid making any protocol changes without broad consensus. Generally, in a system that depends on consensus, there is wisdom in this.
Some would say that Core took this too far; that they impractically avoided making needed changes by looking for perfection. Others believe that this was merely an excuse and that those in control had already made up their minds against raising the blocksize.
Either way, the common thread is that the community lacked clarity around wanting to be a peer to peer electronic cash system and what that really means.
Knowing exactly what we want, and why, will help us to avoid stagnating and splintering in the future.
Written by Jonald Fyookball
Jonald Fyookball (pseudonym) is a cryptocurrency enthusiast, best known as the project leader of the Electron Cash wallet, and for a series of hard hitting articles on the Bitcoin scaling debate. Jonald is a computer scientist, businessman, investor, libertarian, and Bitcoin advocate.
What are your thoughts on educating the BCH community? Share your thoughts in the comments section below.
Images courtesy of Shutterstock.
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