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A pragmatic take on the upcoming Bitcoin Cash split

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Avatar for Mr-Zwets
Written by   36
2 days ago

On November 15th, in about a month, the Bitcoin Cash blockchain will experience a split (again, just like on November 15th 2018 with Craig Wright and what eventually become known as BSV). To catch up see "the year 2020 in Bitcoin Cash so far: a detailed history". leading image from hackernoon

A Monero-Zcash analogy

A helpful way to to think about the difference between both sides on the IFP is the rivalry between the two prominent privacy coins. Both coins have taken a different approach to funding with the Monero team being heavily donation reliant and Zcash using the protocol to fund development. The analogy also holds well because early in the Monero history the primary new developers took over the reign of the old ones who were suspect of corruption, Zcash instead launched much more analogous to a startup, with development heavily centralized around a company-important to add is that they are stepping away from that model more and more with the protocol now funding three different non-profits. Despite having the same goal of furthering private commerce and having important areas of overlap such as being POW, there is undeniable hostility between the two camps. Obviously there's many variables at play including different levels of adoption, ease of integration, etc but regarding the privacy aspects most would agree, I think, that Zcash is superior technology yet has a lower value as measured by total marketcap. This fact, that well funded research and development with scalable infrastructure does not guarantee success, should always be remembered.

A minority softfork

The most popular argument against the different iterations of Bitcoin ABC's IFP was that it is like a tax in that it is not opt-in but compulsory within the framework of bitcoin from the viewpoint of a full node (this argument is best laid out by Vitalik in his 2017 "Hard Forks, Soft Forks, Defaults and Coercion"). The argument however does not hold in case of a minority softfork, in which case the mechanism IS opt-in. As both the Coinflex and CoinEx futures markets indicate the Bitcoin ABC side will be a small minority. This point is important because the whole comparison to government is a counterproductive framework, instead it is better to see this minority fork as entrepreneurship. Having cleared up this brainfog, we can take a look at the second most important argument: (perverse) incentives.

Incentives

Both sides claim understand the incentives, and that those would either lead to instantaneous corruption and bribery or to harmonious alignment. With this point being so important and nuanced- surely not many would argue that it has lead to either extreme in the case of Zcash- I think some intellectual humility is in place. If the goal is P2P electronic cash for the world and it is not obvious what the best way to achieve that given the challenges is, competing approaches make sure that both are atleast tried and that the better approach will reveal itself. It is hubris to think one can plan out how a free-market monetary system would work because it is only through competition and the free market process that it emerges.

Tribalism

Monero and Zcash despite having the same vision and other aspects in approach in common suffer from tribalism. One could have hoped that given that both sides of the November 2020 split will be identical protocol wise except for the IFP and given that they were on the same same team before with the same common enemies that an amicable split was possible. Human nature being what it is this was of course a fantasy. There were meme campaigns and new ad hominems devised by the one side and flying allegations of corruption, looting, theft and rentseeking by the other. The level of discourse did not get better with huge donations to the most provocative claims. What certainly did not help the situation was the way previously exemplary community member getting a lot of pushback with their attempts at community crowdfunding through flipstarter which ended up being unsuccessful.

Different visions?

Bitcoin ABC's vision is easier to articulate because, well, it's the vision of a single company. Bitcoin ABC emphasizes that scalable infrastructure is a necessary - but not sufficient- prerequisite to achieve P2P electronic cash for the world. Because of this they prioritize tackling the biggest and most disruptive protocol changes first. What ABC, or more precisely Amaury Séchet, set out to achieve in a journey to the moon in 2016 and in A future vision for Bitcoin Cash in 2018 was to implement the solutions to the three major bottlenecks of the protocol: CTOR, UTXO commitments and pre-consensus.

The vision of the Bitcoin Cash No-IFP chain, which looking at the futures will retain the majority of the value, certainly includes that no part of the coinbase reward should ever be redirected but instead that infrastructure funding will work itself out when the project is successful.

In contrast to ABC the other BCH dev teams do not seem to plan on prioritize the biggest consensus changes first, with many even being very critical of the disruption caused by the CTOR change and the 6 month hard fork schedule. This impression is well illustrated by Jonathan Toomim's recent appearance on the new BU podcast in which he talked about his research regarding the first bottlenecks that pop up when trying to scale the system. His result are very interesting, because he overturns what was previously identified as the problem, and indeed very important but one can not help but notice the difference in approach. Toomim has also been critical of ABC for not writing any code to take advantage of CTOR, something which he did with Xthinner, but this seems to be a misunderstanding of what ABC, or Amaury, set out to achieve.

Besides the two previous points there seems not much unified vision, with previously discarded ideas like a miner enforced tokenscheme and shorter blocktimes being discussed again as possible improvements.

This is all I wanted to say, I had avoided writing an article about the matter up until now but the main takeaway is that you don't have to choose tribes, especially as an enthusiast, you can like BOTH Zcash and Monero or in this case, support both sides attempting to bring a P2P electronic cash system to the world. Thanks for reading.

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Written by   36
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Comments

The vision of the Bitcoin Cash No-IFP chain, which looking at the futures will retain the majority of the value, certainly includes that no part of the coinbase reward should ever be redirected but instead that infrastructure funding will work itself out when the project is successful.

I'm not sure that is true. Especially if the BMP is successful. I see no reason miners couldn't vote to fund developer X with N% of the coinbase from block Y through block Z. This is a LOT different than an implementation claiming ownership of the chain and mandating payment in perpetuity with no built-in accountability and suggesting that it can always be changed in the future.

$ 0.00
5 hours ago

You pick zcash and monero, but this is very anecdotal. Ethereum is worth more than 10x the both of them combined, and it had a premine. The fact of the matter is that people dont buy something if its morally right to, whatever that means, but people buy it if they want it. They probably dont care about the IFP and just care about the usecases a coin has.

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2 days ago

You're right that people won't buy something based on what is morally correct. They may not care about IFP, but it doesn't change the fact that it leads to corruption and centralization.

$ 0.00
2 days ago

There is little evidence for this conclusion used to justify a risky course of action.

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1 day ago

ZCash has been total shit investment and the team behind that has received the lions share of the "IFP"-style funding have sold a large part of it eroding the price and basically made it a quasi-ponzi. Sure, ZCash works and the tech works, but from an investment standpoint it is just as unsound as XRP.

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12 hours ago

WOW. You have seen past much of the noise. I am not sure the analogies make the discussion of the situation more clear than it would be if discussed without them, but maybe it allows readers to see it from a less involved perspective.

I think you are correct about the difficulty of an amicable split being human nature. What you may not believe is my theory that much of it is due to the greed (human nature) of a third party meddling with and fomenting our infighting to make it much worse than it need be. I could be mistaken, but it has seemed pretty obvious for months to me.

$ 0.00
1 day ago

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$ 0.00
2 days ago

sure :) thanks for the compliment

$ 0.00
2 days ago

Most welcome dear...

$ 0.00
2 days ago

nice post

$ 0.00
2 days ago