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If the IFP in Bitcoin Cash activates, it suggests that cryptocurrencies are doomed to centralization

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Written by   306
1 year ago

There are many arguments against cryptocurrencies, and this is one of them:

How can it be decentralized when the developer with the GitHub repo can give themselves any number of coins, arbitrarily and without recourse?

The answer has always been “don’t worry, miners will reject it” and “they will just fork off from the rest of the network”.

In about a week, this theory will be tested for real in Bitcoin Cash because this is exactly what ABC is trying to do by diverting 8% of the blockreward to themselves. (The only difference is they use Phabricator instead of GitHub).

What harm can a coder do?

Some might say hey, the important thing is miner decentralization, so that transactions cannot be double-spent. Whatever code a developer introduce hardly matters, right?

But it turns out that developers can do an incredible amount of damage. If left unchecked they can for example:

  • Block necessary upgrades (like Bitcoin’s blocksize increase).

  • Censor transactions (see the aftermath of the DAO hack).

  • Push through poor code that can be abused to harm the network (the DAA).

  • Arbitrarily change the emission schedule (what ABC tried to do with Grasberg).

  • Assign themselves an arbitrary amount of coins (the IFP).

Or in other words, with the code they write (or don’t write) they can completely destroy everything that makes a cryptocurrency valuable, and this is why safeguards against the developers’ power are so important.

Historically, the reference client’s code is law

While I’d like to think that the community would reject Bad Code™ so far the opposite seems to be true.

Early on in Ethereum’s history people subscribed to the idea that “code is law”, and that the rules you inscribed into a smart contract made outdated things like human decision unnecessary. But this was thrown out the window after the DAO hack, when a bug in a smart contract was exploited and the Ethereum developers moved to quickly freeze the funds, effectively censoring transactions on the chain.

Preventing the DAO theft isn’t morally wrong, but why weren’t similar hacks counteracted in a similar manner? Maybe because they were too small or didn’t affect the Ethereum developers enough for them to care?

Freezing of funds is an arbitrary human decision that cryptocurrencies were created to remove. Otherwise we’ll just end up with the same problems that plague PayPal and VISA, where money of innocent people are frozen all the time. Yet in Ethereum, the community followed the reference client.

Another example is how Bitcoin Core managed to block the blocksize increase in Bitcoin, even though an increase to 2 MB had broad support by miners and the community. The reason they managed to do this was that the miners ultimately decided to be passive, and to wait for Core to implement the 2 MB increase, which of course never happened.

The third example is how in Bitcoin Cash every change has been dictated by ABC (so far at least). By threatening a fork they managed to push through their preferred changes like the DAA and CTOR, while blocking others like on-chain tokens.

This pattern where the reference client always dictate the rules is repeated all over in the cryptocurrency space, raising serious decentralization concerns.

(The single counterexample I could find is how Monero replaced the original developer team with a new one, which happened early in Monero’s history when it was still very small.)

What if the IFP succeeds?

It seems unlikely that the IFP would activate in BCH, because all the metrics we can come up with shows a clear preference for the no-IFP / BCHN side:

And if the IFP still succeeds it means that all this is meaningless and that the code of the reference client trumps all. It shows that cryptocurrencies cannot break out of developer centralization, and we might just as well replace proof-of-work with proof-of-GitHub or proof-of-Phabricator.

What if the IFP fails?

But if the IFP fails this would be the first time in cryptocurrency history that a reference client of a major cryptocurrency has been kicked out in a “hash war”.

This is huge because it proves that Bitcoin Cash is resistant to rogue developers and can kick them out if they try to change the coin supply, redirect the blockreward to themselves or something else that could cause serious harm.

It shows that cryptocurrencies aren’t necessarily centralized around a developer team, and that the hope of truly decentralized peer-to-peer electronic cash is still alive.

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Bitcoin Unlimited Hosts Week-Long Hackathon to Bolster the Future of Finance Bitcoin Unlimited Hosts Week-Long Hackathon to Bolster the Future of Finance

On December 2, 2020, the organization and full node project Bitcoin Unlimited is hosting a week-long hackathon that aims to build the future of finance by leveraging the decentralized crypto network Bitcoin Cash. The event dubbed “Coinparty 2020” aims to get the top crypto talent in the world to compete for $17k worth of bitcoin cash prizes.

The cryptocurrency community has grown massively in 2020, and there’s been a number of new and exciting innovations this year. Bitcoin Unlimited (BU) wants to bring a number of useful innovations to the Bitcoin Cash (BCH) network and the organization is hosting a hackathon to bolster this goal.

The event is called “Coinparty 2020” and it’s not only supported by BU, but also the team of peer-to-peer electronic cash proponents Satoshi’s Angels and the firm General Protocols as well.

“Join our hackathon to collaborate and compete with top crypto talent from around the world,” the event’s web portal details. “We welcome talented people from all different skill-sets including: developers, marketers, designers, and business people. CoinParty is for anyone who wants to build amazing blockchain tools and products using cryptocurrency,” the website adds.

Bitcoin Unlimited Hosts Week-Long Hackathon to Bolster the Future of Finance

The $17k worth of bitcoin cash (BCH) prizes will be split into

$ 0.00
1 year ago

We learn many other information from your post.important information really heaps for us.thank you so much sir for share this article

$ 0.00
1 year ago

Excellent

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1 year ago

Beautiful one

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1 year ago

💥💥💥👍

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1 year ago

Greatest post it is worth mr marc de messel tip . Congratulations wish you more tips like that

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1 year ago

Nice article

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1 year ago

Good content please post more articles

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1 year ago

Great article

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1 year ago

oh my God you have got 300+$ .you are really creative dude

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1 year ago

It is clear that IFP is a test for the decentralization of BCH and also a test also for the community, I do not think that a single person can with more than 1000 people in the Bitcoin Cash community.

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1 year ago

Coinbase rule is a huge concern. But the DAA doesn't have to do with that directly. An upgrade is ok, splitting to syphon funds to the will of a team (or a single person and friends) is a real turn to centralization that we where trying to avoid all this years. Support BCHN for now, we need to overthrow IFP so anyone that's watching and thinking to do the same, learn a lesson.

$ 0.02
1 year ago

All of us always wants a decentalized one. That fork must fail if we want to continue the decentralisation we have with bitcoin cash.

$ 0.01
1 year ago

Great article amagnificent clarification and good writing.. it's shocking from the start of reading.

It is clear that IFP is a test for the decentralization of BCH and also a test also for the community, I do not think that a single person can with more than 1000 people in the Bitcoin Cash community.

$ 0.00
1 year ago

Great analysis! Countering this attack means that it is free market money, and that people want sound money.

$ 0.00
1 year ago

A magnificent clarification and good writing.. it's shocking from the start of reading.

It is clear that IFP is a test for the decentralization of BCH and also a test also for the community, I do not think that a single person can with more than 1000 people in the Bitcoin Cash community

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1 year ago

The great article

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1 year ago

Nice jobe

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1 year ago

Nice to see you have published an new article . A lot of important information has been included in your article. Thank you.

$ 0.01
1 year ago