The decentralised currency is in trouble because its authority is gone. Bitcoin, which has never been brought down by outside forces, is more likely to die of its own fragmentation. The next month is crucial.
Liu Hongjun|Silicon Valley
Song Wei|The editor
“The Genie is out of The Bottle.” That’s how Ted Rogers, president of Xapo, a bitcoin wallet company, describes the bitcoin civil war. This proverb comes from the story of Aladdin in “One Thousand and One Nights.” It means that once the genie is released from the bottle, it will cause irreversible negative effects on the world.
This story is best described as the current bitcoin, “monster” refers to the bitcoin expansion event.
Bitcoin is a freak in the financial history of the world. A “virtual currency” with no government credit has created numerous wealth legends. According to the current transaction price, the market value of this economic industry chain has reached 91 billion DOLLARS, equivalent to a Baidu. Its invention began with a paper, bitcoin: A Peer-to-peer Electronic Cash System, written by an account named satoshi Nakamoto. The true identity of Satoshi Nakamoto, the mysterious owner of the code name, is the greatest mystery in bitcoin history.
When Satoshi Nakamoto founded Bitcoin in 2009, he planted a time bomb — bitcoin was cheap in its early days and could send so many junk transactions for just a few cents that it maliciously inflated blocks of data to the point where normal transactions couldn’t take place. So he added a 1M block limit. After the white paper was released, his first question in the community was about the potential expansion of Bitcoin in the future.
Each bitcoin currently has a block size of 1M and can process seven transactions per second. Since 2015, as bitcoin prices have risen and transactions have been booming, this capacity has become inadequate, causing the network to become increasingly congested, and an expansion is needed.
Bitcoin is determined by a set of consensus rules, and expanding it means changing the consensus rules. Once the rules are changed, a new currency based on bitcoin’s main chain will be created, raising a philosophical and religious question — is bitcoin still Bitcoin? Who is Bitcoin?
Ideally, if the scheme is amended and everyone agrees, a new currency could replace Bitcoin as a matter of course; But when expansion plans are contested, there is a battle between computing power (the ability to mine bitcoin) and technology development, and the new currency will face an identity crisis.
If bitcoin were a kingdom, the supporters of different expansion plans would be different political parties in that kingdom. There are currently two opposing parties: the Bitcoin core development group and the New York Protocol Group. The former controls bitcoin’s code and authority over its beliefs; The latter is a coalition of exchanges and big miners that emerged from the moment the New York agreement was signed in May.
Among them is Bitmain, a Chinese company affiliated with the New York Protocol, whose final decision will directly affect the direction of bitcoin. The world’s largest bitcoin mining company split the bitcoin empire in early August by forking out its rivals and creating bitcoin Cash, a new currency based on the main bitcoin chain.
In this civil war, there is no authoritative voice to judge right from wrong, which is the root of bitcoin’s current crisis. Satoshi Nakamoto founded Bitcoin with the intention of creating a decentralized currency that was not dependent on government credit. As a result, after The disappearance of Satoshi Nakamoto, there is only democracy and no authority in the world of bitcoin, but democracy cannot solve its own problems. Bitcoin congestion has been evident since 2015, but when different interest groups are trying to solve major problems in the industry, they are bound to fail to agree.
All eyes are on bitcoin’s second fork of the year, which will take place on November 17. It pits the New York Consensus faction, which represents mining pools and exchanges, against the core bitcoin development team.
If government regulation and the development of other virtual currencies are external threats to the Bitcoin kingdom, bitcoin, which has never been knocked down by various external forces, is likely to die of its own internal strife and fragmentation. When the test of life and death, the mysterious control of Bitcoin gradually emerged. Caijing has exclusive interviews with the protagonists and interested parties in the case, trying to explain how the bitcoin split started.
The New York Consensus and Hong Kong’s past
The New York Consensus was a compromise between big miners and exchanges. And the absence of the core developer, for the next series of farce buried a long-term foreshadowing
In May 2017, representatives of 58 companies from 22 countries flew in from around the globe for a secret meeting at a New York hotel. Almost all the most valuable companies in the bitcoin industry chain, including exchanges, mining, as well as the new real power figures in the industry chain, gathered in this venue.
Samson Mow, Blockstream’s chief strategy officer, was invited to a Bitcoin expansion conference in New York, but Barry Silbert stopped him at the door. Barry is the conference organizer and a partner at VIRTUAL currency venture capital firm DCG.
“They just want to compromise with each other, and they don’t want developers to get involved, because if developers get involved, there’s no consensus.” “They didn’t represent the company or the users, and they didn’t send an email asking the developers how they could reach an agreement,” said Miao yongquan, a developer representative. He sees it as a compromise of business interests by untech-savvy businessmen.
The absence of bitcoin’s core developers sets the stage for six months of strife and drama.
To understand the tangle of interests behind the New York consensus, you need to first understand one of Nakamoto’s closest followers: Bitcoin Core.
The interest representative behind Miao Yongquan is the Core team. After Nakamoto disappeared, the development and maintenance of Bitcoin was passed from Nakamoto to Gavin Andreesen, who in turn delegated the code to four other developers, and more and more developers joined to form Bitcoin Core today.
You can think of the development team as a loose group of unpaid volunteers working in a public community on technical issues such as bitcoin security and capacity expansion. Among the many development teams of bitcoin, the Core team has won the support of more than 90% of the mining pools and exchanges because of its good technical ability and reputation.
Later, many Core volunteers joined Blockstream. Blockstream is a company that has a lot of ties to the Core team. They are the spokesmen and benefit carriers of the Core team; The Core team’s cachet in the Bitcoin community is also helping commercialize Blockstream.
In addition to maintaining bitcoin security, the Core team is responsible for finding security solutions for bitcoin expansion. Since 2014, the Core team led by Gavin has been proposing the block expansion plan, but Gavin’s plan has failed to pass the recognition of others again and again. A landmark event is that, In 2015, Gavin and his partner Mike Hearn’s proposal to increase the block size to 8MB was rejected by Core members and they were stripped of the code merge rights. As a result, there were splits within the Core team, and various cliques sprang up.
For bitcoin to scale up, it would need at least 51 percent of its computing power to survive the upgrade. That is to say, bitcoin, which has been dominated by the development team’s expansion plan, now has a more influential party — the mine.
At this time, known as “the world’s most valuable bitcoin company,” the actual control of Bitmain Wu Jihan surfaced. He controls 30% of bitcoin’s computing power, giving him de facto veto power.
Briefly summarize the focus of the controversy of this expansion plan — whether to maintain the size of bitcoin block unchanged. The two sides of the dispute are respectively: the Core team representing the Core development team of Bitcoin, and the large mining pool represented by Wu Jihan.
The Core team supports maintaining the same block size of 1M, using isolated witness on top of Bitcoin, and building an extra layer of lightning network on top of the block to solve congestion problems. Blockstrean, the developer that controls most important bitcoin protocols, can collect fees from proprietary products in the side chain and lightning network. Large mining pools represented by Wu Jihan hope that the expansion plan can expand the block size. They believe that only large blocks can fundamentally solve the congestion and reduce the commission fee, and large blocks are conducive to the centralization of large mining pools.
Isolated witness is designed to allow the blockchain to carry more transactions. The information on the block is divided into transaction information and witness information. Each transaction, if the witness information is isolated, the block can carry more transactions; The Lightning network moves transactions outside traditional blocks to ease congestion.
In the end, the secret Meeting in New York, where the Core team was absent, agreed on a two-step approach to bitcoin expansion: 1. Firstly, the isolated Witness (Segwit) scheme is started. 2. Expand bitcoin’s block size to 2MB in six months. This is known in the industry as the New York Agreement or New York Consensus.
This is almost the same as the Hong Kong agreement reached last year, except that it is implemented in two steps, rather than directly expanding the block capacity to 2MB.
On February 21, 2016, a “Hong Kong Agreement” was reached at Hong Kong’s Cyberport. The agreement was reached between the Core team and the major mine owners. But it wasn’t implemented due to a temporary breach by the Core team. The reason for the breach is that the two sides still disagree on the details and understanding of implementation. So the “Hong Kong Agreement” fell apart.
Core’s breach of contract directly angered Wu jihan. He didn’t hear about the hard fork in October and was not happy about it.
A hard fork is when a bitcoin system is upgraded and users need to upgrade their wallets to continue using it. A soft fork is one that allows users to continue using it without upgrading their wallet. The risk of a hard fork is that all exchanges, wallets, and users will need security upgrades, a major event that will move the industry chain. If a user does not upgrade his wallet and stays on the old version of Bitcoin, he will find that his bitcoin is not compatible with the upgraded version of bitcoin, and two bitcoins will be created, and confusion will occur in the system and the loss of digital assets will occur.
Miao Yongquan was the Core team’s representative at the Hong Kong Consensus. He said the Hong Kong deal was about four or five developers from Core who agreed to try out the expansion options discussed at the time. Those four or five developers didn’t represent the Core team, and the Core team didn’t break the contract and did a technical demonstration.
After the Collapse of the Hong Kong agreement, a team called Bitcoin Unlimited tried a hard fork to remove the block capacity limit and determine the block size based on market development, but was eventually forced to stop due to several bugs due to lack of development capacity. The team has now declared its support for Wu jihan’s BCC, which he believes failed in part because it was too far ahead of its time.
The breakdown of the Hong Kong agreement and the failure of Bitcoin Unlimited meant a rupture in the relationship between the core Bitcoin development team and Gihan Wu, a major Bitcoin miner.
After a breakdown with the Core team, in May the big mine owners brought in their ally, the trading platform, who had been neutral in the dispute.
When the development of Ethereum smart contract brought ICO fire, the price of Ethereum once rose to more than 2800 yuan during the same period, and the market value once reached 70% of Bitcoin. This external impact made bitcoin community have a sense of crisis. At the same time, the looming expansion problem is dragging on. So anxious miners and trading platforms reached a compromise at the New York meeting.
Barry, the businessman who started the New York Consensus, was very good at saying different things to different interest groups to get them to agree with him. As a result, some signatories do not realize that the so-called consensus has not been recognized by the Core team, which means that the consensus has not really reached consensus, and the result of their upgrading may become the “copycat coins” with unorthodox blood ties.
Some of those who supported the expansion at the time publicly withdrew from the New York agreement. As of early October this year, some mining pools, such as Fishpond and Slush, have announced their withdrawal from the New York Agreement. If those two sides are excluded, the New York deal still has 85% support.
Mike Belshe, CEO of Bitcoin security provider BitGo and an initial opponent of the conference, declined to attend because “these solutions were already discussed in the Hong Kong Consensus in 2016, and I don’t see why we should have the same conference.” Eventually, he agreed to the New York Consensus.
Ted was one of the signatories to the New York Consensus. “It took him three months to figure out what the bitcoin expansion problem was,” he told Caijing. In other words, his decision at the time left him without understanding what his signature meant.
spoiler
Bitcoin Cash, which took everyone by surprise, will compete with Bitcoin for computing power in the future. Behind the creation of the new coin is a battle between two philosophies of the bitcoin expansion plan
After the Core team refused to attend the New York Consensus meeting, it announced that it would force the segregated witness program on August 1, with or without consent, and users would choose whether to support it or not. This event is also known as a UASF, or soft fork that activates the user.
Finally, in order to attack the Core group to enforce the isolation witness, Wu jihan and bitcoin developers proposed a hard fork called UAHF. After backing up all data on the original bitcoin chain, the solution removes the upgrade of the isolated witness and the 1MB block size limit, and adopts the dynamic block size limit up to 8MB.
A hard fork in bitcoin’s main chain created a new currency. The currency is defined as Bitcoin Cash, also known as BCH or, more commonly, BCC.
In an interview with Caijing, Wu Jihan described in detail the technical principle of isolation witness, and he believes that the technology itself is not good or bad. But he insisted in August that he did not approve the UASF because of the security risks, and that he would not accept Core’s use of the technology as a political weapon against big block schemes.
This isn’t the only split in Bitcoin. Mike Hearn tried and failed to fork Bitcoin XT when he created the first large block expansion version. “The bitcoin system [mining] is now completely controlled by China,” he said, summing up the failure. The protocol has also come under intense attack as the bitcoin community has been split by the fork.
Who is the real Bitcoin after Bitcoin Cash? With bitcoin set for a second fork in November, this philosophical but practical question is hotly debated.
Among many industry insiders interviewed by Caijing, people are very concerned about how Wu jihan defines bitcoin and Bitcoin cash, which concerns the future development direction of the new currency and bitcoin’s future direction.
Wu Jihan described the relationship to Caijing as follows: bitcoin cash is bitcoin cash, and bitcoin is bitcoin. Bitcoin Cash has its own independent path and has a different understanding of future prospects and future development than Bitcoin. Bitcoin had a history with bitcoin before the fork, but after the fork it was its own separate community, that’s all.
As for what bitcoin is, Wu said: “The bitcoin community has been taken over by Theymos. A handful of four or five people around Them can change it at will. They say it’s bitcoin and it’s bitcoin.”
Theymos, as Mr. Wu refers to them, is an anonymous online code name that belongs to bitcoin’s core development team. He controls most of the voices abroad, controls some of Bitcoin’s core messaging channels and social networking sites, and has formed an alliance with engineers at Blockstream, who jointly manage a heavily subscribed channel on Reddit. Within the consortium, they also manage the email group where bitcoin technologists often discuss issues, and this is where the most important discussion of technology development takes place.
He thinks bitcoin Cash will take a completely different path next. By expanding the block, bitcoin Cash currently costs between one-thousandth and one-thousandth of bitcoin’s fees. He repeatedly stressed that his recognition of the value of money is the transactional nature of money, which can buy and sell goods, so it needs low commission fees and quick use experience.
The core bitcoin development team believes that bitcoin is a rival to fiat currencies. This theory was put forward by Friedrich Hayek, who won the Nobel Prize in economics in 1974. Hayek believed that the government could not restrain the impulse to issue fiat coins. For Bitcoins to protect private property from infringement, they need to decentralize the currency. The future monetary system needs to have many different currencies emerging, competing with each other, and no longer relying on the credit of the government.
“If you’re a developer, you want to make a good system that will last for hundreds of years and change the financial industry. “If it’s a mining pool, it’s more driven by short-term interests and the desire to make more money.” “We want to balance all groups. We don’t want one to dominate,” Mr. Miao said.
Many people interviewed by Caijing were not afraid to say anything about the expansion in August. They all discussed the birth of Bitcoin Cash with the attitude of “unhappy”, but they are seriously considering whether to launch bitcoin cash as a token on exchanges and wallets.
Underlying bitcoin Cash’s development plan is a powerful ambition to address the ease of transaction and transition bitcoin from an asset to a currency. After the fork, what bitcoin cash to do, what Wu Jihan to do, has been the focus of discussion, the circle is also full of gossip about Wu Jihan.
At the end of August, when Bitcoin was surging, a speaker opened the K-chart in a private chat with friends in the circle and said: “This round of bitcoin surging is because Wu Jihan wants to raise the price of Bitcoin and then force his OWN BCC.”
“Bitcoin XT failed to fork. In order to fork, in addition to the mining pool, you need to have an exchange that supports you to push the price up. Wu jihan has partnered with a number of Chinese exchange owners and invested in Korean exchanges himself.”
Wu jihan responded to Caijing by saying, “The total market value of bitcoin is so big, how can it be raised? I have not invested in the Korea Exchange.”
Currently, the five South Korean exchanges account for 60 percent of the BCC’s trading volume, while the United States accounts for 25 percent and China only accounts for 5 percent, according to exchange officials.
In September, along with the Chinese government’s ban on ICO, requiring the withdrawal of all ICO projects, a large number of domestic project sponsors rushed overseas: “Now someone deliberately raised the stock, because they calculated that Chinese entrepreneurs need to buy a large number of bitcoin for ICO liquidation work at this point.”
These “patriarchs” who have been working for six or seven years in the currency circle have become rich by stir-frying currency, ICO and blockchain start-up projects strongly supported by the state, and they also know who their banker is. Miao yongquan said: “The bitcoin economy is not large enough, the current power is also very concentrated, as long as there is enough money enough money does not rule out the possibility of market manipulation.”
According to coin.Dance’s October bitcoin vs. Bitcoin Cash mining chart, BCC’s yield was 14.4% lower that day than BTC’s, which was 6% harder to mine.
Analysts said that in the figure, BCC’s mining income significantly exceeded BTC’s several times. In extreme cases, BCC chain’s computing power once reached 3.5E, while BTC chain only reached 4.5E, diverting nearly half of BTC’s computing power, which would lead to significant congestion of transactions on the Bitcoin chain. The one-hour confirmation fee can be as high as 0.003 to 0.004BTC.
One of the oddities is that 90 percent of bitcoin mining is done under real names, while more than 70 percent of bitcoin cash mining is done anonymously. This means that many people are supporting the BCC anonymously.
After the Chinese government introduced a variety of adverse measures against bitcoin, the value of the currency briefly fell to more than $3,000. With the sword of Darkmus facing a fork, confidence in Bitcoin hit rock bottom at that time.
The personage inside course of study thinks, unless the currency forever guarantee mining yields higher than the BCC, otherwise once because expansion, bifurcate, price nature again failed callback, lead to the currency currency prices, many miners will choose to continue to dig BCC, leading to the currency more congestion, more loss of confidence in selling the currency and the miners more transferred to the BCC, Creating a vicious cycle that led to the collapse of Bitcoin.
“BCC’s computing power and yield are precisely controlled at a price slightly below bitcoin.” That keeps bitcoin going, says one key person. This may explain why Wu Jihan is so eager for a hard fork in bitcoin. This precise control is what everyone is worried about — even if he did not do evil, he has the ability to control.
The owner of the bottom mine
To the unease of the bitcoin community, as Mr. Wu gets more computing power, he will become more vocal, a departure from the original intent of bitcoin’s decentralization
In the Dalat economic development zone in Inner Mongolia, the walls of eight blue factories are emblazoned with the words “Bitmain,” referring to the company. It was once China’s coal heartland. Today, the town’s factories are packed with machines and cooling fans.
This is just one of many mines in Bitmain, and there are many more in Xinjiang and Yunnan. Locals say they have no idea what the machines do or how they work, but they earn a relatively high income from them.
The company behind the mines is Bitmain, which develops its own chips designed specifically for bitcoin and produces and sells 70 percent of the mining machines in the industry. The mine’s computing power is pooled into virtual mining pools, and the company also operates pools, which together account for about 30 percent of the world’s computing power.
Wu Jihan, 31, is baby-faced, thoughtful and adept at leading public opinion. After graduating from Peking University in 2009 with a double degree in economics and psychology and working as a venture capital analyst, He was introduced to bitcoin in May or June 2011 and spent all his savings buying it. He later co-founded Babbitt, a bitcoin social media platform, with Hwang Bin Duan and Mr Chang. He led the translation of Satoshi Nakamoto’s thesis and is known as the “evangelist of Bitcoin.”
He is also the founder of Bitmain, the world’s largest bitcoin mining company, which owns the world’s largest bitcoin mining pools, AntPool and Pool.btc.com, and has invested in ViaBTC and opened a subsidiary, Connect, in Israel. There was media speculation that the monthly net profit of Bitmain in the first half of this year was 30 million DOLLARS, and the net income in the first half of the year exceeded 1 billion yuan.
According to satoshi Nakamoto’s theory of how bitcoin works, the global computing network has produced 50 bitcoins every 10 minutes since 2009, declining by half every four years. By 2017, 12.5 bitcoins were being produced every ten minutes, 1,800 bitcoins a day, so Bitland could mine 540 bitcoins a day. Based on bitcoin’s current price, bitcoin Main’s mining pool produces more than $3 million worth of bitcoin a day.
The cost is mainly hardware cost input, site rental and power consumption. The bitcoins produced by the pool are distributed to miners based on their contribution to computing power. These pools are the upstream producers of Bitcoin, and they have the power to decide how to operate and which currency to mine. If the miners do not agree, the mining rights can be transferred to another pool.
But equally unsettling for the bitcoin community is the fact that as Mr Wu’s pool computing power grows, his voice will grow, contrary to bitcoin’s decentralisation.
Roger Ver, also known as the “Bitcoin Jesus”, recently opened his own mining pool. When asked why he wanted to get involved in the pool business at this time, he told Caijing, “Because if you want to have a bigger say in expansion, you need to control more computing power.”
Earlier this year, a ban on ICOs and a halt to trading on domestic bitcoin exchanges also increased anxiety about when the government would bring mining pools under its control.
Mr. Wu said he had not received any regulatory signals from the government. One of the people who entered the coin circle with Wu Jihan said that now the country is engaged in blockchain innovation, many science and technology parks are the first technological innovation enclosure, and then attract start-up companies, and finally earn rental income; Start-ups are also enjoying various subsidies. Some of Bitmain’s mines are also looking for cheap electricity through incentives, and a key element of mine location is where to find cheap electricity, often close to cheap power plants.
An industry source said that Bitmain had a tense relationship with the Xinjiang government because it could not manage the electricity problem. Wu Jihan responded that he was unaware of the matter. A former mine worker in Yunnan said the mine was shut down due to a power outage for unknown reasons.
In other words, these domestic mines face regulatory challenges, local relations and the stability of electricity consumption.
Roger Ver is a big supporter of the Big Block scheme and Wu Jihan. He was very close to Wu Jihan, who also studied economics. One of them translated Satoshi nakamoto’s papers in Japan and the other in China. He says he has put more money into BCCS and owns more BCCS than Bitcoin.
The interests behind the entanglements in the Blockstream team and Wu Jihan attack each other exposed.
Blocksteam accuses Wu of maximizing the benefits of large mining pools, a control that will eventually lead to the centralization of Bitcoin; Wu Jihan said that Core team is a group of people who control the public opinion of bitcoin community and do their utmost to slander him. The Core reason of their opposition to big block is that only when bitcoin is blocked, all kinds of “fake coins” invested by Blockstream will soar and build a trading market among “fake coins”.
According to Roger Ver, core developers are a group of people who are immersed in a technological utopia, who don’t understand how business and economics work, and money is only valuable if it is exchanged and used. Therefore, he supported Wu Jihan.
Price fight faith
The real split will come in November, when bitcoin’s core developers face off against the New York Protocol faction. Whether it’s computing power, price, belief, any problem on either side will cause bitcoin to collapse
All eyes are on bitcoin’s upcoming second fork at the end of November. It is a battle between The New York Consensus faction, which represents mining pools and exchanges, and Core, the Core developer of Bitcoin.
The Core team has officially stated that they will not support the 2M plan at the end of November and will continue to use the 1M block cap rule. The Lightning network is said to be in place and is already being tested on Litecoin, but once applied to Bitcoin, it will quickly solve the congestion problem; The New York Consensus decided to implement a 2M hard fork at the end of November, and the soon-to-be-born currency is known in circles as B2X for short.
This showdown makes Bitcoin particularly vulnerable, whether it is computing power, price, belief, any problem, directly lead to the collapse of Bitcoin.
“A fork event in November is definitely going to happen. The key is how stable the outcome is in the long run.” Wu Jihan said.
Caijing reporter interviews many people think that, before the BCC split, a lot of people after signing the agreement in New York and had repeatedly and compromise, without the approval of the core development team means that new distribution to money no credibility, the hard bifurcate could have been prevented, bifurcate events have great probability in November will not happen.
“After BCC is separated, Wu Jihan should use some of his calculation power to support the fork in November, when the main chain is split again, B2X and BTC competition, things are more chaotic, he can push BCC up. Without BCC, Wu jihan would not have dared to do this.” Miao yongquan said.
How to choose between BCC and B2X to be split? Wu Jihan also told Caijing that he would strictly implement the New York agreement in the future. “I would initially put all the computing power into the New York consensus, but most of the computing power in our pool would come from other miners,” he said. “We had a dilemma between implementing the New York Agreement and maximizing the profits of the miners. Plans are under way to ensure both.”
It was intended to solve the problem of bitcoin capacity expansion, but if bitcoin is only 60% of the current computing power, the block speed will be 60% of the previous, which will make the bitcoin network more congested. If B2X is overwhelmingly supported by the New York rules in November, it will likely result in less than 51% of the original bitcoin’s computing power.
When a computer wants to survive, it must initiate a program called replay protection. Jeff Garzik, CEO of Bloq, one of bitcoin’s core developers, recently said publicly that he refused to enable replay protection for Bitcoin.
“I don’t know where the confidence in Core comes from,” says one industry insider. “Maybe they just want to change the code when it’s about to break.”
Will Bitcoin collapse because of a fork? The question was answered on both sides of the conflict: “In the event of a bitcoin price crisis, Core will adjust the consensus rules of mining in time to continue the hard fork to stabilize the market.”
The hard fork is a battle between two groups, two technology routes, and it’s price that really decides who wins. Only the side with the higher price, mining will bring more yield, will attract more support. The development teams on both sides are going to have a very difficult time.
Every time the market wails in the run-up to a bitcoin fork, the price rises. An interesting phenomenon in the interview is that for the prediction of the same thing, people say completely different things in the period of rising price and the period of falling price. When the price of Bitcoin fell, everyone was wondering if this fork would happen, if it would cause a crash; On the upside, there was optimism that every hard fork would lead to higher prices.
In Wall Street’s criticism of Bitcoin, the virtual currency’s opponents argue that it is a “tulip bubble” because it does not provide value, and that the entire ecosystem thrives on whether Bitcoin can build itself into a good product — safe, stable and functional.
Miao believes that in the long term, neither bitcoin cash, which is not approved by core developers, nor the new coin after the fork has any hope. Digital currency needs to be maintained by the development team, and soon bitcoin’s smart contract system will come online. “A digital currency without a development team can initially push prices up through the market, but a product without new features will not look good in the long run.”
Indeed, the price of digital currencies is closely related to the flourishing of these open source project communities and the support of a wide range of developers around the world. Ethereum created an ICO through its own smart contract system, which successfully promoted the value of Ethereum. Similarly, litecoin had been around 18 yuan before it joined the quarantine witness, and then it quickly surged to over 300 yuan.
Wu Jihan is concerned about developing his own development team. So far, five teams of developers have been secured for Bitcoin Cash.
Some netizens have compared the structure of opposition to the separation of powers in the United States: the mine is the president; Core is like a court of law, making the rules; Behind capital is the people and consensus. It is like Congress, which can vote on the price of which coin miners will dig, and can decide whether to abolish existing development groups through a hard fork. This set of mutually restrictive designs will also swing back and forth between who has more control. Bitcoin is currently an asset, but if the BCC goes its way, it could be converted into money as it becomes more and more used in commodity transactions.
Who is the real Bitcoin after the fork? “It’s up to them to Theymos,” Said Wu jihan. “They admit who is Bitcoin, nothing else matters.”
When it comes to the development of digital currency, the goal of those who believe in “decentralization” is most likely to develop a prosperous digital currency system. When Bitcoin has actually become the center and even faces the fate of manipulation, various virtual currencies will emerge to compete with the existing bitcoin. Bitcoin may be dead, but the entire digital currency system will be stronger. However, their recent deletion and censoring of posts on Reddit has been criticized by many of their loyal fans.
‘It’s very interesting that when I came into contact with bitcoin in 2011, there was a lot of pessimism about an unregulated currency that wasn’t issued by the government,’ Mr. Wu said. ‘The creation of a currency requires government endorsement.’
“Today’s cult of Core, the bitcoin developer group, strikes me as similar to the cult of the monetary authority of the government in general. “They’re all going to discover their misconceptions about bitcoin in the same way that people who turned their noses up at bitcoin discovered their misconceptions in the early years.”
It is conceivable that the next 12-18 months will be the most difficult for Bitcoin to survive. Everyone will have a rough time.
Ted sighs a dozen times as he talks about expansion, arguing that the question is about faith — about whether the ideal of decentralization can be achieved. He thinks bitcoin came along and spread around the world, and nothing can make it go away. And the faith of the masses, you can’t control it.
(This article first appeared in caijing magazine on October 30, 2017.)