FORKING BitcoinXT: Is it really a coup or just more crypto-FUD?

Let's unleash a new craptocurrency

Something for the Weekend, Sir? Bitcoin is about to fork off. Too forking right, some of you may cheer. But a great many Bitcoin “users” – miners, developers, retailers and spenders – are against the idea. If you ask them about it, they’ll tell you they don’t like being forked about. Some of them say they couldn’t be forked.

You thought Greece was in turmoil over its choice of currency? Spare a thought for the poor lambs in the Bitcoin community. At least the Greeks only had to determine which currency to use. Bitcoin hipsters, on the other hand, no longer agree what their currency is.

The discontent rippling through the community looks at first to concern nothing more than a tech fix. Unfortunately, the implementation of this fix risks causing a rift in Bitcoin’s user base by creating a fork in the dev road.

Worse, the take-it-or-leave-it way in which the fork, known as BitcoinXT, is being thrown at users has been described by some as a “coup” that could subject Bitcoin to the whims of one person.

First, a disclosure of interest: I own a Bitcoin wallet containing 0.00002232 BTC. For those of you who don’t resemble a Captain Haddock cosplayer, this roughly equates to £0.003 or $0.005. Such has been the inexplicable rise in the exchange rate that I can no longer joke about my Bitcoin wealth being “not worth a farthing” – because now it is.

Second, a disclosure of ignorance: I still do not fully understand Bitcoin, which makes it difficult for me to sympathise with its current growing pains. Nor am I convinced by claims that Bitcoin cannot be manipulated by individuals in the same way that other currencies are by banks and governments.

To my mind, Bitcoin gives the impression of being conceived and implemented specifically in order to make a handful of people very rich on the backs of the gullible. Or perhaps it is just coincidental that Satoshi Nakamoto, Bitcoin’s mysteriously anonymous creator(s) and miner(s) of the so-called “genesis block”, is/are said to hold wallets containing almost BTC 1m. At today’s exchange rate, that’s worth about £145m or $224m.

Ah, but you admonish, this is no different than any minor project that eventually turns into a worldwide craze, whether it’s numismatics, collecting artworks by YBAs or launching the Hula hoop. The initiators are entitled to enjoy the benefits of increased demand and value if it turns out to be a success.

I quite agree. Bitcoin is the Hula Hoop of this decade.

The problem facing Bitcoin is that users are waking up to the fact that it’s rather more like commercial software than anyone dared suspect: Satoshi Nakamoto built timed obsolescence right into the framework. It’s all down to the blockchain.

Bitcoin’s decentralised structure and independence from control relies on universal access to the currency’s current situation and its entire history. As the currency is mined and as Bitcoins are exchanged between wallets, every change and transaction is recorded in data blocks of up to 1MB and added to the chain.

None of this is vague or speculative. At any time, give or take the odd 10 minutes, Bitcoin is completely up to date, truthful, comprehensive and in control of itself, with a complete transaction history back to year dot.

In this sense, Bitcoin is more “real” than any other currency on Earth.

It means anyone and everyone can spend and receive Bitcoins in a sensible, safe and self-managed way, rather than having to trust the value and security of their cash to a bunch of reckless bastards snorting coke from the breasts of impressionable ladies on the 32nd floor of some granite and steel skyscraper.

Sorry, that may have sounded a bit technical. I meant to write “banks”.

Now that Bitcoin is getting more popular and the demands increasing, the limitation of how many transactions can fit into a 1MB block threatens to slow everything down. You’d think the solution would be simple: make the blocks bigger.

Yes, but how?

In a commercial software environment, the developers would probably run a few focus groups, farm out the extra work to a coding sweathouse in India, announce a fix bundled with some unwanted new features, and make users pay for it.

In a scientific or academic environment, there would be a lot of chin-stroking, pen-clicking and writing of papers that would be peer-reviewed and tested before being rolled out to users or canned completely.

Bitcoin, however, is a peer-to-peer IT community, so the process of problem-solving involves a lot more email shouting, forum harrumphing, social media trolling, barista bating and generally singeing each other’s ironic Edwardian beards.

Decisions can only be made by committee, and this committee comprises every Bitcoin developer, miner, node-owner and other interested party (i.e. the human species). It’s not going to happen quickly.

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