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The Fort Sumter Of Fake Currencies

War is the remedy that our enemies have chosen, and I say let us give them all they want. -William Tecumseh Sherman
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The blockchain frays. By users ( [Copyrighted free use], via Wikimedia Commons

The blockchain frays. By users ( [Copyrighted free use], via Wikimedia Commons

For years, we’ve watched the growing cold war between the two factions of Bitcoinia. Once the peaceful and gloriously unregulated home of a united race of Bitiots, the former paradise is now riven by disagreements over how money-like this self-proclaimed money should be. On one side are the original bitiots, better known amongst themselves as the cryptoanarchists, distrustful and dismissive of anything that stinks of capitalism in their fake currency. Arrayed against them stand the biterati, a.k.a. the cryptocapitalists, who see in bitcoin the potential to make actual, usable money, and who threaten to hijack the whole utopian project for their own selfish ends.

Three years ago, the former declared their independence from the latter in a most appropriate way: Making a video, and then doing nothing else, in spite of the continued encroachment of their enemies. Now, in the wake of the defeat of the most public leaders of the cryptocapitalist front, the Winklevii, whose bitcoin ETF might have put an end to the cryptoanarchists once and for all, the biterati are preparing to resupply the fortress at the heart of the bitcoin revolution, allowing it to process larger blocks of transactions. The bitiots have pledged a fight. Amidst the existential crisis, civil war is in the air.

One group has coalesced around a version of bitcoin called Bitcoin Unlimited, which doesn’t put any limit on block sizes. Another group, backing what is called Bitcoin Core, is defending the status quo.

The two groups have been debating this topic endlessly and caustically on social media, at conferences and at closed-door meetings. Neither side has been willing to compromise. Also, importantly, neither side has been able to win enough support among the wider bitcoin community to decisively shut down the other, which has resulted in a protracted stalemate.

Lately, though, the Bitcoin Unlimited camp has threatened to implement a “hard fork” of bitcoin’s software….

Bitcoin’s underlying philosophy revolves around creating an open, unbreakable record of every transaction that can never be altered, essentially a definitive record of history. Having two definitive records of history, however, would create uncertainty and raise questions about liquidity.

This, of course, is not good for anyone. But the people of Bitcoinia are resigning themselves to their fate.

On Friday, 20 bitcoin exchanges released a statement saying that while they weren’t endorsing the idea of the hard fork pushed by the Unlimited camp, they would begin trading that version of the currency if the change occurred.

Acknowledging the seeming inevitability of a hard fork, the exchanges said “it is incumbent upon us to support a coherent, orderly, and industry-wide approach to preparing for and responding to a contentious hardfork.”

Bitcoin Price Plunges on Fears of a Currency Split [WSJ]


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