Co-owner of Established Bitcoin Websites Wants a Hard Fork
Cøbra is the co-owner of Bitcointalk.org and Bitcoin.org. These websites have been around since the beginning of Bitcoin and are known for having some of the strongest opinions in the community.
They also see competing chains such as Bitcoin Cash as the arch nemesis and have been opposed to any increase in the block size limit. We saw this last year when they took a strong stance against the SegWit2X hardfork. In the end the hardfork failed but they kept the dialogue going.
Another enemy that these websites have zoned is a company called Bitmain and its CEO, Jihan Wu.
Bitmain is the largest producer of Bitcoin mining ASICs (Application Specific Integrated Circuits). They are also one of the biggest mining companies with a large percentage of global hashpower.
Does Cøbra really have a point in requesting a hardfork and should the community even consider it? Let's take a look.
The Gripe with Bitmain
In a medium post by Cøbra, he made it known that his main gripe with Bitmain was miner concentration of the Bitcoin network. The argument is that centralisation is contrary to the notion of the Bitcoin network and can damage security of it.
When he mentions security, he is talking about the risk of an infamous 51% attack. This is essentially the scenario when one miner has enough mining power to destabilise the network and act in a "dishonest" way. He stated that:
The hashrate has already been abused to give political support to reckless and dangerous hard fork attempts. They have questionable allegiance to Bitcoin at best, seeming more interested in supporting Bitcoin Cash, undermining the very network that employs them
He also mentioned some estimates of Bitmain's earnings for 2017 that were produce by Bernstein. The report in question claimed that Bitmain may have made between $3bn and $4bn in operating profit last year. They calculated a gross margin of about 75%.
He also takes issue with the fact that most miners are based in China. He views the political situation in China as a threat the entire ecosystem. He claims that:
The miners are in a position where the Chinese government can take over their equipment at any time
This may be a farfetched assertion given that the Chinese government has been cracking down on Bitcoin mining firms. Many of the miners are now relocating their operations to other countries such as Canada.
Cøbra has not held his punches and has even compared the mining control of Bitmain as someone holding a gun to your head. He says that it is irrational to assume that Bitmain and Jihan have incentives that are "honest" and that the threat is always present.
His Proposed Solution
The proposed solution that has been presented by Cøbra is a hybrid one that would incorporate some version of a Proof-of-Stake (POS) mining. The algorithms that underpin this technology should allow for easier ASIC production so that new entrants can easily challenge Bitmain.
This hybrid PoW and PoS system is something that the Ethereum network is currently also considering. Ethereum is currently working on their Casper POS protocol that they hope will move the network away from number crunching machines to a system of validating masternodes.
However, unlike in the Bitcoin ecosystem, the Ethereum hashing function (ETash) is more ASIC resistant and hence is a great deal more distributed. They are moving to a hybrid solution in order to help scale the network.
Jihan Wu is not as active online as many cryptocurrency influencers. He has made it known that he was in support of increasing the block size last year. He is also a proud Bitcoin Cash proponent and dedicates a great deal of hashing power to the network.
Yet, he thought that it was appropriate to respond to the accusations that were levelled at him. In response to one of the tweets that Cøbra sent out, Jihan made it known who he thought was centralising discussion on the network.
Altough Jihan does have a point with regards to the progression in development on the Ethereum blockchain, Bitcoin has been through some changes including the implementation of Segregated Witness last year.
There has also been a great deal of work done on other off chain scaling solutions such as the Lightning network which is already having the affect of driving down Bitcoin transaction fees.
Is the Solution Feasible?
While Cøbra has no doubt made a number of valid points with respect to miner control, changing the Bitcoin consensus algorithm does not appear to be the best solution. Proof of stake could also lead to a situation of centralisation with really powerful masternodes.
Moreover, making changes to the Bitcoin protocol is something that the core developers were vehemently opposed to last year. This was the reason that they opposed the SegWit2X fork and it would be hypocritcal to change their stance.
Lastly, there are many who view actions by some in the Bitcoin core community as centralised. This is something that can be evidenced by many of the comments to the post. There are legitimate concerns that many may have with Bitcoin and it helps to have an uncensored platforms to voice them.
Featured Image via Fotolia
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.