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Bitcoin Technology

Bitcoin Is Forking. Again. (vice.com) 121

Merely weeks after it was announced that Bitcoin was splitting into two separate entities, the initial version of bitcoin and it's new "bitcoin cash," the network is adding a third version, according to a report. From the article: On Wednesday, a group of bitcoiners scheduled yet another split for the network in November, which would create a third version of bitcoin. So, what makes this version different from the others? Right now, the bitcoin network can sometimes take a long time to process transactions due to so many people using it. This is because the "blocks" of transaction data that get added to bitcoin's public ledger, the blockchain, are getting full. In the weeks preceding the fork, bitcoin coalesced around a solution called "segregated witness," which will change how data is stored in blocks to free up some space when it kicks in later in August. But the size of the blocks themselves will stay at one megabyte on the original bitcoin blockchain. Still, some bitcoiners maintained that the only way to speed bitcoin up for the foreseeable future was to increase the size of blocks themselves. So, a group of bitcoin companies and developers got together and launched a fork called bitcoin cash, which does not include segregated witness. It bumped the size of blocks up to a maximum of eight megabytes. That fork was widely anticipated to be a failure before it happened, but at the time of writing, bitcoin cash is trading above $300 USD per coin, which is comparable to cryptocurrencies like ethereum. Sounds like everyone got what they wanted, right? Oh, no. There's a third group of bitcoin developers, companies, and users who advocate for a "best of both worlds approach." This group includes Bitmain, the largest bitcoin infrastructure company in the world, and legendary bitcoin developer Jeff Garzik. They got together back in May and signed what is known as the "New York Agreement," which bound them to implement a two megabyte block size increase alongside segregated witness via a hard fork within six months of the time of signing. They call the fork Segwit2x. Now, that's exactly what's happening. According to an announcement posted to the Segwit2x GitHub repository, a bitcoin block between one and two megabytes will be created at block 494,784.
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Bitcoin Is Forking. Again.

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  • by invictusvoyd ( 3546069 ) on Thursday August 17, 2017 @02:48PM (#55035875)
    Its getting closer and closer to paper money.
    • Re:Sounds like (Score:5, Insightful)

      by Train0987 ( 1059246 ) on Thursday August 17, 2017 @02:59PM (#55035961)
      No, paper money is at least backed by something. Even if that backing is only the full faith and credit of the US Government it's still better than being backed by absolutely nothing.
      • Re: (Score:3, Insightful)

        by Mitreya ( 579078 )

        No, paper money is at least backed by something. Even if that backing is only the full faith and credit of the US Government it's still better than being backed by absolutely nothing.

        Also, one money.
        You don't see California or New England creating its own US currency in parallel.

        • Actually, we did see it, some years back, in California. Though some California-esque FUBARness, the state government couldn't pay its bills right away, so it issued some sort of chit or voucher or scrip (I forget the details).

          It wasn't money, of course, because, well, it just wasn't, OK? Get off my back!

          So the state was buying office supplies and electricity and whatnot with these post-dated-checks-that-were-not-really-checks-and-were-not-even-post-dated slips of paper.

          Kind of a bummer if you ran a b

      • by Anonymous Coward

        The US government went a bit crazy with the money printer

        • How so? http://neweconomicperspectives... [neweconomi...ctives.org] Banks don't lend reserves. Reserves are driven endogenously by banks expanding their balance sheets making loans. After that they back fill inter-bank swapping of reserves and ultimately go to the FED (US example) to get reserves at the penalty rate.
      • by bozzy ( 992580 )

        And by extension of the US government's backing, said paper money is backed by lots of large tangibles like real estate and vehicles in the form of loan collateral.

        e.g. My mortgage is payable in USD only. Taking out a loan in cryptocurrency these days would mean far too much volatility over the loan period.

      • US Dollars are nearly entirely backed by debt. In the case of paper money, it is Treasury bonds and other suitable collateral, deposited by banks at the Federal Reserve, in exchange for the paper notes they give people at teller windows and ATMs. In the case of checking balances, those are backed by bank loans. Debt instruments are assets, which are bought and sold on the market all the time, but they are unwieldy for buying coffee or gasoline. Dollars are uniform sized units which are more convenient f

      • Re:Sounds like (Score:4, Insightful)

        by Afty0r ( 263037 ) on Thursday August 17, 2017 @05:05PM (#55037003) Homepage

        Even if that backing is only the full faith and credit of the US Government

        Isn't Bitcoin backed by the full faith and credit of all Bitcoin owners?

      • Faith still counts as nothing.(to be more accurate, faith is the fear of war in case someone trades oil with a different currency)
      • by mad7777 ( 946676 )
        "paper money is at least backed by ... the full faith and credit of the US Government" What does that even mean? Paper is backed by... the promise of printing more paper?

        To be "backed by" something, in my understanding, means that it is a symbolic representation of that other thing. For example, if you store gold at my house, I can issue you a receipt. We agree that I will give this gold to anyone who presents me with this (paper) receipt. Hence, the paper is "backed" by gold. The paper literally s
        • by mvdwege ( 243851 )

          "paper money is at least backed by ... the full faith and credit of the US Government" What does that even mean? Paper is backed by... the promise of printing more paper?

          How about future tax receipts?

          • by mad7777 ( 946676 )
            So... "backed by" means "taxed"? Huh, that is a definition I had not heard before. Probably because you made it up?
      • Paper money is backed by the threat of violence. Cryptocurrency is backed by cryptography.

      • the full faith and credit of the US Government

        What does that mean, exactly? That phrase has baffled me for years.

        If that backing were reduced to, say, 50% of "the full faith and credit of the US Government", what would be different? What about a less drastic cut to say, 90% of "the full faith and credit of the US Government"?

        Or were you being sarcastic, and I missed the joke?

    • Re:Sounds like (Score:5, Insightful)

      by JaredOfEuropa ( 526365 ) on Thursday August 17, 2017 @03:09PM (#55036013) Journal
      They're cloning the tulips
    • by Jamu ( 852752 ) on Thursday August 17, 2017 @03:52PM (#55036437)
      Coming soon... New Bitcoin, Bitcoin Classic, Bitcoin Cherry, Diet Bitcoin, Bitcoin Zero and Bitcoin Life.
    • somewhat inevitable since it attracted attention of governments and big biz i suppose. At least a lot of people got to make a lot of money out of thin air ... more or less :D
      to print more when there's a problem ... i think indeed that was one of the things satoshi was trying to prevent
  • by Anonymous Coward on Thursday August 17, 2017 @03:01PM (#55035983)

    > That fork was widely anticipated to be a failure before it happened, but at the time of writing, bitcoin cash is trading above $300 USD per coin, which is comparable to cryptocurrencies like ethereum.

    Well it is quite a failure in terms that it was given to each Bitcoin owner, and yet most owners dropped it, resulting in price drop from default 100% (you had N bitcoins and N of BCH "bitcoin-cash" tokens)

    through 50% (two times more BCH was sold then bought) - on futures market

    through 20% - when real trading opened, not just futures,

    then 10%

    now trading at 6-8% of original Bitcoin price.

    Also this does not account for all the people who did not yet bothered to sell the BCH "bitcoin-cash" tokens they are given (e.g. because it's in cold-wallet, burried somewhere, or on address not used in years) - or because it is simply lost forever (all addresses that had N amount of BTC on August 1, were "given" also N of BCH).

    Another metric is hashing power (mining power), it is at around 10% of original Bitcoin's.

    • by janimal ( 172428 )

      Blockchains seem to split every time there is a contentious upgrade. The blockchain cryptocurrency that wins out will be the one that is most widely accepted. The best way to think about it is that it is a fair inflation. It's (almost) instantaneous and fairly distributed to all those, who hold the legacy coin. Fears of too much dilution are pure FUD. Dilution is only bad, when it robs savers of their money. If savers have double the coins after the inflationary event (fork), then they were not robbed.

      There

  • by jeff4747 ( 256583 ) on Thursday August 17, 2017 @03:14PM (#55036065)

    In the future, everyone will have their own cryptocurrency for 15 minutes.

  • This is good news for Bitcoin.

  • Split 3X (Score:5, Insightful)

    by stevez67 ( 2374822 ) on Thursday August 17, 2017 @03:22PM (#55036127)

    When one pyramid scheme isn't enough to fuel speculation, triple down on it.

  • by Anonymous Coward

    If only bitcoin could die ... people would finally stop with all their cryptoshit talking and their scam ICO ponzi schemes....

    • by Anonymous Coward

      Cryptos are consuming more and more electricity when humanity should save it up... Bitcoin and etheruem miners are RUINING THE EARTH !!!

    • by GNious ( 953874 )

      I'm sure TrumpCoin will take over and everyone will leave BitCoin behind.
      (Yes, TrumpCoin exists....)

  • for the "best of both worlds"
  • by timholman ( 71886 ) on Thursday August 17, 2017 @03:44PM (#55036331)

    The "success" of Bitcoin Cash has shown the way, as it is currently worth > $300 without impacting the price of BTC. Free money, right? So it will be seen as a no-brainer to keep doing hard forks, as long as different parties in the BTC ecosystem see some advantage to it.

    But at some point, all of these hard forks will make it abundantly clear to everyone that there is nothing special about any cryptocurrency. They're all made up out of the ether. They may provide some marginal utility for currency transfer across borders, but as investment vehicles (which is what is driving the current price spikes), putting your money in a cryptocurrency is like getting involved in a bidding war for a patch of tulips sitting in the middle of a infinite field of them.

    BTC is "special", because there are only 21 million of them, right? Except maybe if there are 210 million, or 21 billion, or 21 trillion, because hey, here comes another hard fork of the blockchain by some group that wants to get rich quick. At some point the whole cryptocurrency mania collapses as everyone realizes just how limitless they really are. That is something that the people pushing BTC do not want to happen, but it is inevitable.

    There are interesting times ahead for cryptocurrencies.

  • by Anonymous Coward

    Bitcoin will be able to go fork itself.

  • by tonique ( 1176513 ) on Thursday August 17, 2017 @04:27PM (#55036715)
    The eventual result will be the will be a separate forked bitcoin for every potential user and then their true value will be seen.
  • PSA: Its vs it's [grammarist.com]
  • by ilsaloving ( 1534307 ) on Thursday August 17, 2017 @05:45PM (#55037267)

    What I don't understand, is why bitcoin is being valued so stupidly highly. To me, this kind of instability is frightening. The risk of losing value is so high that only a fool would invest.

    And yet in the real world, I'm the fool because if I had bought bitcoin earlier on, I'd be filthy rich now.

    • by helga the viking ( 4796617 ) on Thursday August 17, 2017 @06:38PM (#55037581)
      like any ponzi scheme: the best time to invest was way back when it started... or now. Quick ;-)
    • by pots ( 5047349 )

      And yet in the real world, I'm the fool because if I had bought bitcoin earlier on, I'd be filthy rich now.

      This is wrong-headed. When you starting thinking this way, remind yourself: "The best possible investment is buying winning lottery tickets. Not the losing tickets, those are for suckers, just buy the winning ones."

    • The South Sea Bubble https://en.wikipedia.org/wiki/... [wikipedia.org]
    • What I don't understand, is why bitcoin is being valued so stupidly highly. To me, this kind of instability is frightening. The risk of losing value is so high that only a fool would invest.

      And yet in the real world, I'm the fool because if I had bought bitcoin earlier on, I'd be filthy rich now.

      The question is what's the true price of Bitcoin? Everyone thought that back when it was trading at $100, and now that's a distant memory.

      I think I'm going to drop $1000 into bitcoin and etherium, it's money I can afford to lose, but if one of those cryptocurrencies goes legit big time then at least I'll be able to stop kicking myself.

  • This is forking unbelievable.

  • Once you realise bitcoins are a commodity.

    The coin that wins will be the commodity that is most useful. You need a lump of tin, gold, platinum or perhaps something like silicon instead?

    As with most metals they are in small particles with impurities deep in the ground. Then you have to use a lot of energy to extract them in useful quantities and have the right equipment. Assets required to mine bitcoins are a server farm of hardware and a measure of energy.

    they behave like this: https://en.wikipedia.org/wiki [wikipedia.org]

  • by Sqreater ( 895148 ) on Friday August 18, 2017 @08:13AM (#55039835)
    The usefulness of these forks may simply be that they allow an algorithm to determine at the moment of your transfer what coin has the greatest transaction speed at that moment for that transaction, so there will develop an abstract "Bitcoin of Bitcoins," environment. If you fold the other major coins in to such a "Coin of Coins" environment, money transfer goes to a truly mind-boggling level of abstraction. It would be like having one blank credit card that represents the best credit card deal at the moment for that particular purchase.
  • You've got to be forking kidding me!

Philosophy: A route of many roads leading from nowhere to nothing. -- Ambrose Bierce

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