Bitcoin Cash ‘Mining Election’: Is Overcoming Major Misunderstandings Possible?
Why Bitcoin Cash will overcome the Misunderstandings between Major Mining Factions
Since its creation last years, Bitcoin Cash (BCH) has been in the limelight on multiple occasions. Its upcoming ‘split’ that has been reported by the mainstream media is perhaps its most significant news to date. However, the media is entirely wrong, as the impending project is actually a consensus-seeking mechanism that will involve an election process. In this case, a single CPU will represent a single vote, meaning that a higher hashing power translates to more votes. This is in line with the consensus mechanism that is built in on the Bitcoin network, and it is similar to the description given on Satoshi Nakamoto's Bitcoin whitepaper.
Though unknown to many, the deployment of new mining software with new consensus methods is essentially a vote change. Often, such transition processes are smooth because average miners follow the stance of industry leaders.
As expected, some participants have expressed their disagreement with the definition of consensus as outlined in the whitepaper, saying that it is not exclusively as stated in the documentation. To back their argument, they have been referring to the Monero hard fork, which resulted in a massive reduction of hashing power with an aim of reducing the influence of ASIC miners. While the lowering of hashing power is true, this method is not entirely applicable to the Bitcoin network. This is because Monero is a centralized cryptocurrency, meaning that it is fully controlled by its development team. Also, if Bitcoin opts to ditch its Proof-of-Work mechanism for the Monero way, it would spell doom for its entire mining community.
On their part, BCH miners have adopted contradictory stances on the proposed changes. ViaBTC and Bitmain are in support, while nChain and CoinGeek are on the opposing side. Among the suggested modifications, the most contentious is the Canonical Transaction Ordering (CTO). CTO is labelled as being contentious because of the potential upset that it would cause amongst the members of the BCH mining fraternity. In this regard, Amaury Sechet, a developer at Bitcoin ABC, stated that the actions will certainly be irritant, although the current situation calls for their immediate implementation.
In line with Amaury’s prediction, CoinGeek and nChain vehemently opposed the suggested changes. Consequently, this has led to the establishment of new Bitcoin client, known as Bitcoin SV (SV stands for Satoshi's Vision). The client is currently in the testing phase and expected to go live in September, with an aim the original vision of Satoshi Nakamoto.
Obviously, the CoinGeek and nChain have irreconcilable differences with Bitcoin ABC. After the implementation of the modifications, it will be the first time since the inception of Bitcoin that the Nakamoto consensus will decide between two sects that have differing perspectives. Though many blame the two aforementioned companies for the division among BCH miners, it is worth noting that Bitcoin ABC has also acknowledged the contentiousness of the matter.
Most crypto investors are usually calm when everything is going their way. Hence, the introduction of proposals that disrupt the normality usually impels substantial opposition. Regardless of the objective of the change, the response is usually hostile. Consequently, such suggestions usually require lots of time to get accepted, vetted, tested and eventually implemented.
The challenge faced by CTO is its newness to the BCH community, which according to Amaury, is acquainted with the 0-Conf payment method. Essentially, CTO will change 0-Conf, a process that will demand an upgrade of the software infrastructure of the entire ecosystem. Given that these changes are argumentative, may are questioned the rushed deployment of CTO. After all, it would have been better if a Testnet version was released so that key stakeholders can have time to assess and accept the solution.
Previously, Dr Wright from nChain said that CTO will be advantageous to Wormhole, the tokenization solution developed by Bitmain. This declaration caused a stir in the BCH community, mainly because Wormhole, an Omni Layer fork (layer 2 technology) solution, is not compatible with 0-Conf. Instead, this layer 2 application emphasizes on transaction ordering and the necessity of confirmations. Therefore, it is evident that CTO will be significantly beneficial to the Wormhole project.
Additionally, Bitmain might eventually resort to the reduction of block times, a factor that will further improve Wormhole. Nonetheless, Bitcoin ABC has not included such a proposal in the impending fork scheduled for November this year. Contrariwise, the proponents of this change, Bitmain and ViaBTC, have already tweeted in support for the inclusion of such changes to the upcoming BCH fork. Notably, this was done before gauging the reaction of the BCH community to this matter.
The prospect of modifying the functionalities of the Bitcoin network to accommodate a layer 2 project is not something that the BCH community relishes. The dynamics of the Wormhole and its potential impact on Bitcoin economics further enhance the contentiousness of this matter. To mine 100 Wormhole Cash tokens, investors must burn 1 BCH. On the event that the value of Wormhole Cash surpasses that of BCH, the latter would have to burn in large volumes, an outcome that is calamitous.
However, if the intention of ViaBTC and Bitmain is to adjust the Bitcoin network to work seamlessly with Wormhole, then they have the right to vote for such changes because they are miners. As per the Bitcoin whitepaper, each CPU in the network holds a single vote. Therefore, Bitmain can vote since they possess hashing power. Similarly, CoinGeek and nChain are equally right to oppose the suggested adjustments. These two have vowed to uphold their opposing stance, instead proposing an increase in block capacity to 128 MB.
The biggest shortcoming of the upcoming consensus is the short time given to the BCH community to internalize the concept behind it. As mentioned earlier, Bitmain and Bitcoin ABC should have released a Testnet version of the same so that the community can evaluate its purported advantages. The rush to deploy the changes has instead raised suspicion over its intentions. While CTO first came into the fray in June 2018, Amaury indicated that Bitcoin ABC had it in a plan at the very beginning of the project. Surprisingly, ABC is reluctant to adjust the block size during the consensus's launch, yet one of the supposed advantages of CTO is to enable Bitcoin to process large blocks efficiently. The worries around CTO were enhanced considerably after the publication of an opposing paper called “An opinionated critique of the ‘Canonical Transaction Ordering For Bitcoin’ whitepaper, written by Joannes Vermoreletal.” In response, Peter Rizun, the chief scientist at Bitcoin Unlimited, urged the community to wait until CTO is launched before being critical.
Apparently, the intentional sluggishness on scaling Bitcoin Core (BTC) has had several adverse impacts on Bitcoin Cash. The developer community is obsessed with solving the scalability issues, resulting in the fronting of every plausible function as a solution to this menace. Moreover, the plan to conduct a hard fork every six months is failing miserably, though its initial intentions were good. Rather, it has led to the establishment of numerous pointless applications that bloat the network, as well as me it more complicated.
After the initial hard fork on the Bitcoin blockchain, the foremost objective of the resultant BCH network was to restore the block size to the one envisaged by Satoshi Nakamoto, the author of the Bitcoin whitepaper. Back then, the support for this mission was unanimous. However, the proposal to deviate from that initial course has resulted in the division of opinions. Though this (rejection of the proposals) might appear overly conservative, Satoshi's vision has proven throughout the decade that Bitcoin has existed. Therefore, additional features must undergo stringent vetting and testing before being approved for deployment. Simply put, Bitcoin is not a platform for the testing of developer ideas. In fact, the main objective of BTC was to provide a transparent, decentralized and dependable alternative to fiat currencies.
To encourage corporate institutions and big-time investors to stake their wealth in the BCH blockchain, it is imperative to demonstrate the stability of the network. Putting this into perspective, Vitalik Buterin ditched the Bitcoin platform as the base for his Ethereum blockchain because BTC core developers tampered with his creation, making the network an unviable option. Had Vitalik built Ethereum on Bitcoin, the value of Bitcoin would have been immense; its usage would have increased substantially, too.
Nowadays, companies that are looking to leverage distributed ledger technology favor building their own private blockchains from scratch. The preference of private blockchain over public networks is due to the control over the protocol that is available to private blockchains. Thus, such companies believe that their inability to control the protocol in public blockchains can make their data vulnerable because changes are implemented without adequate notice. This perceived risk has to be abolished to foster the adoption of public blockchains.
CoinGeek and nChain are advocating for the lockdown of a protocol, even though similar calls have failed incredibly of late. The locking down of a protocol does not prevent future adjustments, as this is would inhibit productivity. It means that modifications to the network have to be crucial and highly auspicious, and can only be implemented after going through testing and appraisal. Also, the locking down will move development to building applications on the blockchain network. Despite the naming, the lockdown will not ‘lock’ the protocol. To this end, miners will still have the power to propose and vote for changes on the blockchain network.
As of now, the split of the BCH network is looking more unlikely, since both sides of the divide are fighting over a single entity – the BCH blockchain. This battle is pitting two sides that have enormously contributed to the development of the Bitcoin Cash community against each other. Albeit painful, its occurrence was inevitable, and one can bet that it will happen again in the future. Alternatively, investors will have a first-hand experience of a major hashing power war, the first of this magnitude.