The move for regulation is strong. The price spike for Bitcoin back in 2016 and 2017 led to massive media exposure, and brought to light many of both the good and the bad sides of Bitcoin, as well as cryptocurrency in general. Consequently, governments all around the world continue to scramble to figure out the best ways to respond to the massive cryptocurrency markets—a sector which Bitcoin continues to dominate by significant margins. The community is split on how the increased scrutiny might affect the price and realities of the world’s most popular cryptocurrency.
But the biggest threat of governing Bitcoin may come internally—not externally. The debate over the best way to coordinate efforts to prevent hard and soft fork disruption between companies rages on. The very concept of governance of Bitcoin is something that some people within the market and community will vehemently fight against. At its core, Bitcoin was founded with libertarian and free-market ideals in mind. As a result, there exists at least some level of internalized bias within the community against concerted efforts of governance.
Still, the help of industry leaders in governing Bitcoin and its blockchain could be a very good thing. The community has faced significant strife and problems arising from the hard and soft forks which have dominated the blockchain in the past few years. According to some analysts, the solution to a multitude of Bitcoin-related blockchain issues could lie in interference from top participants in the industry.
Benjamin Trump is an executive researcher of the ORISE Fellowship, an organization tasked with providing research and internship opportunities to scientists and professionals in the new generation of technology. Benjamin argues in a new study that the cryptocurrency community needs to improve the ability of their chain to withstand upgrades and changes without resorting to dangerous hard and soft forks.
Along with a team of additional researchers, Trump stated that the current method of improving software associated with cryptocurrencies negatively impact both stability and usability for the average user, which could have an adverse effect on the willingness of the general public to get involved in the evolving industry.
The main problem with both hard and soft forks, according to the research, is that they often reduce the faith of investors and market participants in not only the blockchain and its community, but the cryptocurrency as well.
Trump’s contention was not all speculation, either. His team surveyed 800 unique situations in which a cryptocurrency had to confront either a hard or a soft fork. According to the study, hard forks represented a major “threat to maintaining” the stability and predictability of the system as a whole.
In addition to presenting serious technical questions that the industry may just not be prepared to confront, the threat of losing investor faith is a big one. If cryptocurrency truly wants to change and revolutionize the financial marketplace, the community cannot continue to allow hard forks to undermine the trust of institutional and retail investors so essential to mass adoption.
A Coordinated Alternative
The authors of this particular study took a rather controversial stance, arguing that the best way for the cryptocurrency community to readdress the threat of hard fork disruption is to enlist the help of major institutional players in developing technology to upgrade the network in ways that will not contribute to a hard fork.
To many, this solution seems to serve as an unfortunate antithesis to the philosophical backbone of Bitcoin. This move would take the power away from independent and crowd-motivated efforts to revitalize and upgrade the network, putting the power into the hands of the few.
To some, this means progress. To others, it screams centralization.
If one thing is inarguable from the study, the cryptocurrency community has a major problem to address on its road to mass adoption. In order for crypto to truly change the world, the community must find a way to address the hard forks that continue to turn potential investors and market participants away from the bearish cryptocurrency industry of 2018.