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Much of the current discussion about how to revive the cryptocurrency industry involves what conditions should be present before a Bitcoin hard fork to change the network's capacity is activated. There are various activation schemes floating around: 95% majority of blocks, 75% majority of blocks, forking when a simple 51% is achieved, and so on. Many Core developers hold to the belief that a fork should not be activated unless there is "overwhelming consensus," possibly on the grounds that too much is at stake to move forward otherwise.

However, we saw recently that even a majority of support is not necessary to completely change the course of world history, with an impact far larger and more valuable than the value of bitcoin. The election results made me more convinced than ever of my existing belief that the risk to the cryptocurrency industry is not too great to take action. It is time to "be bold" and execute a simple, unconditional fork of Bitcoin. The purpose of this post is to explain why the possible outcomes of taking unilateral action are mostly positive no matter how things turn out.

The idea of an unconditional fork is simple: starting with Bitcoin Unlimited's codebase, modify the minimal amount of code necessary (which is just a few lines) to enable Unlimited's procedure for large block handling after a certain height - regardless of how many nodes are signaling beforehand. This modified client would be released and a fee for listing would be paid to Cryptopia, Yobit, and other exchanges that will list any coin for a price. The availability of the new client would be advertised, the date of the fork would arrive, and there would be two Bitcoin networks. Then, the market would decide which fork would survive as the main chain.

This suggestion is significantly more aggressive than most other proposals. It is not intended for there to be any lengthy development period to tack on new features, as the /r/btcfork subreddit is allowing for. There would be no conferences or discussion to get miners onboard. There would just be a release, and the market would decide what happens. If there is a demand for larger blocks, as I'm sure other businesses agree there is, enough value will shift to the unlimited size fork that miners will follow. Changing market conditions will incentivize people to upgrade as soon as possible.

The common argument against this course of action is that it is too risky. Before evaluating the outcomes, let's state what I see as the three main goals to this action that many people can agree upon. First, we want to make cryptocurrency available to as many people in the world as possible. Second, we want businesses to be able to invest in the industry and have certainty that capacity will be available for their business models. Third, we want to purge the industry of negative people who are poisoning debate and who will try to block progress of the first two goals or roll them back if they are achieved. With those goals in mind, let's examine a few ways that this bold move could play out:



Outcome 1: the new chain succeeds and replaces the Core chain

In the first outcome, after the network splits, there would be a rush to adopt the new chain. This could happen quickly because there is obviously a good portion of bitcoin users who are fed up with the Core's actions but who have no alternatives available. Remember that miners follow wherever the profit is, so once the fork is announced, we will immediately see multipools created to switch between the two forks. Hashrate on the forks will follow the price ratio between the two of them.

As almost happened with ETC, the price of one of the chains could surpass the other, passing a point of no return. Once that happens, any existing bitcoin client can be easily upgraded with changes to a few lines. The ease of upgrade is why this outcome is far more likely than many people think. Whereas a protocol change like Segregated Witness activation is a major drain of resources, switching forks is a comparatively simple task for most services, and one that requires simply installing a different daemon for Bitcoin Core users.

Here, the outcome is that, after a period of chaos and uncertainty, the industry ends up with a vastly more capable network, and effort can again be redirected towards productive effort rather than working around the Core's limitations. Not only that, but this outcome would constitute a resounding rejection of Core leadership and would result in more ethical and honest people in charge.

Outcome 2: chaos and uncertainty from a prolonged fork battle leads to ETH takeover

Another possible outcome is a long period of chaos and uncertainty. Here, the fork block could activate, but criminals could start DDoS attacks on nodes, which periodically go online and offline. I don't agree that miners would actually be willing to waste money attacking the new chain, but replay attacks could cause thefts and losses of funds. It could also be the case that the two sides are simply so entrenched in their viewpoints that they will not be willing to stop using their own chains no matter what.

This case still results in a positive outcome. While there would be short-term uncertainty and damage to business interests, after some period of time we would probably see more and more merchants accepting other currencies. Since Ethereum is one of the most popular, it is most likely to replace bitcoin. ETH does not have a blocksize limit, and it is led by competent and ethical developers.

Thus, even in the case that an unconditional hard fork destroys the Bitcoin currency through infighting and attacks, we still end up with a positive outcome. Businesses are left with certainty about the future. There will be no capacity limit. And, theymos and those Core developers who are unethical and have conflicts of interest can be left to continue managing the defunct Bitcoin network while honest people like Vitalik Buterin lead the industry.

Outcome 3: the fork immediately fails

A third outcome is that the attempted fork fails. Perhaps there would be a technical problem that causes the network to grind to a halt. Perhaps criminals are successful in taking it offline with DDoS attacks on nodes. Or, perhaps the supporting infrastructure of second tier exchanges would fail as demand grew before the premier exchanges offered the fork for trading.

While this outcome is not desired, few bad things can come of it. Because the network was destroyed while it was small, the casualties among businesses and users would be low. The cause of the failure could be analyzed, and most likely the fork could simply be tried again with the issue fixed.

The most positive effect of this outcome, however, would be to wake up miners that there is demand for a different path. If it turns out that the failure was caused by an unfixable oversight in the idea of an unconditional fork itself, the publicity afforded by the failure would cause more miners to activate existing signaling mechanisms for a switch.

If, as is likely, the failure is able to generate a fall in the price of bitcoin, miners would be especially incentivized to pay attention to the userbase. We saw this in January, when Mike Hearn's article led to a 20% fire sale, and mining firms issued panicked press releases in response. The price of bitcoin would fall, and I continue to believe that complacency caused by high prices are the single greatest hindrance to expansion. A decrease in price does not affect the business models of the people we really want to use bitcoin, like normal people who want to buy things online and businesses who want to create cool new technologies.



In conclusion, the greatest risk to the future of cryptocurrency is that of taking no action. The risk posed by a unconditional fork is minimal, and since it is so easy to execute, significant developer effort is not required to try. There is no need to spend months perfecting code that includes additional features. The purpose of an unconditional fork is to put an alternative out there so that miners lose control and market forces can decide which path is taken. Either the fork succeeds, another coin like Ethereum permanently takes over, or the fork's failure causes the price of bitcoin to fall and grabs the attention of miners. There will be two coins no matter how much agreement there is before the fork occurs, so there is no reason to wait. We saw in Ethereum that the market resolved the issue decisively within a few months.

I've found that the most common opposition to this proposal usually comes from speculators who are more worried about the value of their personal assets than whether cryptocurrency becomes widely successful. To many of these people, cryptocurrency's success is an end to their getting rich, rather than a goal in itself. They recognize that taking unilateral action is likely to significantly reduce, or even destroy, the value of bitcoin, and this is undesirable to them. I believe that allowing businesses to provide value to people around the world is the outcome most people are interested in achieving.

If I didn't have a business to run, I would be working on this right now. However, there are plenty of developers who release new coins and who have the knowledge necessary to make the necessary changes. Since all but one of the Chinese miners is all talk, it's time for someone to step up and take action so that the market can make a choice.

Hardforking BTC will lose trust in this coin.
Its not normal to fork and not the solution for all.

fugju wrote:Hardforking BTC will lose trust in this coin.
Its not normal to fork and not the solution for all.

Statements without any explanations.
Just Fear, Doubts and Uncertain (FUD).

The only major point I don't agree with the OP is the need of a replay attack protection.
This is what you don't want in a fork over capacity.
Ethereum had a point about replay protection because of the content of the ledger. Not the features of the ledger itself.

If the content of the ledger is not contested (at least initially) the same transactions should be compatible with both ledgers and end in both ledgers.
The miners of each ledger would compete to sell blockchain space to the users and they would be paid by the users with coins mined in that branch of the blockchain (both coinbase and fees).

A transaction would end in both branches (in theory) and would pay the same fee to both miners (a fee in branch A and a fee in branch B).
These fees would add to the block reward and would be spendable only in the branch they were mined in.
These miners would sell their coins on the market and the demand would set the price.

In a contentious hard fork with at least 5% (better if it is 10%) of the original hash rate, there would not be the need of a reset of the difficulty.
In fact, a few back of the envelope math show the 5% miners would get 12.5 BTC + 10 BTC of fees in this scenario where they would get 12.5+0.5 BTC staying in the small fork. More than 50% more BTC for the same amount of hashing.

As the offer of space for transactions is not enough to satisfy demand now, a branch offering more space would be rewarded by more transactions than the other branch. And with more transactions, more fees would follow. The demand for coins spendable in the large branch would rapidly bid the price of the coins mined in the large branch to a parity level to the coin spendable in both branches. And miners would follow.
As demand for the coin in the large branch increase, demand for the coin in the small branch will decrease as the price. And miners will leave for the other branch.

What we need to a successful HF (call it insurrection and revolution against the aristocracy) is demand for much more transactions than 1 MB blocks can handle. Transactions paying the current fees o little less. The rest would follow, like pieces of a dominos falling one after the other.

I would add just a few things:

1) Initially, with a very low hash rate, the blocks would need much more time to be found. This should be made public and clear, as much as possible, to the public, so they know the problem is fleeting and not permanent.

2) The maximum block size accepted by the nodes should be very large to compensate for the long period of time between blocks.
In the aforementioned 5% example, the block size should be set, at least to 32 MB initially, better if 64 MB. Because the blocks would a mean interval of 200 minutes (20 times more than the normal 10 minutes).

3) If the demand for coins in the large branch will be enough, the price will surge and the miners will follow.

Ok, lets hard fork every month.