Babbitt column | Yang Haipo: Bitcoin forks past events

Bitcoin Cash officially split from Bitcoin on August 1, 2017, and has passed its second anniversary. Looking back at the development of the two anniversary, Bitcoin Cash is both successful and failed. The success is that it still has an extremely active community, an evolving application, and a solid market position. The failure is that Bitcoin Cash does not meet the expectations of most supporters over Bitcoin, and Bitcoin Cash does not address the same set of governance challenges that Bitcoin faces.

origin

The split between Bitcoin Cash and Bitcoin comes from the expansion of Bitcoin, which should not be a problem. Everything stems from a line of code left by Bitcoin creator Nakamoto in the bitcoin source code, which limits the size limit of the Bitcoin block. Bitcoin is essentially a set of accounting systems, and a block can be understood as a book, the smallest unit of accounting, each of which records all of the transfer transactions that occurred in the Bitcoin network in the past ten minutes. The block size limit limits the transaction processing capabilities of the Bitcoin network. This line of code was originally added to prevent spam attacks. In the early days of Bitcoin's development, when Bitcoin prices were still low, attackers could create a large amount of junk trades to fill the hard drives of all nodes at a small cost, killing this highly innovative and revolutionary system in the cradle. . When adding this line of code, some people worry that the future will limit the development of the Bitcoin network. The answer given by Nakamoto is also very simple: by then we can adjust the limit in advance. Who would have thought that this simple expansion problem would cause bitcoin to split.

Bitcoin expansion has been raised since 2014. Bitcoin's block size reached 300KB at that time, and maintained an exponential rate of increase. According to forecasts, it will reach the 1MB size limit in early 2016. Bitcoin's network is a decentralized network. It relies on a set of consensus protocols to reach consensus. The revision of the consensus protocol must be careful to avoid the entire network from being forked due to incompatibility. If the consensus agreement is tightened, it is called soft fork, and the old node can still run normally without upgrading. If the consensus agreement is released, it is called a hard fork. In this case, the old node must be upgraded before it can run normally. It can be easily understood as backward compatibility with soft forks, while hard forks are not backward compatible. For example, the upper limit of the bitcoin block size is changed from 2MB to 1MB, which is a soft fork, and the change from 1MB to 2MB is a hard fork, because blocks larger than 1MB are considered illegal on the old node. Bitcoin has undergone many soft fork upgrades in history, and there has not been a hard fork, because developers believe that hard fork upgrades are likely to cause the bitcoin network to fork, which is a very dangerous thing. And by increasing the bit size of the Bitcoin block size expansion is a hard fork behavior, so this thing encountered a lot of resistance.

One

I have been paying attention to the development of Bitcoin since 2011. When it started to expand in 2014, I think this is a natural problem to be solved, so I did not put too much effort into this matter. At that time, the discussion in the Chinese community was mainly on a forum called Currency Technology. I occasionally paid attention to the discussion of the community at that time. There are two things in the history of the development of Bitcoin. I always think that it is natural to solve the problem that is very abnormal. One is the problem of Bitcoin expansion, and the other is the standardization of Bitcoin protocol. Bitcoin is essentially a set of protocols, similar to the HTTP and Email protocols, not a set of software. In the history of the Internet, any successful agreement or programming language is finally standardized, which is conducive to more diverse implementation. In 2018, I tried to standardize the protocol on Bitcoin Cash, and I got support from many people, but it was not implemented in the end. This is a follow-up.

I have not been involved in the topic of Bitcoin expansion until 2016, when I was more interested in trading. On the one hand, I feel that I can't influence anything. On the other hand, I think the community is looking for a more suitable way to expand. Then, with the bitcoin block size reaching 1MB in the first half of 2016, Bitcoin still has not expanded. I began to pay close attention to this issue and found that the focus of community debate has changed from how to expand to whether or not to expand. It became a very serious problem. From 2015 to 2016, there have been many things happening in the Bitcoin developer community, such as Bitcoin Classic, the expansion of Bitcoin, and the birth of Bitcoin XT, such as the Hong Kong expansion conference, such as Okamoto’s debut and known as Nakamoto’s successor. Gavin, who is also the leader of the expansion, was seized and so on. The Bitcoin core community was divided into two groups, namely the big block and the block. The two factions gradually began to argue and struggle to break. Finally, the core developers of all the big blocks were kicked out by the community block. The Bitcoin Core code submitted permissions and was fully victorious. Bitcoin Core is the most important software implementation of Bitcoin. It inherits the original code from Nakamoto. Since the Bitcoin protocol is not standardized, Bitcoin Core actually defines what Bitcoin is.

I participated in the Bitcoin expansion dispute because I started a Bitcoin mine in 2016: the ViaBTC mine. Bitcoin mining is the cornerstone of Bitcoin operations and the guardian of the Bitcoin Consensus Agreement, building an indestructible bitcoin network through a vast mining network. In the Bitcoin white paper, it also describes a rule that changes the consensus agreement by miners competing for the longest chain. Therefore, after the developers of the expansion team lose momentum, the supporters of the big block will hope to be placed on the miners. If all the miners reach an agreement and modify the upper limit of the bitcoin block size, it is theoretically possible to achieve the expansion. The Bitcoin mining pool is linked to the Bitcoin network and the miners, so it has gained a lot of voice in the expansion. However, it is very difficult to expand the road through joint miners. The Bitcoin network runs more than a dozen large and small mining pools, which are very scattered. And Bitcoin miners are no longer early geeks, but a group of professional miners who do not mine because they have a deep understanding and belief in Bitcoin, but just a profitable business. It is difficult to convince these people to take an adventurous thing together. However, as long as there is still a glimmer of hope, I still have to try.

Miners also need the right bitcoin software to complete the expansion. In 2015, there were a lot of Bitcoin expansion plans and implementations, including the Bitcoin Classic and Bitcoin XT mentioned above, and another interesting implementation is Bitcoin Unlimited. Bitcoin Unlimited proposes a scheme to dynamically adjust the block size by means of a miner voting, which can avoid subsequent hard fork expansion. At the time when I promoted my own mine pool, some people asked me if I supported Bitcoin Unlimited on Twitter. I replied that I was paying attention and testing. This caused a lot of people's attention and made many friends. Wu Jihan, the largest mining machine manufacturer at the helm of Bitcoin, one of the earliest bitcoin investors and evangelists in China, is also my investor and entrepreneurial mentor. Roger Ver, the first bitcoin investor to invest in a large number of bitcoin startups, is known as Bitcoin Jesus and is also a famous liberal fighter. They are the core supporters of the big block and have given me great encouragement and support. In October 2016, I attended the Bitcoin Developer Conference in Milan, but the entire conference did not allow discussion of the most urgent expansion issues. It is a great irony that the rare speech control in the real world has emerged in the most advocated free bitcoin community. After attending the conference, I added the logo of Bitcoin Unlimited to the block mark of my mine pool and publicly announced support for Bitcoin Unlimited, which caused an uproar.

In all fairness, I am actually the beneficiary of bitcoin congestion. We know that Bitcoin mining revenue includes two parts: SGD rewards and transaction fees. As the Bitcoin mining awards are gradually halved, SGD rewards are gradually reduced, and transaction fees are expected to become popular with Bitcoin. And improve. Prior to 2016, Bitcoin transaction fees accounted for a very small proportion. At this time, the default unspoken rule of the Bitcoin mining pool was that the transaction fee income was owned by the mining pool and was not assigned to the miners. With the start of congestion in Bitcoin in early 2016, bitcoin transaction fees have gradually become considerable. I pioneered the PPS+ revenue distribution model. For the first time, the transaction fee was additionally distributed to the miners, which increased the income of the miners. A lot of customer trust. Subsequent other mining pools have also begun to follow up, becoming the de facto standard. In addition, I also pioneered the Bitcoin Transaction Accelerator, where users can submit bitcoin transaction IDs, and our mine pool will prioritize the transaction, and stipulate that the first 100 transactions can be accelerated for free every hour. This product began to spread virally as bitcoin congestion increased. Whenever someone complained that their bitcoin transaction was not confirmed, someone would throw a link to our transaction accelerator. Soon, 100 free credits per hour became spikes, and this product brought us tremendous traffic and brand spread.

However, early Bitcoin participants and investors were extremely enthusiastic about Bitcoin, and they really didn't want to see Bitcoin become so difficult. In the early years, giants such as Microsoft and Dell began to support bitcoin payments. As bitcoin congestion intensified, Bitcoin gradually became less reliable, but instead began to cancel support for Bitcoin. If it is only from the perspective of a savvy businessman, support for expansion and fork is unprofitable, and even bears anonymity. But if it is not because of faith, who will do these stupid things. Many people like conspiracy theories, but I have always kept the best kindness to those who disagree with me. Everyone just left the idea to the left. As for who is right and who is wrong, it can only be judged by history.

I began to actively contact the major mining pools, and I hope they will support BU (Bitcoin Unlimited). The miners have almost no position in this matter. Like the outsiders, they mainly rely on the decision of the mining pool operators. Although you want to be embarrassed, you must try it. Gradually, some mines were convinced by me and I began to announce support for BU. I helped Roger Ver build the Bitcoin.com mine pool, and he also has a clear support for BU. Jiang Zhuoer also founded his own bitcoin mining pool, which is also a major supporter of the big block. In particular, Bitcoin finally publicly announced support for BU, which suddenly gave BU more than 50% of computing power, and the number of BU nodes also increased significantly. It seems that I will fight again and the BU will succeed. But at this critical juncture, BU has appeared several serious bugs, causing large-area nodes to drop every time. This time Core supporters began to carnival, began to madly smash the big block, and the neutrals gradually began to distrust BU's technical ability and began to fall to Core.

two

The expansion problem began to fall into a deadlock. The essence of the expansion problem is not in what way to expand? Do you want a hard fork? Does it support SegWit? Does it support lightning network? It is a question of whether or not to expand. The expansion team also proposed a number of soft fork expansion plans, but they were rejected by Core. SegWit solves the problem of capacity expansion, but solves the problem of transactional extensibility that Bitcoin has always existed, and provides an easier way to upgrade the Bitcoin protocol in the future. Lightning networks and capacity expansion are not conflicting, and even lightning networks need to be expanded to be truly operational. The essence of the expansion problem is that the two sides have inconsistent understanding of bitcoin and decentralization. The big block thinks Bitcoin is a payment network, its value comes from transactions, the more transactions, the higher the value; and the block thinks that Bitcoin is a value storage network, does not require particularly frequent transactions, the current block size It is enough to use. The larger block thinks that the more bitcoin is adopted, the more people support it, the more decentralized it will be. Even if the block increases, there will be enough people to bear the cost of running the node; Blocks believe that increasing the block will increase the bitcoin running cost, which will cause Bitcoin to become centralized. Ironically, the community believes that it is reasonable to pay a fee of more than $ 100 for a bitcoin transfer transaction , and it is unreasonable to cost more than $ 100 for a hardware device running a Bitcoin node .

Due to the reputation and path dependence problems accumulated by the Bitcoin Core development team in the history, and with the advent of the bull market, a large number of new investors are not very familiar with Bitcoin, and hope to be stable, so Core-led blocks Gradually took the upper hand and BU completely lost. The reason for the expansion of Bitcoin continued for nearly three years without any fork. The reason is that no one wants to see the split of bitcoin. Everyone is afraid of splitting and fearing the price collapse caused by the split. Some people even proposed to use the power to kill small chains and ensure that Bitcoin does not fork. As everyone knows, the chain can kill, but the ideology can't kill. Behind the bitcoin fork is the bifurcation of ideology. As long as someone supports it, a coin can always survive in some form.

I gradually realized that it was impossible to convince everyone to reach a consensus. Some people in the community began to propose the idea of ​​small computing power. I began to support the development of a path of development by small powers. I shared this view with others. Most people still don't want Bitcoin to split, or they want to implement bitcoin expansion and upgrade by means of big computational forks to ensure that Bitcoin does not split. However, fortunately, the small computing power can be done without the support of other people. It is already the only optional direction for the big block to split a new coin.

At this time, most of the big block parties also hoped that the 2MB plus Segwit plan reached by the New York Consensus, I clearly pointed out that this road is not going to work. Although this conference received more than 90% of the computing power and the support of most exchanges and wallet service providers, the miners were just a group of people who could not effectively reach an agreement . Although most of the mines are marked with support for the New York Consensus, who can guarantee that they are actually running a new version? The miners of the rash action will face losses, which is similar to the prisoner's paradox. The most advantageous choice for miners is to run the old version. And the new software version has only one Github code base. The official website and download address are not available. How to get the public trust?

Osamu also made two preparations. While supporting the New York consensus, he used the small computing power as a backup solution. We initially hoped that BU could develop the available software, but they have not been able to develop a stable version. At this time, a new development team, Bitcoin ABC, suddenly appeared and quickly completed a high-quality version. At that time, the core members of the Core team launched the UASF (User Activated Soft Fork) campaign, and were forced to force the activation of Segwit on August 1, 2017, so we also chose to open UAHF on August 1 (user activated hard fork) . The new implementation raises the block size limit to 8MB on a bitcoin basis and modifies the difficulty adjustment algorithm using a mechanism called EDA (Tight Difficulty Adjustment). Bitcoin's block difficulty rule is adjusted every 2016 block (about two weeks). If the new chain follows this rule, the miners pay a huge sunk cost, which is likely to cause the chain to die. . With EDA, the difficulty of mining will be reduced rapidly as the speed is slower to attract miners. Regarding the name of the new chain, we each thought about several, and finally chose Bitcoin Cash proposed by Osamu. The name is taken from the title of the Bitcoin White Paper: Bitcoin: A Peer-to-Peer Electronic Cash System , which also accurately expresses Bitcoin's ideal as a payment system.

three

Near the fork, ViaBTC is more than just a mining pool. We launched the ViaBTC exchange about two months ago to support the exchange of RMB and Bitcoin. On the one hand, we opened the Bitcoin Cash mining option ahead of the mining pool. The mining union that selected Bitcoin Cash automatically carried out Bitcoin Cash mining on August 1; on the other hand, it opened the Bitcoin Cash futures trading on the exchange. The user can recharge the BTC and release the BCH to freeze the BTC for early trading. So when Bitcoin Cash was not really born, it was supported by computing power and price in advance, and it has attracted the attention of many people around the world.

There is also an episode before the fork, we found that the implementation of Bitcoin ABC did not do transaction anti-replay processing. What do you mean? If you do not do transaction anti-replay processing, users will probably pay BTC while paying BCH after forking. This is very dangerous and will cause great trouble to users. It is very likely Will cause the fork to fail. After an urgent communication with the developer, they added anti-replay processing, which would make Bitcoin Cash incompatible with the existing infrastructure, but in order to survive, it can only do so .

The specific fork effective time is 8:00 pm on August 1st, Beijing time. Since the Bitcoin Cash hard fork rule requires that the size of the first fork block must be greater than 1MB, I prepared a lot of transactions in advance to fill the first. Blocks. I also put a sentence I carefully prepared "Welcome to the world, Shuya Yang!" into the block. This sentence is a pun, on the one hand to celebrate the daughter of my birth, and on the other hand to celebrate the birth of Bitcoin Cash. At 8 o'clock in the evening, a lot of computing power poured into Bitcoin Cash, but it didn't come out. The mining process is more like shaking the dice. It is a probability game. Whether you can dig into the mine, not only look at the expected value, but also look at luck. The first block was delayed, I checked the system again and again to make sure there were no errors and waited anxiously. It was not until more than 6 hours, until 2 am, the first block was finally born, dug out by ViaBTC. Bitcoin Cash has been born since then! A few minutes later, another block was also dug by another mine. Some people still silently supported Bitcoin Cash. It is luck that we can grab the first block.

Bitcoin Cash's successful fork has attracted a lot of attention, and the number of registered users of the exchange has soared. The number of users registered in the next day is more than 10,000, which is more than the total registration of our online two months. Ten times more than the amount. Fortunately, our system was designed in accordance with the goals of a large number of users at the beginning, and there is no pressure in the face of rapid growth in business. At that time, the team was only about ten people. Finance was the most stressful department. It was responsible for the user's refinancing and withdrawal of cash. Due to the rapid growth of business volume, we also received special attention from banks. The trading volume of the exchange has also increased sharply, and the daily turnover has reached hundreds of millions of RMB. If it is not forced to shut down due to the upcoming September 4 policy, ViaBTC is likely to quickly grow into one of the world's largest digital currency exchanges.

four

Bitcoin Cash has become a force to be reckoned with. Many exchanges are forced to release Bitcoin Cash assets to users and open up the trading market. Quickly, Bitcoin Cash is supported by almost all exchanges. A large number of large block supporters began to turn to support Bitcoin Cash. After the New York Consensus completely aborted, Roger Ver and other large blocks also turned to support for Bitcoin Cash. Since then, Bitcoin has officially split. The price of Bitcoin has not collapsed as much as everyone else feared. It was only after the fork on August 1 that the price went down briefly and then continued to rise.

Bitcoin Cash's early EDA strategy was also very successful, ensuring that it survived with little computing support. However, it also has an unexpected side effect. EDA will only slow down the difficulty when the block is slowed down, but there is no mechanism to increase the difficulty. This has caused the Bitcoin Cash network to be very unstable. In addition, after the difficulty has dropped rapidly, the benefits of Bitcoin Cash mining are much higher than the digging of bitcoin, which has attracted a large number of miners to arbitrage. We also quickly introduced the function of switching mining currency based on revenue intelligence on the mining pool, attracting a large number of customers. Due to the shortcomings of the EDA mechanism, Bitcoin Cash quickly performed a hard fork in November to upgrade the EDA to DAA. The new algorithm uses a block-by-block difficulty adjustment design to ensure a more stable operation of the Bitcoin Cash network.

end

Bitcoin Cash, although it is a expanded version of Bitcoin, has lost everything in Bitcoin, not just its name, but also all its ecological infrastructure. Everything has to be built from scratch . Although Bitcoin activated SegWit, the expansion effect did not work at all. Bitcoin has become more and more blocked. At the peak, a bitcoin transfer fee needs to be close to $1,000, and a large number of applications are turning to other competitive chains. But the name Bitcoin accumulates the credit that Bitcoin has been running for many years. The value of Bitcoin is mainly composed of investment value, not use value. Bitcoin Cash is still too young, and after a brief shock to a record high of Bitcoin 0.5, prices have started to fall. Bitcoin still embodies the biggest consensus of the entire digital currency, not too big.

In the entire Bitcoin expansion and fork event, it was also revealed that Bitcoin was actually mastered by developers, not miners. Although the operation of Bitcoin is decentralized, governance is heavily dependent on the centralization of decision-making. The same is true for Bitcoin Cash, where miners’ decisions have never really taken effect. Although the Bitcoin ABC team strongly denied it, they were the de facto leader of Bitcoin Cash, and they began to dominate Bitcoin Cash's hard fork upgrade every six months. Decentralized governance has gone bankrupt under the POW consensus mechanism, and may be able to be achieved to some extent under the POS consensus mechanism.

In the second half of 2018, Bitcoin Cash was once again facing a split due to the concept of the problem, and the entire community was badly hurt. The reason for this split can be called ridiculous, and there will be opportunities to elaborate on the article in the future. Together with Bitcoin Cash's core supporter Bittland encountered a series of problems at the end of 2018, Bitcoin Cash prices fell to the lowest point in history.

But even so, Bitcoin Cash still has a strong vitality and is the most powerful competitor of Bitcoin. Bitcoin Cash has produced a lot of applications in the past two years, constantly creating its own ecology. The problem of bitcoin expansion has not been solved, and the lightning network that has high hopes has never really been popularized. In the future when the bull market is coming, Bitcoin will inevitably face more serious congestion problems, and Bitcoin Cash will be a big block version of Bitcoin , and it will definitely shine!

At the beginning of 2018, the ViaBTC exchange was reborn on CoinEx. CoinEx was the first exchange with Bitcoin Cash as the main pricing currency, and it also received investment and support from Bitcoin. CoinEx has become a mature exchange covering more than 80 mainstream digital assets and supports a variety of derivatives including leveraged trading, contract trading, options trading, and futures trading. In addition, the CoinEx public network will be launched soon. The CoinEx public chain is built for DEX (decentralized exchange). We hope that CoinEx DEX will become a decentralized, completely free currency and trading platform. . CET (CoinEx Token) is the CoinEx eco token, which is the built-in token of the CoinEx public chain. We will continue to improve the CoinEx ecosystem and enhance the value of CET.

The future has come, and now may be the worst time, but it will be the best time.

Author: Hai slope, ViaBTC & CoinEX founder