So Bitcoin Might Fork. Here’s What to Expect…

It is with some lament that I write this. If everyone agreed on a path forward, then there would be no need for this post, but here we are. There is a strong likelihood that we will need to know what will happen if Bitcoin forks (again). There is a chance that the protocol of Bitcoin will fork, which will cause a chain fork as well. (I discussed hard forks & soft forks from my perspective in a previous post.)

Some Bitcoin miners are signaling that they would accept one of two competing Bitcoin protocol changes: one protocol is Bitcoin Unlimited (BU), which would increase the maximum transactions that Bitcoin can process by 100%. The other protocol, called Segregated Witness (SegWit), is expected to increase this maximum by 70%. As of this writing, 35.9% of blocks are signaling for Bitcoin Unlimited while 26.8% are signaling for SegWit.

Bitcoin miners signaling for Bitcoin Unlimited and SegWit blocks

Bitcoin blocks found by miners signaling Bitcoin Unlimited support vs. miners signalining SegWit support

Bitcoin Unlimited vs. SegWit: Abstractly, what is happening?

Let’s make a hypothetical situation where the proportion of Bitcoin Unlimited to SegWit votes stays the same, but is extrapolated out so that ALL Bitcoin miners MUST choose either Bitcoin Unlimited or SegWit. That would mean around 55% of miners would be supporting Bitcoin Unlimited and 45% of miners would be supporting SegWit. (There is an incentive to go with the “winning” majority chain, so this division of hashing power could be even more severe at the time of a hard fork.)

If Bitcoin Unlimited activated and a block over 1MB was mined, then the SegWit part of the network would reject this block and build off the previous block. With a drastic drop in hashing power but no change in the difficulty target, it would take the Bitcoin network longer to find the winning solution that confirms a new block to the blockchain. With our hypothetical numbers, blocks for Bitcoin Unlimited would come out approximately every 18.2 minutes and SegWit blocks would come out approximately every 22.2 minutes. Any transaction capacity increase promised by Bitcoin Unlimited and SegWit would be delayed until the difficulty target adjustment shakes out. As more blocks were found, the difficulty of each chain would adjust and after about a month (a little longer for SegWit), the 10-minute block time target would be restored.

How would this hard fork affect Bitcoin users?

A Bitcoin user with coins before the hard fork would then be considered to have a positive balance on both ledgers/blockchains after the hard fork. (The Ethereum blockchain forked after last year’s DAO debacle, yielding ETH tokens and ETC tokens (Ethereum Classic) for users who owned ETH before the fork.) But without taking care, a user could intend to spend coins on one chain and unintentionally spend on both chains; this is known as a replay attack, though it’s really not an attack if it’s done unintentionally. Maybe that should be called a replay error so as to not be confused with an intentional replay attack meant to defraud.

How does one guard against a replay attack after a hard fork?

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On Forks & Hard Forks: Eschew Obfuscation & Watch Your Language

Blockchain hard forks & soft forks: Bitcoin & EthereumLanguage certainly is an important part of the life of a human. The Sapir-Whorf hypothesis states that the structure of a language determines or greatly influences the modes of thought and behavior characteristic of the culture in which it is spoken. In my study of mathematics, we would often joke that we were really studying language.

In all areas of language, we need clear definitions. The same holds true for math; every concept of mathematics needs to be clearly defined. Without clear definitions, we are forever doomed to nonsensical communication. Some proofs require clear definitions of new objects.

Language can also be used to obfuscate, complicate, or hide information. Presenting information in a confusing or contradicting way can influence an argument, and ultimately be used to try to control the thoughts of others. The current prevailing monetary system is riddled with terms that deliberately hide what’s really being done. New monetary systems should avoid duplicating this aspect of their central banking predecessors; transparency and clarity should be valued traits.

Currently, I find that the meaning of the word fork is either not clear to people or purposely being blurred. The meaning of fork that I find blurred is the same meaning the word has when describing a fork in the road. A fork is a situation where one path or way becomes two paths going in different directions. An open source programing project could fork when it is found that there is another purpose that it could apply to. A project could also fork when there is a disagreement of which way it should go. Forking is the ultimate “Why not both?”

The word fork can also apply to a blockchain. Any block in a chain has a previous block and a next block. When there are two possibilities for the next block, that could be considered a fork. Usually, it’s called a fork in the chain if people are actively building on both possible blocks. If there is a next block which is ignored, that is usually called an orphan block. If an orphan block has a handful of blocks built on top of it but is abandoned, it’s called an orphan chain.

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Episode 171 – Steemit Skepticism, Federal Reserve Interest, and BlockStream Won…

Here are the TL;DR headlines from today’s show:

The Federal Reserve is playing with interest rates. Steemit introduces promoted content and we are looking for a wallet to HLOD Steem currencies off the platform… is Steemit decentralized? Civil asset forfeiture is too hard to give up for Police in New Mexico. Lots of Ethereum news, you should give a listen! Imagine if Ethereum and Steemit had a baby blockchain, you may end up with Synereo. One prominent Bitcoin Miner proclaims Blocksteam has won the Block-size debate and we lament the fall of Bitcoin. More details on Monero.

All this and more here on Neocash Radio episode 171! Recorded August 31st, 2016 in Manchester, NH!

We’ve written out short overviews of the topics discussed on today’s show below; be sure to listen in to the whole podcast to get more information, insights, and thoughts on each of them from JJ, Darren, and Randy!

Stream this episode of Neocash Radio here: 

Direct Download – Neocash Radio episode 171 (MP3)
Subscribe to the Neocash Radio podcast on iTunes!

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Episode 167 – A First Look at Steemit and Silbert Announces ETC Pump and Dump

Randy joins us in studio. Bitfinex suffers a massive loss in bitcoins due to a hack and is talking about socialized losses. Barry Silbert announces a pump dump for ETC. Japan is the first to Quantitative Ease for stimulus. Kim dotcom announces Mega 2.0 and bitcache. Be on the look out fr fake bitcoin wallet applications on the Apple Store. The Brave browser may eliminate ads as we know them. Jaxx integrates Dash. We talk with Randy about a first look at Steemit.


Direct Download

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