How likely is it that Bitcoin will be overtaken in the event of a contentious hard fork? I think this is an example of things to come. Bitcoin will be attacked through its mining, the network, legally, and every other possible way. If you don't think Bitcoin is going to be attacked, you've misunderstood what this is about.
You don't go and poke a $20 trillion industry and go, "Hey, we're going to disrupt you!" You can't just wait for it to roll over. This is offensive to a lot of governments, rich institutions, and a lot of people who don't want to see Bitcoin succeed.
If a fork happens, we get to learn what happens when a fork attack occurs. Anyone who thinks a fork will be unopposed is quickly going to discover that this will be a battle on all fronts. Inevitably the two sides are going to attack each other on the network, with denial-of-service attacks, with hash rate; they're going to attack each other publicly, privately, anonymously and not.
Every bug in the software will get poked and poked again, so they better fix them well. The battle becomes "who has the best software development team? How quickly can they maintain that code and keep uptime?" That race is only 7 blocks wide. I don't think the people who are threatening to do a hard fork have thought clearly about the implications.
This will allow Bitcoin to test all the attack vectors (nodes, relays, hashing, replay transactions, etc). And the result will be a Bitcoin that's battle-hardened, because it will have survived a fork attack and we will better understand what happens under such highly contentious conditions.
It's very important to not mistake smooth sailing for good sailors. If any altcoin somehow overtakes bitcoin and gets to this scale, they will have to deal with the same scaling and governance controversies. Many of them will end up centralised or with failures in architecture.
These are the rites of passage; you first have to grow up to face them. How many of the other blockchains are preparing for this? Not many, because they aren't paying attention. This is a fantastic experiment but it's not easy. This is a game with $20 billion at stake.
Transcript
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Oh yeah. So right now we know that Bitcoin has like the largest network effect. So in the event of a contentious hard fork, how likely is it that Bitcoin becomes obsolete as the main currency and other currencies take over? Like by far that's a very good question.
How likely is it that Bitcoin becomes obsolete? Um I don't think it will become obsolete. I think if it faces a contentious hard fork, this is an example of things to come. Bitcoin will be attacked.
It will be attacked through its mining. It will be attacked through the network. It will be attacked legally. It will be attacked in every possible way.
If you don't think Bitcoin is going to be attacked, you've misunderstood what this is about. You don't go and poke a 20 trillion dollar industry and go, "Hey, we're going to disrupt you." And then wait for it to roll over. Right? This is offensive to a lot of governments and a lot of very very rich institutions.
And there are a lot of people who don't want to see Bitcoin succeed because it's decentralized and they're going to attack every aspect of it. Every aspect of Bitcoin will be attacked. So if a fork happens, we get to learn what happens when a fork attack occurs. And we learn how to defend against fork attacks.
Make no mistake, anybody who walks into this thinking that a fork will be unopposed is going to very quickly discover that this will be a battle on all fronts. Day one, we've achieved 51%. We are now going to fork Bitcoin. kind of seems like, hey, shipping date is here.
Our work is done. Your problems are just about to begin, my friend. You launch a 51% attack, that means you are seven blocks ahead every 24-hour period, if you can sustain it. But inevitably, the two sides are going to attack each other.
They're going to attack each other on the network. They're going to attack each other with denial of service attacks. They're going to attack each other with hash rate. They're going to attack each other publicly, privately, anonymously, and not in every possible way and immediately.
Every bug in the software will get poked and then poked again. And if you try to fix it, you'd better write that code well because if you put another bug in, that's going to get poked, too. And then it becomes a battle about who has the best software development team and how quickly they can maintain that code and keep uptime because that race is only seven blocks wide. I don't think some of the people who are threatening to do a hard fork at 51% have thought clearly about the implications of what happens immediately afterwards.
This is not going to be an easy game. It's going to actually allow Bitcoin to test all the possible attack scenarios on nodes, on networks, on relay networks, on hashing, transaction malleability, replay transactions, and everything else. What will come out of that? Probably a Bitcoin that's worth a lot less or in my view, a technology that's worth a lot more because it's battleh hardened.
when it comes out of that it will have survived its first fork attack and we will know a lot more about what happens in highly contentious fork environments. Ethereum taught us a lot but it didn't teach us much about a highly contentious fork. The fork was initiated by the main development team which had more than 80% of the hash rate on their side. The other thing to remember, and I think this is important, there's a lot of people who say if Bitcoin stumbles, it's going to be overtaken by one of these other currencies.
It's very important to not mistake smooth sailing for good sailors, right? In order to have scaling problems, you first need to have scale. In order to have governance problems, you need to have a controversy to govern over, right? And everything's hunky dory kumbaya until you have 20 billion dollars on the table and then the long knives start getting sharpened.
Since this is March, we can use a reference. Beware the eyides of March, right? And you can then say, "Oh, it's not what it looked like. It's not what it looked like." You know, don't pay attention to the stabbing.
really pay attention to the fact that we all came together to stab together. That's the Roman Senate quote. The point here is that what's happening in Bitcoin now isn't unique to Bitcoin. If one of the other currencies gets to this scale and has to handle this many transactions, they have a scaling problem which they're going to have to resolve.
There will be differences of opinion as to how to resolve that. Some approaches will lead to massive centralization and a takeover by miners. Some approaches will lead to failures in architecture and software. These problems will repeat for every other currency.
These are the rights of passage. You first have to grow up to face them, right? And so the big advantage that many of the other blockchains and currencies have is they can look at Bitcoin, watch what happens, and learn these mistakes cheaply so that they don't have to repeat them expensively. Um, now how many of the blockchains are actually doing that?
Not many. Because for the most part, they're too busy going, "We're the best. We're going to win next." Right? and not paying attention to the fact that these exact same problems are going to exist in their own blockchains.
There are no easy answers. There are lots of very delicate design tradeoffs in how you deploy trustwear. Um, and Bitcoin is paving new ground. It's carving a new path.
No one has gone here before. Pay attention. We have a lot to learn. This is a fantastic experiment, but it's not easy.
It looks easy back there. Um, I like to remind people who was here when Bitcoin was in 2013. Anyone here who used Bitcoin in 2013? Yes, a few people.
Okay. How much was the average fee? Zero. Right.
How many blocks were full? Zero. How big was the block size problem? Zero.
How much of a governance problem did we have or danger of a contentious hard fork? Zero. You look back at 2013 and you go easy days, right? What changed?
What changed was now there's $20 billion at stake and the game gets serious, right? So, it's easy to think that it will always be smooth sailing for the other cryptocurrency because they got everything right. That's not going to be the case. [Music]