There has been a lot of talk around the potential of a bitcoin hard fork being implemented and the potential risks and benefits associated with it. Gavin Andresen encountered a great deal of opposition for his proposed BIP101 to increase block size, with a number of mining pools and businesses publishing a letter rejecting the move. Since then, Andresen has withdrawn the BIP101; however, there are those that support the idea.
Bitmain, the Chinese mining company which run Antpool , one of the largest with over 20% of global bitcoin mining power, announced its support and intent to test Bitcoin Classic in the near future in a tweet by co-founder Jihan Wu. Similarly, Brian Armstrong, co-founder and CEO of Coinbase, has written a post in which he has proposed a bet that the implementation of bitcoin’s first hard fork will end up fine.
In his post, Armstrong noted the debate that had followed a post he had made in support of the hard fork, mentioning that there was a huge amount of resistance to the idea. Armstrong declared that bitcoin was upgrading, not splitting; that hard forks were one of the most important innovations of bitcoin and multiple teams working on the bitcoin protocol is a good thing. He is so certain that it is the way forward that he is putting $5,000 behind his views.
This proposed bet, which Armstrong has put forward, is that ‘bitcoin’s first hard fork will be an upgrade of one single currency, not a split, and everything will work out fine’. Although he stated he wasn’t 100% certain, he was confident enough to back up his statement $5,000 paid in any form of currency.
Behind the deal is are a few caveats to qualify the statements and terms that Armstrong has intended with his claims. Armstrong has stated the following:
1. At the moment the network upgrades (or forks), 95% or more of all hashing power will be on a single chain. This will be true regardless of what threshold is used to trigger the upgrade — for example, BitcoinClassic uses a threshold of 75%, and other forks could use an even lower threshold — but, irrespective, 95% or more will be on a single chain by the time the network upgrades.
2.At the moment the network upgrades (or forks), 95% or more of all consumer wallet and merchant companies (by number of users) and exchanges (by trading volume) will support the new version.
3.Two days after the upgrade (or fork) takes effect, the bitcoin price will be higher than it was 1 month prior to the upgrade (or fork) happening.
4. The winning fork is being defined here as the longest bitcoin chain (measured by amount of “work” or hashing power done on it) originating from Satoshi’s genesis block.
5. The “moment the network upgrades” is when the proposed change takes effect. For example, blocks may start to be mined with a vote for BitcoinClassic, but it is not until 751 out of the last 1000 blocks are mined with a vote AND a 28 day grace period elapses, that the change takes effect and 2MB blocks can start to be added to the longest chain. So in this example, it is not until the 2MB blocks can be added to the chain that the upgrade (or fork) has ‘happened’.
6. This bet is limited to the first hard fork that occurs in the next 12 months from the date of this post. Armstrong believes there will be at least one during that time, but if not does not want to leave the bet going on forever. If no hard fork occurs during that time, then there is no winner.
7. This bet is open to any public figure in bitcoin or tech who is willing to accept it – Armstrong will choose one person if more than one accepts it.