The bifurcation will be how to help achieve bitcoin
For a long time, I have been asking smart people the same question, what is bitcoin?
When I was in the recent bitcoin meeting, I put the question to the Asset Management Co MikeSofaer. Mike replied: “bitcoin is for collapse of fiat money system collective insurance.
His answer made me think of a new problem — why don’t we have more insurance companies?
Let us imagine that we have a decentralized system, which means that the miners (at least, those people have reached a consensus) is not working together, they decided the correlation is negligible. As a result, each miner will validate all other people’s behavior, and to abide by its rules of interest.
This is similar to an insurance company, it has sufficient diversification policy, the probability of occurrence of the same claim occurred at the same time actually is zero.
In fact, this is the operation of insurance companies, they have to flood and forest fire policy, apparently the two disaster cannot occur at the same time.
So, how to encrypt monetary economy developed similar robustness? Perhaps the bifurcation is part of the answer.
Step back and say, before bitcoin fork, and those who have not been bitcoin show that, even in this unpredictable situation, the first encryption currency is also strong enough and stable.
In order to further explain, I discussed in this article in this type of bifurcation meet the following conditions:
1, they share a common transaction history
2, they use the same password. In other words, a wallet will be key in bifurcation with another fork in the wallet,
3, they use the same algorithm (at this point, they are different from other branches, algorithm is changed to prevent attack 51%)
The main reason is the bitcoin bifurcation in order to control the development of bitcoin. The system itself is scattered, but obviously on how to further improve the project opinion differences.
If, 1) bitcoin is completely anonymous, 2) miners are scattered and not together, 3) the number of transactions per second will increase with the increase in demand, while demand will not increase the bifurcation.
In this case, the system will constantly close to perfect, and with security expectations and decentralized control will really have the greatest chance of success.
But obviously, we are far from reaching the three cases.
Who will benefit from the bifurcation?
In these several interest groups bifurcation:
1, bitcoin miners. They do not care about their own products, the only concern is the biggest returns, so more bifurcation means more choice.
2, speculators are looking for a proven technology (bifurcation bitcoin has more advantages than other encryption, because it is the oldest library), it has high liquidity, volatility and use.
3, want to use encrypted currency users can high value in the grey economy trading.
Because there are more trading tools and the market value of all encryption currency is in growth, which will create more opportunities in the transfer of value chain, also indirectly led to the increase of liquidity. At the same time governments that track all different encryption currency is more and more difficult, the level of competition will lead to decreased cost.
However, in the final analysis, Forx has a series of negative and positive results.
On the negative side, they weakened the investors for an asset of confidence (which one is the real bitcoin?) and inflation, which is one of the main arguments against Fawkes.
If we are afraid of inflation, then we will equate with bitcoin services. For example, if the town is only a hair salon, so the barber price will be greater than 100 such high salon. Nevertheless, you still have a lot of copies of Monalisa, and the number of them will never affect Da Vinci’s original value.
In addition to the negative factors there are some positive benefits. One example is the bifurcation will promote the progress of technology, because they will force the team to compete against each other.
Beyond the limit
For any one bit type system, the most difficult problem is that the system is controlled by a view to really go to the center of the. Consider bitcoin cash (BCH), the main mining operations are concentrated in the hands of a small group of people (some people worry about bitcoin ownership and transaction).
Obviously, not everyone put bitcoin cash coins sold (even Satoshi didn’t sell his or her or their bitcoin). However, manipulating the price of bitcoin opportunities than the original bitcoin is much greater. So far, bitcoin cash community has not introduced any clear standard operation to prevent bitcoin, so it is difficult to judge whether they have the ability to carry out such development.
On the other hand, you have to admit, if completely anonymous, a branch has 10 thousand independent miners and millions of users look and 3 miners and 100 users (because we don’t know who controls the hash rate, or the account will be exactly the same.).
Only in the trading case, in quantity and value trading index is useless, or people in the “pocket” on the exchange.
If bitcoin experiment can succeed, it will teach us how to create a distributed control system is anonymous, and provide to the center of the control can be proved. In this case, such a system can be started in the real dispersion, security, quality of service and transaction cost on the level of competition.
Of course, there is no reason to believe that the “traditional” financial system does not mutate into this form. Each country, whether real or virtual can create their own currency, the “central bank” using a format such as contract management, intelligent data analysis, its economic performance and use them to establish monetary policy.
In my opinion will be new bifurcation occur especially for Ethernet square, especially when it is converted to verify when (it than that work more easily). For bitcoin, is very likely to have potential new and improved, because of the need to introduce a hard bifurcation (such as for MimbleWimble keen).
We must pay attention to the extensive use of single mining bitcoin will increase the possibility of double spending attacks. There may be a bitcoin payment platform is exactly this kind of attack took place. But the advantage of this is that the real experience of this attack will provide statistical data to prevent such attacks for other future network.
I have to start thinking in short, if the system is not the competition to become the “king of the mountain”, then its value will have positive significance. If we go along the decentralized line then there should be a system.
Based on this principle, the user should be free to choose any time to choose which system. A single global currency, carved into a true path in the stone a founding father of a country contract, now seems to be more and more like a Orwell’s future — even to the center of the sauce”.
Forks provides an opportunity for the ideological leader, let them put their ideas into practice, and not to fall into the endless quarrel with others.
In addition, this does not mean to create a new encryption currency from zero, and trying to get user support — now has been holding bitcoin.
A long-term view is that this method can produce results, because it can be tested independently of different technical solutions, and then select the best solution.