Jason C.

Are Hash Wars Good? 2018-11-14

It doesn’t really matter whether you think a hash war is good or not, just like it doesn’t really matter whether you think war is good or not. Regardless if you think war is terrible (it is), it still exists. Hoping people will altruistically not attack each other doesn’t make war go away.

Many people believe that if two opposing bitcoin factions disagree they should be able to go their separate ways. For instance, Bitcoin Cash (BCH) was able to split from Bitcoin (BTC). However, just because this has occurred in the past, and even if you think it is better, does not mean all splits will be successful.

In history most secessions are ugly. Sometimes two factions split successfully, like the American Revolutionary War, and other times one faction forces the other to stick around and follow their rules, like the American Civil War.

For the first time since bitcoin was invented 10 years ago, one faction has decided to invoke their ability to fight to prevent a split. This has not been tested before and the outcome is unknown. I think it’s perfectly justified to label this as an attack. But no matter if you think it is bad or not, it doesn’t change the fact that it exists.

People have made lots of hypotheses about how a hash war could go down, but so far those have not been tested. Now that the idea has been planted, even if this hash war were called off, one would likely occur in the future. Isn’t it better to learn what a hash war looks like now instead of find out later when the stakes are higher though?

It seems hash wars may be here to stay, regardless of whether you think they are good or not. It may not be all bad though, wars could actually make cryptocurrencies stronger and more unified.

Looking at history, almost all countries are the result of wars. As deadly and terrible as they may be, some, such as Ian Morris in the book War! , argue that the temporary destruction of war on average results in a safer and more prosperous society afterward. Wars can take a region that is splintered into many small factions and unify them into a strong single entity. This does not mean all wars are good, or that war itself is ever good, or that the ends justify the means. It just means that war exists and that sometimes the net long-term effect can be positive.

Since bitcoin was released, many alternative cryptocurrencies have been created. For instance litecoin is a simple fork of bitcoin with relatively few changes. In one view these different cryptocurrencies are good because they can test out different ideas. Similar to how different countries can try out different policies. However, splinter too much and you lose the benefits of being unified. There are now thousands of cryptocurrencies, does this mean there are many diverse ideas being tested or are many of these just clones of others?

One possibility for the splintering of cryptocurrencies and the gridlock progress in Bitcoin (BTC) is because of weak governance. You could even argue there isn’t any governance, that it is essentially anarchy. People are freely creating new cryptocurrencies and users can choose to use whichever ones they want.

It was perhaps only a matter of time before people grouped up and decided to attack other factions. Instead of land in the real world, in the proof-of-work (PoW) crypto world there are hashing algorithms. Right now BCH and BTC are surviving on the same island, SHA-256. Litecoin is on a separate island, scrypt. Miners supporting a currency on one island are much more likely to attack other currencies on the same island, since that is the hardware they have.

In the coming Bitcoin Cash hash war, ABC devs have stated that in a worst case scenario they will consider changing the PoW algorithm, which is like retreating to a new island where you are less likely to be attacked. If SV is successful in eliminating or forcing ABC to a new island then it will prove that hash wars are effective.

Once Pandora’s box is opened it will be difficult to close. No matter how much time passes, there will always be tension between the two inhabitants of the SHA-256 island. It seems that it would inevitably result in a war with only one remaining.

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