On Bitcoin’s 89th Death and the Silver Lining

In the last couple of days, I’ve been through the whole seven stages of grief after learning of the (89th) death of Bitcoin. Mike Hearn, ex-Google developer and one of the earliest developers of Bitcoin, but not one of the ‘core’ developers (he actually only implemented three changes according to GitHub), has decided that Bitcoin is now too broken to fix and declared it dead, and if not dead, about to die.

He has some valid reasons: Bitcoin is still considered an experiment and it is broadly recognized that changes have to be made to the software or it may not be able to grow big enough to be as usable as we have been promised. It works well enough with a million users and a 4-5 billion market cap, but what will happen when those numbers are a billion users and trillions of dollars? Further, rather than any software changes needing to be approved by everyone running the software as Satoshi more-or-less wanted, we now have huge mining farms, many located in China, who have a huge proportion of the voting rights while most regular users like me no longer have any voting rights at all.

These, and many of the other problems that Hearn talked about are real and do need to be addressed (I’m not a fan of RBF as it’s currently expected to be implemented). That, coupled with the death of another long-time exchange, Cryptsy, and the subsequent huge decline in Bitcoin’s price, had me going through the stages of grief with a lot of time spent at the stages of denial and anger.

After my crisis of faith, though, I settled down and realized that Bitcoin is still an experiment, but it is one that is being run ‘in the wild.’ Right now many banks are researching, building, and testing private blockchains, basically trying to reinvent Bitcoin for themselves, but which they will fully control. All of these will be tested in labs, given stress tests, ad thoroughly evaluated before they ever are tried out with anyone’s real money. Bitcoin, though, was thrown into the world and grew organically into being worth the four billion it is today. Challenges are expected, and they can be overcome.

Hearn of course knows all of this very well. Last summer, he ad Gavin Andresen, former lead developer of Bitcoin who was passed the keys to the software directly from Satoshi Nakamoto himself before he disappeared, introduced an alternative version of Bitcoin that solved some of the problems Hearn talks about, but in ways not everyone was happy with. This software, a version of the core client, was named Bitcoin XT, and caused a huge, contentious debate in the community. If enough of the community adopted this version by this January, then Bitcoin would essentially flip to that version in what’s known as a hard fork. They needed 75 percent of the community to adopt, and I believe they only got something on the order of 10 percent. The debate got acrimonious; dirty tricks were played (opponents apparently hired hackers to DDOS people running the XT software). In the end, it does seem that although a number of key people and Bitcoin businesses were in support of XT, even without the dirty tricks it would likely not have come anywhere near to being adopted.

It is a shame that things got so acrimonious and it would have been better for people to let the debate happen without dirty tricks, name calling, and death threats. Hearn, though, was no saint in the battle, at one point claiming that Bitcoin would be better off it had a benevolent dictator, something that flies in the face of what almost everyone in the community believes, and something that would gain him few supporters. And, for lack of a better term, his declaring Bitcoin dead when he announced he was abandoning the project was little more than a fuck you to the Bitcoin community. As someone who has gotten a lot of press in Bitcoin circles, he surely knew that his long-form post on Bitcoin’s shortcomings and his strong claim that Bitcoin is fatally flawed would draw the attention of the mainstream press. The adage is that ‘if it bleeds, it leads,’ and Hearn’s vocal departure gives the press an opportunity to gleefully what they say they knew all along. Even if all of the issues Hearn notes are fixed, for years people will be bringing up that a core developer walked away saying it was too broke to fix.

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The adult thing to do would have been for Mike to say to himself that Bitcoin no longer matched his vision and leave it to its own devices, especially when the efforts, money, projects and careers of so many hang in the balance. I have enormous respect for things that Hearn has contributed, but I’m frankly dismayed that when his own idea about how to fix Bitcoin wasn’t adopted, he figuratively just tried to turn the game board upside down and storm away.

There is a huge silver lining to all of this. As I said, Bitcoin does have issues. When Hearn and Andresen introduced their own version of Bitcoin’s software to try to fix what they saw as its problems, it sparked a debate. I suspected at the time that they knew that their controversial alternative wouldn’t get adopted, but that they hoped by introducing it that it would spark real, constructive debate that would get the community moving to fix the problems. In some ways, that happened. There were two conferences on scaling Bitcoin and a brilliant proposal by the current lead developer to more than double capacity by reconfiguring what information is necessary to be confirmed in the blockchain. Further, there are now two more alternate versions of the Bitcoin software, one known as Bitcoin Unlimited and the other Bitcoin Classic, which lack many of the things that made XT controversial and may allow Bitcoin to grow into its destined role. The Classic version has even implemented an open voting system to let developers know what they think are the highest priorities for them to be working on. These are huge steps in the right direction and I am eager to see how they develop.

I no longer have belief enough in Hearn to think he is playing the long-game and merely trying to get us to look in the mirror long enough to recognize and fix our own problems. That may be just what his departure might have sparked.

Onward and upward!