A New Hard Fork of Bitcoin

Iron sharpens iron
- Proverbs 27:17

The time has come for the Bitcoin Community to revist the “hard fork”. The upside potential is enormous: global scalability, privacy, competition, rapid improvement and adoption (ie, survival). The downside is limited: some drama, plus every Bitcoiner gets some free money.

Note: Below, the project’s name is given as “MC” (“mainchain”), but that will not be the launch name. It is a placeholder.

1. An Altcoin? You are leaving Bitcoin?!

I would prefer not to. Ideally, Bitcoin would succeed (and MC would fail).

But it’s not up to me.

Other people are damaging the Bitcoin project. Core developers have become self-interested, lazy, and corrupt. Miners have abdicated their duty, to maximize both [1] the utility of the network, and [2] their own txn fee revenue. Bitcoin culture has many entrenched errors, and is probably unfix-able at this point.

2. Errors? Isn’t Bitcoin already unstoppable?

Well, if Bitcoin is unstoppable, then you certainly won’t hear me complaining! That would be great!

And hey – if Bitcoin is unstoppable, then MC is nothing to worry about. Just stop reading now.

Alternatively, though – if I am correct [that Bitcoin is not perfect], then it would be wise to prepare. What’s our backup plan? It is MC.

Even if Bitcoin is perfect today, it may not remain so. There’s no limit to how good of an idea someone might come up with in the future – and there’s no limit to how large a mistake the Bitcoin Community might someday make.

Ironically, the “Bitcoin is perfect” belief, is likely to be what finally kills Bitcoin. Success often leads to complacency, and failure. See: the Fall of Rome, Star Wars Episode I – etc. The book “Innovator’s Dilemma” details the history of bankruptcies in business – often it is easier to just start a company over.

3. I don’t like what you are doing, becau–

Let me stop you right there. You are getting free MC… so: sell it! Use it to get more BTC. Do that, instead of complain.

Think of it as a free number-go-up on your BTC.

4. You really think a new coin can defeat Bitcoin?

Yes. It is at least 5% likely.

Even at such a “low” chance of success, MC is still worth trying. The Bitcoin project is too important, to let some idiots screw it up.

Plus, its free money for everyone.

5. Why is a hard fork necessary? Please describe each technical change you are making.

The hard fork is necessary to form a new community. It is not the BTC code that is broken, it is the BTC community.

We need a way to bet against that community, and disproportionately reward our early supporters (who take the risk of supporting us). That is why we need a new coin.

The hard fork itself is pretty minimal, code-wise:

  1. We force, at a specified block height, a “special difficulty adjustment”, down to the minimum difficulty.
  2. We give half, of Satoshi’s “patoshi” coins (about 550k of 1.1 M) – to our investors and supporters.
  3. We allow our txns to have an optional “extra byte” – this intentionally mangles the TxID, allowing users to opt in/out of “transaction replay”.
  4. Other superficial changes (the name, the “network magic”, seed node IPs, etc).

Other than that, our L1 code is identical to Bitcoin Core – and will remain so.

We plan to immediately adopt two soft forks (that BTC is unwilling to adopt):

  1. Reduce blocksize by 10x – ie, from 4 MB to 400 kb.
  2. Bips 300/301.

Both of these can be done via “CUSF” – (ie, without changing any lines of code).

We will intentionally keep our L1 codebase identical to Bitcoin Core for as long as possible. (In that way, we will automatically gain access to CVE fixes, and new Core features – without doing any work.)

6. Aha! You are taking Satoshi’s coins! That is why you are doing this! Thief!!

Well, again:

  1. We’d prefer not to do this, at all.
  2. If BTC activates BIPs 300/301, we will abandon this project (unless the MC marketcap is higher than BTC, at that time).

And furthermore:

  1. We are “stealing” zero of Satoshi’s BTC. (We do not have the power to take any BTC.)
  2. In fact, we are giving Satoshi free MC.
  3. Admittedly, in a hypothetical future scenario where MC replaces BTC, then Satoshi would have fewer coins – but, in that world, the MC marketcap almost certainly exceeds today’s BTC marketcap, by more than 2x. So, the value of Satoshi’s holdings, will have gone up, due to our actions.
  4. In fact, in that scenario, we will have actually rescued Satoshi’s net worth, from $0.
  5. Our project contains a zk-snark privacy L2 – this might be, in practice, the only way for Satoshi to safely use any his coins, at all.

On top of that:

  1. Innovators are certainly entitled, to make some return on their risk (at the expense of their haters).
  2. It is immoral for Bip300-supporters and Bip300-haters to be treated equally, in this case.

And:

  1. We intentionally want to split the community, and drive away the overly-conservative faction. (Those are the “bad guys” who are killing BTC.)
  2. Instead, we want new people: open-minded, entrepreneurial, risk-taking, contrarians. We want to shake things up, and prioritize the new over the old.

Finally:

  1. Lack of competition is killing the BTC project. It is an existential risk, that warrants emergency action.
  2. Overall, our economy is growing too slowly, and technology is advancing too slowly – we need new ideas.
  3. If you don’t like it – then sell. (See answer #3.)

7. Doesn’t the failure of Bitcoin Cash (BCH), prove that hard forks always fail?

Bitcoin Cash suffered from a long list of fundamental problems.

We will not make the same mistakes. So, in those ways, we can easily improve on their performance.

Today, BCH trades under 1% of BTC. However, back during its first year, BCH “flippened” Ethereum for one day, to (temporarily) become the #1 Altcoin. This speaks to the inherent strength of the hard fork concept.

In other words, despite BCH’s many flaws, it reached an enormous height.

Even today, BCH is worth over ten billion dollars. That’s a lot of money! (Not bad, for a “failure”!)

8. What is your plan for surpassing BTC?

Here are the general principles:

  1. Allow BTC to trailblaze.
    • Let BTC do the “leg work”, of normalizing crypto for the masses.
    • Keep almost everything the same – fixed supply, 21 million, proof of work, etc.
  2. Use BTC as an “on-ramp”.
    • Swap BTC for MC, cryptographically. Therefore, any BTC liquidity, also becomes MC liquidity.
    • This also undermines the “privacy coins are sinister, transparent BTC is more palatable” narrative – since BTC is now an on-ramp for a privacy coin.
  3. Focus on what BTC can’t do:
    • Tech innovation / tech competition – (currently roadblocked by Core / prestige economy).
    • Privacy – (currently roadblocked by Saylor / corporate interests).
    • Mining Revenue – (currently roadblocked by non-mined L2s; superstitions about mining).
    • Fun – (currently roadblocked by Bitcoin twitter).
    • Specific use-cases (BitNames, BitAssets, Coin-Swaps, Prediction Markets) – (currently roadblocked by maxi culture).
  4. Focus on users.
    • Define users as: those who pay transaction fees to miners.
    • In contrast, non-users are: developers, miners, investors, and media personalities.
    • In the long run, users win. Non-users are parasites who must be kept at bay (when necessary).
  5. Sabotage BTC, by promoting “degrowth” policies such as…
    • Complacency narratives: ossification, “Bitcoin has already won”, “Don’t break bitcoin”.
    • Failed L2 concepts, such as Lightning.
    • Distractions, such as Covenants.
    • Anti-node, anti-sovereignty concepts, such as: “federated” sidechains, Fedi, Liquid, etc.
    • Wishful thinking, and other “braindead” advocacy. Stock-to-flow. “Carnivore-style” maximalism, and other “lifestyle” cult-like nonsense.
    • Toxicity, and pointless misanthropy. “We never wanted these users, anyway.” “You’ll come crawling back to Bitcoin, you’ll see!”
  6. Grow the new community.
    • We can only succeed, if we “recruit” people.
    • We need these people to [1] understand the mission, [2] buy the coin, and then [3] contribute their unique skill.
    • So, we need our own “Andreas Antonopoulos”, Roger Ver, Hal Finney, etc. (We also need our own BitPay, Blockstream, Microstrategy, etc.)
    • We also need new disputes. For example, a new “Mike Hearn vs Greg Maxwell”. But – this time around – they will settle their dispute NOT with a new Altcoin, but with a new L2, on the existing MC network.
    • Our new community must prioritize growth. It must elevate those who promote user-adoption, and it must shame those who hold adoption back.

A lot of it will happen automatically. Bitcoin has many serious errors, which its community is failing to address. When the new coin launches, millions of stakeholders will be invited to form an opinion. Among the opinionated, coins will be bought and sold – and the new owners will argue their case (on Twitter and elsewhere). A bright light will shine upon these errors.

It is these errors which create our investment opportunity. (Not the brilliance of Bip300.) If Bitcoin is perfect, then no “plan for surpassing BTC” could possibly succeed. But if instead, BTC is permanently disadvantaged due to unfixable cultural errors, and if there is a way of getting everyone to notice this, then there will (eventually) be a stampede to abandon BTC for the nearest viable alternative.

9. Once MC begins to succeed, won’t BTC copy it? So, you are doomed either way: either [1] you fail immediately; or [2] you achieve some initial success, then BTC copies you, and then you can no longer compete with BTC’s network effects, and you fail at that point. So, why would anyone invest in a doomed project? It’s [1] lose if you lose; [2] lose if you win.

Indeed – this is a big risk! We could be right about everything written here so far – and yet, MC could still go to zero against BTC. In fact, one way it might do so, is if BTC later agrees with us, too quickly. It is quite the paradox.

Here are some reasons to doubt that BTC will be able to copy MC in time:

  1. BTC is more rotten than people realize – and much of this rot is cultural (which is not easy to change).
    • In particular, there is a whole “ossification” coalition of Bitcoin; and an “anti-drivechain” coalition. Both are moderately influential. Both will have their reputations damaged, if they have to walk back their anti-drivechain comments. So they will fight tooth-and-nail to keep drivechain away from BTC.
    • Bitcoin has (in large part) ossified already. Where is the next soft fork? (Nowhere in sight.)
  2. Different people, learn at different rates.
    • So, when a person learns [that MC > BTC], they will be faced with a choice: [1] jump ship immediately (and be the first into a new, winning trade); or [2] wait patiently and try to convince others. But, on any single day, only a tiny minority of people will be in the [2] category.
    • And – they have to contend not only with [1] the difficulty of persuading others, but also [2] the risk that those others will themselves jump ship (instead of persuade).
    • Everyone who jumps ship, will then have an incentive to delay drivechain’s adoption on BTC – or even to spread misinformation about drivechain.
    • Convincing people is hard. Drivechain has existed for 10 years, yet it still has not activated.
  3. BTC and MC share a mining algorithm (Sha256d). Thus, in the short run, an sudden increase in the price of one coin, will starve its rival of hashrate.
    • So, in the early days (while the MC marketcap is small), “most people” will be skeptical that MC is better. The risk [of BTC copying MC] will be low.
    • But afterwards, (as the MC marketcap rises), mining the BTC blockchain might no longer be possible. So, it may be too late [for BTC to copy MC].

10. In the past you have mentioned “coiling the spring”. Can you elaborate on what this means?

It refers to a strategy for competing with larger rivals, in arenas where network effects are strong.

It consists of two phases…

  1. “Coiling the spring” – In this phase, we purposefully de-emphasize marketing, hype, and politics – to the point of self-sabotage. We gather evidence, and “stress test” our ideas by trying to falsify them. We are pure truth-seeking; zero teamwork and growth. Pure scout; zero solider. Pure mistake-theorizing; zero conflict-mentality. We avoid politics – and, in fact, we allow the sociopaths and parasites to have breathing room, to hopefully trick them into coming “out in the open” – so that we may identify them, before they become suspicious of us.
  2. “Unleashing the spring” – In this phase, we restore politics [and hype and marketing] to their rightful places. Since our idea has been improving objectively throughout phase 1, it is (hopefully) now much better. Thus it creates an opportunity, for new influencers, promoters, and politician-types to “team up” with the newer, better idea. They have two advantages: [1] they can emulate their BTC-predecessors; and [2] they have a better fundamental idea to work with.

…with the goal of paving the way for FAST “viral” growth. That is the only way a new coin can defeat Bitcoin. Early on, it must attract supporters who expect future fast growth; later, the fast growth must be fast enough to topple the #1 project before it can react.

11. Bitcoin is #1. And it always will be #1 – Bitcoin can’t be beat.

Most Altcoins are pure junk.

Many have huge premines. Some actually have 100% premines: Ripple, Stellar, NXT, Tron, and SHIB. Others, used their genesis block to “distribute to ICO investors” – which is [basically] equivalent to a “100% premine, that is all sold instantly”. These include: ADA, EOS, Aptos, and AVAX. Solana had a 50% pre-mine.

A high pre-mine is bad, because it caps growth – and is therefore ultimately fatal to the project. It caps growth in three ways: [1] it leaves too many people out of the initial coalition, [2] it gives too many coins (as a % of total coins) to the people in the coalition (and thus cannot be taken seriously, as a proposal to the rest of us), and [3] it incites all users to instead release their own new coins, with high premines (favoring themselves, this time). All of this, motivates newcomers to join a coin (or create one), instead of join with the existing coin.

A premine is also terrible, because none of the Altcoins are quite finished (nor is Bitcoin). This introduces chaos to the project, as the original founders quit, retire, or are forced out – or various “committees” and foundations appear, to “guide development”. The project drags on, due to the realities of software development – until morale collapses and the project is abandoned.

In contrast, Bitcoin took a more reasonable path: 0% premine at genesis, 87.5% of the coins released continuously over 12 years. This punishes latecomers appropriately, but not so much that they leave the coalition. The Bitcoin UTXO set (unlike its Altcoin counterparts) has “moral glue” holding it together – those who bought Bitcoin, partly embrace a shared vision [of an alternative to banking]. It is a team effort.

A “hard fork” preserves this UTXO set. This automatically puts it in a different category.

What of the other UTXO-forks? Are they any good?

Well, BCH we have already discussed (in question 7). BSV is a fork of BCH (not BTC), and its litigious and ridiculous founder has speedily driven away all reasonable people. The other forks (“BitcoinGold”, “BitcoinDiamond”, etc), are frivolities. These forks were not attempts to compete with BTC. They did not aspire to be the #1 coin. They were created because people wanted free money; and because it was easy to recompile the software with a new name. Probably, many of them were created to de-legitimize BCH (with the goal of muddying the waters, in that debate). Therefore, out of all the hard forks, only BCH presented a serious vision. The others are knockoff cash-grabs. (We discussed BCH in question 7.)

We now turn to Ethereum – the #2 coin. It has differentiated itself [from Bitcoin]. Proof of stake; frequent hard forks (ie “mandatory upgrades”); account model (vs UTXO); aggressive culture (vs conservative); fast block times; uncle blocks rewarded; higher node costs (and less discipline in capping node costs); Turing-complete EVM scripting. All of those changes… are bad. Ethereum exists because developers want to create stuff and have fun (which is understandable) – but drivechain is better for that. Drivechain has no gas fees. Each L2 has its own chain, and does not share a chain (nor a fee-rate) with any other chain/contract.

So – there has been a depressing lack of seriousness among the Altcoins. A handful – Ethereum, Monero, Namecoin, zCash – have an actual vision for the world. The rest are just get-rich-quick schemes, or hobbyist projects.

The dogsh\t quality of today’s Altcoins has, lamentably, contributed to Bitcoin’s complacency. As Gary says, in Pokemon Red/Blue: “My rival should be strong to keep me sharp!” – but there are no strong Altcoins, and so Bitcoin has lost its edge.

12. What would convince you NOT to go through with this hard fork?

Well – one thing, could be for 51% BTC hashrate, to activate Bip300 (on BTC). That might render MC useless.

Bip300 is an opt-in, reversible, soft fork. With the CUSF client, miners can start/stop it at any time. Plus, Bip300 (hopefully) gets them more money – much more money.

The bigger problem is the community. Without a community of genuinely interested users, the mere activation of Bip300 will do very little.