Right, ontological/epistemological phrasing is just a higher-level phrasing than utility phrasing. In other words, in everyday talk it is extremely cumbersome to phrase everything in terms of utility, so we speak about things being "real" or "imagined," but these are just shorthand for different sets of utility statements, as your example with the hammer illustrates.

As we start to analyze things with unusual care, we eventually come to a point where utility phrasing is the clearest. If we try to carry the terms of everyday talk ("reality," "other people," etc.) into such an analysis, we just run around in semantic circles and confuse ourselves.

This suggests a kind of graduated strategy for forking. As opposed to the old strategy of...

1) Musing on fork possibilities
2) Debate of concrete proposals
3) Consensus

...there is a new more gradual strategy:

1) Musing on fork possibilities
2) Debate of concrete proposals
3) Rough consensus
4) Market arbitrage

The second strategy seems especially useful when getting full consensus is hard or is taking too long and time is of the essence. If blocks are filling up and transactions are getting delayed, some larger-capacity altcoin is leeching market share away by the day, and the media is having a field day, I imagine getting consensus to raise max_blocksize gets much easier. But in those cases where a straw poll isn't enough, putting it to a "market vote" is the final test.

It's only appropriate when every other means of assessing consensus leaves it indeterminate which proposal will win.

My guess is once rubber hits road, when blocks are actually filling up and fees start to get bid up, it will be an easy choice. Same with full node incentives: once there start to be issues with large block propagation, miners will start to work out payment agreements with nodes, say, and it will all seem obvious in hindsight.

Ripple Labs is the worse kind of parasite, always sticking their nose into everything Bitcoin-related in an attempt to take advantage of (and amplify) misunderstandings. When they show up at Bitcoin conferences and especially government hearings with their schtick it's pretty offputting, makes me think of this clip

Yes, too different in features and Bitcoin enthusiasts will avoid it because they like Bitcoin's features; too similar and the fragmentation isn't worth it (more accurately, selling BTC Classic for BTC New is not a good investment, since everyone will agree the fragmentation isn't worth it, so the opposite happens, the speedy make money from the few fools, and holders remain even and safely oblivious).

I don't see any real issue of new investors "buying both chains" during a fork, because it should be pretty much over in minutes in the on-exchange arbitrage situation I described above. It would only affect those people who happened to make the decision to start investing in Bitcoin during those few minutes and couldn't wait.

Now in the unlikely future event of a real schism with two persistent forks, it doesn't affect current investors. They can sit tight and whatever happens their money is safe. For new investors of course they have to make a choice (or hedge between them), but that is natural given there was a real schism in the economic majority, which suggests there were good reasons for it. I don't think hardly anyone is going to invest in a smallblock fork versus a reasonably larger block fork, for example. If we assume a major schism where investors support both, which seems very unlikely, then there was probably a good reason for it.

It wasn't possible for the minority to transact in gold, because of the government ban on gold possession from 1933 through 1974. Especially by 1975 it was far more cumbersome to transact in gold than to use the established banking and new credit card system.

In the historical case, once again, the "exit" dynamic was very seriously hindered. In Bitcoin it isn't.


Here's the semantic issue rearing its head. If you change it to my phrasing it sounds incorrect, doesn't it? The economic majority of the people in Bitcoin now prefer the system as it is, without government modification. The government can fork it however it wants, and it may get the majority of US citizens to go along with it, but this economic majority (most current bitcoiners) will go on using Bitcoin Classic. The dark markets will go on using Bitcoin Classic. Everyone who wants to offshore their wealth will go on using Bitcoin Classic. Hard money folks who understand Bitcoin will go on using Bitcoin Classic.


Forking Bitcoin Classic is not changing Bitcoin Classic. It is making a competing system with, in this case, neutered features. Why would those who are interested in Bitcoin precisely for the features the government doesn't like be willing to jump ship to the government-approved version?


Bitcoin is a consensus-based system where the consensus is about a set of rules. It is not fundamentally a rules-based or math-based system. It is whatever this economic majority agrees on. No one is bound to use Bitcoin Classic over a fork, and vice versa. It's impossible for it to be unforkable without being closed source and centralized.

Also, it's not that forking should be common, it's that it should be easy to do. Just because it's easy to fork it doesn't imply it will happen often. Network effects, among other things, prevent forking over smaller issues.

In summary, I still see absolutely no danger or concern. So far I think it's entirely a case of confusing terminology and the counterintuitive aspects of fully forkable systems.

Isn't this just the difference between a geographically selected community where a central government is in control (the US population) and a non-territorial self-selected community where the economic-majority "decentralized governance" is in control (Bitcoin)?

In other words, isn't this in some sense just the question of statism vs. anarchy, or centralization vs. decentralization, restated? The whole idea of economic majority control only works because of the exit dynamic afforded by the decentralized nature of cryptoledgers.

It seems to me that insofar as you buy the argument that decentralization or non-territorialism, wherein this voice/exit dynamic gets maximum play, is superior to centralization and territorial monopolies of power wherein you cannot exit without physically emigrating, you would also buy my argument in the long post above that there is nothing to fear from forkability.

As an example, if when the gold standard was broken people could choose to fork off and keep the gold standard, regardless of being geographically located in the United States, the legislation could not have passed, or if it did it wouldn't have been effective - at least not for those in the population who care about sound money. The economic majority among US citizens may have supported going off the gold standard, but then there is still a minority who want to keep the gold standard. In a statist system, the minority is the minority and gets overridden; in an anarchic system, the economic minority simply becomes the economic majority of a smaller community and retains the system they prefer. (If they deem their differences sufficient to make it worth breaking away.)


Reiterating the above point for clarity, this tragedy happened because the gold holders weren't allowed to "exit in place," and I assume they weren't in fact allowed to exit US territory at all (with their gold). This is a problem of statism, but Bitcoin is not a statist system. In Bitcoin the economic majority, or perhaps we can refine the phrasing even further and say each economic community (defined by their similar beliefs about what is ideal money), can always choose their own fork.

My "economic majority" phrasing becomes a little confusing here because we must continually ask, "A majority among whom?" A large enough minority with enough difference of opinion from the majority will break away and become the economic majority of a community of people who agree with their values. There are still reasons why each little economic community with varying beliefs about ideal money will not necessarily fork off: size is an advantage, voice can still work if the minority makes convincing arguments, etc.

The main thing I want to point out is that there is a set of implications in this shift from mostly voice-only territorial democratic control to fully-enabled location-independent voice+exit control,* in other words there is a set of implications of the exit dynamic getting full play for the first time, and I think these implications haven't been fully understood or at least not fully internalized.

Note: Although I'm arguing in this vein, I don't even think I myself have fully internalized the implications of now having a real exit option available at all times. I feel like I can see some of them implicitly but I'm not sure I could articulate the full set of implications yet. I'd like the above arguments hinting at some of the counterintuitive implications to be fleshed out and made more explicit, perhaps through further debate. The semantic challenges this new idea poses are also pretty formidable: the term "majority" becomes fluid in a way we aren't used to, for instance, as mentioned above, and even the term "Bitcoin" develops a dynamic character that at first feels unsettling.

*I'll quit using the term "exit-democracy" for this, to avoid confusion, because I think the associations of the word democracy to voting (voice) are just too strong.

I think both proof of burn and straight mining are perfect ways to distribute altcoins as far as fairness goes. Proof of burn is nicer for BTC holders, though, since it increases bitcoin scarcity.

So we can look at at least three aspects of the various methods of distributing a new altcoin:

1) Effectiveness for long-term success of the innovation

2) Fairness

3) Favorability to Bitcoin investors

My view is that the IPO method is worst in all three, straight mining is good for 2 but not so good for 1 and bad for 3, spin-offs are good for all three (though not 3 if you think Bitcoin distro is unfair), and proof of burn is decent for 1 and good for 2 and 3. As for sidechains, it depends on the implementation but it could be anywhere from bad for all three to good for all three.

Now 3 might seem like only a good thing for Bitcoin investors, but I think it does tie in with 1 because not detracting from Bitcoin's position tends to make it more popular with bitcoiners (note the near-total ban on altcoin submissions on /r/Bitcoin). Though it could also be argued that people who think Bitcoin is unfair or bad will be turned off by 3.

In summary, spin-offs seem like the natural way to do altcoins (in the case of spin-offs they're perhaps better called "alt-protocols for the Bitcoin ledger") now that Bitcoin exists.

I think Aethereum will succeed if it isn't able to be incorporated into or on top of Bitcoin/Counterparty. So one way or another we will get smart contracts, DAOs, etc. The question I'm contending is whether the economic model the Ethereum team is operating under will pan out for investors, and whether it will be the fastest way to success. I think if they started out with Aethereum and had no IPO there would be a lot more interest in the project and it would be a lot farther along by now.

In practice you'd probably have to pay off everyone in line, if there were that many people, which would be expensive but some would likely do it. My guess is all vehicles would be in some kind of OpenBazaar-style web of trust anyway, and that would likely smooth out a lot of the edge cases.

You seem to think I'm making a fairness argument; I'm not. I'm simply saying that it is a recipe for failure to not employ the spin-off method using the primary ledger when it can be done.

And if that could have been done with the transition from fiat to Bitcoin, it would have. And that is basically what mining is. I don't think there is anything closer to spinning off that could have been done with Bitcoin. It is only now that Bitcoin exists that perfect spinning off is possible for the first time. The "technical considerations" you mention are exactly the reason.


That's pretty hilarious coming from him. Besides, if you're going to make a fairness argument, there is absolutely nothing wrong fairness-wise with a freely mineable coin like Monero (whereas Ethereum's IPO was arguably a bald money grab). It's just that it's an ineffective way to launch a coin versus the spin-off technique.

Ripple had the same idea: "XRP are not an altcoin, they are just a worthless spam prevention token!" This was in reality just a ploy to make money off the coins, and it worked: http://coinmarketcap.com/ It was obvious that this was their plan all along, because they contridictorily retained XRP by the reasoning that is was to "fund the devs." Well it can't be both worthless and be used to fund development.

With Ethereum it's the same story: "ETH is not money!" But, "We issue ETH by IPO to fund the devs." It's basically the Ripple model. It can't be both "not money" and "IPO-worthy," but Ethereum was sneaky enough to put in their contract that they make no promises of delivering an actual product, so the "IPO" was more like a donation drive where people had dollar-signs in their eyes because of roundabout implications despite the official denial.

Etherium is an altcoin (alt-ledger). Aetherium is an alt-protocol for updating the Bitcoin ledger, so it's a spin-off, not really an altcoin in the traditional sense.

The economic majority is in the Bitcoin ledger. Alternative systems want to use alternative ledgers because that could make the founders rich, but their systems are only likely to succeed if they use the Bitcoin ledger. So there is a gigantic trade-off for all altcoin founders to consider:

• 1) Create an alt-ledger and try to get rich without the benefit of Bitcoin's network effect
• 2) Distribute the coin based on Bitcoin's ledger to give the coin the best chance for long-term success

So far every altcoin founder has opted for (1), and their altcoins have all failed to gain any serious traction.

But even if any altcoin did gain serious traction, there is the spin-off maneuver to swoop in and take away your early-adopter/founder gains. Still, many cling to the hope that they can make a quick buck before reality sets in. I see it as a lack of confidence in their product.

If you are the dev or founder of the first altcoin to gain traction in the cryptocurrency space, you'll be a legend and should have no trouble making money in the future. So leverage the economic majority ledger (a.k.a. Bitcoin)!

On forkability in general, I see it as a great strength, not a weakness. It means that the economic majority is always in control even when major changes have to be made.

As a side note, I find it cumbersome during deeper analysis to think in terms of "Bitcoin." Rather, I think more fluidly in terms of the economic majority ledger (currently known as the Bitcoin ledger). Forking the protocol is largely powerless* to affect the economic majority ledger, because - by the same logic as in my previous two posts - the new protocol fork only retains control of the economic majority ledger to the extent that the protocol change is compelling to the economic majority.**

Since every differentiated protocol fork (here I mean altcoins) has so far created an entirely new ledger, of course they aren't very compelling to the economic majority, receiving at most tepid investment interest. A spin-off would be based on the economic majority ledger, so it would have a great advantage over an altledger/altcoin, though if it wasn't compelling it would just be sold off by bitcoin holders for more bitcoins.

If a substantially different protocol fork or spin-off is ever more compelling to the economic majority, and of course using the same ledger is the first requirement for that, it would be adopted. The economic majority retains their ledger with their wealth in all cases. Bitcoin-the-protocol may be no more, but the ledger stays so bitcoin holders have nothing to fear except a re-naming.

Suppose a substantial segment of the economic majority shows interest in some change you find repulsive. Likely many others will agree with you, so in some unlikely scenarios you will potentially have two ledgers form over time.** If this does occur, it's the most amazing form of democracy (not voice democracy, but exit democracy) because everyone can use the system they want without compromise. However, again, there is a strong tendency to simply converge on ideal money based on the wisdom of (investing) crowds.

For instance, if we suppose a substantial segment of the economic majority shows interest FedCoin, then the legal situation may make it likely that the two coexist, with Bitcoin either on the black market in that country or competing directly with FedCoin. In that case, again, exit-democracy prevails and the Feds have no more tools to corrupt cryptocurrency than they do now (see the arguments in my two previous posts).

Here's another important implication of thinking in terms of the economic majority ledger: Bitcoin issuance is not limited to 21 million coins because of the protocol, but because of the exit-democratic consensus of the economic majority. It is incorrect to say we have moved from an era of control by central bankers to an era of control by mathematics. We have moved to an era of control by the economic majority.

This is a great advance, but not because "no one" can change the protocol, but because no one can force any group of people to stop using it. To effectively change the coin limit, you have to either convince the economic majority to do so, which is a herculean task, or convince some subset of the economic majority - but then that doesn't affect the rest of the people. That means the coin limit could change (for example, in 50 years to deal with mining incentives), but not without a reason that is so incredibly compelling that it sways all or most of the economic majority - in which case the typical bitcoiner should probably not worry, despite how bad it sounds, because the economic majority has those same reservations to overcome. And also we know that the change wouldn't allow for any net-harmful degree of continuing inflation or other effects, because the wisdom of the economic majority would be behind it.***

This is the kind of guarantee Bitcoin provides; it's essentially a decentralized governance where voice vs. exit is fully exercised at all times. What Bitcoin provides is not a guarantee by code or math, rather code and math are what enforce the "edicts" of this decentralized governance structure subject to the continual pressures of voice and exit backed by investment flows.

If, for example, the economic majority believes that increasing max_blocksize to 20MB or shorter block times or Turing completeness will make the protocol for updating the economic majority ledger more compelling, a fork incorporating these changes would thrive and beat out the Bitcoin Classic protocol.

So to me, all that's required for Bitcoin-the-ledger to survive in perpetuity and make every investor rich is for the protocol to be upgraded if and only if the economic majority deems it truly compelling, with all the prudence about viability that that entails. Forking makes that happen, giving that critical exit option to balance voice, which in Bitcoin is already vastly superior to government democracy voice since it's backed by actual money.

*So far around 90% powerless, considering the combined market cap of all the altledgers compared to the economic majority ledger (Bitcoin).

**Although some kind of 50/50 or 40/60 split could happen in theory, the incentives involved make it seem unlikely in practice - and even if it does happen (because both forks are highly compelling in their own right), the market can only support a few such splits because there are only so many protocol feature sets to compete on through differentiation.

***If you're skeptical of the wisdom of the economic majority, first realize this is what controls Bitcoin right now, in fact, as is the theme of this post. Secondly realize this is as good as it gets; there is no way to create a system smarter than the economic majority, at least not without centralization (and in my opinion not even then). Third, if you're convinced that prediction markets are a huge deal, this should be appealing for the same reasons. If you're not sold on prediction markets, read the five numbered documents here. Although Truthcoin may be a misguided system, Paul Sztorc's arguments on the importance of prediction markets are impressive.

It's not that different from simply declaring Bitcoin illegal. In either case the incentive to use Bitcoin is affected similarly, to the extent that FEDCoin lacks Bitcoin's key features. (And again, to the extent that it doesn't lack Bitcoin's features, it's wonderful - just not for Bitcoin investors - but also highly unlikely to happen.)

More than that, banning Bitcoin and using a FEDCoin lacking many of Bitcoin's key features just hamstrings the US in the economic race. It's a giveaway to other countries.


This is a dream scenario for Bitcoin: they've familiarized the general public with some or most of the benefits of Bitcoin, now they are corrupting their own fork, driving people to use Bitcoin (or, if the original FEDCoin is sufficiently Bitcoin-like to keep people away from Bitcoin, then people will just keep using the more Bitcoin-like fork; if they also ban the original FEDCoin fork, then we're back to the "Bitcoin ban" scenario mentioned above).

So I can't see any move toward FEDCoin not helping Bitcoin, or at least advancing the cause of cryptoledgers.

I get the analogy to gold vs. gold-backed dollars, but in Bitcoin's case I can't think of any specific changes the Feds could make to a fork that would allow it to both (a) obviate almost everyone's need for Bitcoin and (b) be enough different from Bitcoin for the government to be satisfied with it (and hardcore bitcoiners to be dissatisfied with it).

For example, if the money supply remains un-changeable, this is awesome as the Federal Reserve has effectively been neutralized. If they make a fork that can be inflated, Bitcoin Classic retains its store-of-value properties and will be highly sought after. If they do something in between, we get a little of both. If they remove all anonymity possibilities in their fork, Bitcoin thrives in the black market; if they don't, awesome. If in between, a little of both.

At one end of the spectrum they take just a few of Bitcoin's properties to build a system that is better than current fiat, which would be moderately liberty-promoting, while still leaving Bitcoin's differentiated value proposition very firmly intact. At the other end of the spectrum they adopt almost all of Bitcoin's properties, which would be extremely liberty-promoting, but leaving Bitcoin with little differentiated advantage. Either result is overall very good liberty-wise (though the result where they mimic Bitcoin quite closely may not be very good for Bitcoin investors - but that result is also highly unlikely), and I see no point in between those extremes that would be any worse. So I conclude there is nothing to worry about.

If they can fork Bitcoin to their liking while not destroying its major selling points, more power to them and I'll even invest in their fork, but I don't think that's possible. The changes the government would demand would make it orders of magnitude less valuable and most of the current economic majority would stay with Bitcoin Classic. They could grow FEDCoin larger than Bitcoin, more valuable, etc., but Bitcoin would still have its uses - precisely those uses that were neutered in FEDCoin.

In summary, government-sponsored forks aren't a threat to Bitcoin. In fact they would probably just help, because they would get the general public familiar with the ins and outs of crypto, such as security. Then there's Bitcoin with its ex-hypothesi better features.

I'm starting to wonder if forks are really that big a deal.

Imagine if all the exchanges were set up to handle economic arbitrage of two or more forks. Say you have 20 BTC on Bitstamp when a fork happens. Your account is automatically split into 20 BTC in BitcoinOld and 20BTC in BitcoinNew. If you don't know/care about the fork, you do nothing. If you think one of the two is obviously more viable and/or obviously more likely to get support, you immediately start selling BTC in one for BTC in the other.

Since everyone is doing the same, I bet this all plays out in a matter of minutes because once the trend becomes clear it will snowball since no one wants to be on the losing fork. Luckily, again, you can sit out the arbitrage and leave your stash untouched whichever fork wins. It's just that you can earn yourself some extra coin if you guess the winning fork correctly.

Now to guard against possible glitches in BitcoinNew, even if it wins in initial trading, BitcoinOld will probably still retain some value for a time - for instance 10% of its former value for a few days or weeks - as a representation of an estimated 10% probability of a glitch in BitcoinNew. After that it would likely fade into nothingness. All the while your bitcoins are safe no matter the outcome.

Not only is this far faster than waiting for "consensus," it also ties more solidly into the basic economics of Bitcoin itself. As Daniel Krawisz has pointed out, where investors go, everyone else follows. Investors have the ultimate control, so the forking process should reflect this and exchanges should be setting their systems up for this.

The effect would be, at worst, equivalent to the float while the money is being transferred. Something like how much money is being transferred at any given time, since that is that much less coin available to be placed on ask walls. At best it will a lot more because of Bitcoin actually having its first major legitimate use outside store of value.