Open letter to the Bitcoin exchanges who signed the letter of March 17 2017.
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Dear Bitcoin Exchange,
In your letter you said you have a responsibility to maintain orderly markets and to minimize potential confusion in the event of a hardfork between Bitcoin Core and Bitcoin Unlimited.
To accomplish this, you propose to keep listing Bitcoin Core as the current default Bitcoin symbol "BTC/XBT", and create a new ticker symbol for Bitcoin Unlimited called “BTU/XBU”.
We would like to respectfully advise against this for the following reasons:
- Designating Bitcoin Core as the default Bitcoin BTC/XBT is premature at best and at this point a highly political decision. Willingly or unwillingly, this makes you support Bitcoin Core and makes you take a stand against Bitcoin Unlimited. If this is your intention, we think it would be fair to disclose that fact to your customers. If you do wish to remain neutral, then it would be fair to not take a stance at this point on which implementation can ultimately take the default Bitcoin BTC/XBT symbol.
- As it currently stands, Bitcoin Core will highly likely end up as a minority fork, with a high risk of being completely overtaken by the majority fork (Bitcoin Unlimited), which would make Bitcoin Core worthless as a result. If Bitcoin Core carries the default Bitcoin BTC/XBT symbol during that time, the outside world will panic, which will have a detrimental effect on Bitcoin and cryptocurrencies as a whole.
- We are of the opinion that exchanges should remain neutral in this debate, so the market can make an informed decision instead of being influenced by ticker symbols and the "default Bitcoin". As you are aware, this fork is highly contentious and the outcome unpredictable. In such situations, it is always better to take a hands off approach.
For the reasons above, we would like to strongly advice you to designate both forks under their own sub symbol "BTC-Core" and "BTC-Unlimited", or "BTC-C" and "BTC-U", until the market has settled down and a clear outcome has been reached.
UPDATE: One exchange gave me feedback that for technical reasons they need to use 3 letter designations and one fork needs to be called "BTC". I doubt this is the case, but if it is, here's the solution: The Bitcoin Whitepaper clearly states that the longest chain (aka the one with the most proof of work behind it), is Bitcoin. Excerpt: 'Proof-of-work is essentially one-CPU-one-vote. The majority decision is represented by the longest chain, which has the greatest proof-of-work effort invested in it.' and 'They vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this consensus mechanism.'
This means that if Bitcoin Unlimited would have the majority of hashpower behind it, then it should be the one to carry forward the Bitcoin name and BTC/XBT symbol. It would make no sense whatsoever to have minority chains carry forward the BTC ticker, because in that case Bitcoin's Proof Of Work (POW) system, which is the backbone of Bitcoin that secures the blockchain, might as well be declared invalid today. Instead we can all see who can fake the most non-POW nodes or use the most sockpuppets and shout the hardest on some censored forum.
UPDATE 2: Two of the exchanges that signed the original letter, stated that the original letter was edited without them being aware. The letter originally said that if "whichever side of the fork clearly "won", they may eventually earn the BTC/Bitcoin name.". This is already a move in the right direction, but until that happens, the naming should be kept neutral or in line with my previous update..
UPDATE 3: The CEO of Coinbase (a non-signatory), Brian Armstrong, clarified their stance today. I'm happy to report that is completely in line with our petition, and it seems we are starting to have an effect. Please continue sharing this and ask your friends, colleagues and fellow Bitcoin fans to sign! You are the one that makes this happen.
Brian Armstrong / Coinbase wrote:
Coinbase didn't sign the industry letter because I think the intention behind it is wrong. On the surface it is a communication about how exchanges would handle the hard fork, and a request to BU for replay attack protection. But my concern was that it was actually a thinly veiled attempt to keep the BTC moniker pegged to core software. I think a number of people who put their name on it didn't realize this.
A couple thoughts:
Certainly it makes sense to list forked assets separately on exchanges, especially during periods of uncertainty. But it doesn't make sense to say BTC can only be modified by one development team. If there is overwhelming support from miners and users around any new version of the software (regardless of who wrote it), then I think that will be called Bitcoin (or BTC).
The replay attacks are a real concern. We spent some time talking with Peter Rizun from BU last week and he/they seem very open to hearing ideas on replay attack protection and coming up with solutions, which was great to see. It is not as trivial for them to add as I originally thought, because it seems adding replay protection would break SPV clients (which includes a number of mobile wallets). We as a community could probably use more brainstorming on how to solve this generally (for any hard fork). I'll make a separate post on that.
I think regardless of what was stated in the letter (and people's personal views), pretty much every exchange would list whatever version got the overwhelming majority of miner and user support as BTC. I also think miners know this.
A number of exchanges (GDAX, Poloniex, Gemini) didn't sign the letter, or later clarified their position on it (ShapeShift, Kraken), so I think there are a variety of opinions out there. I think creating public industry letters that people sign is a bad idea. They haven't been very effective in the past, they are "design by committee", people inevitably say their views were not accurately represented after the fact, and they tend to create more drama. I'd rather see private communication happen to move the industry forward (preferably on the phone, or in person - written communication is too easy to misinterpret people's tone). Or to have each exchange state their own opinion.
My goal is to have Coinbase be neutral in this debate. I think SegWit, BU, or other solutions could all be made to work in bitcoin. We're here to provide whatever our customers want as best we can across all digital currencies, and work with the wider community to make forward progress.
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