Cryptocurrency: the Battle for Bitcoin
Alternate versions of the bitcoin software threaten its existence
The story became well-publicized early in 2016. Mike Hearn, one of the leading developers in the bitcoin community, announced that “bitcoin is dead” and that he was stepping away from the virtual currency.
The Battle for Bitcoin Begins
In a post on Medium, the former Google executive wrote, “The fundamentals are broken, and whatever happens to the price in the short term, the long-term trend should probably be downwards. I will no longer be taking part in Bitcoin development and have sold all my coins."
His leaving once again heralded the “end of bitcoin.” However, the reputation of Hearn and the “brain drain” that he’s leaving creates in the bitcoin community was something to be concerned about. The importance of it was reflected in the fact that the New York Times ran a lengthy article about Hearn’s loss of belief in bitcoin and how the whole matter had “shaken (his) faith in humanity."
The reality is that this matter was a long time coming and had its roots many years ago when topics like “mining monopolies” and “hard forks” were being debated by the most influential people in the bitcoin world.
Bitcoin is built on an underlying software program that was initially developed by an entity known as Satoshi Nakamoto. Like any other software, it has to be maintained and updated over time. This maintaining process was done by a group of volunteers to provide direction and approval over many of the potential changes needed for the software.
Hearn was part of this group of volunteers, as was Gavin Andresen, who has been one of the longest-tenured developers in the bitcoin world and a highly respected and regarded voice about bitcoin progress and concerns.
During the last few years, many startups and brilliant developers began entering the bitcoin and blockchain world in search of profits and societal disruption.
Soon it became clear that those in the bitcoin world had to deal with something that they all had hoped would be a concern – expanding numbers of bitcoin transactions. This began to expose and pit the two sides of the bitcoin community against each other – one side was the traditional bitcoin supporters who saw it as a “radical challenger to existing currencies” and the other which recognized the commercial potential of bitcoin.
One particular concern that developers had was the potential for bitcoin to develop another version of the underlying software. This could happen if you had a situation where 51% of the bitcoin miners exerted their power to change the underlying software.
This separate software is known in the bitcoin community as a “fork”. Most doubted that it could happen because of their belief that the decentralized manner of bitcoin would protect against miners gaining a 51% “monopoly” standing and executing such a change for their own benefit.
But it wasn’t the miners who implemented the fork. Rather it was Hearn and Andresen.
On August 15, 2015, Hearn announced his version of the underlying bitcoin software called Bitcoin XT saying, “So this is it. Here we are. The community is divided, and Bitcoin is forking.