The ins and outs and future of the 2017 Bitcoin fork (Part 2)

In August 2022, 5 years have passed since 2017. The market has also experienced two bull-bear transitions. In the 2017 bull market, Bitcoin rose from $150 to $20,000, and in the 2021 bull market, Bitcoin rose from $3,200 to $68,000. The hot spot in 2017 is forks and ICOs. The hot spot in 2021 is DEFI, NFT.

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As a participant in the Bitcoin fork war in 2017, in five years, we can see the main course of the development of Bitcoin, and at the same time, the current review can also minimize the disturbance to the market.

Origin of Bitcoin forks

In the process of Bitcoin’s development, due to the prosperity of the community, the number of users has increased. On-chain data usage is increasingly huge. Since 2014, the community has gradually worried about the future, that Bitcoin’s blockchain transaction capacity cannot support the growth of users. So began the discussion of expansion. The community has hosted a number of public expansion meetings, as well as a closed-door meeting between developers and the Chinese community. I have participated in the following conferences on site: scaling bitcoin: hongkong, milan, tokyo, silicon valley. Hong Kong developers and miners scaling conference, and closed-door conference of developers and Chinese community in Silicon Valley at the end of July 2016.

As an in-person participant in multiple conferences, the main contradictions I have observed focus on:

1. Whether the developer team of Bitcoin is a close-knit organization.

2. As a private company, Blockstream, the overlap between the identity of the private founder and the identity of the Bitcoin developer, will technically adopt a route that is beneficial to Blockstream.

3. The choice of expansion technology route: Segwit, large block, Mimbelwimble (the technology was immature at that time.

When the closed-door meeting in July 2016 ended, my prediction for 2017 was: The unification of community and computing power will be a huge challenge in the bull market, and a civil war in Bitcoin is inevitable. On August 3, 2016, on the way to New York, I posted the following Weibo:

Silicon Valley, China Community and Developers Conference concluded. Go to New York at night. Bitcoin as a decentralized value system. There are two major challenges in the future: maintaining the decentralization of computing power and building community consensus.

https://weibo.com/3935181301/E1KSreYt5

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Started the preparation of the Bitcoin Gold (hereinafter referred to as BTG) project.

The 2017 Bitcoin fork civil war, the public debate is a war of technical lines, and the essence is that different interest groups in the community compete for the huge commercial interests of Bitcoin.

Fork details of BitcoinGold (BTG)

As a firm supporter of Bitcoin’s decentralized core architecture, I support the small block + SEGWIT route and soft fork design proposed by CORE developers. Therefore, the route selection of BTG is as follows:

Decentralized governance, 4/6 multi-signature. I personally own one. Members come from all over the world, and no choice is entirely from the Chinese community.

1. BTG will not start without a fork initiated by a third party;

2. BTG is the test chain of Bitcoin in the production environment. Bitcoin has a non-production test chain.

3. BTG chooses the general computing hardware of the computer as the mining hardware.

4. BTG does not raise funds, does not participate in secondary market transactions, and does not make remarks that affect prices.

With the launch of the BCH project at Bitmain’s Chengdu Mining Conference in May 2017, the BTG project was officially announced in 2017. The selected technical route is: 1M+Segwit, gpu mining, two-way dynamic difficulty adjustment, address format different from Bitcoin, replay attack protection. Try to explore the possibility of returning to general-purpose computing hardware mining for the Bitcoin community to hedge against the risk of some ASIC miners attacking Bitcoin.

With Bitfinex and other exchanges using pre-fork to open trading pairs. BTG started the market performance as follows.

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BTG started trading at more than 100 US dollars. With the development of the Bitcoin bull market, the main network was activated, and the price of the currency reached its peak due to the positive stimulation of the opening of transactions on the same day in the three major exchanges in South Korea: more than 1,000 US dollars, ranking fifth in the world. Then there is the bottom of $5, and in the 2021 bull market, it will reach $200.

As for the price performance, frankly, as a founder, I am not satisfied with the price of BTG today. If you must give a score, it can only be the 60 points that have just passed.

Management details of BTG

In order to pay tribute to Satoshi Nakamoto and achieve the goal of BTG: the Bitcoin test chain in the production environment, the distributed and decentralized management architecture design has been implemented from the very beginning:

1. The team members come from all over the world, and there are 6 core members. There are two core members that I haven’t met until 2022. 2. Financially, the digital assets of the project are managed by multi-signature accounts. Use the 4/6 rule. Some assets are locked and unlocked on a monthly basis to support the long-term development of the project.

3. The source of funds for the project is to use the method of activating the main chain and quickly generating blocks in the first stage, with a total of 100,000 BTG transferred to the multi-signature account. There are two main sources of funding for the blockchain: 1. Bitcoin’s free development model, where developers are completely free. 2. ETH’s foundation model. The foundation controls 100% of the token equity in the early stage. 3. BTG adopts an innovative donation model. Meanwhile, managers own only 0.5%.

This governance design avoids the frequent technical and community hard forks that occur with other projects. Although BTG will not pass the market performance in the bull market in 2021 until 2022, it still ranks in the top 100 in the world and has not returned to zero. It is enough to prove the power of distributed and decentralized communities.

4. Difficulties and challenges of decentralized project governance

Decentralization is the goal pursued by blockchain projects. When I founded BTG, I initially adopted a distributed and decentralized design for team management. At the same time, the economic model fully complies with Bitcoin’s economic model, monetary policy.

In practice, in terms of management, governance problems are bound to arise: rapid decision-making and long-term incentives.

You can take a look at the K line of BTC in the bull market in 2021:

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Let’s take a look at the K line of BTG at the same period:

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The market value of BTG showed that the price of the 2021 bull market did not exceed the high point of the 2017 bull market, and at the same time, the ranking fell from the highest fifth to the lowest 100. More than 70 now.

There are other currencies, such as BCH, EOS, etc. This is entering a death spiral. In this round of bear market, how much will the lowest price fall, and how will it perform in the next round of bull market in 2025?

Based on my observations on the Bitcoin and ETH communities, BTG’s personal practice, and the experience and lessons I have gained from investing in many blockchain projects:

A successful project must have a core team that is active, open, willing to keep trying, and even self-dedicated and sacrificed. If I review BTG, I will probably correct the following parts:

1. Continue to build a global team, and at the same time require members to move in and out. In the early days, the members I chose to hold the other 5 private keys needed to have an exit mechanism. Their roles start from CTO, developer, web designer. Finally make a request to the co-founder. I went from sole founder to co-founder. The title change, I don’t care. The point is that you need to keep up with the needs of community development, and you can move forward and back.

2. When BTG once stood at the fifth peak of the global market value, I once wrote a notice: the market gave BTG a very high valuation, and our team needs to improve its ability to ensure the long-term value of the project. This announcement did not receive a positive response from everyone.

3. In the early days, when the currency price was high, I proposed that some (10,000-20,000) BTG could be exchanged for fiat cash, but no support was obtained. Failure to implement this suggestion resulted in the team not having enough funds to carry out development, promotion, and community incentive work when the currency price was low.

4. My long-term dream for BTG is decentralized governance. So at the end of 2018, it was proposed to withdraw from the management of the BTG project and continue to serve BTG as a consultant. And on January 1, 2019, the BTG used on the public account was sold, and the selling price was about 20 US dollars. For this behavior, within the team, the DISCORD channel was violently abused by some members. Outside, after being ridiculed by the leeks, they returned them to the community. It was removed from the official website at one point.

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5. When I exit management, my advice to the team is to focus on two directions: payment and smart contracts. Throughout the 2021 bull market cycle, the BTG team did not send a loud signal in the community, and neither technology nor promotion actively participated.

There are more details of dog blood, just let it go with wind (tribute to Scarlett).

This made me deeply appreciate the joy of Chairman Mao fighting with others; the experience of Jobs being kicked out of Apple in those days.

I think, I will continue to participate in the BTG community in an appropriate way. at the right time. Certainly.

Easter egg 1: I founded the BTG project, how many leeks did I cut?

Easter egg 2: This time ETHASH miners were fired by Vitalik, how will I participate?

If you are interested, I will continue to write two more articles.

Note 1:

Professional terms: Bitcoin, fork (fork), soft fork (soft fork), hard fork (hard fork), Segwit (segregated witness), Scaling (expansion), please search for relevant technical explanations by yourself.

Note 2:

It is a long time ago, and there are inevitably omissions in the review. Interested friends can participate and record an important period in the history of Bitcoin together.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/the-ins-and-outs-and-future-of-the-2017-bitcoin-fork-part-2/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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