Double Billing is not ‘Healthy Competition’
Let’s say that you’re running a company and want to create some internal competition between teams to see which ones can perform better. You can do this with R&D, and sales, but I would humbly suggest that you don’t do it with receivables. Sending out duplicate invoices to customers is generally referred to as ‘criminal behavior’.
But the CEO of Coinbase is seriously claiming, with no hint of sarcasm, that this is exactly what Bitcoin should do. Rather than claiming that a hard fork could be done cleanly and without a split, he’s instead doubling down and saying that the chaos and thievery which would come with two active competing forks would be ‘healthy competition’.
Let me explain how this would go down. Right now there’s a proposal for a hard fork of Bitcoin called ‘Bitcoin Classic’. It’s called that for purely marketing reasons, it would be a new fork, the adjective ‘classic’ is a lie, but for clarity I will continue to refer to it by that name. The technical details of this are a little silly: Classic has a doubling of the block size, but rejects an upcoming proposal which would have the same effect, resulting in it being incompatible with no tangible benefit whatsoever.
Where Classic would be almost not incompatible is that everyone who owns Bitcoins would immediately own both Bitcoins and Classiccoins. This creates massive confusion in transfers: If you want to do a transfer to somebody else, are you supposed to transfer Bitcoins, or Classiccoins, or both? Some counterparties will only accept Bitcoins, either on principle or because they haven’t done the requisite development, some are going to only accept Classiccoins, because they’re partisans, and some will try to be conservative and require transfers of both. Inevitably Bitcoin and Classic will have two completely separate valuations. When stocks split their combined value doesn’t go up. You can’t create value with accounting tricks. The sum dollar value of a Bitcoin and a Classiccoin will be no greater than a Bitcoin was to begin with. That’s assuming that the chaos won’t result in an overall price drop. A plummet seems more likely.
People expecting both Bitcoin and Classiccoin will be viewed by some as attempting to steal, even though they’re merely asking for the full quantity they were expecting before. Bitcoin-only receivers will be underpaid as the senders keep the Classic funds for themselves. Payments sent from Bitcoin-only wallets will have overt stealing as the receivers take the transaction which paid them and add it to Classic, thus claiming funds which aren’t rightfully theirs. The security level of both will be less than Bitcoin was before, because mining resources are split between them. End users will be forced to understand all of this, as the distinction between Bitcoin and Classiccoin has to be explained everywhere: In wallets, on exchanges, and in news articles talking about it.
I don’t know why the CEO of Coinbase is advocating for this insanity. It’s possibly because Coinbase would be well positioned to engage in the sort of chicanery explained above. But it’s equally plausible that he’s just an idiot. Either way, I’m no longer going to give credence to the pretext that we’re having a serious technical discussion in which both sides have good points. My response to overtly destructive acts is, and will continue to be, to tell people to fuck off.
