Following is a transcript of the video.
We just got a super smart and simple explanation of what a bitcoin fork actually is
Nolan Bauerle, the director of research at CoinDesk, explains what exactly happens when bitcoin splits and what it means for the future of the digital currency.
Silverstein:It's just the majority of the miners that need to agree, right?
Bauerle: You got it.
Silverstein: To change the rules.
Bauerle: Well, then you can have a fork where a certain minority believe that the truth and valid blocks are different and that's where you get into this area of forks which we saw this summer where you had a group of miners decide that different rules should apply to a valid transaction. So that persists as a different blockchain.
So those miners in Bitcoin Cash from the summer decided that blocks should be much bigger, that every miner should be moving bigger blocks of memory. Bitcoin now moves one megabyte per block.
Silverstein: And Bitcoin Cash?
Bauerle: Did eight megabytes.
Silverstein: Oh, wow.
Bauerle: But that was already baked into the original paper when bitcoin was first announced by Satoshi Nakamoto and he had a road plan for how to go up to those higher blocks.
Silverstein: Was part of the road plan just to split off?
Bauerle: No, there would be chaos and the debate around it is a feature of the technology, not a bug. It was never shy that there would be debate about when this should happen because there is no one in control of this. There are groups of people and individuals that all have their own vision about how this should work.
So the point was that there would be no one on top of this, a top-down structure that would lead the chain towards whatever upgrades or changes that would be there. There would be from a fulsome debate and that people would have disagreement and that's okay. So there was never a desire to not have debate about this it's okay that it's rigorous and fulsome and that everyone's point gets through.
Silverstein: So then if there's two sides to the debate who gets to be the bitcoin and who has to be the Bitcoin Cash or gold or 2.0?
Bauerle: That's really where a lot of the emotions have come in. You can think of it a bit as when you go to a diner and you ask for a Coke and they say, I'm sorry, it's a Pepsi. Right, they're fighting over having that name. In the end there are rules that will help determine so the most difficulty accumulated, the longest chain.
Silverstein: So help me understand, if I have a bitcoin and a fork happens, what happens to me?
Silverstein: If I'm actually holding it and I have a key and all that then I get both.
So every day the honey badger survives, every day that bitcoin survives, it fulfills more and more of this quality of being a store of value.
Silverstein: So every time it doesn't get killed it's made stronger. It always picks the longer, the better, the stronger chain with more people?So I don't think that's gonna go away I think it strengthens bitcoin. We have this idea of anti-fragility, so the more it survives the more reputable it becomes and I think we’re seeing that.
Bauerle: You got it, you got it.
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