The past few weeks have seen ever-increasing levels of drama. While it’s not worth diving into the details of each incident, one of the bigger bombshells was the bitcoin equivalent of the Republicans claiming that the real reason Nancy Pelosi opposed Trump/Ryan-care because she could secretly make $100 million extra if Obamacare remained in place. And although there was no evidence she was doing so, the mere fact it was possible meant the system needed to change. However, the bitcoin version of the Democrats claimed that their advantage was really due to efficiency — and what’s so bad about optimizing technology?
The latest salvos in this never-ending war are putting into stark relief a dirty secret that few cryptocurrency enthusiasts like to admit: This technology that promised to replace trust in financial institutions and governments with software is just as susceptible to politics and power plays as any other system.
As the two sides engage in posturing akin to a nuclear arms race, the threat that bitcoin could split into two coins is real. Then the question becomes, which will be considered the “real” bitcoin? As venture capitalist and Angel List cofounder Naval Ravikant tweeted, “In a showdown (fork) between Miners and Developers [respectively, the “Democrats” and “Republicans” described above], the more decentralized coin will win. Bitcoin without decentralization is just fiat.”
“These dynamics [are] evidence that these are emerging quasi-political systems that are just ill-defined in terms of them having a self-consciousness of their political nature,” says Jesse Posner, a software engineer at Coinbase and former lawyer.
The wonder of bitcoin is that the system manages to get a few groups whose interests are not aligned to interact in a way that results in an optimal outcome for all.
However, over the last two years, faced with the question of how to enable more transactions on the network, the initial uneasy equilibrium between the various groups turned first into a stalemate and more recently into a full-blown civil war.
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