Miscalculations About the Endgame of the Ethereum Fork (It ain't over 'til it's over)
A Brief History of the Past Month - A vocal minority forks successfully
Whether one is opposed to or in favour of the ethereum hard fork, it was clear that the pro-fork forces were a far more organized movement during the period leading up to the forking block.
They were able to persuade developers of every flavour of ethereum to create their fork, they were able to persuade every mining pool to mine on their chain and they were able to persuade every exchange to trade ether only from their fork.
This they managed even though there was quite a bit of ambiguity about what the vast majority of ethereum holders and miners actually wanted to do. There was some voting, but because of the short time frame, confusion and complexity, none of the votes had particularly large turnouts.
Where we are now - another vocal minority preserves the original chain
But we must remember that blockchains are very anti-fragile systems, and that the only way to snuff out a chain is to stop everyone in the world from mining on it.
This was the miscalculation of the pro-fork forces. A very small movement rose up in the last days before the fork proclaiming that they would continue to mine the original "classic" ethereum chain. And that small group kept their word.
Within a day or two, mining difficulty on their chain had fallen and they were producing blocks at nearly the same rate as the main chain.
And within five days, exchanges decided to trade ethereum classic, ETC.
Where we are headed - a prolonged and unpredictable battle
It turns out that the occurrence of the fork was not the end game, not checkmate, but merely the ending of the opening of the battle between ETH and ETC.
Now it needn't be a battle on a technical level.
But it is a battle for the same reason it was a battle between pro-fork and status quo before. That is, the pro-forkers are the ones who have a great deal to lose if their fork doesn't endure.
However, unlike before the fork, when the DAO funds were locked up, on the forked chain all the ether is available for withdrawal, and this creates the window for DAO investors to get their ETH back and to sell it for 10 to 20 times as much ETC. That's a mighty interesting migration path from the forked chain to the classic chain. While I wouldn't expect anyone to do precisely that, buying back an amount of ETC equivalent to your holding of ETH with your returned ETH is actually a very interesting hedge. In fact there's lots of interesting trading positions to take that are different from holding only one coin.
And because there is no more DAO to draw the attention of the community towards new investment opportunities, trading ETH with ETC (and other coins) is about the most interesting thing to watch.
Can the pro-forkers come up with a plan to end ETC or will both chains exist in some state of battle for years or even decades? Too hard to predict.
This piece was solid.
But this is not. The consensus was pretty clear at the time as no gauge showed an anti-HF majority. Those anti-HFers had it easy to show everyone how wrong it was -- they could have doubled their or tripled it. I alone could have increased the Carbonvote results substantially. It took so little and yet when push came to shove, the anti-HF was the vocal minority.
It's even more clear now when you look at the economic vote we are seeing between ETH and ETC. One is worth 25x more than the other. One has 25x more hashing power. So to see that as a battle that ETC can win, you have to think that not only is the crazy project that was/is Ethereum viable and able to work, already not necessarily even likely, you have to also think ETC can overcome an advantaged competitor from which it's only possible edge is the philosophical value of not having forked to undo the DAO attack (technically ETC is as forkable as ETH, if not more, due to the fewers users and smaller hashing supporting it).
ETC inherits all of the riskiest parts of Ethereum (competition against Bitcoin, competition against other new coins and projects, scalability issues, technical challenges) and it does so with a 25x hashing disadvantage to Ethereum and a 25x price disadvantage and I would guess about a similar if not greater disparity in terms of people involved. On top of that dapps will not work on both in a way that is safe and honestly probably not at all if they have to interact in any with the physical world or world outside Ethereum. This goes for both Maker and Digix, both of whom have stated that they will not support the unforked chain. No devs (or maybe de minimis support?), no dapps, few people, little hashing, no price.
The biggest thing ETC has going for it is the support of people in the Bitcoin world who have been the most hostile towards Ethereum and called it and everyone altcoin a shitcoin. How valuable is that support? How long does it last if ETC starts succeeding and challenging BTC in their minds?
Glad to have you on Steem though, you put in the effort and that's great. What are you Steem thoughts so far? Is it sustainable? Would you buy Steem and Power it up or not? If not, why?
So that 25x price disadvantage is now down to only 5x, within two days of me having written the article. Don't mistake a strong looking opening for a sure victory.
Second, I have more to learn about Steem. I have read the white paper, but need to re-read it. I have no problem with a market cap of $250 million-$300 million though, as a social network with a rapidly growing user base would easily be valued in this range in the venture capital world.
Do you have a strong understanding of how it works at the blockchain level and with the Steem Dollar tokens?
You brought up an interesting point about minority/majority in the fork discussion. You might be right about there being not much voters in the pre-fork vote. We now have 2 chains and people can decide which one they use. The fact that we can trade ETH/ETC makes the current situation effectively a vote.
People put their money where their mouth is, so the question about vocality becomes less important. I think it is a good thing that the non-forked chain continues to exist, so it is clear to those using the forked chain that they are not being forced to do so. There should be no ambiquity in the consensus, and both chains can co-exist if people see the need for them. Trying to fight battles only results in wasted energy.