Hard Forks

The crypto-currency Ethereum completed a hard fork on Wednesday. The Ethereum core developers, after getting a vote of support from the Ethereum community, hard forked Ethereum to “get back” the roughly $40mm of Ethereum that was taken in the hack of The DAO.

Hard forks are a bit of a lightning rod issue in the blockchain sector. The Bitcoin community has been debating the idea of doing a hard fork to increase the block size for well over a year. It seems that most of the Bitcoin core developers are against a hard fork and see it as risky. Bitcoin did have an accidental hard fork back in 2013, but that was dealt with quickly and confidence in the Bitcoin blockchain was restored.

I believe that hard forks are an inevitable occurrence in the blockchain sector. There have been, and will continue to be, issues that crop up that are best solved with hard forks. I do not think they will be common and I do not think they should be common. But they are an important tool in the toolset that core developers have to move these protocols forward. And so I see the successful Ethereum hard fork this week as an important milestone for public blockchains.

I like what Cornell CS Professor Emin Gün Sirer said about the Ethereum hard fork:

It’s a point of strength to be able to adapt to that change, to be able to respond to it, to be able to do it in an orderly fashion. Ethereum just demonstrated this. I think this is a rite of passage for ethereum.

In my mind, adaptability is more important than immutability.

And to some extent, that is what is now at the center of the Bitcoin vs Ethereum competition for the hearts and mind of developers. I believe the Bitcoin core developers have more or less landed on immutability and Ethereum core developers are very much into adaptability. It may be that it is useful to have two significant, liquid, and highly capitalized public blockchains, one that is immutable (think of gold) and one that is adatpable (think of the dollar).

There was a time when I was a Bitcoin absolutist. That changed a while ago and I now believe that we are going to have multiple blockchains, multiple currencies, and a ton of app tokens, some with their own blockchains, some built on top of Bitcoin or Ethereum.

It’s a very interesting time in the public blockchain sector right now. Stuff is happening. Lot’s of stuff.