The great Bitcoin fork of 2017—when the original blockchain split last August to create Bitcoin Cash—appears to have ended pleasantly, at least for investors. The sum of the parts turned out to be greater than the whole: Within a week of the split, the two assets together were worth more than $15 billion in additional market value that didn’t exist prior to the fork.
Far away from Wall Street, however, the schism—which came about when two factions couldn’t agree on whether to speed up transaction times by expanding the size of units on the blockchain (Bitcoin Cash favoring larger blocks)—is still seething. There are signs the rift is growing more acrimonious, threatening to polarize the Bitcoin community around the world.
I witnessed the bitterness of the so-called scaling debate when I visited Tokyo in late March to report on new twists in the saga of Mt. Gox, the hacked Bitcoin exchange, for my latest magazine feature, “Mt. Gox and the Surprising Redemption of Bitcoin’s Biggest Villain”. There I found that much of the once tight-knit community had since become alienated by the Bitcoin Cash split.
I’m not going to analyze the technical merits of the scaling debate—regarding the speed and cost of transactions—here today, both for the sake of brevity and because the latest flare-ups have been less technological and more philosophical: The Bitcoin-Bitcoin Cash battles are now often over ethics, censorship, transparency, and even the political parties of their supporters.
Case in point: Coincall, a portfolio tracking site for cryptocurrency investors, this week labeled Bitcoin Cash a “shitcoin” for “intentionally misleading newcomers to believe it’s the ‘real’ Bitcoin, for example by misusing bitcoin.com and the @bitcoin Twitter handle.” (Last month, scandal arose after the @bitcoin account appeared to endorse Bitcoin Cash, and was subsequently suspended by Twitter.) But even if those criticisms are accurate, they have nothing to do with whether or not Bitcoin Cash is actually faster, cheaper or easier to use than Bitcoin.
In Tokyo, however, Bitcoin Cash now seems to dominate the Bitcoin scene: Supporters have their own meetups; their own bars accepting Bitcoin Cash—they even have their own Satoshi Nakamoto, an Australian named Craig Wright. (Wright, though, has failed to irrefutably prove that he is the mysterious creator of Bitcoin—and others have offered evidence debunking Wright’s claims.)
My trip coincided with the Satoshi’s Vision Conference, an event that makes the case that Bitcoin Cash is the true Bitcoin. At a happy hour following the conference, people exclaimed “Make Bitcoin great again!” One guest called out to a woman carrying a baby: “Future big-blocker right there!”