Suggestions that Bitcoin - the grandparent of so-called alternative currencies - might experience a fork in the next few days have generated much comment. Reactions to the possibility that Bitcoin might split into two currenices vary from bafflement to pragmatism.
“Forks are usually bad,” says David Siegel, chief executive officer of Twenty Thirty AG, a Swiss-based blockchain innovation company . “Forks are generally philosophical bordering on political, and they create bad will among the different "camps" of the cryptocommunity.
“This obviously doesn't help the overall image of the industry,” he goes on. “Even if one fork "wins" and is called Bitcoin, it's a blow to gaining the confidence of people around the world who deserve a better monetary system.”
Nothing to fear
The Bloomberg Prophets service carried a headline stating there is nothing to fear. Author Aaron Brown then delivers a cogent argument to justify that statement. He compares and contrasts the Bitcoin experience to traditional government-backed currencies.
He observes that most of the 140 physical currencies that existed a century ago “evaporated without significant payment to holders”. Of those that have not evaporated, the British pound has lost 98% of its value and the US dollar 95%.
Even the mighty Swiss franc has lost 75% of its value, he calculates. Bitcoin enjoys much greater protection against the risks of hyperinflation, government default, expropriation or losing a war, he states.
“Forking hell...the Bitcoin split” is the attention-grabbing headline to a piece penned by Chris Skinner. Revered in a number of quarters in the world of international finance, Skinner has a winning way with words. Until it comes to the minutiae of explanation.
He sets out the issue in much greater technical detail than falls under the www.capital.com remit. Astrophysicists looking for something to while away the time waiting for a cup of coffee to be prepared might care to look here.
An email from digital currency platform Coinbase to its customers refers specifically to the user activated hard fork (UAHF) as a proposal to increase the Bitcoin block size, scheduled for 1 August (also known as, ironically, given the comments above, Swiss National Day).
UAHF breaks Bitcoin rules
Coinbase adds that the UAHF is incompatible with Bitcoin rules. If it proceeds, it will create a separate blockchain. Should that happen, Coinbase says it will not support the new blockchain or coin.
To this cryptocurrency sceptic that sounds very much like default or at the very least devaluation. This would seem to be in direct breach of one of the cornerstones of Bitcoin, that only a finite amount will ever exist.