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Every time a chain hardforks like this, they basically create a new currency and everyone starts calling the new currency "Bitcoin", "Ethereum" etc. While in th

by TekMol 6y ago

Every time a chain hardforks like this, they basically create a new currency and everyone starts calling the new currency "Bitcoin", "Ethereum" etc. While in theory it is not. What would happen if a Bitcoin fund like Grayscale would say that their customers are only entitled to the "original" Bitcoins in the fund. So investors would be left with pretty much worthless stuff? What would happen if they don't, but the original coins keep being traded at say 10% of the value of the new ones. Who pockets those 10%?

WanderPanda 6y ago
I don’t get why this is downvoted. It is technically true and raises an interesting legal issue. Edit: Isn’t this also what happened on some exchanges with the previous big forks?
- TekMol 6y ago
  I think this is a systematic issue with Hacker News, Reddit etc. While low quality comments are easy to spot, low quality votes are not. I often think HN should have the requirement to explain a downvote. I would think that downvotes like these have low quality explanations like "Shut up, idiot!". So these low quality votes could be dealt with and the voters future votes could be discounted.
  - nullc 6y ago
    You're being downvoted here because this isn't a compatibility breaking change. No hardfork. So the questions you raise aren't likely to be implicated here.
    - TekMol 6y ago
      I don't think that is true. I don't think miners and nodes can keep running the old software and not run into problems. Look through this thread to see my reasoning: https://news.ycombinator.com/item?id=27021878 https://news.ycombinator.com/item?id=27021878
      - nullc 6y ago
        Did you find my reply there and here https://news.ycombinator.com/item?id=27022013 https://news.ycombinator.com/item?id=27022013 informative?
      - martinko 6y ago
        Not sure you realize who you're debating regarding the mechanics of Bitcoin forks...
        ur-whale 6y ago
        https://en.wikipedia.org/wiki/Argument_from_authority https://en.wikipedia.org/wiki/Argument_from_authority
        ric2b 6y ago
        Doesn't apply, nullc is backing up their arguments with actual technical explanations, not just saying "Just trust me, don't you know who I am?"
        ur-whale 6y ago
        Not criticizing nullc's arguments (which I agree with), but rather the acolyte trying to tell the disagreeing party off thereby actually ruining it for everyone.
        BelenusMordred 6y ago
        One of the problems of online communications. Everyone has an equal voice, but certainly not all voices are equal. Hopefully the GP comment spends 10 seconds trying to work out if you are correct.
        nullc 6y ago
        It's all cool. It only turns silly when instead of discussing they flip to "you don't understand how Bitcoin works". :) For every person that won't take my word for it there are probably 100 people here reading and learning something they didn't know.
- ComputerGuru 6y ago
  I didn’t downvote, but I think the comment has a factually inaccurate premise: this isn’t a hard fork.
  - TekMol 6y ago
    After activation of Taproot, coins can be spend in ways they could not before. How is that not a hard fork?
    - ComputerGuru 6y ago
      Because this release is a soft fork basically to vote on whether or not to upgrade “the” BTC network. If 90% agree, I think it’s disingenuous to call it a fork rather than an upgrade.
      - deleted 6y ago
        [deleted]
    - wcoenen 6y ago
      For Segwit (a soft fork in the past), it was done by making the new transactions look like they have unsecured "pay to anybody" outputs, as far as the not-upgraded bitcoin clients are concerned. The new bitcoin clients would however be aware of extra data (the "segregated witness") and use that for additional validation. This way all of the new stuff would still be valid for the not-upgraded clients. To make future soft forks easier, the Segwit data has a version byte, and unknown future versions are also considered as "anyone can spend". So taproot only had to increment the version from 0 to 1 to work as a soft fork.
      - TekMol 6y ago
        That might make a Segwit transaction in a block look legit to a node. But what happens if a miner interprets a Segwit transaction as "pay to anybody" and creates a block that violates the "additional validation" performed by newer miner/node software?
- nullc 6y ago
  It's being downvoted because it's inapplicable to this situation... there isn't any hardfork here. The change is fully compatible. The question he's trying to bring up is an interesting one, but this is the wrong thread to bring it up on. On this subject-- Checkout Archer v. Coinbase, where coinbase kept a large amount of a users forked coins and prevailed in court.
jamesgreenleaf 6y ago
I would guess that Grayscale and others have thought of that, and have written it into their contracts with customers. I'd also bet they're the ones who pocket the proceeds from any forks.
- wmf 6y ago
  I decided to look this up. "If a permanent fork, similar to Ethereum, were to occur to bitcoin, the Trust would hold equal amounts of the original and the new bitcoin as a result. In consultation with the Index Provider, the Sponsor would select a Bitcoin Network (and therefore a single version of bitcoin). The Sponsor would simultaneously isolate the bitcoin on the Bitcoin Network that it did not select to segregate it from the Trust’s Bitcoin Holdings. The Sponsor’s intention would be to distribute to its Shareholders the bitcoin on the Bitcoin Network that it did not select. Therefore, the Trust would only hold one version of bitcoin. It is uncertain whether the value of the distribution of the bitcoin on the Bitcoin Network that the Sponsor did not select would equal the change in the value of the Shares. Consequently, a permanent fork could materially and adversely affect the value of the Shares." Pretty loose policy. https://www.sec.gov/Archives/edgar/data/1588489/000119312517013693/d157414ds1.htm https://www.sec.gov/Archives/edgar/data/1588489/000119312517...
deleted 6y ago
[deleted]
wmf 6y ago
The ETC/ETH split was an actual fork resulting in two chains, but Segwit and Taproot don't cause chain splits so it's not a similar situation. If somebody like Grayscale decided to outright scam their own investors (why?) there are a hundred excuses they could invent to justify it; they don't need to blame a protocol upgrade. Segwit was activated years ago. There were some conspiracy theories about Segwit UTXOs being worth less than legacy UTXOs but AFAIK they were totally unfounded. So far Bitcoin is Bitcoin and I don't see any reason why that would change.
ur-whale 6y ago
> Every time a chain hardforks I may be mistaken, but I don't think taproot is a hard fork.

by TekMol 6y ago

WanderPanda 6y ago

I don’t get why this is downvoted. It is technically true and raises an interesting legal issue. Edit: Isn’t this also what happened on some exchanges with the previous big forks?

TekMol 6y ago
I think this is a systematic issue with Hacker News, Reddit etc. While low quality comments are easy to spot, low quality votes are not. I often think HN should have the requirement to explain a downvote. I would think that downvotes like these have low quality explanations like "Shut up, idiot!". So these low quality votes could be dealt with and the voters future votes could be discounted.
- nullc 6y ago
  You're being downvoted here because this isn't a compatibility breaking change. No hardfork. So the questions you raise aren't likely to be implicated here.
  - TekMol 6y ago
    I don't think that is true. I don't think miners and nodes can keep running the old software and not run into problems. Look through this thread to see my reasoning: https://news.ycombinator.com/item?id=27021878 https://news.ycombinator.com/item?id=27021878
    - nullc 6y ago
      Did you find my reply there and here https://news.ycombinator.com/item?id=27022013 https://news.ycombinator.com/item?id=27022013 informative?
    - martinko 6y ago
      Not sure you realize who you're debating regarding the mechanics of Bitcoin forks...
      - ur-whale 6y ago
        https://en.wikipedia.org/wiki/Argument_from_authority https://en.wikipedia.org/wiki/Argument_from_authority
        ric2b 6y ago
        Doesn't apply, nullc is backing up their arguments with actual technical explanations, not just saying "Just trust me, don't you know who I am?"
        ur-whale 6y ago
        Not criticizing nullc's arguments (which I agree with), but rather the acolyte trying to tell the disagreeing party off thereby actually ruining it for everyone.
      - BelenusMordred 6y ago
        One of the problems of online communications. Everyone has an equal voice, but certainly not all voices are equal. Hopefully the GP comment spends 10 seconds trying to work out if you are correct.
      - nullc 6y ago
        It's all cool. It only turns silly when instead of discussing they flip to "you don't understand how Bitcoin works". :) For every person that won't take my word for it there are probably 100 people here reading and learning something they didn't know.
ComputerGuru 6y ago
I didn’t downvote, but I think the comment has a factually inaccurate premise: this isn’t a hard fork.
- TekMol 6y ago
  After activation of Taproot, coins can be spend in ways they could not before. How is that not a hard fork?
  - ComputerGuru 6y ago
    Because this release is a soft fork basically to vote on whether or not to upgrade “the” BTC network. If 90% agree, I think it’s disingenuous to call it a fork rather than an upgrade.
    - deleted 6y ago
      [deleted]
  - wcoenen 6y ago
    For Segwit (a soft fork in the past), it was done by making the new transactions look like they have unsecured "pay to anybody" outputs, as far as the not-upgraded bitcoin clients are concerned. The new bitcoin clients would however be aware of extra data (the "segregated witness") and use that for additional validation. This way all of the new stuff would still be valid for the not-upgraded clients. To make future soft forks easier, the Segwit data has a version byte, and unknown future versions are also considered as "anyone can spend". So taproot only had to increment the version from 0 to 1 to work as a soft fork.
    - TekMol 6y ago
      That might make a Segwit transaction in a block look legit to a node. But what happens if a miner interprets a Segwit transaction as "pay to anybody" and creates a block that violates the "additional validation" performed by newer miner/node software?
nullc 6y ago
It's being downvoted because it's inapplicable to this situation... there isn't any hardfork here. The change is fully compatible. The question he's trying to bring up is an interesting one, but this is the wrong thread to bring it up on. On this subject-- Checkout Archer v. Coinbase, where coinbase kept a large amount of a users forked coins and prevailed in court.

jamesgreenleaf 6y ago

I would guess that Grayscale and others have thought of that, and have written it into their contracts with customers. I'd also bet they're the ones who pocket the proceeds from any forks.

wmf 6y ago
I decided to look this up. "If a permanent fork, similar to Ethereum, were to occur to bitcoin, the Trust would hold equal amounts of the original and the new bitcoin as a result. In consultation with the Index Provider, the Sponsor would select a Bitcoin Network (and therefore a single version of bitcoin). The Sponsor would simultaneously isolate the bitcoin on the Bitcoin Network that it did not select to segregate it from the Trust’s Bitcoin Holdings. The Sponsor’s intention would be to distribute to its Shareholders the bitcoin on the Bitcoin Network that it did not select. Therefore, the Trust would only hold one version of bitcoin. It is uncertain whether the value of the distribution of the bitcoin on the Bitcoin Network that the Sponsor did not select would equal the change in the value of the Shares. Consequently, a permanent fork could materially and adversely affect the value of the Shares." Pretty loose policy. https://www.sec.gov/Archives/edgar/data/1588489/000119312517013693/d157414ds1.htm https://www.sec.gov/Archives/edgar/data/1588489/000119312517...

deleted 6y ago

[deleted]

wmf 6y ago

The ETC/ETH split was an actual fork resulting in two chains, but Segwit and Taproot don't cause chain splits so it's not a similar situation. If somebody like Grayscale decided to outright scam their own investors (why?) there are a hundred excuses they could invent to justify it; they don't need to blame a protocol upgrade. Segwit was activated years ago. There were some conspiracy theories about Segwit UTXOs being worth less than legacy UTXOs but AFAIK they were totally unfounded. So far Bitcoin is Bitcoin and I don't see any reason why that would change.

ur-whale 6y ago

> Every time a chain hardforks I may be mistaken, but I don't think taproot is a hard fork.