Bitfinex, currently the biggest bitcoin exchange by trading volumes despite its inability to handle fiat deposits and withdrawals, announced yesterday they will initially list segwit2x as B2X even if it has the vast majority of hashpower.
The exchange, which did not sign the New York Agreement, says the decision is not political, but based on practical considerations. They say they can’t suspend trading to see which chain is the winner, therefore they have to create a new ticker for the new chain.
That’s because they say there is no “sufficient consensus to identify a clear winner in the Segwit2x hard fork,” with the exchange not quite providing any definition of consensus.
Nearly all bitcoin companies agreed to a roadmap that implemented segwit to be followed by the November 2x fork. While as good as all miners are currently showing agreement with segwit2x through their non-sybilable mined blocks.
Therefore, it is unclear how they are gouging whether there is any “sufficient consensus” at this stage, which arguably is somewhat too early to determine.
As such, although they say their decision is not political, the Blockstream connected exchange does say in the announcement that:
“The incumbent implementation (based on the existing Bitcoin consensus protocol) will continue to trade as BTC even if the B2X chain has more hashing power.”
They do not say if the ticker would change and if so under what circumstances, nor do they say why they expect two chains to co-exist when that is highly unlikely unless one chain makes protocol changes.
Making it a highly political decision, which is unlikely to be primarily concerned with practical considerations because by the time of the fork it will probably be obvious where the vast majority stands.
As such, their announcement directly contradicts the bitcoin whitepaper itself, which says:
“The proof-of-work also solves the problem of determining representation in majority decision making. If the majority were based on one-IP-address-one-vote, it could be subverted by anyone able to allocate many IPs. Proof-of-work is essentially one-CPU-one-vote. The majority decision is represented by the longest chain, which has the greatest proof-of-work effort invested in it.”
It is that proof of work, rather than proof of “sufficient consensus,” that allows bitcoin to operate as one network. Not least because the minority chain has no chance of survival without protocol level modifications.
Once such modifications are necessary, it’s security vis a vis the main chain is lost, thus necessarily its value is lower too, unless the circumstances are highly exceptional.
This statement by Bitfinex, therefore, whereby they won’t follow the longest chain, is the most political statement since bitcoin’s invention and attempts to fundamentally change the way consensus is reached from objective proof of work to proof of exchanges’ subjective opinion.